Clinton urges states to cut ties with Syria

US Secretary of State Hillary Clinton has urged all countries to cut their political and economic ties with Syria.

She said buying oil and gas from Syria and exporting arms there were giving President Bashar al-Assad "comfort in his brutality".

Clinton's comments came as large anti-government protests continued despite a harsh army crackdown.

Activists said at least 16 people died on Friday as protesters came under fire in towns and cities across the country.

More than 1,700 people have died and tens of thousands have reportedly been arrested since the uprising against the 41-year rule of Assad's family began in March. Correspondents say there is little the US can do to directly pressure the Syrian regime, with which it has few ties or shared interests.

So Washington has been stepping up the pressure on Europe, Russia and China, to use the leverage that they do have, and on Friday Clinton extended the pressure to all those with ties to Damascus. "We urge those countries still buying Syrian oil and gas, those countries still sending Assad weapons, those countries whose political and economic support give him comfort in his brutality, to get on the right side of history," she said.

British police defend handling of crisis

Police chiefs have defended their handling of this week's riots despite criticism from the prime minister.

England's Association of Chief Police Officers President Sir Hugh Orde rejected suggestions that the restoration of calm was due to political intervention.

Acting Met Police commissioner Tim Godwin said comments were being made by people "who weren't there".

British Prime Minister David Cameron said police did make mistakes over numbers and tactics - but also praised the bravery of officers.

Godwin denied police had been too "timid" in their initial response to the riots on Saturday - but he said that "if police officers had the benefit of hindsight as foresight, we would obviously do things slightly differently".

Ministers and police chiefs have clashed over who was responsible for bringing about a surge in police numbers on the streets of London from 6,000 on Monday to 16,000 on Tuesday.

British police defend handling of crisis

Police chiefs have defended their handling of this week's riots despite criticism from the prime minister.

England's Association of Chief Police Officers President Sir Hugh Orde rejected suggestions that the restoration of calm was due to political intervention.

Acting Met Police commissioner Tim Godwin said comments were being made by people "who weren't there".

British Prime Minister David Cameron said police did make mistakes over numbers and tactics - but also praised the bravery of officers.

Godwin denied police had been too "timid" in their initial response to the riots on Saturday - but he said that "if police officers had the benefit of hindsight as foresight, we would obviously do things slightly differently".

Ministers and police chiefs have clashed over who was responsible for bringing about a surge in police numbers on the streets of London from 6,000 on Monday to 16,000 on Tuesday.

S&P under fire for downgrading America

It was a humbling moment for America, and the decision by Standard and Poor's to strip the country of its triple-A credit rating on August 5 came at a particularly sensitive time.

Furious Obama administration officials immediately attacked the ratings agency and the criticisms increased on August 8, the first trading day following S&P's announcement, when the Dow Jones Industrial Average plummeted by 5.5 percent.

Was S&P justified? This matters for the downgrade as well as the downgraded. The reputations of ratings agencies are still stained by their gross overstating of the quality of mortgage-backed bonds before the credit crisis.

The most extreme criticism is that S&P and its peers should not really be in the business of rating the American Government anyway.

A credit rating is far less relevant to Treasury bonds than it is to, say, a corporate bond. The United States Government has ample taxing power to repay its bonds, and its central bank, like that of any country that controls its own currency, can as a last resort simply print the money needed, albeit at the risk of inflation.

As if to underline the point, yields on US Treasury bonds actually fell in the days after the downgrade, as investors fled to them as a haven. All true, but the basic fact is that credit ratings are useful for investors: if the likes of S&P did not exist, the market would invent them. No matter how much Barack Obama huffs and puffs, a ratings agency's job is to rate bonds, including government ones, and to speak out when it thinks the least risky asset in the world has become riskier. So did S&P get it right?

Gravity

The gravity of its announcement was not helped by some dodgy analysis. Before releasing its report, S&P notified the Treasury Department, which soon discovered that the firm had overstated cumulative deficits by some $2 trillion, inflating the debt by eight percent of GDP in 2021. S&P corrected the error but went ahead with the downgrade, revamping the announcement to elevate politics as a main rationale for the move.

Critics say the timing was odd too. Under the deal between Obama and Congress to raise America's debt ceiling, a panel has to come up with deficit-reduction plans which Congress must accept or reject by December 23; if the panel fails to agree or Congress rejects its proposal, automatic spending cuts are triggered in 2013. Moody's and Fitch, the two main rival agencies, have for now given America the benefit of the doubt. Yet, as flawed a messenger as S&P is, its message should still be heeded. Even after cleaning up its maths, it concluded that America's debt was rising unsustainable as a share of GDP, in contrast to other AAA-rated countries such as Britain and Germany that have put in place plans to stabilise that ratio. (A similar rationale explains why Moody's has a negative outlook on America's rating.)

As for the timing, the debt deal in Congress just before the downgrade was plainly inadequate. It focuses its cuts on discretionary spending, which future legislatures can too easily override.

More durable deficit reduction means reforming both the tax system and entitlements such as pensions and healthcare for the elderly. And there is no guarantee that Congress will allow the deal's spending cuts to occur.

Above all, S&P's verdict is based on the uselessness of America's politicians: both their inability to deal with the budget and their vividly displayed political brinkmanship. S&P argues that America's policy-making has become less predictable and its finances less manageable. The threat of default, previously unthinkable, is now a bargaining chip in Washington. This is not how an AAA-rated country behaves. S&P did America a favour by pointing this out.