Should Brett Favre come out of retirement…again?

lthough NFL training camps are still weeks away, each passing day brings new reports suggesting that Brett Favre is about to come out of retirement for a second time in as many years. The Vikings have openly admitted their interest and Favre has done the same.
While the New York Jets and Green Bay Packers are trying to rebuild around younger quarterbacks, the Minnesota Vikings appear to be willing to throw a proverbial Hail Mary pass to an aging quarterback in the hopes he can take them to the Promised Land.
During an appearance on HBO’s Joe Buck Live, his first since retiring from the New York Jets last February, the three-time NFL MVP said he had surgery a couple of weeks ago on his throwing arm. He said the doctor who performed the surgery on his biceps told him it would take four to five weeks to find out if the procedure was a success.
As long as his right arm is healthy, it looks like Favre is coming back to the NFC where he’s spent almost his entire career. The Cajun may not be able to part the river that runs through the Twin Cities, but his eye-popping statistics cannot be overlooked so easily: he won Super Bowl XXXI, was voted Associated Press MVP three years in a row (last one shared with Barry Sanders), selected 10 times to play in the Pro Bowl and he holds NFL record for the most touchdown passes.
Last year, Favre’s season with the Jets started well; in week four he threw six touchdowns against the Arizona Cardinals, a personal best and one fewer than the NFL record. By week 12, the Jets had compiled an 8-3 record, including a win over the previously undefeated Tennessee Titans. However, the Jets lost four out of the last five games of the season including the final game against the Miami Dolphins, who had acquired Chad Pennington after he was released from the Jets to make room for Favre.
In a recent interview, the NFL’s all-time leader in touchdowns, receptions and receiving yards, Jerry Rice didn’t show a lot of confidence in Favre. Rice said the stress of a 16-game season might be too much for a 39-year-old. “Brett is a competitor. But I know towards the latter part of my career, even though I still wanted to be out on that football field, it was like things became a little bit more difficult,” Rice told the Minneapolis Star-Tribune.
Should Brett Favre come out of retirement…again?
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PHOTO: New York Jets quarterback Brett Favre leaves the field after throwing an interception against the Miami Dolphins during the fourth quarter of their NFL football game in East Rutherford, New Jersey, December 28, 2008. REUTERS/Ray Stubblebine

Watson leads Golden Oldie march at Turnberry

TURNBERRY, Scotland (Reuters) - Tom Watson rolled back the years to grab an early one-shot lead in Thursday's first round of the British Open as a bunch of veterans took advantage of ideal scoring conditions.
With hardly a breath of wind at the spectacular Ailsa Course, the 59-year-old American fired a flawless five-under-par 65 to set the pace in the season's third major.
Thirty-two years after outduelling Jack Nicklaus to win the first Open staged at Turnberry, Watson upstaged his Spanish playing partner Sergio Garcia who opened with a 70.
"I played very well in the practice round and thought I would do well this week," Watson told BBC television after covering the back nine in three under.
Asked if he drew on memories of his 1977 triumph dubbed the 'Duel in the Sun', the eight-times major winner replied: "I don't dwell in the past.
"Certainly it has been at the forefront of conversations this week. A lot of kids playing in this tournament were not even born in 1977," five-times Open champion Watson added with a smile.
Australian John Senden, a late addition to the field after the withdrawal of Indian Jeev Milkha Singh on Tuesday due to a rib injury, birdied four of the last six holes for a 66.
Also at four under was in-form American Steve Stricker, who has won twice on the PGA Tour in his last four starts.
Much of the early running, however, was dominated by senior players with former winners Mark Calcavecchia, 49, and Mark O'Meara, 52, and Vijay Singh, 46, carding matching 67s.
Calcavecchia, who teed off in the first group of the day on a sun-splashed morning, made the most of the conditions.
PERFECT WEATHER
"The weather was perfect," the 1989 winner told reporters. "There was no wind and the early start doesn't bother me. I played well.
"I hate to say Turnberry was easy, because it's a really hard course, but if you're going to shoot a good score out there, today was the day to do it."
Calcavecchia tied for 11th when the Open was last held at Turnberry in 1994 and he felt the layout, stretched by 247 yards since then, now posed a tougher challenge.
"The fairways are narrower, there are more bunkers and it is longer," he said. "A lot of the holes are three-woods off the tee and I don't remember the rough ever being as thick.
"Thankfully I only hit it in there once today."
World number one Tiger Woods, a heavy favorite to win his 15th major title, was one over after 16 holes.
Watched by huge galleries in a high-profile grouping with Briton Lee Westwood and Japanese teen sensation Ryo Ishikawa, Woods offset a birdie at the second with a bogey at the third.
He then birdied the par-five seventh to reach the turn in one-under 34 before following another bogey at the 10th with a birdie at the par-three 11th. He aso bogeyed the 15th after hitting a poor chip and the 16th.
Title holder Padraig Harrington of Ireland, who is seeking a rare British Open hat-trick, was among the late starters.

Obama prods Congress on healthcare; Senate panel acts

WASHINGTON (Reuters) - Saying it was "time to get this done," President Barack Obama pressed on Wednesday for swift congressional action on healthcare after a Senate panel approved a bill to overhaul the $2.5 trillion industry.
Panels led by his Democratic Party have stepped up activity on legislation that would meet Obama's goal of guaranteeing all Americans healthcare coverage, but they remain far from resolving the thorniest issue -- how to come up with about $1 trillion over 10 years in new taxes or savings to pay for it.
The first of five congressional panels to act, the Senate Health Committee approved legislation by a 13-10 vote that would set up a government-run insurance program to compete with private insurers. No Republicans voted for the measure.
The vote came a day after House Democratic leaders introduced a sweeping healthcare reform bill that included a government insurance option and is partially paid for with a planned tax on the wealthy. It would require employers to offer health coverage or pay into a government fund.
Obama praised the Senate panel's action, but appealed to Americans to get involved, saying at the White House, "It's time for us to buck up Congress, this administration, the entire federal government, to be clear that we've got to get this done."
The full Senate must vote on healthcare legislation and reconcile its bill with the House proposal before it goes to the White House.
Health insurance reform is considered central to Obama's administration, building on his campaign pledge to expand coverage and control skyrocketing medical expenses, which are a burden on the federal government, businesses and individuals.
The Senate bill would require most Americans to obtain health insurance and require employers of more than 25 workers to provide coverage or face a $750-per-worker penalty. Insurers could no longer bar people with pre-existing conditions. But, no one with insurance would be required to change insurers.
In a renewed push for Congress to complete work on healthcare reform before it recesses in August, Obama met with four Republican senators at the White House on Wednesday afternoon. They discussed ways the healthcare delivery system could be reformed to eliminate waste and lower costs while improving the quality of care.
They agreed it was a top priority to fix what is broken in the healthcare system, while building on what works, an administration official said.
In a series of network television interviews on healthcare, Obama said he now supported a requirement that all Americans have health insurance.
TAX PROPOSALS CONTROVERSIAL
"I'm now in favor of some sort of individual mandate as long as there's a hardship exemption," Obama told the "CBS Evening News," saying he had changed his mind since his statements during the presidential campaign opposing a mandate. [nN15375456]
Most Americans have health insurance that is partially paid by their employers, but an estimated 46 million have no coverage.
The National Federation of Independent Business, which worked to derail President Bill Clinton's reform push in the early 1990s, warned lawmakers the House bill would harm U.S. jobs and that it failed to meaningfully curb costs

Capitol police say suspect killed near Capitol

WASHINGTON (Reuters) - U.S. Capitol Police said one suspect was killed and two officers injured in a shooting near the U.S. Capitol on Wednesday in an incident police said was not related to Capitol security.
Police briefly closed a road adjacent to the Senate side of the complex, home to the U.S. Congress, and entrances to the Capitol building were temporarily locked on its North side.
The shooting occurred after a Capitol police officer tried to make a routine traffic stop near Union Station, a police spokeswoman said. Sgt. Kimberly Schneider said the driver fled, nearly ran over two officers, struck a parked and then crashed into a police cruiser.
"The subject disregarded repeated demands by police officers to put down the weapon that the suspect had. He began shooting a weapon at several U.S. Capitol Police officers. U.S. Capitol Police returned fire, hitting the suspect," Schneider said in statement.
Schneider said the suspect, who was not identified, had died. She said the shooting was an isolated incident and no one else was involved.
Robert Drumm, visiting Washington from Edmond, Oklahoma said he was walking near the Capitol when he saw police cars engaged in a high speech chase with a white Mercedes.
There was a crash and then "boom, boom, boom, boom. A pause and then a bunch more," Drumm added, estimating he heard more than a dozen gunshots.
The incident was the second shooting in just over a month near a popular tourist attraction in Washington.
On June 10, an elderly gunman linked to an anti-Jewish website shot and killed a security guard at the U.S. Holocaust Memorial Museum, a short distance from the Capitol.

Foreclosures at record high in first half 2009 despite aid

NEW YORK (Reuters) - U.S. home foreclosure activity galloped to a record in the first half of the year, overwhelming broad efforts to remedy failing loans while job losses escalated.
Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday.
The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15 percent from the first half of last year.
"Despite everybody's best efforts to date we're not really making any headway against the problem," Rick Sharga, senior vice president at RealtyTrac in Irvine, California, said in an interview.
Loans that were temporarily frozen by various state and federal programs, which mostly ended in March, started pushing through the process in the past three months.
One in every 84 households with loans got at least one foreclosure filing in the first half of this year.
"I don't think this suggests the economy is any worse than anyone expected but I certainly don't think it shows by itself any signs of improvement," Sharga said.
President Obama's housing rescue is gaining momentum in refinancing troubled borrowers with higher-rate loans and modifying untenable terms for others.
But the programs have been off to a slow start and in some cases will be too late or not enough to help severely struggling homeowners, industry analysts agree.
Private sector efforts to alter loans terms have made headway but are facing an uphill battle as the unemployment rate heads to double digits.
Problems emanating from loans made when standards were much looser have taken a back seat to defaults stemming from job losses and wage cuts.
"Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes are now worth represent a potentially significant future risk," James J. Saccacio, RealtyTrac chief executive, in a statement.
In June, as home prices continued to fall, albeit more slowly, foreclosure filings rose 5.0 percent from May and 33 percent from a year earlier.
June's foreclosure activity was the third highest on record, and the fourth straight month of filings on more than 300,000 properties.
"If we're really going to slow down the inflow of new foreclosure activity we are probably going to need to see more aggressive and more integrated activity between the lending community and the government," Sharga said.

he Treasury Department asked the largest 25 mortgage servicers last week to appoint a special liaison to work directly with government officials aiming to thwart defaults.
RealtyTrac forecasts about 4 million total filings this year on 3.2 million households with loans, which means little improvement from the first-half performance. The prior record was 3.1 million filings last year, up from a more typical year when about 800,000 foreclosure actions would be made.
The highest unemployment rate in nearly 26 years is the biggest factor keeping homeowners from staying current on monthly payments, Sharga said.
But there could also be a whiplash caused by "the big white elephant in the middle of the room" -- option ARMs, or adjustable rate mortgages with the option to make minimum payments. "A lot of them are going to be seriously upside down, probably at least 40 percent upside down."
That would mean a borrower owes at least 40 percent more on the mortgage than the home is worth.
A new U.S. program enabling borrowers are up to 25 percent upside down to refinance their loans would not be enough to help most option option ARM holders, Sharga said.
States where sales and prices soared most in the five-year housing boom early this decade stayed hardest hit in the first half of 2009.
Nevada remained the state with the highest foreclosure rate, with one in every 16 housing units with a loan getting a foreclosure filing. Arizona, Florida and California followed.
Other states in the top 10 were Utah, Georgia, Michigan, Illinois, Idaho and Colorado.
California was the state with the highest total number of foreclosure filings in the first half, with actions taken on 391,611 properties, or one in every 34 housing units with mortgages.

GM exits bankruptcy

DETROIT (Reuters) - A new General Motors emerged from bankruptcy protection on Friday -- far more quickly than most industry watchers had expected -- as a leaner automaker pledging to win back American consumers and pay back taxpayers.
A whirlwind 40-day bankruptcy for GM concluded with the closing of a deal that sold key operations to a new company majority-owned by the U.S. Treasury.
The development, which follows a similar fast-track reorganization of Chrysler, represented a victory for the Obama administration and its commitment to save jobs and prevent a liquidation of the largest U.S. automaker.
At the same time, the U.S. government has taken on substantial new risks as a 60 percent owner of the new GM with a $50 billion equity investment and $10 billion in debt and perpetual preferred shares.
Analysts said the government intervention had given GM a new chance and sharply lower operating costs, but left management facing deep challenges given the weak economy and GM's long-running slide in market share.
"I wouldn't really call it a new GM, it is just a smaller GM. That would be more of an apt description. They still have a lot of hurdles to jump," said Mirko Mikelic, portfolio manager at Fifth Third Bank. "Right now, they are in a survival mode."
Chief Executive Fritz Henderson said the new company would shed layers of management, make decisions faster and shed the bureaucracy that critics say contributed to the failure of the 100-year-old automaker.
The company's white-collar workforce will be cut by more than 20 percent by eliminating 6,000 jobs. Executive ranks will be cut 35 percent.
NO MORE BUSINESS AS USUAL
"The bottom line is that business as usual -- and as we have had it until today -- is over," Henderson told reporters at GM's Detroit headquarters. "Everyone associated with GM must be prepared to change -- and fast."
Bankruptcy slashed GM's debt and healthcare obligations and brought down labor costs to be on par with Japanese competitors led by Toyota Motor Corp.
The new GM will have slashed its debt and healthcare obligations by $48 billion, dropped almost 40 percent of the dealers from an unprofitable network and moved to sell laggard brands such as Saab, Saturn and Hummer.
Analysts said that gives GM a chance to deliver on its commitment to launch more fuel-efficient cars and to focus its resources on fewer brands, models and dealerships.
"The challenge in the future is how to approach a marketplace that has been burned by GM," said Pete Hastings, a fixed-income analyst at Morgan Keegan.
While key assets and the Chevrolet, Cadillac, Buick and GMC brands were sold out of bankruptcy to form the new General Motors Company, other assets, including shuttered factories, remain in bankruptcy for a liquidation process

U.S. eyes possible goal increase for the Afghan army

WASHINGTON (Reuters) - The United States and NATO may need to increase their goal for expanding Afghan forces significantly to better support President Obama's strategy for stabilizing the country, officials said on Friday.
The current goal is to boost the Afghan army to 134,000 soldiers and police to 86,000 by 2010 to ensure the U.S. and NATO security mission has what officials have described as "an Afghan face."
But officials, who spoke on condition of anonymity, said top defense and military officers have discussed plans to double the goal for Afghan soldiers to nearly 270,000 to better combat insurgents and avert the possibility that Western forces might come to be viewed by Afghans as foreign occupiers.
"All of that has been discussed," said one official.
Obama administration officials have examined the possibility of increasing the Afghan army and police to 400,000 personnel. But no decisions have been made.
The Washington Post reported on its Web site on Friday that the new U.S. commander in Afghanistan, Army General Stanley McChrystal, has told U.S. Defense Secretary Robert Gates that the target for Afghan security forces should be increased well beyond current targets.
U.S. defense and military officials had no immediate comment on the Post article.
(Reporting by David Morgan; editing by Todd Eastham)

Americans swap homes for hotels as recession bites

CAMBRIDGE, Massachusetts (Reuters) - Some Americans are swapping homes for motels as the ranks of the homeless swell during the recession, crowding out shelters and forcing cities and states across the country to find new types of housing.
In Massachusetts, a record number of families are being put up in motels due to high unemployment and the rising number of homes going into foreclosure, costing taxpayers $2 million per month but providing a lifeline for desperate families.
"I feel like this has saved my life," said Tarya Seagraves-Quee, a 37-year-old former nurse.
Seagraves-Quee has lived in a cramped one-bedroom suite in a hotel in Cambridge, Massachusetts, with three of her four children for nearly two months. "I'm managing the best way possible. I've learned to make things in the microwave oven."
In Massachusetts, homeless shelters are at capacity. State law requires temporary accommodation for those without shelter, leading authorities to place 830 families, including 1,125 children, in 39 motels -- an unprecedented number.
"This truly is the highest we have ever seen it," said Nancy Paladino, director of the family team for the Boston Health Care for the Homeless.
Other cities are noticing a similar trend. In Indianapolis, Indiana, overcrowded homeless shelters are turning families away, forcing growing numbers to seek vouchers for hotels provided by nonprofit groups such as United Way.
"Anecdotally, it's increased," said Michael Hurst, director of the Coalition for Homeless Intervention and Prevention Indianapolis. The advocacy group started to compile statistics on the number of homeless families living in hotels this year after noticing signs of an increase.
"The hotel owners will tell you it has increased. The homeless service providers and the school officials will say we know there are more people living in hotels and putting their kids in school because that is the address they are giving us."
'JUST A STEPPING STONE'
In the Dallas-Fort Worth metropolitan area, the large Wilson family turned to a budget motel as a weeklong transition between a homeless shelter and an apartment.
"Each step we're going it's just a stepping stone," said 42-year-old Frederick Wilson as he sat with his wife, Annette, in a one-bedroom suite they share with four of the six children in their care, including a grandchild.
Called by God, they said, to move from Minnesota to Texas, the family has rapidly made a shift from homeless status to paid employment. Annette has just landed a job as a bus driver, while Frederick said he will work in an office that offers clerical support to Medicaid patients.
They spent two-and-a-half weeks in a homeless shelter in Dallas and were preparing to move into an apartment from the motel. The Urban League, an organization that helps struggling African Americans, is paying the $204 cost of their suite, which does not include sheets, pillows or toilet paper.
In Phoenix, demand for emergency accommodation is swamping available services as the recession and spiraling foreclosures turn even more families out of their homes.

Obama mulls bailout funds for small business

WASHINGTON (Reuters) - The Obama administration is considering a plan to help small businesses through the economic downturn by diverting some of the billions of dollars approved by Congress for bank bailouts, but the idea is at a very preliminary discussion stage, officials said on Friday.
The proposal to shift part of the $700 billion bank bailout program to millions of smaller firms would allow the administration to help one of the largest sources of job creation in the U.S. economy.
The idea is among many possible economic support efforts that have been discussed by the Treasury, White House and Small Business Administration, but no decisions are imminent.
"There has been no determination," said one administration official. "There have been many, many ideas and many possible steps that have been thrown out for consideration among the members of this administration, so any consideration of this idea is extremely preliminary."
The Washington Post on Friday reported that Treasury Department officials are floating the idea of using bailout funds to expand a Small Business Administration program that helps small businesses borrow money from banks at low rates.
Under that plan, lines of credit for small companies could be increased. The government would step in and repay a loan, maybe as much as 90 percent of it, if a company defaulted.
At a White House meeting last week, Treasury Secretary Timothy Geithner showed support for the proposal while National Economic Council director Lawrence Summers had reservations, but neither has taken a final stand on the plan, the Post said.
The newspaper said administration officials told it discussions are in the early stages and a final plan is not likely before autumn.
The internal debate over using some of the financial bailout money to help small business comes as market confidence in the stabilization of the economy has weakened, and rising concern about continued job losses.
President Barack Obama and Democrats are trying to fend off criticism from Republicans that a $787 billion economic stimulus is not working, and some are discussing the possibility of a second stimulus plan.
At a House of Representatives hearing on Friday, Geithner said the stimulus program was "on its expected path" in putting money in taxpayer pockets, and promised that infrastructure investments would have their "maximum effect" on the U.S. economy in the second half of the year.
Using funds from the Troubled Asset Relief Program would provide a source of already approved funds, but it could cause anger among members of Congress who approved the program to keep the financial sector from collapsing.
After 10 large banks returned $68 billion in taxpayer funds last month, the Treasury has about $127 billion in uncommitted TARP funds at its disposal.

Allen Stanford lightly regulated by Florida: newspaper

MIAMI (Reuters) - Florida regulators seldom checked the Miami operations of Allen Stanford after giving the accused fraud master unprecedented freedom to send cash overseas and sell investment securities, the Miami Herald newspaper reported on Sunday.

Beginning in 1998, the newspaper said, Stanford had clearance from Florida bank regulators to move money from a Florida office to Antigua without filing reports to government agencies and to sell certificates of deposit to wealthy investors without fraud checks.

"Over objections by the state's chief banking lawyer -- including concerns that Stanford was laundering money -- regulators granted sweeping powers never given to a private company," the newspaper said.

Now in jail, after last week being refused bail by a judge in Houston, Stanford, 59, faces criminal charges for a $7 billion Ponzi scheme involving high-yielding certificates of deposit at his bank in the Caribbean island of Antigua.

Stanford says he is innocent of the charges and that his multinational business was legitimate until the federal regulators gutted it by filing civil charges, which led to the confiscation of all his assets by a court-appointed receiver.

Stanford's Miami office was lushly appointed and one of the best producing in Stanford's company, which frequently focused on Latin American clients, according to the Miami Herald.

"There was no lawful way that office should have been opened," the newspaper quoted Richard Donelan, the state's chief banking counsel, as saying.

Donelan told the newspaper that he argued during the late 1990s that the Stanford proposal broke Florida law and substantial questions existed about whether Stanford's bank complied with laws and money laundering in the Caribbean.

After winning the right, never before granted in the state, to run a foreign trust office, Stanford sold certificates of deposit without reporting the purchases, the newspaper said, citing state and court records.

"In the first six years, the office -- known as Stanford Fiduciary Investor Services -- took in $600 million from customers, state records show," according to the newspaper.

The newspaper said that the Miami offices, unlike other Stanford companies elsewhere in the United States, bypassed rules requiring regular reports to officials of the amounts of money sent overseas.

"In fact, employees shredded records of the trust agreements and (certificate of deposit) purchases once the original documents were sent to Antigua, state records show," the newspaper said.

State examiners visited the Stanford office three times over the past 10 years, the newspaper said.

An official of Florida's Office of Financial Regulation was not immediately available on Sunday to respond to the newspaper story, but the Herald said officials at agency had refused to comment other than to say they were reviewing the 1998 decision.

Disney worker dies in Florida monorail collision

MIAMI (Reuters) - A Walt Disney World employee died on Sunday in a collision of monorail trains carrying tourists at the theme-park complex in central Florida, according to a theme park spokeswoman.

The futuristic elevated trains collided near the entrance to the sprawling resort's Magic Kingdom park around 2 a.m. Eastern time, according to spokeswoman Zoraya Suarez.

Details of injuries were not immediately available, she said, though local media reported no tourists were seriously injured. The cause of the crash was being investigated, according to local police.

Disney World, a unit of the Walt Disney Co, has closed the monorail system used to carry tourists to parks and hotels, but otherwise was operating normally, according to Suarez and Mike Griffin, a vice president at the resort

Schwarzenegger signals key budget concession

SAN FRANCISCO (Reuters) - Governor Arnold Schwarzenegger, optimistic California can finish its budget negotiations in a few days, is willing to reconsider his proposed cuts to education in hopes of averting a cash crisis, the San Francisco Chronicle said on Saturday.

A compromise between the Republican governor and Democratic lawmakers may help clear the way for an agreement on an overdue state budget and avert a cash crisis for the government of the most populous U.S. state. California already is issuing billions of dollars in "IOUs" and, without a deal, is on track to run out of cash this month.

The San Francisco Chronicle reported that Schwarzenegger, in a Friday meeting with its editorial board, said he would be willing to reconsider his proposal to help reduce California's $26.3 billion budget deficit with cuts to school spending that would require suspension of constitutional rules on education expenditures.

"We are not stuck ... about the suspension," Schwarzenegger said during the meeting. "We've got to analyze all this."

He said budget negotiations are moving fast. "I think if we continue this way we can get this done in the next few days," he said.

Backing off on education spending cuts would go a long way with Democrats who control the state legislature.

On Thursday Democrats said they would no longer hold out for increasing taxes to help raise revenues to fill the budget gap. That was a major concession to Schwarzenegger and Republican lawmakers, who had opposed tax hikes and pressed for balancing the state's books with deep spending cuts.

That helped Republicans gain confidence that a budget deal could be reached soon.

"I think there is at least a 50-50 chance that we'll find a solution that is acceptable to all parties within a week," Assembly Republican Leader Sam Blakeslee said.

Democrats see backing off on education spending cuts as an important concession by Schwarzenegger.

"While taxes may be off the table, education cuts also have to be off the table," Democratic state Senator Leland Yee told Reuters.

GRIM REVENUE OUTLOOK

Lawmakers failed to agree on balancing the state's budget on Tuesday and the state government began its fiscal year on Wednesday without a spending plan in place.

In response, state finance officials began issuing "IOUs" in lieu of payments for tax refunds owed to taxpayers to preserve cash from higher prior payments, including payments to investors holding the state's debt. They warned that local agencies overseeing health programs and a variety of recipients of state financial aid, including the disabled and college students, could be in line for IOUs.

The state controller plans to issue more than $3 billion this month in registered warrants promising payments if Schwarzenegger and lawmakers fail to agree on a budget

California is experiencing a severe revenue downturn as a result of the recession, rising unemployment and the lengthy housing downturn that will leave the state's government with an austere budget. It likely will force additional spending cuts throughout the fiscal year.

"The reality is that the revenues are not looking good," Yee said. "We just simply don't have the money to keep up the pace of services we're providing."

California finance officials hope a budget deal is reached soon so they can stop their IOU effort, which aims to reassure the municipal debt market that the state will honor its bond payments ahead of nearly all other obligations.

Finance officials also want to reassure the market in anticipation of having to sell short-term debt for cash-flow purposes once a budget deal is reached.

California's budget turmoil has made Wall Street nervous. Standard & Poor's warned in a statement on Wednesday that if California's budget is not settled soon, the state's A-credit rating, already the lowest of any of the 50 states, is at risk of falling.

Autopsy planned for slain NFL star Steve McNair

NASHVILLE (Reuters) - Autopsies were being performed on Sunday on the bodies of former NFL quarterback Steve McNair and a female friend who were found shot to death on Saturday in a Nashville apartment, police said.

McNair, who was 36, was shot multiple times, according to a statement posted late Saturday on the Nashville police website. Sahel Kazemi, 20, was also found dead in the living room of the condominium with a single bullet wound to her head.

A pistol was found near Kazemi's body. The police offered no possible motive for the killings, and a spokesman was not available for comment on Sunday.

A witness reported that McNair arrived at the condo early Saturday morning. Kazemi's vehicle was already parked outside, the statement said.

McNair rented the condo with sporting goods dealer Wayne Neeley, who arrived there before 1 p.m. on Saturday and found the two bodies. Neeley called a friend who came to the scene and called the police.

Two days earlier, Kazemi had been arrested in the early hours for driving under the influence. McNair was in the passenger's seat at the time of the police stop.

McNair, who played 13 seasons in the NFL, was a local hero who did extensive charity work in Nashville. He played mostly with the Tennessee Titans and its predecessor team, the Houston Oilers.

Drafted by the Oilers in 1995 out of Alcorn State College in Mississippi, McNair led the Titans to their only Super Bowl appearance, losing to the St. Louis Rams in 2000.

He was the NFL's co-MVP in 2003, and was selected for the Pro Bowl three times. McNair ended his career with the Baltimore Ravens and retired after the 2007 season.

According to local press reports, Kazemi had moved to Nashville from her parents home in Florida. She worked as a waitress at a restaurant where she met McNair.

McNair was married and had four sons, one of whom, Steven Jr., is a high school football star who has received offers to play college football

Michael Jackson drug reports prompt doctors' warning

LOS ANGELES (Reuters) - Media reports about possible drug use by pop star Michael Jackson the day he died prompted a warning from anesthesiologists on Sunday, as lawyers prepared to square-off in a courtroom battle over his estate.

Reports of prescription drug use have increasingly surfaced since the "Thriller" singer's sudden cardiac arrest more than one week ago, and a police probe is said to be focusing on the role doctors may have played in providing Jackson with at least one powerful medication, anesthetic Diprivan, according to the Los Angeles Times.

Investigators are trying to determine if the drugs, which were found in searches of Jackson's rented Los Angeles mansion, were improperly prescribed and if they had a role in the June 25 death of the "King of Pop" at age 50.

"Numerous bottles," of Diprivan without labels were found at the mansion, according to the Los Angeles Times.

Diprivan, the brand name of propofol, is an anesthetic that "should never be used outside of a controlled and monitored medical setting," the American Society of Anesthesiologists (ASA) said in a statement, noting that its members have not studied the particulars of Jackson's death.

Patients can have extremely variable responses to the drug and some patients can become completely anesthetized, including losing the ability to breathe, the group said.

Two autopsies were performed on Jackson after his death but toxicology results are not expected for weeks.

BATTLE OVER JACKSON'S ESTATE

Meanwhile, the battle over Jackson's estate was set to move forward on Monday, with a hearing scheduled in Los Angeles Superior Court between lawyers for his 79-year-old mother, Katherine Jackson, and attorneys who were named as co-executors of a Jackson will that surfaced late last week.

At stake is a fortune that an attachment to the will estimated could be worth more than $500 million, although Jackson has been reported as deeply in debt the day he died.

Katherine Jackson was granted temporary administrator of Jackson's affairs last week before the will, which names lawyer John Branca and music executive John McClain, as co-executors over the 2002 will, putting his assets in a family trust that benefits his three children, Katherine Jackson, and charities.

A separate hearing over the guardianship of Michael Jackson's children has been postponed until July 13. In the meantime, Katherine Jackson has been named temporary guardian of Prince Michael Jackson Jr. 12, Paris Michael Katherine Jackson, 11, and Prince Michael Joseph Jackson, II, 7.

About 1.6 million people have registered to be one of 8,750 people who will get two free tickets to attend Jackson's public memorial, set for Tuesday morning in downtown Los Angeles

FDA confirms E. coli found in Nestle cookie dough

WASHINGTON (Reuters) - The U.S. Food and Drug Administration (FDA) on Monday confirmed that it has found E. coli O157:H7 bacteria in a sample of Nestle Toll House refrigerated cookie dough.
The contaminated sample was collected at Nestle's facility in Danville, Va. on Thursday, the FDA said in a statement.
Nestle SA earlier on Monday announced a recall of Toll House refrigerated cookie dough, saying the FDA had found evidence of E. Coli in a production sample of a refrigerated chocolate chip cookie dough bar.
Nestle's USA's baking division said the recall did not include other Nestle toll house products or any Nestle professional cookie dough products destined for foodservice use.
On June 19, the FDA and the U.S. Centers for Disease Control and Prevention warned consumers not to eat pre-packaged Nestle Toll House refrigerated cookie dough, citing the risk of E. Coli contamination.
The warning was based on an epidemiological study conducted by the CDC and local health departments, the FDA said.
As of last Thursday, the CDC reported that 69 people in 29 states had been infected with a strain of E. Coli. Thirty-four people have been hospitalized.
The FDA said more tests were needed to conclusively link the E. Coli strain found in the cookie dough to the strain that is causing the outbreak.
E. coli O157:H7 can cause diarrhea and dehydration. Children, the elderly and people with weak immune systems are the most susceptible.

Supreme Court overrules Obama nominee in race bias case

WASHINGTON (Reuters) - The U.S. Supreme Court overruled President Barack Obama's high court nominee Sonia Sotomayor on Monday in an important race discrimination case, but the White House remained confident she would be approved.
The court's 5-4 ruling held that the city of New Haven, Connecticut, violated federal civil rights law when it threw out the results of a promotion exam which had yielded too many qualified white applicants and no acceptable black candidates.
Civil rights groups and legal experts said the ruling in the closely watched racial discrimination case could affect promotion policies for employers nationwide, many of which operate under "affirmative action" programs designed decades ago to foster diversity and redress past bias.
"This decision will change the landscape of civil rights law," Fordham University law professor Sheila Foster said. Other legal experts said the ruling rolled back 25 years of precedent.
Dividing along conservative and liberal lines, the justices overturned an earlier ruling by a three-judge U.S. appeals court panel that included Sotomayor, who is Obama's choice to replace retiring Supreme Court Justice David Souter.
"I don't foresee that...this will represent anything that would prevent her from a seat on the Supreme Court," White House spokesman Robert Gibbs told reporters.
Conservative critics seized on the decision, authored by Justice Anthony Kennedy, to demonstrate that Sotomayor was "out of sync" with mainstream legal thinking.
Senate confirmation hearings begin on July 13 and if approved she will be the top court's first Hispanic justice.
'UNTOLD' DAMAGE
The liberal judges on the Supreme Court issued an impassioned dissent to Monday's ruling.
"Congress endeavored to promote equal opportunity in fact and not simply in form. The damage today's decision does to that objective is untold," Justice Ruth Bader Ginsburg said, taking the rare step of reading her dissent from the bench.
The Supreme Court ruled in favor of a group of 19 white firefighters and one Hispanic firefighter who filed a lawsuit in 2004 against New Haven.
The firefighters said they would have been promoted if the city had not thrown out the tests for lieutenant and captain because no blacks had scored high enough to move up in rank.
It marked the first ruling by the court addressing racial discrimination in employment under Chief Justice John Roberts, who joined the court in 2005. In 2007, the court's conservative majority barred public schools from taking race into account to achieve or maintain integration.
Senator John Cornyn, one of seven Republicans on the 19-member Senate Judiciary Committee that will hear Sotomayor's nomination, said, "All nine justices were critical of the trial court opinion that Judge Sotomayor endorsed.

Obama says coup in Honduras is illegal

WASHINGTON (Reuters) - U.S. President Barack Obama said on Monday the coup that ousted Honduran President Manuel Zelaya was illegal and would set a "terrible precedent" of transition by military force unless it was reversed.
"We believe that the coup was not legal and that President Zelaya remains the president of Honduras, the democratically elected president there," Obama told reporters after an Oval Office meeting with Colombian President Alvaro Uribe.
Zelaya, in office since 2006, was overthrown in a dawn coup on Sunday after he angered the judiciary, Congress and the army by seeking constitutional changes that would allow presidents to seek re-election beyond a four-year term.
The Honduran Congress named an interim president, Roberto Micheletti, and the country's Supreme Court said it had ordered the army to remove Zelaya.
The European Union and a string of foreign governments have voiced support for Zelaya, who was snatched by troops from his residence and whisked away by plane to Costa Rica in his pajamas.
Obama said he would work with the Organization of American States and other international institutions to restore Zelaya to power and "see if we can resolve this in a peaceful way."
"TERRIBLE PRECEDENT"
"It would be a terrible precedent if we start moving backwards into the era in which we are seeing military coups as a means of political transition, rather than democratic elections," Obama said, noting the region's progress in establishing democratic traditions in the past 20 years.
Despite Obama's comments, Secretary of State Hillary Clinton said the administration was not formally designating the ouster as a military coup for now, a step that would force a cut-off of most U.S. aid to Honduras.
Under U.S. law, no aid -- other than for the promotion of democracy -- may be provided to a country whose elected head of government has been toppled in a military coup.
"We do think that this has evolved into a coup," Clinton told reporters, adding the administration was withholding that determination for now.
Asked if the United States was currently considering cutting off aid, Clinton shook her head no.
The State Department said it was unable to immediately say how much assistance the United States gives Honduras.
The State Department has requested $68.2 million in aid for fiscal year 2010, which begins on October 1, up from $43.2 million. This covers funds for development, Honduran purchases of U.S. arms, military training, counter-narcotics and health care but does not include Defense Department aid, a U.S. official said.
White House spokesman Robert Gibbs said he did not believe Obama had spoken to Zelaya since the ouster

Facebook keeps getting more like Twitter

Facebook has a new question for its users: Who do you want to tell?
The social network is revamping its publishing and privacy capabilities, giving individuals greater control about who sees the status updates, photos and messages they post on the service.
Facebook announced the new features, which are currently in beta testing, in a blog post on Wednesday. The changes provide greater control to limit who sees particular content - pictures of the kids can be viewable by a customized list of family members as opposed to someone’s broader group of Facebook friends.
But the real significance of the move may be in encouraging Facebook users to share their messages with the world at large instead of only with their group of approved group of friends.
Facebook is increasingly emphasizing the “real time” elements of its social network amid competition from microblogging service Twitter. The Twitter stream of real-time messages, viewable to everyone, have gained currency as a way to quickly find out the latest discussion about a particular topic, from the protests in Iran to the new iPhone.
Facebook’s 200 million active users and the content they constantly churn out represent a valuable source of real time news and the changes could help make that content more widely available.
With the new features, a Facebook user can elect to have each individual piece of content they upload into the news stream viewable to “Everyone,” which means that anybody on Facebook, whether or not they are logged-on, can see it.
In a separate announcement on Wednesday, Facebook unveiled a feature that will allow Web sites hosting live events, like music concerts, to incorporate real-time comments by Facebook users.
Facebook has previously experimented with such features through special partnerships, but the new which is part of the Facebook Connect program, means any Web site can now add Facebook conversations by inserting a few lines of code to their sites.

People implicitly trust social networking

"People implicitly trust social networking sites because they don't understand the real threats and dangers. It's like walking down the street and trusting everybody you meet," said Randy Abrams, a researcher with security software maker ESET.
Amy Benoit, a human resources manager in Oceanside, California, said she may stop using Facebook altogether after she became entangled in a popular scam: A fraudster sent instant messages to a friend saying that Benoit had been attacked in London and needed $600 to get home.
Yale University last week warned its business school students to be careful when using Facebook after several of them turned in infected laptops.
One of the most insidious threats is Koobface, a virus that takes over PCs when users click on links in spam messages. The virus turned up on MySpace about a year ago, but its unknown authors now focus on spreading it through Facebook, which is struggling to wipe it out.
"Machines that are compromised are at the whim of the attacker," said McAfee Inc (MFE.N) researcher Craig Schmugar.
McAfee, the world's No. 2 security software maker, says Koobface variants almost quadrupled last month to 4,000. "Because Facebook is a closed system, we have a tremendous advantage over e-mail. Once we detect a spam message, we can delete that message in all inboxes across the site," said Schmugar.
Facebook's Axten said the site does not know how many users have been infected by Koobface.
A new website that follows Facebook news, www.fbhive.com, recently identified a vulnerability that made it possible to access any user's private information using a simple hack. The loophole has since been closed.
"We don't have any evidence to suggest that it was ever exploited for malicious purposes," Axten said.
Hackers even find ways to get into accounts of savvy users like Sandeep Junnarkar, a journalism professor at City University of New York and former tech reporter. Last month he learned his account was hacked as he waited for a flight for Paris. He quickly changed his password before boarding.
"Am I surprised that it happened? Not really," he said.

Cybercrime spreads on Facebook

BOSTON (Reuters) - Cybercrime is rapidly spreading on Facebook as fraudsters prey on users who think the world's top social networking site is a safe haven on the Internet.
Lisa Severens, a clinical trials manager from Worcester, Massachusetts, learned the hard way. A virus took control of her laptop and started sending pornographic photos to colleagues.
"I was mortified about having to deal with it at work," said Severens, whose employer had to replace her computer because the malicious software could not be removed.
Cybercrime, which costs U.S. companies and individuals billions of dollars a year, is spreading fast on Facebook because such scams target and exploit those naive to the dark side of social networking, security experts say.
While News Corp's (NWSA.O) MySpace was the most-popular hangout for cyber criminals two years ago, experts say hackers are now entrenched on Facebook, whose membership has soared from 120 million in December to more than 200 million today.
"Facebook is the social network du jour. Attackers go where the people go. Always," said Mary Landesman, a senior researcher at Web security company ScanSafe.
Scammers break into accounts posing as friends of users, sending spam that directs them to websites that steal personal information and spread viruses. Hackers tend to take control of infected PCs for identity theft, spamming and other mischief.
Facebook manages security from its central headquarters in Palo Alto, California, screening out much of the spam and malicious software targeting its users. That should make it a safer place to surf than the broader Internet, but criminals are relentless and some break through Facebook's considerable filter.
The rise in attacks reflect Facebook's massive growth. Company spokesman Simon Axten said that as the number of users has increased, the percentage of successful attacks has stayed about the same, remaining at less than 1 percent of members over the past five years.
By comparison, he said, FBI data shows that about 3 percent of U.S. households were burglarized in 2005.
"Security is an arms race, and we're always updating these systems and building new ones to respond to new and evolving threats," Axten said.
When criminal activity is detected on one account, the site quickly looks for similar patterns in others and either deletes bad emails or resets passwords to compromised accounts, he said. Facebook is hiring a fraud investigator and a fraud analyst, according to the careers section of its website.
CANNOT GUARANTEE WEB SAFETY
But ultimately Facebook says its members are responsible for their own security.
"We do our best to keep Facebook safe, but we cannot guarantee it," Facebook says in a warning in a section of the site on the terms and conditions of use

Jackson's final hours puzzle doctor, family

LOS ANGELES (Reuters) - Both Michael Jackson's family and his personal physician were at pains to explain on Sunday what caused the troubled pop star's sudden death weeks before his long-awaited comeback.

Dr. Conrad Murray, who was at Jackson's side when he died, told police he did not inject the singer with painkillers before his fatal cardiac arrest on Thursday, his lawyer said on Sunday after reports he received a shot of narcotic Demerol.

When asked at Sunday's BET Awards about the care his son received from doctors in his last moments, Jackson's father, Joe, said, "I have a lot of concerns. ... I can't get into that, but I don't like what happened."

He said funeral arrangements for the King of Pop were still being discussed. A family friend said services could take place on Wednesday and the body could be buried at Jackson's famous Neverland Ranch.

Tension over the mysterious death came to the surface at the BET Awards, modified at the last minute as a tribute to Jackson's musical genius. Some stars bristled over coverage of Jackson's downward spiral during the last decade, filled with accusations of child molestation and bizarre behavior.

"He is one of our heroes," said rap artist and music impresario Sean "Diddy" Combs. "As African Americans, we are not going to let everybody beat him up."

Jackson, 50, was weeks away from an anticipated comeback with a series of 50 concerts in London. He rehearsed regularly up to the night before his death.

Concerns about his health had been rampant during his 2005 trial in California on charges of child sex abuse, of which he was acquitted. Last year, he was photographed in Las Vegas in a wheelchair.

'BARELY ATE, DRANK'

Promoter AEG Live said Jackson had passed a four-hour medical exam earlier this year.

Murray -- a cardiologist hired ahead of the concerts and paid by AEG, according to his lawyer -- was surprised to find Jackson unconscious and not breathing in his rented chateau in an upscale Los Angeles neighborhood.

"He barely ate, he barely drank. But (there was) nothing which would lead the doctor to believe that he had any possible problems that would cause sudden death," said Edward Chernoff, the attorney who accompanied Murray during three hours of police questioning on Saturday.

Los Angeles police said after questioning Murray that they do not consider him a suspect. Law enforcement sources told the Los Angeles Times the meeting revealed "no red flag" of criminal activity.

The Jackson family holed up in their L.A. compound making plans for a funeral that could take place on Wednesday, possibly at the Neverland estate in central California, family friend Stacy Brown said.

Brown told Reuters that a family source said Jackson had received an injection of the narcotic painkiller Demerol shortly before paramedics were called to the mansion.

"They have been concerned about his addiction to medicines for years," said Brown, who co-wrote the book "Michael Jackson: The Man Behind the Mask."

"It's been no family secret that they've been trying to get him help for his addiction," Brown said.

The family arranged for a second, private autopsy on Saturday after the Los Angeles coroner said it would need four to six more weeks to determine the exact cause of death.

Jesse Jackson, the civil rights leader who was with the Jackson family last week, echoed Joe Jackson's doubts about what transpired in his son's final hours.

"There is a concern about what happened the last 12 hours of Michael's life," Jackson told People magazine. "The doctor has shown some bizarre behavior."

Jackson is survived by three children aged 12, 11 and 7, the first two from his ex-wife Debbie Rowe and the last from an unidentified surrogate mother.

Addressing speculation of a custody battle over the children, Joe Jackson said in a statement from the BET red carpet that only he and wife Katherine "have authority for our son and his children."

Howard hoping U.S. have proved worth on big stage

U.S. goalkeeper Tim Howard said he hoped the American performance at the Confederations Cup has proved his team could play on football's biggest stage.

"We hope we've opened some eyes and proven to some people we can play on a big stage," the Everton goalkeeper told reporters after the Americans lost 3-2 to Brazil in Sunday's final in Johannesburg.

"But without question it was exceedingly disappointing to lose," he added.

"Today was a tough challenge, one of the biggest and we almost had them," said defender Jay DeMerit after the U.S. let slip a 2-0 halftime lead to lose 3-2.

Landon Donovan, who scored his 40th international goal in the match, said his side had been overrun in the second half.

"It's Brazil! They are never going to lie down and they came wave after wave. We did make mistakes though and could have used the ball better. We gave it away too easily."

Donovan said the Americans were "disappointed but proud."

The U.S. lost their opening two games at the tournament but recovered in their final group game, a 3-0 win over Egypt which earned a semi-final berth.

They then scored one of their biggest ever upsets by ending Spain's long-standing winning streak and came close to another shock score in the final.

"We've really grown as a team at this tournament and proven to ourselves, the coaches and the fans that we are a really good team and we are really looking forwards to the 2010 World Cup," said striker Charlie Davies.

Winning coach Dunga also paid tribute to the runners-up.

"Since the last World Cup they have become a very competitive team. All the players are very combatitive and difficult. Their side is tactically and physically strong," said Dunga after his side retained the Confederations Cup.

Kaka says Brazil will keep feet on ground after victory

JOHANNESBURG (Reuters) - Brazilian playmaker Kaka says the squad have learnt from the mistakes they made four years ago when they won the Confederations Cup, then headed off to the World Cup in Germany expecting to win that too.

Instead, they failed to retain the trophy they won in 2002, going out to France in the quarter-finals.

Kaka played a key role as Brazil retained the Confederations Cup on Sunday with a 3-2 comeback win over the United States and although he did not score he was named Man of the Match and also won the Golden Ball as Player of the Tournament.

Asked if the success made Brazil favorites to win the World Cup next year, he replied: "Well, we have to qualify first. We have four games left and hopefully we will qualify.

"But we must avoid any unnecessary euphoria now because after we won the Confederations Cup in 2005 our celebrations were too euphoric.

"Now we must keep very calm, but when we get together as a squad and train together for an extended period, we know what we are capable of. If we do go to the World Cup as favorites, let's hope it will be justified."

No team that has won the Confederations Cup, used as a test event for the World Cup, has gone on to lift the World Cup the following year, but Kaka said Brazil obviously had a chance of coming back and doing just that.

"We have played very well here and if we do the same next year we must have a chance, but we have to keep working hard and not be carried away by this success."

According to preliminary FIFA figures, Brazil will move to the top of the their world rankings list when it is published on Wednesday, displacing Spain who have held the No.1 spot for the last year.

On Tuesday Kaka will be officially presented as a Real Madrid player for the first time following his 68.0 million euros ($98 million) transfer from AC Milan. He said he was delighted to be moving to his new club with a new trophy.

Although delighted with Brazil's win, he thought he should have been credited with a goal after an hour when his header appeared to cross the line before being caught by U.S. keeper Tim Howard.

"It would have been fantastic to have scored a 'legal' goal he said. "But FIFA should see what can be done to improve these situations. It would have been very important to score this goal, but we won in the end, so that is okay."

Brazil fight back to sink U.S. in Confederations Cup final

JOHANNESBURG (Reuters) - Holders Brazil fought back from 2-0 down with three second-half goals to beat the United States 3-2 and win the Confederations Cup for the third time in an entertaining final Sunday.

The U.S., who shocked Spain in the semis, looked set to complete an even greater upset when goals by Clint Dempsey and skipper Landon Donovan put them 2-0 ahead at halftime.

U.S. goalkeeper Tim Howard produced several good saves before striker Luis Fabiano took his tournament tally to five just after the restart and he equalized with a header.

Brazil captain Lucio completed his side's stunning recovery when he rose superbly to power home an Elano corner six minutes from time.

The match was a fitting climax to an outstanding tournament which provided shocks, excellent football and noisy crowds, auguring well for next year's World Cup finals in South Africa.

The U.S. stunned Brazil by taking the lead with a fortuitous goal by Dempsey.

He connected with Jonathan Spector's cross and although he did not get a perfect touch the ball sped past Julio Cesar.

Astonishingly, the Americans doubled their lead after 27 minutes.

Donovan started the move deep in his own half when he found Ricardo Clark who broke down the left before sending a perfect cross back to Donovan.

His first touch wrong-footed Ramires, creating an opening for the striker who switched the ball to his left foot and cracked it past Julio Cesar for his 40th international goal in his 114th match.

PREVIOUS MEETINGS

Brazil had beaten the U.S. 14 times in 15 previous meetings but keeper Howard kept the outsiders firmly in control with a number of fine saves.

Brazil had the majority of the possession but rarely threatened until a minute after the restart when Luis Fabiano turned and shot through the legs of a defender in one movement.

Brazil twice went close to an equalizer, Howard pulling off an excellent diving save from a Lucio header and getting lucky when Kaka's downward header looked to have crossed the line before the keeper held on to it.

But he was not quite as fortunate the next time Brazil hit the bar.

Iraq ready to handle security without U.S.

BAGHDAD (Reuters) - Iraq's Prime Minister Nuri al-Maliki said Saturday that the withdrawal of U.S. combat forces from Iraqi cities at the end of June showed Iraq can handle its own security, despite a wave of bombings this week.

The U.S. pullback from Iraq's urban centers scheduled to be finished at the end of the month has been seen as a milestone on Iraq's road to sovereignty after years of military occupation.

But a spate of bombings in the capital and in northern Iraq this week, including two of the bloodiest attacks in more than a year, have shaken the confidence of Iraqis in their own forces.

"We are on the threshold of a new phase that will bolster Iraq's sovereignty," Maliki said. "It is a message to the world that we are now able to safeguard our security and administer our internal affairs."

Two big bombings in Baghdad and the northern Iraqi city of Kirkuk this week killed more than 150 people between them. On Friday, a bomb killed at least 13 people at a market in Baghdad. A spattering of other bombs has also fueled apprehension.

U.S. and Iraqi officials have warned they expect the number of attacks to rise as the U.S. troops pull back, and also in the run-up to parliamentary elections next January.

"We have high trust in our security forces to administer security and pursue al-Qaeda remnants and criminal gangs," Maliki said.

He added that Iraq had achieved comparatively good levels of security, not just through better policing but efforts at political reconciliation between Iraq's divided factions -- something his critics often accuse him of dragging his feet on.

"If they (militants) want to bring down the political process, we say, it won't collapse, unless national unity is shaken," Maliki said.

(Reporting by Khalid al-Ansary; Writing by Tim Cocks)

U.S. reverses Afghan drug policy

TRIESTE, Italy (Reuters) - Washington is to dramatically overhaul its Afghan anti-drug strategy, phasing out opium poppy eradication, the U.S. envoy to Pakistan and Afghanistan told allies on Saturday.

Richard Holbrooke, attending a G8 conference on stabilizing Afghanistan, also discussed efforts to support its August 20 election. Washington has nearly doubled its troops to combat a growing Taliban insurgency and provide security for the vote.

"The Western policies against the opium crop, the poppy crop, have been a failure. They did not result in any damage to the Taliban, but they put farmers out of work," Holbrooke told Reuters after a series of bilateral meetings in Italy.

"We are not going to support crop eradication. We're going to phase it out," he said. The emphasis would instead be on intercepting drugs and chemicals used to make them, and going after drug lords.

He said some crop eradication may still be allowed, but only in limited areas.

Afghanistan supplies more than 90 percent of the world's heroin.

Despite the millions of dollars spent on counter-narcotics efforts, drug production kept rising dramatically until last year -- U.N. figures indicate Afghanistan's opiate output has risen more than 40-fold since the 2001 U.S.-led invasion.

Italian Foreign Minister Franco Frattini said Holbrooke told delegates the United States planned to cut back funding for eradication while allocating several hundred million dollars to support legal crop cultivation.

The head of the U.N. Office of Drugs and Crime, told Reuters the old U.S. eradication strategy had been "a sad joke."

"Sad because many, many Afghan policemen and soldiers ... have been killed and only about 5,000 hectares were eradicated, about 3 percent of the volume," Antonio Maria Costa said.

Iran declined to attend the event but Antonio Maria Costa, head of the U.N. Office of Drugs and Crime, told Reuters it was strongly committed to a regional effort to tackle trafficking from Afghanistan and had begun joint counter-narcotics operations with Afghan and Pakistani authorities.

"This is very new, it has not happened in the past."

U.S. President Barack Obama has put Afghanistan and Pakistan at the center of his foreign agenda and launched a new strategy aimed at defeating al Qaeda and stabilizing Afghanistan.

The 45 nations and multilateral organizations at the conference issued a statement pledging to look at ways to boost humanitarian aid to Pakistan, where nearly 2 million people have been displaced by fighting.

Holbrooke said allies were not doing enough.

He reportedly sent moving vans to empty his son's mansion in the upscale Holmby Hills neighborhood, concerned that items would be stolen. The singer's younger sister, Janet, spent several hours at the estate, which city records show is worth $20 million and owned by a trust linked to apparel mogul Herbert Guez.

Jackson's parents, siblings and three young children were in seclusion at the family compound in the Los Angeles suburb of Encino, as distraught fans from around the world gathered outside its brick walls.

Jackson's body is being held at an undisclosed mortuary after the coroner returned it to the family on Friday evening. Funeral plans have not been announced.

"We need something where we can mourn and celebrate his life, say our goodbyes," said Donna Green, a 44-year-old resident of Las Vegas who once ran a Jackson fan club.

(Additional reporting by Laura Isensee and Dean Goodman; Editing by Will Dunham)

Doctor queried in Michael Jackson death, 2nd autopsy held

LOS ANGELES (Reuters) - Los Angeles police on Saturday again questioned Michael Jackson's doctor, while the family of the pop music icon ordered its own private autopsy two days after his death shocked fans around the world.

Jackson's father issued a statement urging fans not to despair because the singer "will continue to live on in each and every one of you."

The family sought a second autopsy -- the official one was conducted on Friday -- amid reports about the 50-year-old singer's reliance on prescription medications.

Jackson's personal physician, Texas cardiologist Dr. Conrad Murray, who was with the singer when he collapsed at his rented mansion on Thursday, hired an attorney to accompany him to what was expected to be a lengthy meeting with the Los Angeles Police Department late on Saturday.

"Dr. Murray is considered to be a witness to the events surrounding Michael Jackson's death and he is not a suspect," Houston law firm Stradley, Chernoff & Alford said in a statement.

"Dr. Murray hired legal counsel to help guide him through the police investigation process. The law firm was hired to make sure the police investigation is conducted properly."

An LAPD spokeswoman said she had no updates on the meeting, three hours after it was scheduled to begin.

According to media reports, Jackson was injected with the narcotic painkiller Demerol shortly before he went into cardiac arrest. Murray was desperately trying to revive Jackson when paramedics arrived, and he rode with the singer in an ambulance to the hospital where the pop star was pronounced dead.

The official autopsy, conducted on Friday, failed to determine what killed Jackson, pending toxicology tests that were expected to take up to six weeks. Such tests could reveal the presence of drugs in his system.

The celebrity website TMZ.com, which first broke the news of Jackson's death, reported that the second autopsy took place at an undisclosed location in Los Angeles on Saturday afternoon, on the orders of the Jackson family.

'DID HE INJECT HIM?'

The Rev. Jesse Jackson, who has been serving as a spokesman for the singer's family, told ABC News the family also had questions for Murray. Jackson is not related to the singer's family.

"When did the doctor come? What did he do? Did he inject him? If so, with what?" he said in an interview with ABC.

Michael Jackson's father, Joseph, issued a statement through People magazine, calling his son's death "one of the darkest moments of our lives."

He added: "We miss Michael endlessly, our pain cannot be described in words. ... But please do not despair, because Michael will continue to live on in each and every one of you