Trump, Sanders ride U.S. anti-establishment tide to New Hampshire win

MANCHESTER, N.H. Republican Donald Trump and Democrat Bernie Sanders coasted to victory on a wave of voter anger in the New Hampshire presidential nominating contest, thrashing traditional U.S. politicians in a display of anti-establishment power.Sweeping wins by Trump, a New York billionaire, and Sanders, a democratic socialist, on Tuesday testified to the sizable share of American voters upset at U.S. economic conditions and willing to send a shockwave to Washington in the Nov. 8 presidential election.New Hampshire's verdict sets up a tough fight for Republicans in South Carolina on Feb. 20 and for Democrats there on Feb. 27. Some of the most monumental campaign battles in elections past have been fought in the state that holds the first primary election of the American South.For Trump, New Hampshire showed he has staying power and can take a punch after losing on Feb. 1 to Texas Senator Ted Cruz in the first contest, the Iowa caucuses. His win showed pundits were wrong to think he would ultimately self-destruct based on his penchant for insults and imprecise plans for the presidency.Democrat Hillary Clinton, the former U.S. secretary of state and former U.S. senator, now looks wounded, trailing Sanders by 60 to 39 percent based on 86 percent of the returns.The wife of former President Bill Clinton, Clinton barely won Iowa and now has been trounced in New Hampshire, where young voters liked Sanders' populist proposals to break up big banks and have the government pay for free college tuition.“People have every right to be angry but they’re also hungry, they’re hungry for solutions,” Clinton, 68, said after congratulating the 74-year-old Sanders. "I will work harder than anyone to actually make the changes that make your lives better."Clinton was headed to New York, home to her campaign headquarters, to regroup with top aides and prepare for Thursday’s Democratic debate. Her campaign has denied reports it is considering a shakeup but acknowledged it would be natural to add members to their team as the campaign progresses.Sanders said his victory showed "we have sent the message that will echo from Wall Street to Washington, from Maine to California, and that is that the government of our great country belongs to all of the people and not just a handful of wealthy campaign contributors."Some 73 percent of voters say they think the United States is on the wrong track, and these disaffected people make up a majority of the support bases for Trump and Sanders, according to a Reuters/Ipsos poll.They are worried about the economy and distrust establishment politicians they perceive as being part of the problem. SHADOW-BOXING TRUMPTrump, 69, who has campaigned to deport illegal immigrants and temporarily ban Muslims from entering the United States, was in first place with 35 percent of the vote on the Republican side based on 88 percent of returns.At his victory rally, Trump dispensed with niceties. He congratulated other candidates in the race but promised to soon return to his pugnacious approach. "Tomorrow: boom, boom," he said, shadow boxing while his supporters cheered.The New Hampshire Republican race did little to clear up confusion about who would emerge as the establishment contender to Trump on the Republican side.Ohio's Republican governor, John Kasich, won a spirited fight for second place in New Hampshire, with Cruz, former Florida Governor Jeb Bush and U.S. Senator Marco Rubio of Florida fighting for third place. All four were headed to South Carolina. Bush, the son and brother of former presidents, lived to fight another day, making something of a comeback after a strong debate performance and solid weekend of campaigning. “While the reality TV star is doing well, it looks like you all have reset the race," Bush told supporters. "This campaign is not dead. We're going on to South Carolina."Rubio failed to dispatch Bush, seeing a drop in his support after a debate on Saturday in which he drew criticism for repeating rehearsed lines from his stump speech."I did not do well on Saturday night - listen to this: that will never happen again," Rubio told supporters.New Jersey Governor Chris Christie, who called out Rubio for his robotic debate, fell behind the others in the voting and canceled plans to go to South Carolina, a sign he could drop out soon. DISENCHANTED VOTERSIndependent voters wield special clout in New Hampshire, second in the series of state-by-state contests that lead to the parties' formal presidential nominating conventions in July, because they can vote in either party's primary.At a polling station in Manchester, Joan and Roland Martineau said they voted for the two candidates they believed they could trust to shake things up.Joan, 68, went for Sanders. “I like this views, I like the way he speaks, I think I can trust him,” she said.Roland, 73, a registered Republican, went for Trump, a man he said was "more honest" than other candidates. But he said he would back Sanders over Trump in the general election in November.Clinton had for months been the front-runner nationally. But a Reuters/Ipsos poll done Feb 2-5 showed Clinton and Sanders now in a dead heat.Clinton campaign manager Robby Mook said in a memo that the Democratic nomination would "very likely" be decided in March, with the support of black and Hispanic voters key to victory. The next primary races are in Nevada and South Carolina later this month."It will be very difficult, if not impossible, for a Democrat to win the nomination without strong levels of support among African-American and Hispanic voters," Mook wrote. (Writing by Steve Holland and Roberta Rampton; Additional reporting by James Oliphant, Luciana Lopez, Ginger Gibson, Steve Holland, Megan Cassella, Emily Stephenson, John Whitesides, Jonathan Allen, Susan Heavey, Clarece Polke and Doina Chiacu; Editing by Howard Goller)SAP is the sponsor of this content. It was independently created by Reuters' editorial staff and funded in part by SAP, which otherwise has no role in this coverage.

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Facebook's India stumble could embolden other regulators

SINGAPORE/MUMBAI India's decision to effectively ban Facebook's pared-back free Internet service is a major blow to the social network's plans, and may prompt other regulators to demand equal online access for their users.Facebook will have to reconsider its approach in the light of India's new rules preventing Internet service providers from having different pricing policies for accessing different parts of the Web, analysts said."This is a major setback for Facebook," said Naveen Menon, lead analyst at A.T. Kearney in Singapore. "Not only because India was expected to be such a critical piece of the overall Internet.org success story, but more so because it has potential dangerous knock-on effects for the universal access initiative in other markets."Internet.org is Facebook's umbrella initiative to bring Internet access to the unconnected. Part of that is the Free Basics program, which Facebook has launched in around three dozen emerging countries. The service has been criticized outside India, too, with Facebook accused of infringing the principle of net neutrality - the concept that all websites and data on the Internet be treated equally.Critics and Internet activists argue that allowing free access to a select few apps and Web services disadvantages small content providers and start-ups that don't participate.Ram Sevak Sharma, chairman of the Telecom Regulatory Authority of India (TRAI), told Reuters he hoped its ruling would clarify ambiguity about net neutrality and "that India has set the record straight that will be followed [the] world over."In Facebook posts after Monday's ruling, founder Mark Zuckerberg said Free Basics was just one part of a larger initiative that includes solar-powered planes, satellites and lasers, and pairing with local entrepreneurs to provide wireless hotspots. Expanding these approaches with or without the operators was one option for Facebook now, as well as legal workarounds where the service is repackaged, said Martin Geddes, a UK-based telecoms consultant.Facebook could also challenge the ruling in the courts, but a more likely move, said Marc Einstein, Asia-Pacific director at Frost and Sullivan, would be to sit down with the TRAI "to try to come up with a solution that's deemed a little more neutral."Facebook executives were not immediately available for comment, but India-born Karthik Naralasetty, whose blood donor matching service Socialblood is available in more than 20 countries via Free Basics, said Facebook was already re-thinking its approach."Facebook is re-thinking what it's doing, coming up with better plans," he said by telephone. "Communications will have to improve. They have to get the buy-in of different governments before they go into those countries." FIGHT GOES ONIt won't be easy. For one thing, said Neil Shah, a director of Counterpoint Research in Mumbai, Free Basics made little headway in India before it was suspended in December, gaining 1 million users. Only 252 million of India's 1.3 billion people have Internet access.Opponents of the service said they would continue to fight."Facebook is not going to take it lying down and they will try and figure out a way for it to happen one way or the other," said Sachin Bhatia, co-founder of Indian dating app TrulyMadly. "Our job is to keep at it non-stop to ensure Internet freedom is not threatened."Regional telecoms operators which partner Facebook, such as Indonesia's PT Indosat, controlled by Qatar's Ooredoo, and Globe Telecom in the Philippines, said the ruling would not lead them to reconsider the partnerships."The Indian experience is very isolated," said Vicente Froilan Castelo, general counsel of Globe Telecom. (Reporting by Jeremy Wagstaff and Himank Sharma, with additional reporting by Ruma Paul in Dhaka, Eveline Danubrata in Jakarta and Neil Jerome C. Morales in Manila; Editing by Ian Geoghegan)

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Venezuela confirms recession, highest inflation in Americas

CARACAS Venezuela confirmed on Tuesday it had entered a recession while inflation remained the highest in the Americas, and President Nicolas Maduro's socialist government blamed political foes for the dismal data.The Central Bank said GDP contracted in each of the first three quarters: 4.8 percent, 4.9 percent and 2.3 percent. Twelve-month inflation reached 63.6 percent in November.Economists, banks and regional bodies have long forecast that the OPEC member would be the worst-performing major economy in the region this year. The central bank statement confirmed those views just before Maduro began a news conference in which he was expected to announce economic changes.Maduro, 52, won election last year to replace his mentor Hugo Chavez. He has blamed political opponents, who protested in the streets for four months this year, for damaging the oil-dependent economy. Those protests resulted in violence that killed 43 people, including protesters, security officials and Maduro backers."These actions against public order blocked the correct distribution of basic goods to the population, as well as the normal development of production of goods and services," the central bank statement said."This resulted in an inflationary spike and a fall in economic activity."Venezuela, whose last recession was from 2009-2010, may struggle to turn around its economy given the plunge in oil prices. Venezuelan crude has dropped to $48 per barrel, compared with $96 mid-year. Opponents say Venezuela's economic crisis is a consequence of 15 years of socialist policies, begun by Chavez, who ruled from 1999 to 2013 before dying of cancer."With one day of the year left, they publish the September, October and November figures. The highest in the world. Economic efficiency Nicolas! Wonderful," scoffed opposition leader Henrique Capriles via Twitter.CHANGES COMING? Venezuela had not published inflation data since August.Inflation in September was up 4.8 percent, October 5.0 percent and November 4.7 percent, compared with the same months of 2013, the bank said in its statement, which can be viewed at ( here ) The bank said Venezuela's balance of payments posted a surplus of $6.8 billion by the end of the third quarter, with a current account surplus of $899 million, and the capital account showing a deficit of $568 million. Venezuelan exports, of which oil accounts for more than 90 percent, fell 14.2 percent to $19 billion in the third quarter, while imports were down slightly, by 1.4 percent, to $12.2 billion in the same period, the bank said. Chavez-era welfare policies have long been popular among Venezuela's poor, and the bank said social indicators were all improving despite the poor GDP data. It said extreme poverty was down to 5.4 percent of households in 2014, half the level before Chavez came to power, while unemployment fell to 5.9 percent."Despite the protests and economic war during 2014, Venezuela's economic indicators have improved," Maduro said at the start of his news conference."This economic war, this fall in the oil prices, is a great opportunity for economic change. 2015 is the year of opportunity, for great change in the economic model."Many analysts are recommending reforms such as a unification of Venezuela's three-tier currency controls and a rise in gasoline prices that are the cheapest in the world. But Maduro has balked at such measures so far, perhaps wary of a social backlash prior to a crucial vote for a new parliament next year. (Additional reporting by Eyanir Chinea and Corina Pons; Editing by Peter Murphy and David Gregorio)

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Recalled cars create a costly problem for U.S. auto dealers

Honda Motor Co's (7267.T) order that its U.S. dealers stop selling some 2.2 million of the automakers' most popular models is compounding financial and regulatory headaches for car dealers stuck with millions of vehicles that have potentially hazardous air bags or other safety defects.With the recalls affecting Honda vehicles dating back several years, used-car dealers are facing increased pressure. It is legal under federal law to sell used cars with unrepaired safety defects that are subject to recall, but dealers that operate under franchises with manufacturers could be violating those agreements.It is illegal to sell new cars that are subject to a recall under federal law.Because some used-car dealers operate independently of any manufacturer, the growing number of used cars that need safety repairs is creating divisions among dealers. The National Highway Traffic Safety Administration says this difference creates a "safety loophole."John Isaacson, a Honda dealer in Auburn, Maine, said he was hit by three recalls the same day, but would respect Honda's ban. "If people are selling these with open recalls, customers get mad," Isaacson told Reuters. "Over time, it's not good for business." Regulators have taken steps to address sales of used cars subject to safety recalls. In a settlement last month with General Motors Co (GM.N) and two dealer groups, the Federal Trade Commission warned automakers and dealers not to claim that used vehicles sold as "certified pre-owned" cars had undergone comprehensive inspections if repairs required under a recall had not been done. “Companies touting the comprehensiveness of their vehicle inspections need to be straight with consumers about safety-related recalls,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement.As in Honda's case, manufacturers sometimes issue a "stop sale" on models subject to recall and can penalize their franchise dealers if they sell such cars. The head of the California New Car Dealers Association, Brian Maas, said one of his members had 15 percent of his inventory affected by the Honda recall.However, dealers outside the new vehicle franchise system, whether independents or chains such as CarMax (KMX.N), the largest U.S. used-car retailer, can sell such cars. AutoNation Inc (AN.N), the largest new vehicle dealer group in the United States, has said it will not sell a new or used vehicle that needed repairs under a recall, and Chief Executive Mike Jackson is calling on rivals to do likewise. In the meantime, Jackson told Reuters, the policy is proving costly, in part because the chain has to stock more vehicles to make up for the roughly 16 percent of inventory it cannot sell. AutoNation, with its huge network of dealerships, can "afford to do the right thing," said Kelley Blue Book analyst Rebecca Lindland. Smaller dealers need to turn cars quickly and cannot afford dead inventory.Honda has said parts to repair the Takata airbags will not be ready until late summer. CarMax says it is transparent about recalls on its used cars, including a link on each car's listing on the website to search for open recalls. Carmakers do not allow CarMax to perform recall repairs, so customers are "best positioned" to get repairs at franchised dealers after purchase, the company says. (Reporting by Alexandria Sage; Editing by Leslie Adler)

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Venezuela confirms recession, highest inflation in Americas

CARACAS Venezuela confirmed on Tuesday it had entered a recession while inflation remained the highest in the Americas, and President Nicolas Maduro's socialist government blamed political foes for the dismal data.The Central Bank said GDP contracted in each of the first three quarters: 4.8 percent, 4.9 percent and 2.3 percent. Twelve-month inflation reached 63.6 percent in November.Economists, banks and regional bodies have long forecast that the OPEC member would be the worst-performing major economy in the region this year. The central bank statement confirmed those views just before Maduro began a news conference in which he was expected to announce economic changes.Maduro, 52, won election last year to replace his mentor Hugo Chavez. He has blamed political opponents, who protested in the streets for four months this year, for damaging the oil-dependent economy. Those protests resulted in violence that killed 43 people, including protesters, security officials and Maduro backers."These actions against public order blocked the correct distribution of basic goods to the population, as well as the normal development of production of goods and services," the central bank statement said."This resulted in an inflationary spike and a fall in economic activity."Venezuela, whose last recession was from 2009-2010, may struggle to turn around its economy given the plunge in oil prices. Venezuelan crude has dropped to $48 per barrel, compared with $96 mid-year. Opponents say Venezuela's economic crisis is a consequence of 15 years of socialist policies, begun by Chavez, who ruled from 1999 to 2013 before dying of cancer."With one day of the year left, they publish the September, October and November figures. The highest in the world. Economic efficiency Nicolas! Wonderful," scoffed opposition leader Henrique Capriles via Twitter.CHANGES COMING? Venezuela had not published inflation data since August.Inflation in September was up 4.8 percent, October 5.0 percent and November 4.7 percent, compared with the same months of 2013, the bank said in its statement, which can be viewed at ( here ) The bank said Venezuela's balance of payments posted a surplus of $6.8 billion by the end of the third quarter, with a current account surplus of $899 million, and the capital account showing a deficit of $568 million. Venezuelan exports, of which oil accounts for more than 90 percent, fell 14.2 percent to $19 billion in the third quarter, while imports were down slightly, by 1.4 percent, to $12.2 billion in the same period, the bank said. Chavez-era welfare policies have long been popular among Venezuela's poor, and the bank said social indicators were all improving despite the poor GDP data. It said extreme poverty was down to 5.4 percent of households in 2014, half the level before Chavez came to power, while unemployment fell to 5.9 percent."Despite the protests and economic war during 2014, Venezuela's economic indicators have improved," Maduro said at the start of his news conference."This economic war, this fall in the oil prices, is a great opportunity for economic change. 2015 is the year of opportunity, for great change in the economic model."Many analysts are recommending reforms such as a unification of Venezuela's three-tier currency controls and a rise in gasoline prices that are the cheapest in the world. But Maduro has balked at such measures so far, perhaps wary of a social backlash prior to a crucial vote for a new parliament next year. (Additional reporting by Eyanir Chinea and Corina Pons; Editing by Peter Murphy and David Gregorio)

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