IMF Issues $2.3trn Warning Over QE's End

By Ed Conway, Economics Editor, In Washington

Investors could be facing a potential loss of $2.3trn (£1.44trn) if the world's central banks cannot smoothly unwind the emergency measures carried out during the financial crisis, the International Monetary Fund (IMF) has warned.

For the first time, the Fund put a number on the potential impact of a messy end to quantitative easing, as central banks, led by the Federal Reserve, bring their unconventional monetary measures to an end.

The calculation comes on the very day President Obama is to nominate Janet Yellen as the first female head of the Fed, the US central bank.

Yellen comes into the job with the Fed on the brink of bringing its latest phase of quantitative easing, under which it has been creating money and buying up $85bn (£53bn) of bonds each month, to an end.

In its Global Financial Stability Report, the IMF warned that if investors took fright at the end of QE, pushing up the interest rates on government bonds around the world by a percentage point, investors would suffer a 5.6% loss on their bond portfolios – equivalent to $2.3trn.

This equates to more than half the losses on assets faced during the height of the financial crisis.

Although the Fund said that such an outcome was less likely than a smooth, gradual increase in interest rates, which would not imply as great losses, its warning comes amid consternation at the scale of the task for the Fed – and indeed other central banks including the Bank of England – in the coming years.

Ms Yellen's nomination brings to an end one of the most testy and public appointment processes for a Fed chairman in history.

The other front-runner for the job, former Treasury Secretary Larry Summers, withdrew last month after it emerged that, although he was favoured by President Obama, he was unlikely to get Congressional approval.

Ms Yellen, deputy to the current Fed chairman, Ben Bernanke, was widely seen as the favoured choice of economists – but the President had been less enthusiastic.

Her four-year term is likely to be among the most testy in Federal Reserve history, as the central bank attempts to deflate the bond bubble created around the world by quantitative easing.

In the wake of the crisis, the Fed and its fellow central banks pumped trillions of dollars worth of cash into the financial system.

This is thought to have lessened the immediate pain of the recession; however, economists fear it will be difficult to wean markets off the sugar high created by this money.

Ms Yellen, who is married to Nobel laureate George Akerlof, will become the first female chair since the Fed was created a century ago.

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UK Tibetan Monk 'Stabbed To Death' In China

By Mark Stone, China Correspondent in Beijing

A Tibetan Monk with British citizenship has been murdered in the Chinese city of Chengdu.

Choje Akong Tulku Rinpoche, 73, was well known within the Buddhist community.

The founder of the first Buddhist monastery in Britain, he was killed in a residential district of the western Chinese city on Tuesday, according to a statement by local police.

It claimed the monk was with his nephew and a driver when they were involved in a dispute over money.

All three were stabbed to death. The perpetrators, also said to be Tibetan, have been arrested.

"Following a verbal dispute between the two sides, the three suspects stabbed the three victims to death with knives they were carrying," the police statement read.

"They went to the victims home to negotiate at 11am on the day of the case. The two parties had a verbal quarrel and fight. Three suspects then stabbed the three victims.

"After the arrest, the three suspects confessed the killing of the three victims. This criminal case is undergoing investigation at the moment."

Akong founded the Samye Ling Monastery on the banks of the River Esk in Scotland in 1967.

His younger brother is the abbot of the monastery and released a statement on its website.

"To all dear friends of Samye Ling and Choje Akong Tulku Rinpoche, I am very, very sorry to inform you all that tragically, my brother Choje Akong Rinpoche, my nephew and one monk who was travelling with them, were all assassinated in Chengdu," it read.

"Rinpoche's body has been taken to hospital where a post mortem will be carried out. That is all the news I have so far. If I receive further news I will let you know."

Sky News understands that UK consular officials, likely to be based at the British consulate in Chongqing, are currently trying to establish the facts of the case in Chengdu.

The British Foreign Office in London has confirmed the death of a British national but has not identified the victim.

According to the victim's brother in Scotland, Abbot Lama Yeshe Rinpoche, the Dalai Lama, Tibet's spiritual leader, has been informed of Akong's death. He is understood to have known the victim.

Akong was born in 1940 and fled to India following the Chinese occupation of Tibet.

In 1980 he founded ROKPA International, described on its website as a humanitarian aid organisation.

Part of his role in the organisation was to expand humanitarian visits to Tibetan areas of China and Nepal.

It is not clear if he was on such a visit when he was killed.

In order to sustain his humanitarian work, Akong managed to maintain unusually stable relations with the Chinese government.

He is credited for seeing the opportunities presented by China's 'open-door policy' of the 1990s. This allowed him to visit China freely.

In 1992, he was a key figure in choosing the person who could succeed the Dalai Lama.

With the agreement of Beijing, Akong brought Apo Gaga, then seven years old, from a remote village to the Tsurphu Monastery near Lhasa where he was installed as the 17th Karmapa Lama - the second most important figure in Tibetan Buddism after the Dalai Lama.

The Kamapa Lama later fled Tibet for India amid concerns that Beijing was using him for their own political gain.

In June 2011, British Home Secretary Theresa May honoured Akong for his role in the contribution that refugees have made to British society in the 60 years since the UN Refugee Convention was formed.

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NY Biker Brawl: Undercover Cop Charged

An undercover police officer is due to appear in court to face riot and criminal mischief charges after a New York biker brawl.

Wojciech Braszczok was apparently seen on a video hitting and kicking a car whose owner was allegedly attacked by a group of motorcyclists.

The driver, Alexian Lien, was pulled from his Range Rover last month and assaulted after hitting a motorcyclist when a biker rally spiralled into violence.

Braszczok's lawyer said on Monday that the detective, a 10-year veteran of the city's police force, had only witnessed other bikers attacking the vehicle.

But investigators apparently discovered video evidence showing him punching an already damaged back window, then twice kicking the side of the SUV before leaving the scene.

The SUV ran over one of the bikers

The officer surrendered on Tuesday, according to police.

Meanwhile, another man has been arrested in connection with the fight.

Police detained Clint Caldwell on gang assault and other charges. He is the sixth person arrested following the September melee.

NYPD internal affairs investigators had initially been looking into Braszczok's conduct because he did not report until three days later that he had been at the rally.

The expectation that police officers will act if they see crimes is not the same for undercover officers.

The encounter, captured partly on a helmet-mounted video that was posted online, began when about two dozen riders slowed down, swarming the SUV after it bumped a biker on the West Side Highway.

Some riders dismounted and approached the SUV, and police said some bikers began damaging it.

Mr Lien took off running over motorcyclist Edwin "Jay" Mieses Jr. The impact broke Mieses' legs and caused spinal injuries that may leave him paralysed.

Mr Lien's wife has said he feared for their lives and the safety of their two-year-old daughter and had no choice but to flee. Mr Lien has not been charged with any crime.

The bikers pursued the SUV, which left the highway and got stuck in traffic.

One biker used his helmet to shatter the driver's window, and others pulled Lien out and beat and kicked him, police and prosecutors said. Mr Lien needed stitches.

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Great White Shark That Couldn't 'Seal' The Deal

For a heart-stopping moment a seal was inches from being crushed in the jaws of a great white shark off the South African coast.

But the plucky creature evaded a gory death after balancing on the shark's snout and slipping back into the sea.

The death-defying moment was captured by wildlife photographer David Baz Jenkins.

Jenkins, 41, from Dublin, said a colony of seals were making their way back to Seal Island after feeding out at sea when the shark moved in.

The seal makes his great escape. Pic: David Baz Jenkins/Caters

Seal Island, in False Bay, is home to a huge number of cape fur seals whose main predator is the great white.

This seal may have been lucky but hundreds of pups fall prey to shark attacks every year.

Great whites can be up to 20ft (6m) long and weigh up to 5,000lbs (2,268kg).

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Alitalia Could Be Grounded Over Unpaid Bills

Italian airline Alitalia is running the risk of being refused fuel for its planes as the company battles to secure its future.

Alitalia, which employs 14,000 staff, has been told by Italian provider ENI that its taps will be turned off unless unpaid fuel bills are settled.

The airline, which has a mountain of debt, is trying to raise £85m from shareholders as part of efforts to shore up its finances.

ENI's chief executive Paolo Scaroni said the firm "cannot provide credit to a company whose future seems no longer assured.

"If Alitalia doesn't get the support of its shareholders, we cannot keep it alive with our gas," he warned.

The investor vote is scheduled for Monday October 14 while Italian authorities work to find a solution with the prospect of receivership looming large.

Talks, which have included the country's prime minister, have yielded nothing so far and a decision may be taken by aviation authorities in the coming days on whether Alitalia is a viable company.

Alitalia has not made a profit in years and in September posted net losses of £249m for the first half of the year.

At the same time its plea for a capital increase was met with opposition from its biggest shareholder.

Air France-KLM took a 25% stake in Alitalia in 2008 as part of a compromise after-then Italian prime minister Silvio Berlusconi blocked a proposed takeover.

Italy's current prime minister Enrico Letta has since said that decision was an error "that we are paying for today."

Air France-KLM has problems of its own - this week announcing a huge restructuring involving about 1,800 lost jobs.

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Egypt: Ousted President Morsi To Face Trial

The trial of ousted President Mohamed Morsi on charges of inciting the murder of protesters is due to start on November 4.

Morsi will stand trial with 14 other members of his Muslim Brotherhood over the killings of at least 10 protesters outside his presidential palace in December 2012, according to state news agency MENA.

The deadly clashes broke out after the Brotherhood dispersed a sit-in by secular-leaning opponents.

They had gathered to oppose a temporary decree passed by Morsi placing his decisions beyond judicial review.

Morsi's predecessor Hosni Mubarak is also on trial

The deaths came almost six months before Morsi was deposed in a military coup in July.

Morsi, who became Egypt's first democratically elected president, has been detained in a secret location since.

Following his departure, security forces launched an extensive crackdown on his supporters that has resulted in more than 1,000 deaths. The Muslim Brotherhood has also been banned.

Hundreds of Islamist loyalists were killed on August 14 when security forces broke up two protest camps set up by Morsi supporters in Cairo.

Many of the Brotherhood's leadership, including Supreme Guide Mohamed Badie, are standing trial on other charges.

Western mediators including EU foreign policy chief Catherine Ashton had demanded Morsi's release as a goodwill gesture, but were rebuffed by the government which accuses the Brotherhood of "terrorism".

The movement has called for more marches on Friday to head to Tahrir Square in central Cairo, in a repeat of Sunday's protests that turned violent.

Morsi is the second Egyptian president to be charged over the killings of protesters.

His predecessor, Hosni Mubarak, is on trial for complicity in the deaths of protesters during the 18-day uprising that forced him to resign in 2011.

::  US officials say the Obama administration is poised to slash hundreds of millions of dollars in military and economic assistance to Egypt following the military coup.

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Hungarian Man Dies In China Wingsuit Jump

A Hungarian man has died while performing a 700m (2,290ft) wingsuit jump in central China.

The body of Victor Kovats was discovered in the Tianmen Mountain National Forest Park in Hunan province on Wednesday, the day after his jump, according to state broadcaster CCTV.

More than 200 rescuers spent the night searching for him.

The extreme sport involves people gliding long distances using a special jump suit.

Victor Kovats performs a jump in the Tianmen Mountain National Forest Park

Reports suggest Kovats, a three-time Hungarian national wingsuit champion, died from head injuries after crashing into a cliff-side.

State media said the death may be related to equipment failure or gusting winds.

In footage of the jump, Kovats is seen suddenly veering off course and disappearing into tree cover.

Kovats was carrying out a practice run ahead of the second World Wingsuit Championship being held in the park this weekend.

The competition's mountainous backdrop was part of the inspiration behind James Cameron's alien landscape in the Hollywood blockbuster film Avatar.

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Mexico: 13 Police Held In Kidnap Gang Swoop

Mexican authorities have arrested 13 federal police officers who were allegedly part of a kidnap and murder gang that operated in the resort of Acapulco.

The officers were detained along with five civilians - four men and a woman - who also allegedly killed some of the kidnap victims.

The gang is thought to have been involved in seven murders and four kidnappings.

The suspects were arrested on the outskirts of Acapulco after an anonymous tip, the Mexican government's national security spokesman, Eduardo Sanchez said.

"Investigations confirmed these individuals committed crimes mainly in the port of Acapulco," said Mr Sanchez, speaking in Mexico City.

"They are suspected of committing crimes against health, organised crime, homicide, kidnapping, carrying weapons used exclusively by the Armed Forces, among others.

"(Previous arrests) led to the discovery of ... graves in the hill of El Veladero in the municipality of Acapulco where three bodies were found."

The Pacific coastal tourist resort of Acapulco, which lies in the western state of Guerrero, has been hit by a wave of violence in recent years.

It is now one of Mexico's most violent cities with a murder rate of 77 homicides per 100,000 people.

The federal police have suffered various high-profile embarrassments in recent years.

In June last year a shoot-out between federal police and corrupt officers at Mexico City's airport resulted in three deaths.

A few months later 14 federal police were charged with attempted murder after opening fire on a car carrying two CIA agents outside Mexico City.

President Enrique Pena Nieto, who took office in December, has vowed to end the blood-letting by targeting crimes such as kidnapping and extortion.

Guerrero is one of the most dangerous states in Mexico with 86 reported kidnappings in the first eight months of this year - more than in the whole of 2011 and 2012, according to official figures.

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Lampedusa Tragedy: Barroso And Letta Heckled

European Commission chief Jose Manuel Barroso and Italian Prime Minister Enrico Letta have been barracked during a visit to Lampedusa where a boat carrying African asylum seekers caught fire and sank, killing up to 350 people.

Residents of the remote Italian island have long complained to the EU that they have been left alone to deal with the thousands of migrants who come ashore each year from Africa and the Middle East.

Both Mr Barroso and Mr Letta were booed and jeered by protesting islanders who shouted "disgrace" and "killers".

Up to 500 people were on the boat when it sank

"They should be ashamed of themselves. They should solve this humanitarian problem." one protester said.

Another added: "We've been living with this for 20 years. We've had enough of death. These deaths are on the conscience of Italian and EU politicians."

Mr Barroso pledged Italy would receive an additional 30 million euros (£25m) in EU funds to help improve standards at its immigrant holding centres following last Thursday's tragedy.

And Mr Letta said that Italy would hold a state funeral for the migrants who died after their boat capsized.

The coffins of the victims in an airport hangar in Lampedusa

They visited the airport hangar where the coffins of the dead have been laid out.

"That image of hundreds of coffins will never get out of my mind," said Mr Barroso.

The pair also visited the island's refugee centre which houses around 1,000 migrants, but only has 250 beds.

Some 30,000 migrants have flocked to Italy so far this year. An estimated 17,000 to 20,000 have died while crossing the Mediterranean during the past 20 years on overcrowded fishing boats or rubber dinghies, seeking a better life in Europe.

The Tunisian man suspected of being the captain of the refugee boat

Eritrea, Somalia and Syria are the main countries of origin and the majority of arrivals are on Lampedusa, Italy's southernmost point which is closer to north Africa than to the Italian mainland.

During Wednesday's visit, Mr Barroso also promised to work "tirelessly" to implement an EU-wide asylum policy and to beef up Frontex - the EU's border patrol agency - to prevent future tragedies.

Meanwhile, Italian authorities have detained a 35-year-old Tunisian man suspected of being the captain of the boat, from which only 155 refugees are believed to have survived.

He faces charges of aiding illegal immigration and multiple counts of homicide.

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Japan: Leak Contaminates Fukushima Workers

Six workers at Japan's crippled Fukushima nuclear plant have been doused with highly radioactive water after wrongly disconnecting a pipe.

The accident sent toxic water spilling on to them and the entire floor of the facility which houses a set of three units designed for water treatment. 

The workers were wearing face masks with filters, protective hazmat suits and raingear, and their exposure is believed minor but still under investigation, said Yoshimi Hitosugi, spokesman for operator Tokyo Electric Power Co (Tepco).

The workers were part of an 11-member team, and the remaining five were not splashed, he said. They managed to reattach the pipe later.

Water on the ground as workers work on clearing the leak

The accident is latest in a string of mishaps. A week earlier, workers overfilled a storage tank without fully checking water levels, and caused a leak of 430 litres (113 gallons) of contaminated water which is thought to have run into the sea.

Tepco has been battling to contain radioactive water since the plant suffered triple meltdowns and hydrogen explosions following a devastating earthquake and tsunami in March 2011.

In the latest incident, the company said a worker mistakenly detached a pipe connected to a treatment system which removes salt from the hundreds of tonnes of cooling water Tepco pumps over the melted fuel in wrecked reactors.

Tepco said seven tonnes of water were spilled in Wednesday's incident but was contained within the site.

The area where the latest Fukushima leak occurred

Masayuki Ono, Tepco's general manager, said: "At the moment we only have provisional figures, but we think the amount of water that leaked was about seven tonnes.

"We have confirmed the leak has stopped within the building and has not seeped out into the wider area."

The accidents at the Fukushima Daiichi plant, 130 miles (220 kilometres) north of Tokyo, are adding to a crisis no one seems to know how to contain, and stirring doubt over Tepco's abilities to carry out a complex cleanup widely expected to take decades.

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