Lunsford Money

Top ten ways Warren Buffet says to get Rich

2009-12-29T17:54:00.000-08:00

1. Reinvest Your Profits: When you first make money, you may be tempted to spend it. Don't. Instead, reinvest the profits. Warren Buffett learned this early on. In high school, he and a pal bought a pinball machine to pun in a barbershop. With the money they earned, they bought more machines until they had eight in different shops. When the friends sold the venture, Warren Buffett used the proceeds to buy stocks and to start another small business. By age 26, he'd amassed $174,000 -- or $1.4 million in today's money. Even a small sum can turn into great wealth.

2. Be Willing To Be Different: Don't base your decisions upon what everyone is saying or doing. When Warren Buffett began managing money in 1956 with $100,000 cobbled together from a handful of investors, he was dubbed an oddball. He worked in Omaha, not Wall Street, and he refused to tell his parents where he was putting their money. People predicted that he'd fail, but when he closed his partnership 14 years later, it was worth more than $100 million. Instead of following the crowd, he looked for undervalued investments and ended up vastly beating the market average every single year. To Warren Buffett, the average is just that -- what everybody else is doing. to be above average, you need to measure yourself by what he calls the Inner Scorecard, judging yourself by your own standards and not the world's.

3. Never Suck Your Thumb: Gather in advance any information you need to make a decision, and ask a friend or relative to make sure that you stick to a deadline. Warren Buffett prides himself on swiftly making up his mind and acting on it. He calls any unnecessary sitting and thinking "thumb sucking." When people offer him a business or an investment, he says, "I won't talk unless they bring me a price." He gives them an answer on the spot.

4. Spell Out The Deal Before You Start: Your bargaining leverage is always greatest before you begin a job -- that's when you have something to offer that the other party wants. Warren Buffett learned this lesson the hard way as a kid, when his grandfather Ernest hired him and a friend to dig out the family grocery store after a blizzard. The boys spent five hours shoveling until they could barely straighten their frozen hands. Afterward, his grandfather gave the pair less than 90 cents to split. Warren Buffett was horrified that he performed such backbreaking work only to earn pennies an hour. Always nail down the specifics of a deal in advance -- even with your friends and relatives.

5. Watch Small Expenses: Warren Buffett invests in businesses run by managers who obsess over the tiniest costs. He one acquired a company whose owner counted the sheets in rolls of 500-sheet toilet paper to see if he was being cheated (he was). He also admired a friend who painted only on the side of his office building that faced the road. Exercising vigilance over every expense can make your profits -- and your paycheck -- go much further.

6. Limit What You Borrow: Living on credit cards and loans won't make you rich. Warren Buffett has never borrowed a significant amount -- not to invest, not for a mortgage. He has gotten many heart-rendering letters from people who thought their borrowing was manageable but became overwhelmed by debt. His advice: Negotiate with creditors to pay what you can. Then, when you're debt-free, work on saving some money that you can use to invest.

7. Be Persistent: With tenacity and ingenuity, you can win against a more established competitor. Warren Buffett acquired the Nebraska Furniture Mart in 1983 because he liked the way its founder, Rose Blumkin, did business. A Russian immigrant, she built the mart from a pawnshop into the largest furniture store in North America. Her strategy was to undersell the big shots, and she was a merciless negotiator. To Warren Buffett, Rose embodied the unwavering courage that makes a winner out of an underdog.

8. Know When To Quit: Once, when Warren Buffett was a teen, he went to the racetrack. He bet on a race and lost. To recoup his funds, he bet on another race. He lost again, leaving him with close to nothing. He felt sick -- he had squandered nearly a week's earnings. Warren Buffett never repeated that mistake. Know when to walk away from a loss, and don't let anxiety fool you into trying again.

9. Assess The Risk: In 1995, the employer of Warren Buffett's son, Howie, was accused by the FBI of price-fixing. Warren Buffett advised Howie to imagine the worst-and-bast-case scenarios if he stayed with the company. His son quickly realized that the risks of staying far outweighed any potential gains, and he quit the next day. Asking yourself "and then what?" can help you see all of the possible consequences when you're struggling to make a decision -- and can guide you to the smartest choice.

10. Know What Success Really Means: Despite his wealth, Warren Buffett does not measure success by dollars. In 2006, he pledged to give away almost his entire fortune to charities, primarily the Bill and Melinda Gates Foundation. He's adamant about not funding monuments to himself -- no Warren Buffett buildings or halls. "I know people who have a lot of money," he says, "and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you'll measure your success in life by how many of the people you want to have love you actually do love you. That's the ultimate test of how you've lived your life."

Fund Boss Made $7 Billion in the Market Crash

2009-12-22T10:35:00.000-08:00

In this comeback year for investors, David Tepper may have scored one of the biggest paydays of all.

Mr. Tepper's hedge-fund firm has racked up about $7 billion of profit so far this year—with Mr. Tepper on track to earn more than $2.5 billion for himself, according to people familiar with the matter. That is among the largest one-year takes in recent years.

Behind the wins: a bet worth billions of dollars that America would avoid a repeat of the Great Depression.

Through February and March, Mr. Tepper scooped up beaten-down bank shares as many investors were running for the exits. Day after day, Mr. Tepper bought Bank of America Corp. shares, then trading below $3, and Citigroup Inc. preferred shares, when that stock was under $1. One of his investors insisted more carnage loomed. Friends who shared his bullish beliefs were wary of aping his moves amid speculation that the government was about to nationalize the big banks

"I felt like I was alone," Mr. Tepper recalls. On some days, he says, "no one was even bidding."

The bets paid off. A resurgent market has helped Mr. Tepper's firm, Appaloosa Management, gain about 120% after the firm's fees, through early December. Thanks to those gains, Mr. Tepper, who specializes in the stocks and bonds of troubled companies, manages about $12 billion, a sum that makes Appaloosa one of the largest hedge funds in the world.

Mr. Tepper, whose office overlooks the parking lot of a Hilton hotel in Short Hills, N.J., across from an upscale mall, now is taking aim at a new target. He's purchased about $2 billion of beaten-down commercial mortgage-backed securities. Among his purchases are bonds backed by chunks of the debt of Peter Cooper Village & Stuyvesant Town and 666 Fifth Ave. in New York, two high-profile real-estate deals that have fallen in value over the past two years.

Some experts predict more bad news for commercial real estate—and say that if Mr. Tepper's move doesn't pan out, it could jeopardize a chunk of his recent gains. Mr. Tepper says he remains optimistic.

Hedge funds, once darlings of well-heeled investors, suffered dearly in 2008, dropping 19%. Nearly 1,500 funds, or 16% of the total, shuttered last year. This year, hedge funds are clawing back, with gains of 19% through November, on pace for their best annual gains in a decade, according to Hedge Fund Research Inc.

A handful of funds—including Everest Capital's emerging-market funds and the stock-focused Glenview Capital—have racked up fat gains this year. In sheer dollars, though, none appear to have come close to matching Appaloosa's winnings.

Mr. Tepper grew up in a middle-class neighborhood in Pittsburgh, the son of an accountant who worked seven days a week and once won a $715,000 lottery payout. In the late 1980s, he helped run junk-bond trading at Goldman Sachs. Mr. Tepper wears jeans and sneakers to work, and can be self-deprecating, playing down his successes. He claims to have popularized on Wall Street the phrase "it is what it is" to explain the need to adjust a portfolio if facts on the ground shift.

After he was repeatedly passed over for a partnership, Mr. Tepper left Goldman to start Appaloosa in 1993. By 2008, he had a track record of annual gains averaging about 30% and a net worth estimated at about $2 billion.

Mr. Tepper lives in a two-story home in New Jersey he bought in 1990 for $1.2 million. He recently purchased an ownership stake in the Pittsburgh Steelers football team, and flies to every home game. In 2004 he gave $55 million to Carnegie Mellon University's business school, his alma mater, which renamed itself the Tepper School of Business.

The husky, bespectacled trader laughs easily, but employees say he can quickly turn on them when he's angry. Mr. Tepper keeps a brass replica of a pair of testicles in a prominent spot on his desk, a present from former employees. He rubs the gift for luck during the trading day to get a laugh out of colleagues.

His biggest scores over the years have come from buying large chunks of out-of-favor investments. When Asian markets crumbled in 1997, Mr. Tepper added Korean stocks to a portfolio laden with Russian debt. The moves led to hundreds of millions of dollars in profits when markets rebounded two years later. He scored big on junk bonds in 2003, and his 2007 wager on steel, coal and other resource companies paid off in 2008 when commodity prices soared.

But because he sometimes places more than half of his portfolio in a single trade idea, Mr. Tepper also is prone to brutal, abrupt losses.

That approach cost him more than $1 billion last year. In January 2008, Societe General SA trader Jerome Kerviel was revealed to have lost €5 billion ($7.2 billion), one of the world's largest trading loss. Mr. Tepper sold large chunks of his holdings, fearing a market tumble. Prices held up, though, hurting Appaloosa. In the spring of last year, he turned bullish on large-company stocks and did some buying, but suffered as markets declined.

Mr. Tepper made a big wager on Delphi in 2006. But in April of last year he and a group of investors withdrew from a deal to inject as much as $2.6 billion in the bankrupt auto-parts supplier, sparking a nasty legal battle that was resolved this summer. Appaloosa lost almost $200 million on its investment in Delphi.

Mr. Tepper's largest fund dropped 25% for 2008, worse than the industry's 19% average decline.

"Investing with David is like flying, with hours of boredom followed by bouts of sheer terror," says Alan Shealy, a client of more than 18 years. "He's the quintessential opportunist, investing in any asset class, but you have to have a cast-iron stomach."

Mr. Tepper entered 2009 cautiously, with more than 30% of his firm's assets in cash, or more than $2 billion. He itched to do some buying. Mr. Tepper explains his investment philosophy with a line from Allan Meltzer, a professor at his alma mater: "Trees grow." In other words, growth is the natural state of economies, so optimism usually is rewarded.

On Feb. 10 of this year, Mr. Tepper read that the Treasury Department was introducing the so-called Financial Stability Plan. It included a commitment by the government to inject capital into banks by buying their preferred stock, or shares that carry less chance of reward but also less risk than common stock.

At the time, investors worried that the government ultimately would have to nationalize big banks. U.S. officials said they had no intention of such a move, which could wipe out common shareholders, but investors were dubious.

The news from the Treasury Department struck Mr. Tepper as proof that the government would stand behind the banks. He directed his traders to begin buying bank stock and debt.

Few investors were feeling as optimistic. The Dow Jones Industrial Average fell more than 382 points on the day Treasury Secretary Timothy Geithner introduced the plan, nearly 5%. Bank shares continued to tumble in the days that followed. Bank of America shares fell as low as $2.53 on Feb. 20. By March 5, Citigroup traded as low as 97 cents.

"This is ridiculous, it's nuts, nuts, nuts!" Mr. Tepper recalls saying to Michael Lukacs, one of his partners, on the firm's small trading floor. "Why would the government break its word? They're not going to let these banks go under, people aren't being logical!"

Mr. Tepper huddled with Mr. Lukacs and Jim Bolin, another top Appaloosa executive. Mr. Tepper insisted that stimulus spending and low interest rates would boost the economy. He said he estimated there was only a 20% chance that the U.S. would nationalize banks such as Citigroup.

Mr. Bolin, who people at the firm say tends to be more conservative than Mr. Tepper, was bullish about banks, but still thought it safer to stick to bank debt than to riskier shares. Mr. Tepper says he listened to the arguments, but said it was time to place a big bet.

Over several weeks, Mr. Tepper's team bought a variety of bank investments, including debt, preferred shares and common shares. Just months earlier, the government had injected billions of dollars to keep companies such as American International Group Inc. going, much as they were now doing with the banks. But that didn't prevent shares of those companies from tumbling.

At one point in March, the firm was down about 10% for the year, or about $600 million. Mr. Tepper got on the phone to make more trades, something he often left to subordinates. This time, he wanted to talk directly to Wall Street brokers to test how bad things really were.

The answer: really bad. Mr. Tepper says he was told that he was the only big investor doing much buying.

"Clients were nervous that the game had changed and capitalism wouldn't be the same. There was real fear," recalls Timothy Ghriskey, chief investment officer at Solaris Asset Management, a $2 billion investment firm, who says he only bought a small amount of bank shares during this period.

One day in late winter, Mr. Tepper heard from a skeptical client of his own, Mr. Shealy.

"This thing is far from over," Mr. Shealy recalls saying, referring to the bank problems. Still, Mr. Shealy, who runs an investment firm in Boise, Idaho, stuck with Mr. Tepper. "I figured the positions were fairly liquid, so if he was wrong, he would get out."

Mr. Tepper hadn't paid his investors' nerves much heed since 2000. That year, he bet that the tech-heavy Nasdaq index would fall. But so many investors complained that Mr. Tepper was straying from his roots in debt investing that he canceled his bets. When the Nasdaq collapsed months later, Mr. Tepper fumed.

By late March of 2009, Citigroup shares had tripled, and Mr. Tepper's other holdings, including junk bonds, were rising. He and his team bought more, spending more than $1 billion, when various banks conducted share sales. Mr. Tepper says his average cost for shares of Citigroup was 79 cents; for Bank of America it was $3.72.

At one point in the summer, Mr. Tepper had recorded about $1 billion of profits in shares of just Citigroup and Bank of America, and his overall gains soared past $4.5 billion, or 70%, since January.

After Mr. Bolin, the Appaloosa executive, urged caution, Mr. Tepper did some selling to lock in gains. But the firm remains a big holder of both Bank of America and Citigroup shares, which now trade at $15.03 and $3.40, respectively.

Mr. Tepper remains upbeat. He says he expects interest rates to stay low, and argues that stocks and bonds are reasonably priced.

This belief is driving another risky bet. At the end of each quarter this year, Mr. Tepper noticed that investors were dumping holdings of troubled bonds backed by commercial properties. He had never dabbled in these investments, but he and his 10-person team did some research and judged them attractive, with some seemingly safe debt trading at yields above 15%.

Mr. Tepper slowly spent more than $1 billion to gain ownership of between 10% and 20% of highly rated slices of commercial mortgage-backed securities, or CMBS. He focused on debt backed by loans of properties including Stuyvesant Town and 666 Fifth Ave. in New York.

His bet: If the economy improves, he'll earn hefty interest payments on the bonds. But if the properties can't make their payments, Mr. Tepper believes he owns so much of the debt that he'll have a big say in how the properties get restructured. That means he could ultimately end up ahead.

He's taking a big risk, some analysts warn. The value of commercial real estate continues to fall. Owners of debt classes don't always have much power to influence a commercial real-estate restructuring. And because the debt of these big properties was carved into many pieces, and many investors are involved, any battle for control will be complicated.

Mr. Tepper says the worrywarts have it wrong: "If you think the economy will be fine, as we do, then we're going to do very well."

from the wall street journal

The smile pockets a rattling controversy.

2009-11-16T09:27:00.000-08:00

The smile pockets a rattling controversy.

WWE(R) Reports 2009 Third Quarter Results

2009-11-05T13:27:00.000-08:00

STAMFORD, Conn., Nov 05, 2009 (BUSINESS WIRE) -- World Wrestling Entertainment, Inc. (NYSE:WWE) today announced financial results for its third quarter ended September 30, 2009. Revenues totaled $111.3 million as compared to $108.8 million in the prior year quarter. Operating income was $14.5 million as compared to $7.9 million in the prior year quarter. Net income was $8.9 million, or $0.12 per share, as compared to $5.3 million, or $0.07 per share, in the prior year quarter.

"We are pleased with our solid performance. During the quarter we achieved an 84% increase in our operating income and managed a 26% increase for the first nine months of the year," stated Vince McMahon, Chairman and Chief Executive Officer. "Entering the year, we established clear goals to reduce our cost structure and to improve our operating efficiency. Our results to date, including significant and sustained improvement in our profit margins, demonstrate our ongoing commitment in meeting these objectives."

"Looking ahead, we believe WWE can achieve meaningful growth by taking advantage of our strategic opportunities and maintaining our focus on managing costs. Our portfolio of businesses exhibit significant operating leverage and, through disciplined cost management, we expect that leverage to drive future earnings growth."

Results by Business Segment

The following charts reflect net revenues by segment and by geographical region for the three months ended September 30, 2009 and September 30, 2008. (Dollars in millions)

Revenues from outside North America increased 17% led by the timing and performance of our live events in Asia Pacific.

Net Revenues by Segment

Three Months Ended
September 30,

2009
September 30,

2008

Live and Televised Entertainment $ 77.9 $ 68.7
Consumer Products 23.0 26.6
Digital Media 7.4 7.9
WWE Studios 3.0 5.6
Total $ 111.3 $ 108.8
Net Revenues by Region

Three Months Ended
September 30,

2009
September 30,

2008

North America $ 81.3 $ 83.2
Europe, Middle East & Africa (EMEA) 14.4 17.1
Asia Pacific (APAC) 12.5 6.8
Latin America 3.1 1.7
Total $ 111.3 $ 108.8

Live and Televised Entertainment

Revenues from our Live and Televised Entertainment businesses were $77.9 million for the current quarter as compared to $68.7 million in the prior year quarter, representing a 13% increase.

Live Event revenues were $27.2 million as compared to $20.3 million in the prior year quarter. Revenues increased 34% primarily due to higher average attendance and an increase in the number of international events.
There were 94 events, including 17 international events, during the current quarter as compared to 89 events, including 12 international events, in the prior year quarter.
North American events generated $16.6 million of revenues from 77 events as compared to $15.5 million from 77 events in the prior year quarter. North American average attendance increased 9% to approximately 5,800 from 5,300 in the prior year quarter. The average ticket price for North American events was $36.26 in the current quarter as compared to $38.21 in the prior year quarter.
International events generated approximately $10.6 million of revenues as compared to $4.8 million in the prior year quarter. The quarter-over-quarter increase reflected five additional events in the current quarter and a 38% increase in average attendance to approximately 9,100 fans. These factors were partially offset by a 19% reduction in average ticket prices to $65.59, in part due to changes in foreign exchange rates.
Pay-Per-View revenues were $14.5 million as compared to $16.4 million in the prior year quarter reflecting a 10% decline in total pay-per-view buys and a higher percentage of international buys, which are generally lower in price. For the comparable pay-per-view events which occurred in both the current and prior year periods, pay-per-view buys declined 22% in the quarter and 9% on a year-to-date basis.

The details for the number of buys (in 000s) are as follows:

Events (in chronological order)
Three Months Ended
September 30, 2009
Three Months Ended
September 30, 2008

The Bash(TM) - 196
Night of Champions(R) 267 -
SummerSlam(R) 369 477
Breaking Point(R)/Unforgiven(R) 169 211

Prior events 31 42
Total 836 926

Venue Merchandiserevenues were $4.3 million as compared to $4.2 million in the prior year quarter, as higher average attendance and the impact of five additional international events was offset by an 11% decline in lower domestic per capita merchandise sales to $8.71 in the current quarter.
Television Rights Fees revenues were $28.3 million as compared to $24.4 million in the prior year quarter. This increase was primarily due to fees received from our new WWE Superstars television show and contractual increases from our existing programs.
WWE Classics On Demand(TM) revenues were$1.2 million as compared to $1.4 million in the prior year quarter.

Consumer Products

Revenues from our Consumer Products businesses were $23.0 million versus $26.6 million in the prior year quarter, representing a 14% decrease.

Home Video net revenues were $11.2 million as compared to $11.0 million in the prior year quarter. The increase reflects the performance of our new releases and catalog titles.
Licensing revenues were $7.9 million as compared to $10.6 million in the prior year quarter. The decrease primarily reflects the reduction in royalties earned on the sales of toys and videogames, particularly in international markets.
Magazine publishing net revenues were $3.4 million as compared to $4.7 million in the prior year quarter. The decrease primarily reflects a reduction in subscription revenue and the publication of one fewer issue of WWE Magazine in the current quarter.

Digital Media

Revenues from our Digital Media related businesses were $7.4 million as compared to $7.9 million in the prior year quarter, representing a 6% decrease.

WWE.com revenues were $4.5 million as compared to $4.0 million in the prior year quarter, reflecting increased sales of online advertising and expanded licensing of our website for international markets.
WWEShop revenues were $2.9 million as compared to $3.9 million in the prior year quarter. The number of orders declined by 21% to approximately 55,000 and the average revenue per order decreased by approximately 8% to $50.46 from the prior year quarter.

WWE Studios

During the current quarter, we recorded revenue of $3.0 million related to four previously released films, including Behind Enemy Lines: Colombia as compared to $5.6 million in the prior year quarter related to See No Evil, The Marine, and The Condemned. In the prior year quarter, we recorded a $1.9 million charge related to revised expectations for our film See No Evil. During the first quarter of 2009, we released our fourth feature film, 12 Rounds, as well as a Direct-to-DVD film, Behind Enemy Lines: Colombia. 12 Rounds generated approximately $12.2 million in gross domestic box office receipts and was released on DVD on June 30, 2009. We participate in revenues generated by the distribution of these films after the print, advertising and distribution costs incurred by our distributors have been recouped and the results have been reported to us. As such, no revenues have been recorded for 12 Rounds to-date.

Profit Contribution (Net revenues less cost of revenues)

Profit contribution increased to $51.2 million in the current quarter as compared to $42.5 million in the prior year quarter. Gross profit margins increased to 46% as compared to 39% in the prior year quarter, reflecting increased efficiencies in our Live and Televised Entertainment segment. Improved margins were driven by continued cost reductions in marketing and TV production, and by the impact of the staff reduction at the beginning of the 2009 year.

Selling, general and administrative expenses

SG&A expenses were $33.1 million for the current quarter as compared to $31.3 million in the prior year quarter, reflecting an increase in accrued incentive compensation, partially offset by decreases in advertising, travel expenses, as well as legal and professional fees.

EBITDA

EBITDA was approximately $18.1 million in the current quarter as compared to $11.2 million in the prior year quarter, primarily due to the improved efficiencies discussed above.

Investment and Other Income (Expense)

The decline in investment income of $0.6 million in the current quarter reflects lower interest rates. Other income of $0.2 million, as compared to other expense of $1.4 million in the prior year quarter, reflected changes in realized foreign exchange gains and losses and the revaluation of warrants held in certain licensees.

Effective tax rate

In the current quarter the effective tax rate was 42% as compared to 32% in the prior year quarter. The effective tax rate reflects differences between the taxes provided for as compared to actual amounts calculated on returns for both periods.

Summary Results for the Nine Months Ended

Total revenues through the nine months ended September 30, 2009 were $357.9 million as compared to $401.1 million in the prior year period. Operating income for the current period was $59.3 million versus $47.0 million in the prior year period. Net income was $39.1 million, or $0.53 per share, as compared to $31.8 million, or $0.43 per share, in the prior year period. EBITDA was $70.3 million for the current nine month period as compared to $56.5 million in the prior year period.

The following charts reflect net revenues by segment and by geographical region for the nine months ended September 30, 2009 and September 30, 2008. (Dollars in millions)

Net Revenues by Segment

Nine Months Ended
September 30,

2009
September 30,

2008

Live and Televised Entertainment $ 251.2 $ 255.3
Consumer Products 77.0 102.4
Digital Media 22.2 23.9
WWE Studios 7.5 19.5
Total $ 357.9 $ 401.1
Net Revenues by Region

Nine Months Ended
September 30,

2009
September 30,

2008

North America $ 268.6 $ 298.3
Europe, Middle East & Africa (EMEA) 55.8 69.5
Asia Pacific (APAC) 25.1 28.4
Latin America 8.4 4.9
Total $ 357.9 $ 401.1

Live and Televised Entertainment

Revenues from our Live and Televised Entertainment businesses were $251.2 million for the current period as compared to $255.3 million in the prior year, a decrease of 2%.

September 30,

2009
September 30,

2008

Live Events $ 79.6 $ 80.2
Pay-Per-View $ 63.7 $ 75.5
Venue Merchandise $ 15.2 $ 15.0
Television Rights Fees $ 81.5 $ 73.1
Television Advertising $ 5.5 $ 5.3
WWE Classics On Demand
$ 4.2 $ 4.8

Consumer Products

Revenues from our Consumer Products businesses were $77.0 million versus $102.4 million in the prior year, a decrease of 25%.

September 30,

2009
September 30,

2008

Home Video $ 29.0 $ 43.5
Licensing $ 36.7 $ 45.8
Magazine Publishing $ 9.9 $ 11.9

Digital Media

Revenues from our Digital Media related businesses were $22.2 million as compared to $23.9 million in the prior year, a decrease of 7%.

September 30,

2009
September 30,

2008

WWE.com $ 12.9 $ 12.5
WWEShop $ 9.3 $ 11.4

WWE Studios

We recorded revenue of $7.5 million in the current period related to four of our releases, See No Evil, The Marine, The Condemned, and Behind Enemy Lines: Colombia as compared to $19.5 million in the prior year period, which was led by the performance of The Marine. During the first quarter of 2009, we released our fourth feature film, 12 Rounds, as well as a Direct-to-DVD film, Behind Enemy Lines: Colombia.

Profit Contribution (Net revenues less cost of revenues)

Profit contribution increased to $165.6 million in the current period as compared to $158.4 million in the prior year period, as improved efficiencies essentially offset the impact of revenue declines as discussed above. Total profit contribution margin increased to approximately 46% as compared to 39% in the prior year period, reflecting increased efficiencies in our Live and Televised Entertainment segment.

Selling, general and administrative expenses

SG&A expenses were $95.3 million for the current period as compared to $101.9 million in the prior year period, reflecting decreases in advertising, legal and professional fees and travel expenses, offset by an increase in accrued incentive compensation and bad debt expense. Current period expenses include the impact of our corporate restructuring of approximately $2.2 million in severance costs while expenses in the prior year included $3.5 million associated with our McMahon's Million Dollar Mania brand awareness campaign.

EBITDA

EBITDA for the current period was approximately $70.3 million as compared to $56.5 million in the prior year period.

Investment and Other Income (Expense)

The $2.0 million decline in investment income in the current period reflects lower average interest rates. Other income of $0.3 million as compared to other expense of $3.7 million in the prior year period includes the revaluation of warrants held in certain licensees.

Effective tax rate

The effective tax rate was 37% in the current period as compared to 33% in the prior year period. The prior year rate reflects tax benefits related to previously unrecognized tax positions.

Cash Flows

Net cash provided by operating activities was $92.8 million for the nine months ended September 30, 2009 as compared to $17.7 million in the prior year period. The increase was driven by the timing of feature film investments, favorable changes in working capital and reduced capital expenditures. Capital expenditures were $3.7 million for the current period as compared to $19.8 million in the prior year period as the prior year reflected an approximate $11.5 million investment in High Definition broadcasting equipment.

Additional Information

Additional business metrics are made available to investors on a monthly basis on our corporate website - corporate.wwe.com.

Note: World Wrestling Entertainment, Inc. will host a conference call on November 5, 2009 at 11:00 a.m. ET to discuss the Company's earnings results for the third quarter of 2009. All interested parties can access the conference call by dialing 888-647-2706 (conference ID: WWE). Please reserve a line 15 minutes prior to the start time of the conference call. A presentation that will be referenced during the call can be found at the Company web site at corporate.wwe.com. A replay of the call will be available approximately three hours after the conference call concludes, and can be accessed at corporate.wwe.com.

World Wrestling Entertainment, Inc. (NYSE: WWE) is an integrated media and entertainment company headquartered in Stamford, Conn. Additional information on the Company can be found at wwe.com and corporate.wwe.com.

Trademarks: All WWE programming, talent names, images, likenesses, slogans, wrestling moves, trademarks, copyrights and logos are the exclusive property of World Wrestling Entertainment, Inc. and its subsidiaries. All other trademarks, logos and copyrights are the property of their respective owners.

Forward-Looking Statements: This news release contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. These risks and uncertainties include the conditions of the markets for live events, broadcast television, cable television, pay-per-view, Internet, feature films, entertainment, professional sports, and licensed merchandise; acceptance of the Company's brands, media and merchandise within those markets; uncertainties relating to litigation; risks associated with producing live events both domestically and internationally; uncertainties associated with international markets; risks relating to maintaining and renewing key agreements, including television distribution agreements; and other risks and factors set forth from time to time in Company filings with the Securities and Exchange Commission. Actual results could differ materially from those currently expected or anticipated. In addition to these risks and uncertainties, our dividend is based on a number of factors, including our liquidity and historical and projected cash flow, strategic plan, our financial results and condition, contractual and legal restrictions on the payment of dividends and such other factors as our board of directors may consider relevant.

World Wrestling Entertainment, Inc.
Consolidated Income Statements
(in thousands, except per share data)
(Unaudited)

Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008

Net revenues $ 111,254 $ 108,782 $ 357,873 $ 401,072

Cost of revenues 60,077 66,279 192,264 242,655
Selling, general and administrative expenses 33,108 31,263 95,337 101,884
Depreciation and amortization 3,578 3,330 10,954 9,521

Operating income 14,491 7,910 59,318 47,012

Investment income, net 704 1,290 2,495 4,511
Interest expense (82 ) (110 ) (261 ) (324 )
Other income (expense), net 168 (1,356 ) 300 (3,649 )

Income before income taxes 15,281 7,734 61,852 47,550

Provision for income taxes 6,342 2,460 22,717 15,720

Net income $ 8,939 $ 5,274 $ 39,135 $ 31,830

Earnings per share - basic:
Net income $ 0.12 $ 0.07 $ 0.53 $ 0.44

Earnings per share - diluted:
Net income $ 0.12 $ 0.07 $ 0.53 $ 0.43

Shares used in per share calculations:
Basic 73,944 73,191 73,646 72,725
Diluted 74,419 73,735 74,207 73,469

World Wrestling Entertainment, Inc.
Consolidated Balance Sheets
(dollars in thousands)
(Unaudited)
As of As of
September 30, December 31,
2009 2008
ASSETS

CURRENT ASSETS:

Cash and equivalents $ 152,706 $ 119,655
Short-term investments 53,058 57,686
Accounts receivable, net 60,613 60,133
Inventory, net 2,847 4,958
Prepaid expenses and other current assets 23,691 37,596
Total current assets 292,915 280,028

PROPERTY AND EQUIPMENT, NET 85,990 92,367

FEATURE FILM PRODUCTION ASSETS 28,799 31,657

INVESTMENT SECURITIES 22,878 22,299

INTANGIBLE ASSETS, NET 339 1,184

OTHER ASSETS 1,734 1,875

TOTAL ASSETS $ 432,655 $ 429,410

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Current portion of long-term debt $ 1,062 $ 1,002
Accounts payable 21,192 18,334
Accrued expenses and other liabilities 35,647 27,121
Deferred income 12,538 11,875
Total current liabilities 70,439 58,332

LONG-TERM DEBT 3,068 3,872
NON-CURRENT TAX LIABILITY 15,431 7,232

STOCKHOLDERS' EQUITY:
Class A common stock 256 252
Class B common stock 477 477
Additional paid-in capital 323,056 317,105
Accumulated other comprehensive income 2,333 1,171
Retained earnings 17,595 40,969
Total stockholders' equity 343,717 359,974

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 432,655 $ 429,410

World Wrestling Entertainment, Inc.
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
Nine Months Ended
Sept. 30, Sept. 30,
2009 2008
OPERATING ACTIVITIES:
Net income $ 39,135 $ 31,830
Adjustments to reconcile net income to net cash provided
by operating activities:
Amortization/write-off of feature film production assets 3,723 13,220
Revaluation of warrants 802 2,198
Depreciation and amortization 10,954 9,521
Realized (gains)/losses on sale of investments (863 ) 348
Amortization of investment income 805 384
Stock compensation costs 5,659 7,953
Provision for doubtful accounts 3,115 179
Provision for inventory obsolescence 1,745 2,316
Reimbursement of operating expenses by principal shareholder - 1,950
Provision (benefit) from deferred income taxes 6,000 (1,010 )
Excess tax benefits from stock-based payment arrangements (74 ) (1,091 )
Changes in assets and liabilities:
Accounts receivable (3,596 ) (12,177 )
Inventory 366 (3,721 )
Prepaid expenses and other assets 12,615 (3,138 )
Feature film production assets (1,496 ) (24,742 )
Accounts payable 2,859 (1,870 )
Accrued expenses and other liabilities 10,025 (6,539 )
Deferred income 1,033 2,084
Net cash provided by operating activities 92,807 17,695

INVESTING ACTIVITIES:
Purchases of property and equipment (3,640 ) (19,591 )
Purchase of film library assets (92 ) (212 )
Purchase of investment securities (41,489 ) (104,736 )
Proceeds from sales or maturities of investment securities 45,586 143,634
Net cash provided by investing activities 365 19,095

FINANCING ACTIVITIES:
Repayments of long-term debt (744 ) (688 )
Dividends paid (61,605 ) (60,929 )
Issuance of stock, net 864 771
Proceeds from exercise of stock options 1,290 6,251
Excess tax benefits from stock-based payment arrangements 74 1,091
Net cash used in financing activities (60,121 ) (53,504 )

NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS 33,051 (16,714 )
CASH AND EQUIVALENTS, BEGINNING OF PERIOD 119,655 135,805
CASH AND EQUIVALENTS, END OF PERIOD $ 152,706 $ 119,091

World Wrestling Entertainment, Inc.

Supplemental Information - EBITDA
(dollars in thousands)
(Unaudited)

Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008

Net income reported on U.S. GAAP basis $ 8,939 $ 5,274 $ 39,135 $ 31,830

Provision for income taxes 6,342 2,460 22,717 15,720

Investment, interest and other income (expense),
net
790 (176 ) 2,534 538
Depreciation and amortization 3,578 3,330 10,954 9,521

EBITDA $ 18,069 $ 11,240 $ 70,272 $ 56,533

Non-GAAP Measure:

EBITDA is defined as net income before investment, interest and other income, income taxes, depreciation and amortization. The Company's definition of EBITDA does not adjust its U.S. GAAP basis earnings for the amortization of Feature Film production assets. Although it is not a recognized measure of performance under U.S. GAAP, EBITDA is presented because it is a widely accepted financial indicator of a company's performance. The Company uses EBITDA to measure its own performance and to set goals for operating managers. EBITDA should not be considered as an alternative to net income, cash flows from operations or any other indicator of World Wrestling Entertainment Inc.'s performance or liquidity, determined in accordance with U.S. GAAP.

World Wrestling Entertainment, Inc.

Supplemental Information- Free Cash Flow
(dollars in thousands)
(Unaudited)

Three Months Ended Nine Months Ended
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2009 2008 2009 2008

Net cash provided by operating activities $ 17,778 $ 14,617 $ 92,807 $ 17,695

Less cash used in capital expenditures:
Purchase of property and equipment and other assets (820) (4,160) (3,732) (19,803)

Free Cash Flow $ 16,958 $ 10,457 $ 89,075 $ (2,108)

Non-GAAP Measure:

We define Free Cash Flow as net cash provided by operating activities less cash used for capital expenditures. Although it is not a recognized measure of liquidity under U.S. GAAP, Free Cash Flow provides useful information regarding the amount of cash our continuing business is generating after capital expenditures, available for reinvesting in the business and for payment of dividends.

SOURCE: World Wrestling Entertainment, Inc.

World Wrestling Entertainment, Inc.Media:Robert Zimmerman 203-359-5131orInvestors:Michael Weitz 203-352-8642

WWE, Inc. Announces 2009-12 Business Outlook

2009-11-05T13:23:00.000-08:00

STAMFORD, Conn., Nov 05, 2009 (BUSINESS WIRE) -- World Wrestling Entertainment, Inc. (NYSE:WWE) today issued a revised business outlook, targeting average annual earnings growth between 15% to 20% over the 2009 through 2012 period.1 The revised outlook is based on a comprehensive review of the Company's operations.
Vince McMahon, Chairman and Chief Executive Officer, said, "We believe we can achieve meaningful growth by strengthening our global expansion and television distribution, leveraging our new partnership with Mattel and continuing to improve operating efficiency. Through disciplined cost management, we expect our operating leverage to deliver outstanding earnings growth with even moderate increases in revenue."
George Barrios, Chief Financial Officer, added, "WWE's projected earnings growth reflects our focus on producing superior economic returns on the capital invested in our business and thereby creating value for our shareholders."
Additional information on World Wrestling Entertainment, Inc. (NYSE:WWE) can be found at wwe.com and corporate.wwe.com. For information on our global activities, go to http://www.wwe.com/worldwide/.
Notes:
1The outlook above does not include the impact of any future merger or unplanned restructuring charges, the impact from sales and acquisitions of operating assets and investments, or the impact of taxes on the above items, that may occur from time to time due to management decisions and changing business circumstances. The Company is currently unable to forecast precisely the timing and/or magnitude of any such amounts or events.

Trademarks: All WWE programming, talent names, images, likenesses, slogans, wrestling moves, trademarks, copyrights and logos are the exclusive property of World Wrestling Entertainment, Inc. and its subsidiaries. All other trademarks, logos and copyrights are the property of their respective owners.
Forward-Looking Statements: This news release contains forward-looking statements pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties. These risks and uncertainties include the conditions of the markets for live events, broadcast television, cable television, pay-per-view, Internet, entertainment, professional sports, and licensed merchandise; acceptance of the Company's brands, media and merchandise within those markets; uncertainties relating to litigation; risks associated with producing live events both domestically and internationally; uncertainties associated with international markets; risks relating to maintaining and renewing key agreements, including television distribution agreements; and other risks and factors set forth from time to time in Company filings with the Securities and Exchange Commission. Actual results could differ materially from those currently expected or anticipated. In addition to these risks and uncertainties, our dividend is based on a number of factors, including our liquidity and historical and projected cash flow, strategic plan, our financial results and condition, contractual and legal restrictions on the payment of dividends and such other factors as our board of directors may consider relevant.

SOURCE: World Wrestling Entertainment, Inc.
World Wrestling Entertainment, Inc.Investors:Michael Weitz, 203-352-8642Media:Robert Zimmerman, 203-359-5131

Disney, Reaches Another Major Milestone on Shanghai Theme Park Project

2009-11-05T08:58:00.000-08:00

BURBANK, Calif., Nov 03, 2009 (BUSINESS WIRE) -- The Walt Disney Company today announced that the Project Application Report (PAR) for a Disney theme park in the Pudong district of Shanghai has received approval from the relevant authorities of the central government of China.

"China is one of the most dynamic, exciting and important countries in the world, and this approval marks a very significant milestone for The Walt Disney Company in mainland China," said Robert A. Iger, president and CEO of The Walt Disney Company.

The PAR approval will enable Disney and its Shanghai partners to move forward toward a final agreement to build and operate the park and begin preliminary development work. Upon completion of the final agreement, the project's initial phase would include a Magic Kingdom-style theme park with characteristics tailored to the Shanghai region and other amenities consistent with Disney's destination resorts worldwide.

About The Walt Disney Company China

The Walt Disney Company (DIS), together with its subsidiaries and affiliates, is a diversified international family entertainment enterprise with five business segments and is a Dow 30 company with revenues of nearly $38 billion in its most recently reported fiscal year. Our first animation screened in China in the 1930s and today our long association continues with offices in Beijing, Shanghai and Guangzhou with over 600 employees.

About Walt Disney Parks and Resorts

Walt Disney Parks and Resorts are where families experience and enjoy the magic of Disney's beloved characters and where dreams come true. More than 50 years ago, Walt Disney created a new kind of entertainment families could experience together, immersed in detailed atmospheres and vibrant storytelling. His vision now includes a collection of five of the world's leading family vacation destinations -- Disneyland Resort, Anaheim, Calif.; Walt Disney World Resort, Lake Buena Vista, Fla.; Tokyo Disney Resort, Urayasu, Chiba, Japan; Disneyland Paris, Marne-la-Vallee, France; and Hong Kong Disneyland Resort, located on Lantau Island. In addition, Walt Disney Parks and Resorts includes the world-class Disney Cruise Line; Disney Vacation Club, with 10 resorts and more than 400,000 members; Adventures by Disney, a guided group vacation experience to some of the world's most popular destinations; and Walt Disney Imagineering, which creates and designs all Disney parks, resorts and attractions.

from the wire

Disney will merge retail with entertainment

2009-10-14T09:50:00.000-07:00

LOS ANGELES, Oct 13, 2009 (UPI via COMTEX) -- Walt Disney Co. said it would overhaul its 340 European and U.S. stores to include entertainment designed to keep customers shopping longer.

The company is considering a turnaround that includes pumping about $1 million into each store in part to have children eager to visit, play and linger in the same location as the retail outlet that sells toys, games, plush animals and other retail items.

"The world does not need another place to sell Disney merchandise -- this only works if it's an experience," said Jim Fielding, president of Disney Stores Worldwide, The New York Times reported Tuesday.

Disney said it would begin the bold retail step -- pushing forward while many stores are retrenching -- in Southern California, Long Island and Madrid. It is also hoping to create a flagship store in Times Square in New York City, the newspaper said.

Disney plans to outfit stores with theaters for kids to select video clips to watch and install systems for kids to teleconference with Disney stars.

"It's time to take risks," Mr. Fielding said he told them. "When consumers are ready to spend again, we will be ready."

Copyright 2009 by United Press International

Strategists turn global

2009-10-08T11:53:00.000-07:00

NEW YORK (MarketWatch) -- With signs of growth convincingly returning to parts of the globe, some U.S. strategists are turning their attention overseas, either by raising their exposure to global equities or by focusing on U.S. firms with a large chunk of international revenues.

Standard & Poor's Equity Research, which late Wednesday raised its 12-month target on the S&P 500 Index ($SPX) to 1,150 from 1,100, also decided to recommend investors add their exposure to worldwide equities.

"We see equity prices benefiting from an expected gradual rise in global economic-growth projections, a further weakening of the U.S. dollar and the expectation of a continued improvement in corporate [earnings per share]," wrote Sam Stovall, chief investment strategist at S&P, in a note.

On Thursday, the Dow Jones Industrial Average ($INDU) gained 72 points, or 0.8%, to 9,797. The S&P 500 rose 8 points, or 0.8%, to 1,066, while the Nasdaq Composite Index (COMP) advanced 18 points, or 0.9%, to 2,129.

Gains were fueled by aluminum-giant Alcoa Inc. (AA), often seen as a barometer of the economy, which kicked off the third-quarter earnings season by posting a surprise profit.

Alcoa's results were due to a mix of improved demand and aggressive cost cuts. Aluminum prices have risen since June and demand has ticked higher, mostly as China replenishes its stockpiles.

In its latest World Economic Outlook, the International Monetary Fund projected the global economy would grow by 3.1% next year, up from its 2.5% forecast in July. Asia is expected to lead the recovery, with the region expected to grow by 2.8% this year and by 5.8% in 2010.

Among the S&P 500's 10 sectors, S&P recommends overweighting three sectors with high exposure to global growth, such as energy, materials and industrials.

BNY Convergex's chief market strategist Nicholas Colas believes that weakness in the dollar should now benefit the Dow industrials over the S&P 500, given the higher percentage of multinationals represented in the blue-chip average. See full story.

According to Ed Yardeni, chief investment strategist at Yardeni Research, U.S. firms increasingly are trying to find more revenues and earnings overseas, especially among emerging economies.

from MarketWatch

American moguls could buy some of the world's economies

2009-10-04T22:39:00.000-07:00

Castles in France. Islands in the Caribbean. Private jets. With a collective $1.27 trillion at their disposal, the members of The Forbes 400 could buy almost anything.

How about a country? A quick glance at the CIA Fact Book suggests the individual fortunes of many Forbes 400 members are as big as some of the world's economies.

Bill Gates, America's richest man with a net worth of $50 billion, has a personal balance sheet larger than the gross domestic product (GDP) of 140 countries, including Costa Rica, El Salvador, Bolivia and Uruguay. The Microsoft (MSFT) visionary's nest egg is just short of the GDP of Tanzania and Burma.

Warren Buffett, who lost $10 billion in the past 12 months and is this year's Forbes 400 biggest dollar loser, still has a fortune the size of North Korea's economy at $40 billion. (The Oracle of Omaha probably would steer clear of that investment, though.)

One Forbes 400 member does actually run a small chunk of a state in an official capacity: Mayor Michael Bloomberg. While he is busy serving as the chief executive of New York City and grappling with its sluggish economy, his own personal balance sheet -- amassed through financial information services and media company Bloomberg LP -- equals the value of all the goods and services produced in South Africa's Republic of Zambia's ($17.5 billion).

Some say that land developer Donald Bren, whose assets throughout the vicinity of Orange County, Calif., include 475 office buildings, 115 apartment communities, 41 retail centers, resort properties and new housing, runs Orange County -- he certainly owns most of it. And with a net worth of $12 billion, he could, in theory, buy Haiti's economy, too.

Casino mogul Sheldon Adelson's $9 billion net worth is akin to the Bahamas' GDP ($9 billion). Pierre Omidyar, founder of eBay (EBAY), the world's biggest auction marketplace, could theoretically control Somalia's market with his $5.5 billion fortune.

George Lucas, the famed Hollywood director behind the Star Wars and Indiana Jones franchises and ILM, the world's most bankable special effects shop, has a $3 billion fortune, making him worth as much as the GDP of Guyana.

Hedge fund founder David Shaw's $2.5 billion net worth parallels Belize's marketplace.

Investor John Paulson amassed much of his fortune by exploiting the real estate bubble and shorting the subprime market in 2007. Today he has a net worth of $6.8 billion -- the equivalent of Montenegro's gross domestic product.

Although Eli Broad's fortune suffered because of AIG's (AIG) collapse last fall -- he's lost $1.3 billion in the last 12 months -- he still has a bank account that rivals Barbados' economy ($5.4 billion).

Forbes 400 members with net worths just under $1 billion still possess fortunes that could operate the economies of significant fractions of the globe. Gary Magness, who owns water rights in Colorado through his ranch holdings, has a net worth of $990 million, which barely exceeds Vanuatu's GDP ($988.5 million).

If this year's three poorest Forbes 400 members were to combine their wealth (a combined $2.9 billion), their amassed fortune would be worth more than the workings of Belize's entire economy.

from Forbes

Three Stocks that are in Trouble

2009-08-27T23:21:00.000-07:00

WASHINGTON – Investors are still trading common shares of Fannie Mae, Freddie Mac and American International Group Inc. by the billions, even though analysts say their prices are almost certain to go to zero.

All three are majority-owned by the government and are losing huge sums of money. The Securities and Exchange Commission and other regulators lack authority to end trading of stocks in such "zombie" companies that technically are alive — until the government takes them off life support.

Shares of the two mortgage giants and the insurer have been swept up in a summer rally in financial stocks. Investors have been trading their shares at abnormally high volumes, despite analysts' warnings that they're destined to lose their money.

"People have done well by trading them (in the short term), but when it gets to the end of the road, these stocks are going to be worth zero," said Bose George, an analyst with the investment bank Keefe, Bruyette & Woods Inc.

Some of the activity involves day traders aiming to profit from short-term price swings, George said. But he said inexperienced investors might have the misimpression that the companies may recover or be rescued.

"That would be kind of unfortunate," he said. "There could be a lot of improvement in the economy, and these companies would still be worth zero."

The government continues to support the companies with billions in taxpayer money, saying they still play a crucial role in the financial system.

Fannie and Freddie buy loans from banks and sell them to investors — a role critical to the mortgage market. They have tapped about $96 billion out of a potential $400 billion in aid from the Treasury Department.

Officials have said AIG's failure would be disastrous for the financial markets. Treasury and the Federal Reserve have spent about $175 billion on AIG and AIG-related securities. The company also has access to $28 billion from the $700 billion financial industry bailout.

But analysts say the wind-down strategies for the companies are almost sure to wipe out any common equity, making their shares worthless.

"There are some folks that believe that somehow that 20 percent (of the stock) that's out there in the public market might be worth something someday," said Daniel Alpert, managing director of the investment bank Westwood Capital LLC. But he said the three companies are doomed because they are "massively indebted," and the values of their assets are declining.

The stocks remain in circulation mainly for two reasons: They've violated no rules on the New York Stock Exchange, where they are traded. And no regulator has the power to suspend their trading without evidence securities laws are being violated.

Alpert said no regulations exist to deal with cases where the government props up unsustainable companies.

By contrast, regulators were able to warn investors about stock in the "old" General Motors, which also sits on a mound of government debt. The SEC and the Financial Industry Regulatory Authority, the brokerage industry's self-policing group, have issued alerts and taken other steps to prevent investor losses on that stock.

In that case, the SEC could act because GM acknowledged the stock was headed for zero in a restructuring plan filed with the SEC.

The SEC says it has no reason to suspend trading of stocks that still technically meet its standards, which include filing timely financial reports and disclosing events that could affect share values.

The NYSE's rules include maintaining minimum numbers of shareholders and market capitalization. But they give the exchange full discretion over which stocks are listed — regardless of whether a company meets those listing standards.

FINRA has jurisdiction over NASDAQ-traded stocks and over "pink sheet" stocks, which are worth too little to be traded on a major exchange. It has no jurisdiction over stocks on the NYSE.

Shares of Fannie, Freddie and AIG — along with their trading volumes — have jumped this summer, when activity normally fades as traders take vacations. Fannie shares have more than tripled since the end of July. Their volume soared to 360 million shares Thursday from 6.45 million shares on the last day of July.

Freddie and AIG shares have surged threefold since then. Freddie's volume jumped to 191 million shares from 4.5 million. And 148 million AIG shares changed hands on Thursday, compared with 5 million on July 31.

By comparison, the trading volume of General Electric Co.'s common shares fell to around 63.7 million shares Thursday, compared with 109 million shares July 31. The stock price rose 5.3 percent in that stretch.

AIG shares rose $10.15, or 26.9 percent, to $47.84 Thursday. Analysts speculated the company might be reconciling with former CEO Maurice "Hank" Greenberg, who could help bring private capital and other business benefits to the company.

A reverse stock split in early July raised the price by a factor of 20. In a reverse split, a stock price is increased, and the number of shares are reduced by a similar proportion. It has no effect on shareholders' equity.

Fannie shares closed up 3.8 percent at $1.92 Thursday; Freddie shares rose 10 percent to $2.24.

Fannie and Freddie's government owners haven't announced their plans for the companies. That means there's a possibility — however remote — that their shares could retain some value. But the administration is expected to announce in February that the companies will be wound down, merged into a federal agency or have their bad mortgage assets split into a new government-backed company.

All those possibilities are almost certain to eliminate any remaining shareholder equity, analysts said.

Lawrence J. White, a professor at New York University's Stern School of Business, said the higher trading volumes might reflect speculation about the government's February announcement.

With the share prices still so low, White said investors are willing to bet on the outcome of the government's announcement. He said trading volume is likely to grow further, with even sharper price swings, as February approaches.

Still, Freddie Mac Chairman John Koskinen said the price fluctuations were hard to understand.

"I have absolutely no idea what that represents," he said.

Representatives for Fannie, the SEC, AIG, FINRA and the NYSE declined to comment. Spokeswomen for Treasury, which owns most of AIG, and the Federal Housing Finance Agency, which holds Fannie and Freddie in conservatorship, also wouldn't comment.

by the associated press

Oil hits $74 per barrel on economic optimism

2009-08-24T11:14:00.000-07:00

HOUSTON — Oil prices approached $75 a barrel Monday for the first time in 10 months amid growing optimism that the world's economies are on the mend.

Benchmark crude for October delivery rose 73 cents to $74.62 a barrel on the New York Mercantile Exchange. Oil last topped $75 in October.

Natural gas rebounded strongly from new seven-year lows Monday, though prices remained well below $3 per 1,000 cubic feet.

Expectations that demand for energy will grow were spurred Friday by Federal Reserve Chairman Ben Bernanke, who said the U.S. economy is reviving. Bernanke's remarks and signs of improvement in the U.S. housing market sent stock markets higher, and that carried over into the new week.

Even before Bernanke spoke, however, prices had already begun to rise on a large and unexpected drawdown in U.S. oil supplies last week.

Equities appeared to follow energy prices, which took off midweek.

Asian and European markets were higher Monday, and the Dow Jones industrial average rose moderately in early trading.

This time, it appeared energy prices followed equities trading.

"No doubt about it, we're riding the wave of a strong stock market," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates. "These bullish financial developments have forced a huge amount of passive capital into commodities, especially the oil space."

It's been slightly more than a year since a barrel of crude soared close to $150 a barrel. No one expects another run to those heights anytime soon, but even the prospect of increasing demand is sure to keep upward pressure on oil prices.

In a report Monday, trader and analyst Stephen Schork said once oil gets to $75, "there is not a hell of a lot to prevent it from going to $80 or $85."

Natural gas is another story. Prices are at seven-year lows and supplies continue to grow. Friday marked the 11th session out of 12 trading days in which gas prices fell.

"Demand prospects are the worst they have been in recent memory," said PFGBest Research analyst Phil Flynn.

It has been a very moderate summer and meteorologists are forecasting the same through the fall. That could drive prices down even further if people don't need as much heat for their homes.

Gasoline prices have flattened and few expect a major run on prices as the driving season winds down.

Retail gas prices were almost unchanged overnight, falling to a new national average of $2.626 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded is 14.5 cents more expensive than it was a month ago, but it's $1.062 cheaper than last year.

In other Nymex trading, gasoline for September delivery added 265 cents to $2.0221 a gallon and heating oil for September delivery rose about 2 cents to $1.9246 a gallon. Natural gas for September delivery rose 7 cents to $2.875 per 1,000 cubic feet after tumbling 14.1 cents on Friday.

In London, Brent prices rose 21 cents to $74.40 a barrel on the ICE Futures exchange.

by the associated press

Cash for Clunkers program is ending

2009-08-24T11:09:00.000-07:00

It was a race to the finish for dealers and customers alike as the government's Cash for Clunkers program headed into its final lap on Monday.

Over the weekend, car dealers across the country watched their lots grow empty as crowds rushed to trade in gas guzzlers after the government said that the $3 billion rebate program would end at 8 p.m. EDT Monday, two weeks earlier than expected.

Transportation Secretary Ray LaHood, speaking to reporters in Norristown, Pa., called the program an unprecedented success and a boon for car dealers, automakers, scrap yards and financial institutions.

"Once the program ends at 8 o'clock there will be 700,000 to 800,000 cars that have been sold, most of them fuel efficient," replacing gas-guzzling cars and trucks, LaHood said.

Transportation officials said through early Monday, dealers had submitted 625,000 vouchers totaling $2.58 billion and expected to work up to the deadline to submit the proper paperwork.

Adding to the urgency, some dealers said they would stop Cash for Clunkers sales even earlier to make sure the government reimbursed them for the rebates — or because they didn't have enough eligible cars left.

"We thought about it a couple weeks ago," said Annette Palmer, 51, at Town and Country Honda in Berlin, Vt., on Saturday with her husband. They hoped to trade in a 1999 Jeep Grand Cherokee for a Honda CR-V.

"We kind of dragged our feet. Then we heard it was closing and we picked up our feet and ran," she said.

Though short of some new models, such as the Ford Focus, Honda Civic, Toyota Corolla and Nissan Altima, many dealers were still selling as many cars as they could before Monday night's deadline.

Standing outside one of his Hyundai dealerships in Appleton, Wis., John Bergstrom said customers traded in 100 clunkers throughout his fleet of 20 dealerships on Saturday and 100 the day before. They were his two biggest sales days during the clunkers program.

"That's about as good as it gets," Bergstrom said. "It's going out with a bang."

In all, Bergstrom said his dealerships — whose brands include Ford, GM and Toyota — sold 800 cars during the program, boosting sales 30 percent. He had to bring in extra staff to deal with the paperwork, but the sales were worth the hassle, Bergstrom said.

Cash for Clunkers has been wildly successful in spurring new-car sales and getting gas-guzzling models off the road, though some energy experts have said the pollution reduction is too small to be cost-effective. Customers receive rebates of between $3,500 and $4,500, depending on the improvement in fuel efficiency from their old vehicle to their new one. As of early Friday, nearly half a million cars had been sold through the program.

But the new sales left many dealers worried about not being reimbursed by the government. As of Friday, dealers had been reimbursed for just a small fraction of the billions in sales.

Some dealers chose to stop participating over the weekend so they could have enough time to process and file the paperwork, including AutoNation Inc., the nation's largest auto dealership chain.

Martin Main Line Honda in the Philadelphia suburb of Ardmore stopped its Cash for Clunkers sales at noon on Saturday. But by late afternoon there were still groups of people wandering the lot.

General sales manager Michael Freeman said the program had been "overwhelming," with 115 clunker sales and big surges in customer traffic at the start and now at the end. He's aiming to get the final stack of paperwork filed before Monday's deadline.

"I have people upstairs, that's all they're doing — paperwork," he said. "The backlog is a nightmare, and it's starting to be a nightmare at the end."

by the associated press

New Volt to Get 230 MPG

2009-08-11T11:37:00.000-07:00

WARREN, Michigan – General Motors Corp. said Tuesday its Chevrolet Volt rechargeable electric car should get 230 miles per gallon (98 kilometers per liter) of gasoline in city driving, more than four times the current champion, the Toyota Prius.

The Volt is powered by an electric motor and a battery pack with a 40-mile (65-kilometer) range. After that, a small internal combustion engine kicks in to generate electricity for a total range of 300 miles (480 kilometers). The battery pack can be recharged from a standard home outlet.

GM is marketing the 230-mile (370-kilometer) figure following early tests using draft guidelines from the U.S. Environmental Protection Agency for calculating the mileage of extended range electric vehicles.

The EPA guidelines, developed with guidance from automakers, figure that cars like the Volt will travel more on straight electricity in the city than on the highway. If a person drives the Volt less than 40 miles (65 kilometers), in theory they could go without using gasoline.

Highway mileage estimates — which are generally higher than city ones — for the Volt have yet to be released using the EPA's methodology.

"We are confident the highway (mileage) will be a triple-digit composite," GM CEO Fritz Henderson said.

If the figure is confirmed by the EPA, which does the tests for the mileage posted on new car door stickers, the Volt would be the first car to exceed triple-digit gas mileage.

EPA said in a statement Tuesday that it has not tested a Volt "and therefore cannot confirm the fuel economy values claimed by GM." The agency said it applauded "GM's commitment to designing and building the car of the future — an American made car that will save families money, significantly reduce our dependence on foreign oil and create good-paying American jobs."

GM has produced about 30 Volts so far and is making 10 a week, CEO Fritz Henderson said during a presentation of the vehicle at the company's technical center in the Detroit suburb of Warren.

Henderson said charging the volt will cost about 40 cents a day, at approximately 5 cents per kilowatt hour.

Most automakers are working similar plug-in designs, but GM could be the leader with the Volt, which is due in showrooms late in 2010.

Toyota's Prius, the most efficient car now sold in the U.S., gets 48 miles per gallon (20 kilometers per liter) of gas. It is a gas-electric hybrid that runs on a small internal combustion engine assisted by a battery-powered electric motor to save gasoline.

Although Henderson would not give details on pricing, the first-generation Volt is expected to cost near $40,000, making it cost-prohibitive to many people even if gasoline returns to $4 per gallon.

The price is expected to drop with future generations of the Volt, but GM has said government tax credits of up to $7,500 and the savings on fuel could make it cost-effective, especially at 230 miles per gallon (98 kilometers per liter).

"We get a little cautious about trying to forecast what fuel prices will do," said Tony Posawatz, GM's vehicle line director for the Volt. "We achieved this number and if fuel prices go up, it certainly does get more attractive even in the near-term generation."

Figures for the Volt's combined city/highway mileage have not yet been calculated, Posawatz said. The combined mileage will be in the triple digits as well, he said, but both combined and highway will be worse than city because the engine runs more on longer highway trips.

The mileage figure could vary as the guidelines are refined and the Volt gets further along in the manufacturing process, Posawatz said.

GM is nearly halfway through building about 80 Volts that will look and behave like the production model, and testing is running on schedule, Posawatz said.

Two critical areas, battery life and the electronic switching between battery and engine power, are still being refined, but the car is on schedule to reach showrooms late in 2010, he said.

GM is simulating tests to make sure the new lithium-ion batteries last 10 years, Posawatz said, as well as testing battery performance in extremely hot and cold climates.

"We're further along, but we're still quite a ways from home," he said. "We're developing quite a knowledge base on all this stuff. Our confidence is growing."

The other area of new technology, switching between battery and engine power, is proceeding well, he said, with engineers just fine-tuning the operations.

"We're very pleased with the transition from when it's driving EV (electric vehicle) to when the engine and generator kick in," he said.

GM also is finishing work on the power cord, which will be durable enough that it can survive being run over by the car. The Volt, he said, will have software on board so it can be programmed to begin and end charging during off-peak electrical use hours.

It will be easy for future Volt owners living in rural and suburban areas to plug in their cars at night, but even Henderson recognized the challenge urban, apartment dwellers, or those that park their car on the street might have recharging the Volt. There could eventually be charging stations set up by a third-party to meet such a demand, Henderson said.

Chrysler Group, Ford Motor Co. and Daimler AG are all developing plug-ins and electric cars, and Toyota Motor Corp. is working on a plug-in version of its gas-electric hybrid system. Nissan Motor Co. announced last month that it would begin selling an electric vehicle in Japan and the U.S. next year.

by the associated press

FHA loan holders could get help

2009-08-08T11:24:00.000-07:00

WASHINGTON — Loans backed by the Federal Housing Administration will be eligible for payment reductions similar to the Obama administration’s loan modification program, the government said.

Effective Aug. 15, financially troubled homeowners who have an FHA-insured loan can apply for a modification under a program parallel to "Making Home Affordable” to help lower their payments and avoid foreclosure.

The program, launched in March, is designed to lower monthly payments for 3 million to 4 million borrowers, although only about 200,000 have been helped so far. Lenders have agreed to adjust 500,000 loans by Nov. 1.

The FHA, which backs about 5 million loans, is a government-run mortgage insurance program.

It became the main source of home loans to borrowers with poor credit and low down payments after the collapse of the subprime lending market.

The agency lets borrowers take out home loans with down payments as low as 3.5 percent, compared with 20 percent for a typical loan that doesn’t require mortgage insurance.

By law, FHA cannot offer borrowers interest rates as low as 2 percent, which are available under the Obama plan.

Instead, FHA will allow lenders to set aside up to 30 percent of the total principal balance until the house is sold or the property is refinanced. No interest will be charged on that amount.

Government officials did not have an estimate of how many borrowers would qualify.

"We’re bringing another important tool to the table to help struggling families who are desperate to keep their homes,” Housing and Urban Development Secretary Shaun Donovan said in a statement.

Lenders who participate in the FHA program will receive an incentive fee of up to $1,250 and can be reimbursed for $250 in costs.

by the associated press

New appraisal code

2009-08-08T11:16:00.000-07:00

CHICAGO — New rules aimed at making home appraisals more accurate are raising costs and prompting longer waits to get to the closing table, some in the mortgage industry say.

The new regulations— known as the Home Valuation Code of Conduct and in effect less than three months — have driven up the cost of home appraisals, said Keith Stewart, a mortgage consultant with NorthPoint Lending Group in Chicago.

An appraisal that once cost $275 to $300 now runs $375 to $500, Stewart said. That’s because under the new rules a third party, often an appraisal management company, must serve as middleman between a mortgage broker and the appraiser, said Drew Kessler, director of sales for Rand Mortgage in New City, N.Y.

A bill in the U.S. House of Representatives proposes a moratorium on the new rules, as some in the industry are concerned the code will slow a housing-market recovery.

But the Federal Housing Finance Agency disputes those claims and maintains that the new code is necessary to make sure homes are appraised correctly and fairly. The code was announced by Fannie Mae and Freddie Mac last year, went into effect in May and applies to conforming mortgages, which are those that are able to be sold to Fannie Mae and Freddie Mac, the troubled government-backed mortgage agencies.

"Unfortunately, during the 2005-to-2007 period, mortgage lending was much too aggressive and placed pressure on the appraisal process,” the FHFA said in a recent statement. "In some cases, that resulted in unrealistically high appraisals, hurting home buyers as well as investors. The HVCC is designed to promote professional appraisals free from inappropriate pressure from lenders, borrowers or brokers.”

What was at issue?
In short, the rules aim to address a serious problem faced by many appraisers: the pressure to produce a desired value on a property, said Bill Garber, director of government and external relations for the Appraisal Institute, an association of professional real-estate appraisers.
In some cases, appraisers were motivated to comply with the request because they didn’t want to risk losing business.

"Mortgage-broker pressure on appraisers was real during the past 10 to 20 years,” Garber said. "They are no longer able to order, select or compensate appraisers, and as such, some of that pressure has subsided.”

Added Jim Amorin, president of the Appraisal Institute: "Consumers were maybe paying more for a home than it was really worth because of undue pressure being applied” to the appraiser.

The FHFA also said that rising costs are not due to the new code, but instead can be attributed to lenders’ tightened underwriting standards and mortgage-security investors’ desire to reduce fraud. They’re increasingly requiring additional information or second appraisals, according to the agency.

Other costs increase
But the new rules cause other indirect costs, too, Kessler said. Under the new code, the appraisals are not "portable,” meaning a consumer’s mortgage broker can no longer use the same appraisal to apply for loans at different lenders. An appraisal done for a Bank of America loan, for example, can’t be easily used to apply for a Wells Fargo mortgage, he said.
"Previously, the broker owned (the appraisal). That has changed. Now, it’s in the name of the actual lender,” Kessler said.

If a borrower decides to pursue a mortgage with another lender — after an appraisal has already been procured through a different lender — the borrower may need to pay for a second appraisal. Even though the borrower typically pays for the appraisal, it is held by the person or firm that orders the appraisal, he said.

The FHFA disputes this complaint, too, saying that appraisals are transferable between lenders under the new rules, although — and this is key — whether a lender decides to make a transfer or accept another lender’s appraisal is up to that lender.

Reports of time delays are also common among mortgage brokers, and the FHFA acknowledges that the implementation of the code may have slowed the mortgage process a bit. But the agency also said there are other reasons for delays, including the efficiency of an underwriting staff or increased demands by lenders.

by the associated press

Bill will set lending rules, aid shoppers

2009-08-08T11:12:00.000-07:00

WASHINGTON — Health care reform has drawn most of the attention on Capitol Hill lately, but for homebuyers, sellers and mortgage applicants the legislative ballgame will really get under way in September, when Congress begins serious work on the proposed Consumer Financial Protection Agency.

Legislation creating the new agency already is pending in the House, pushed by Financial Services Committee Chairman Rep. Barney Frank, D-Mass., who is its principal author. The Obama administration had outlined a similar plan at the end of June and considers passage of a bill a top priority.

Why should you care? What might the new agency do for you — or to you?

To begin with, you should be aware that the agency’s powers and oversight would extend far beyond mortgages and real estate — into all credit cards, debit cards, consumer loans, payday loans, credit reporting agencies, debt collection, stored-value cards and even investment advisory and financial advisory services, to name only part of the list.

The agency would be the dominant federal consumer protector in all home real estate settlements. It would regulate "affiliated” title, escrow and financing businesses connected with realty firms and builders. It would oversee equal credit opportunity and fair housing, and would set standards for all mortgage offerings, whether from the biggest national banks or the smallest local brokers.

Generally it wouldn’t seek outright bans on mortgage products that carry elevated risks — interest-only loans, for instance — but would require that lenders restrict such mortgages to well-informed applicants who can document that they understand the risks and afford the payments.

Within its first year, the agency would be tasked with creating consumer-friendly, uniform disclosures for all home purchase and financing transactions, starting with a combined "good-faith estimates” and truth-in-lending statement.

Banking and mortgage trade group leaders generally agree that the existing regulatory system failed badly, for consumers and the industry itself.

"Are reforms needed? Yes, absolutely. We’re in favor of better consumer protection,” said Anne Canfield, executive director of the Consumer Mortgage Coalition, a trade group that represents major mortgage originators and banks. How to go about achieving those reforms is where Canfield’s group and others part company with the administration and consumer supporters.

Canfield and other industry lobbyists are concerned about any radical shakeup of the way banks and mortgage companies traditionally have been overseen by the federal government. Currently the regulators responsible for checking on banks’ "safety and soundness” also are empowered to look for risky, discriminatory or anti-consumer practices and products at those institutions.

Handing over consumer protection and enforcement powers to a separate agency that might not understand the business side of the ledger could be burdensome for lenders, they argue, and could add extra layers of bureaucracy and nightmarish legal liabilities.

But proponents, such as Harvard Law School professor Elizabeth Warren, say the industry’s criticisms about stifling consumers’ choices and reshaping banking industry regulation are simply efforts to preserve the status quo.

"If the status quo is about choice,” asked Warren, an Oklahoma City native, "then explain why half of those (consumers) with subprime loans ‘chose’ high-risk, high-cost loans when they qualified for prime mortgages. The truth is no consumer ‘chose’ to accept the tricks and traps buried in the legalese of financial products,” she said — they were steered to those loans by lenders, brokers and Wall Street promoters who were not required by regulators to explain the risks to their customers.

→Outlook for the bill: Passage in the House appears likely. Count on the banks to mount their biggest battles in the Senate.

Washington Post Writers Group

Exterminator warns of bee-killing ants

2009-08-08T11:10:00.000-07:00

DALLAS — A species of ant that has ruined sewage pumps, fouled computers and made it difficult for homeowners to enjoy their yards has a new target: the honeybee.

The range of the so-called Rasberry crazy ant has more than doubled in the past year, swarming in 11 counties beginning near Houston and moving north, scientists say.

"It really is spreading at an alarming rate and we need to do research now,” said Danny McDonald, a Texas A&M University doctoral student who is examining the tiny creature’s biology and ecology. "There’s no time to wait.”

But serious research requires serious dollars.

The Texas Department of Agriculture and U.S. Department of Agriculture will fund in-depth research, but only if the ant gets the pest classification. And to do that, state officials say more research must be done. It’s a sticky Catch-22.

"This is absolutely idiotic,” said Tom Rasberry, the exterminator for whom the ant is named because he fought against them early on. "If killing honeybees does not put it in the ag pest category, I don’t know what does.”

Emerging by the billions during the warm, humid season, the reddish-brown insect is at its peak in August and September and appears resistant to over-the-counter ant killers. They are believed to have arrived in cargo through the port of Houston.

The ants — formally known as "paratrenicha species near pubens” — are called "crazy” because they wander erratically instead of marching in regimented lines. Although they eat stinging fire ants, they also feed on beneficial insects such as ladybugs and honeybees.

Apiculturists say the ants don’t appear to be interested in the honey; they’re after the brood. They invade the honeycomb cell, dine on larvae then lay their own eggs.

by the associated press

Airspeed sensor failures

2009-08-08T11:08:00.000-07:00

WASHINGTON — On at least a dozen recent flights by U.S. jetliners, malfunctioning equipment made it impossible for pilots to know how fast they were flying, federal investigators have discovered. A similar breakdown is believed to have played a role in the Air France crash into the Atlantic that killed all 228 people aboard in June.

The discovery suggests the equipment problems are more widespread than previously believed. And it gives new urgency to airlines already scrambling to replace air sensors and figure out how the errors went undetected despite safety systems.

The equipment failures, all involving Northwest Airlines Airbus A330s, were brief and were noticed only after safety officials began investigating the Air France crash — on a Rio de Janeiro to Paris flight — and two other recent in-flight malfunctions. The failures were described by people familiar with the investigation who spoke only on condition of anonymity because they were not authorized to comment publicly.

Air pressure readings
While a car’s speedometer uses tire rotation to calculate speed, an airplane relies on sensors known as Pitot tubes to measure changing air pressure. Computers interpret that information as speed. A car’s broken speedometer might be little more than an inconvenience, but many airplane control systems rely on accurate speed information to work properly.
Like the fatal Air France flight, the newly dis- covered Northwest incidents and the two other malfunctions under investigation all involved planes with sensors made by the European electronics giant Thales Corp.

The Air France crash called into question the reliability of the sensors and touched off a rush by airlines to replace them.

Many companies, however, simply replaced them with another Thales model. As it became clear the problem was more widespread, Airbus and European regulators told companies to replace at least two of the three sensors on each plane with models made by North Carolina-based Goodrich Corp. The planes are allowed to continue flying while the switch is made.

Thales officials declined to comment. The company has previously said its sensors were made to Airbus specifications.

Data found in merger
The Northwest incidents were discovered when Delta Air Lines, which merged with Northwest last year, reviewed archived flight data for its fleet of 32 Airbus A330s, the people close to the inquiry said. All the planes involved landed safely.
Aviation experts said the discovery could provide clues to what caused Air France Flight 447 to crash into the Atlantic June 1, and what might be done to prevent future tragedies.

French investigators have focused on the possibility that Flight 447’s sensors iced over and sent false speed information to the computers as the plane ran into a thunderstorm at about 35,000 feet.

Three weeks after the crash, the U.S. National Transportation Safety Board began investigating two other A330 flights that experienced a loss of airspeed data.

The most recent was on June 23, when a Northwest flight hit rain and turbulence while on autopilot outside of Kagoshima, Japan. According to an NTSB report, speed data began to fluctuate. The plane alerted pilots it was going too fast.

Autopilot and other systems began shutting down, putting nearly all the plane’s control in the hands of the pilot, something that usually happens only in emergencies.

by the associated press

27 reported ill in ground beef recall

2009-08-08T11:06:00.000-07:00

VISALIA, Calif. — Health officials in three states say at least 27 people have reported illnesses tied to recalled ground beef that may be tainted with salmonella.

Thursday, Fresno-based Beef Packers Inc. recalled 825,769 pounds of ground beef produced from June 5 to June 23.

The U.S. Department of Agriculture’s Food Safety and Inspection Service says the beef was sent to retail distribution centers in Arizona, California, Colorado and Utah.

The department said Friday that California, Colorado and Wyoming have reported illness that may be linked to the recall.

Colorado health officials say 21 people there have been sickened. All are recovering.

California officials say five people have reported feeling sick. The total number of people ill in Wyoming is unclear.

The beef was repackaged and sold under different retail brand names, so customers are being urged to check with their local store to determine if they bought any of the beef.

A separate recall last month involved beef tied to the hospitalization of 12 people in a possible E. coli outbreak. That meat was produced in Colorado.

Twitter outage Linked to attacks on blogger

2009-08-08T11:03:00.000-07:00

NEW YORK — The outage that knocked Twitter offline for hours was traced to an attack on a lone blogger in the former Soviet republic of Georgia — but the collateral damage that left millions worldwide tweetless showed just how much havoc an isolated cyberdispute can cause.

"It told us how quickly many people really took Twitter into their hearts,” Robert Thompson, director of the Center for the Study of Popular Television at Syracuse University, said Friday.

Tens of millions of people have come to rely on social media to express their innermost thoughts and to keep up with world news and celebrity gossip.

Twitter "is one of those little amusements that infiltrated the mass behavior in some significant ways, so that when it went away, a lot of people really noticed it and missed it.”

The attacks Thursday also slowed down Facebook and caused problems for the online diary site LiveJournal.

But Twitter, the 140-character-or-less messaging site used by celebrities, businesses and even Iranian protesters, suffered a total outage that lasted several hours.

Those attacks continued Friday from thousands of computers pummeling its servers, said Kazuhiro Gomi, chief technology officer for NTT America Enterprise Hosting Services, which actually hosts Twitter’s service.

Twitter crashed because of a denial-of-service attack, in which hackers command scores of computers toward a single site at the same time to prevent legitimate traffic from getting through.

The attack was targeted at a blogger who goes by "Cyxymu” — the name of a town in Georgia — on several Web sites, including Twitter, Facebook and LiveJournal.

But they could have just as well targeted Twitter itself. That’s because the effects were the same whether the excess traffic went to the "twitter.com” home page or to the page for Cyxymu at "twitter.com/cyxymu.”

Same with Facebook and LiveJournal.

"A denial of service attack like this one is a very blunt instrument,” said Ray Dickenson, chief technology officer at Authentium, a computer security firm. It’s as if a viewer who didn’t like one show on an entire television channel decided to "knock out the whole station.”

Or like fishing with dynamite: You’ll catch something, but the blast will kill dolphins, sharks and other organisms, too.

Just who was behind these attacks is not yet clear, but the dispute was probably related to the ongoing political conflict between Russia and Georgia.

Gomi said the attacking computers were located around the world and the source of the attacks was not known.

by the associated press

Fewer layoffs might give companies and consumers new confidence

2009-08-08T11:01:00.000-07:00

WASHINGTON — Finally, a lot fewer workers are hearing the dreaded words, "You’re fired.”

In the clearest sign yet that the recession is ending, layoffs slowed dramatically in July, the jobless rate dipped for the first time in 15 months and workers’ hours and pay edged upward.

Those are the kinds of figures that could give Americans the psychological boost necessary for recovery to take root after the worst recession since World War II.

A net total of 247,000 jobs were lost last month, the fewest in a year and a drastic improvement from the 443,000 jobs that vanished in June.

The Labor Department’s report Friday showed that the unemployment rate dropped a notch to 9.4 percent in July, from 9.5 percent the previous month. Together with slight increases in the average workweek and wages, the new figures suggested the economy is in a transition from recession to recovery.

"The worst may be behind us,” President Barack Obama declared. "Today, we’re pointed in the right direction.”

Still, the job market remains shaky.

A quarter-million lost jobs are a far cry from the employment growth needed to put the national economy on solid footing.

When the economy is healthy, employers need to add a net total of about 125,000 jobs a month to keep the unemployment rate stable. And to push the jobless rate down to a more normal 5 percent, it would take stronger growth — at least 200,000 new jobs a month. Economists say it might take until 2013 to drive down the unemployment rate to 5 percent.

Yet the improvements in July could give some businesses the confidence to hire again — or at least not to lay off more workers. And consumers, less anxious about losing jobs, could respond by spending more freely.

"If people and companies think the worst is behind them — and it probably is — their confidence will be restored,” said Richard Yamarone, economist at Argus Research. "That confidence can feed on itself.”

On Wall Street, the report propelled stocks higher. The Dow Jones industrial average jumped 114 points, and other stock averages also gained.

Analysts had been forecasting bleaker employment figures: more job losses and an increase in the unemployment rate to 9.6 percent.

The White House said the president still expects the rate to hit 10 percent this year. So do many economists and the Federal Reserve.

The worst may be behind us.”

President Barack Obama

by the associated press

Fairs attract record attendance

2009-08-05T01:01:00.000-07:00

CHARLESTON, W. Va. — Fun-seekers venturing out to farm fairs, art festivals and other mainstays of the American summer are finding either crowds or cancellation notices this year — and sometimes for the same reason.

Many festivals have met their demise when national sponsors pulled away and lawmakers slashed grant budgets, leaving organizers without enough money to buy tables, tents, portable toilets and other fair basics. That has many wondering whether their events will ever mount a comeback, though the ones that downsize stand a better chance than the ones that cancel entirely.

The survivors have trimmed endeavors and expenses, with many receiving record crowds eager for a recession-inspired "staycation.”

"It’s going to be Darwinian,” said to Ira Rosen, who runs Entertainment on Location, a festival and event production service. "The ones who can survive are going to be stronger, because now they have to watch every nickel and dime, and there’s going to be less competition.”

The flip side of that gloom is that fairs have weathered past recessions well. For every event cutting back or canceling this year, there seems to be another with happy crowds shelling out for corn dogs, concerts and rides.

"The trend really is people vacationing here in their backyard,” said Eiron Smith, a spokeswoman for Watkins Glen International Raceway in New York, which just wrapped up the 12th Finger Lakes Wine Festival.

Watkins Glen, which owns the festival, spent less selling itself to other states and more on marketing at home, Smith said, and was rewarded with a 10 percent increase in attendance over 2008.

Typically, the festival draws about 20,000.

When Gov. Ted Strickland opened the 156th annual Ohio State Fair this week, he called it a way for families to enjoy a "staycation.” State fair spokeswoman Christina Leeds said the event attracted 227,719 people during the first four days of its 12-day run.

The 17-day Alameda County Fair in California drew more than 432,000 people in July — 1,000 more than the previous attendance record, set in 1997. Other fairs in California and Wisconsin have also drawn record crowds, said Marla Calico, director of grants and special education for the International Association of Fairs and Expositions, which has 1,300 member events.

Bigger crowds are common during economic downturns, Calico said.

"There’s almost a pent-up demand for some- thing fun,” she said. "It’s a nice escape.”

by the associated press

June shows slight gain

2009-08-05T00:59:00.001-07:00

WASHINGTON — As gasoline prices rose, Americans spent more in June than in May — despite falling incomes. For the rest of the year, economists expect falling wages and rising unemployment to act as a drag on spending.

Consumer spending is closely watched because it accounts for about 70 percent of economic activity and has helped lift the economy out of previous recessions. While analysts expect the economy to grow in the second half of this year, consumers aren’t likely to lead the way.

Americans boosted their spending 0.4 percent in June, the Commerce Department said Tuesday, the second consecutive monthly increase. But adjusting for inflation, spending fell 0.1 percent, following a flat reading in May. Inflation-adjusted spending hasn’t increased since February, the department said.

Personal income, meanwhile, dropped 1.3 percent in June, the eighth straight decline and steepest fall in four years. Incomes were inflated in May due to one-time payments from the Obama administration’s stimulus program. But wages and salaries also fell 0.4 percent in June.

"The key message is that … income remains weak” and consumers are likely to keep saving more, Paul Dales, U.S. economist at Capital Economics, wrote in a note to clients. "Under those circumstances, we expect spending to remain muted for some time.”

Gasoline prices peaked June 22 after rising nearly every day for two months. A price index included in the income and spending report showed overall prices rose 0.5 percent in June, but were up only 0.2 percent when food and energy are excluded.

by the associated press

Climate experts not for Cash for Clunkers

2009-08-05T00:55:00.000-07:00

WASHINGTON — Cash for Clunkers could have the same effect on global warming pollution as shutting down the entire country — every automobile, every factory, every power plant — for an hour per year.

That could rise to three hours if the program is extended by Congress and remains as popular as it is now.

Climate experts aren’t impressed.

Compared to overall carbon dioxide emissions in the United States, the pollution savings from Cash for Clunkers do not noticeably move the fuel gauge. Environmental experts say the program — conceived primarily to stimulate the economy — is not an effective way to influence climate change.

"As a carbon dioxide policy, this is a terribly wasteful thing to do,” said Henry Jacoby, a professor of management and co-director of the Joint Program on the Science and Policy of Global Change at MIT. "The amount of carbon you are saving per federal expenditure is very, very small.”

Officials expect a quarter-million gasoline guzzling vehicles will be junked under the original $1 billion set aside by Congress — money that is now all but exhausted.

Calculations by The Associated Press, using Transportation Department figures, show that replacing those fuel hogs will reduce carbon dioxide emissions by just under 700,000 tons a year. While that may sound impressive, it’s nothing compared to what the U.S. spewed last year: nearly 6.4 billion tons (and that was down from previous years).

That means on average, every hour, America emits 728,000 tons of carbon dioxide. The total savings per year from Cash for Clunkers translates to about 57 minutes of America’s output of the chief greenhouse gas.

Likewise, America will be using nearly 72 million fewer gallons of gasoline a year because of the program, based on the first quarter-million vehicles replaced. U.S. drivers go through that amount of gas every 4

hours, according to the Energy Department.

by the associated press

Prairie grouse protections could threaten wind energy in Oklahoma

2009-08-05T00:52:00.000-07:00

LUBBOCK, Texas — A little prairie grouse could give the wind energy industry big fits in Texas, Oklahoma and three other states.

Should the lesser prairie chicken become listed as threatened or endangered — and it’s close now — there would be significant restrictions on companies hoping to plant towering turbines across a five-state region believed to have some of the nation’s best wind energy potential.

"We’ve never seen the likes of this,” said Texas Parks and Wildlife Department wildlife biologist Heather Whitlaw, who is part of conservation efforts with the other states and believes the bird could be listed within two years. "Anybody who puts anything on our landscape would be evaluated in one form or another.”

Scientists believe the prairie chicken population has dropped 80 percent nationally since 1963, the result of habitat loss and fragmentation, population isolation, drought and changes in land usage.

They once numbered about 3 million across an area that stretches through eastern New Mexico, eastern Colorado, western Kansas, northwest Oklahoma, and in parts of the Texas Panhandle and South Plains. Estimates show their population now at about 30,000.

The birds’ habitat could shrink further beginning in September when 1.3 million acres in the five-state area come out of a federal land conservation program started about 25 years ago. Farmers and ranchers may then use the land as they wish — which could include crop cultivation that would eliminate more of the bird’s breeding and nesting grounds.

Their habitats also lie in areas with plentiful and strong wind resources — where energy companies are eager to build.

The companies, which have been criticized before over the number of birds and bats killed by flying into the blades of wind turbines, are being more careful about where they put wind farms, said Laurie Jodziewicz, a spokeswoman for the American Wind Energy Association.

A tall threat
For the lesser prairie chicken, it’s not about the blades — it’s about size.
The shortflight bird, which weighs about 400 grams, has an aversion to tall structures around its breeding and nesting grounds because its predators include raptors who perch in high places awaiting their opportunity.

For about five years the wind industry generally has not heeded a 2004 recommendation from the U.S. Fish and Wildlife Service asking companies not to put turbines within 5 miles of a lek, the lesser prairie chickens’ breeding grounds. The American Wind Energy Association has asked for the scientific basis of the 5-mile limit.

"We still have not seen anything that looked at prairie grouse and leks and wind turbines,” Jodziewicz said. "I don’t know that (any wind company) is” looking at the 5-mile limit.

The lesser prairie chicken should have been listed as threatened or endangered 10 years ago, said Mark Salvo with the Sante Fe, N.M.-based group WildEarth Guardians, which filed a listing petition for it in the mid-1990s.

Restoring the prairie chicken population "will be much more difficult now” even if it is listed, he said. Moreover, as developers "slice and dice the habitat into ever smaller spaces,” Salvo said, other plants and animals that depend on that kind of habitat also will suffer.

"It’s already a relatively small landscape and it’s getting smaller,” he said. "We are in an emergency situation here.”

by the associated press

Senators from Oklahoma , oppose ‘clunkers’ extension

2009-08-05T00:49:00.000-07:00

WASHINGTON — Oklahoma’s senators said Tuesday that they oppose extending the government’s Cash for Clunkers program.

Sen. Jim Inhofe called it a "regressive tax.”

Inhofe and Sen. Tom Coburn, both Republicans, criticized the program on the same day Senate Majority Leader Harry Reid said the Senate will vote this week on adding $2 billion to the $1 billion already spent. Reid, D-Nev., said there are enough votes to approve the program’s extension.

The House last week overwhelmingly approved the extension, directing that money be taken from stimulus funds.

Inhofe said Tuesday, "On the surface, the Cash for Clunkers program may seem like a good idea. However, closer examination highlights why government should not get into the business of running businesses. It just doesn’t work.”

Steve Rankin, president of the Oklahoma Automobile Dealers Association, said Monday that the program — which offers rebates up to $4,500 for trading in used cars and sport utility vehicles for vehicles that get better mileage — had generated a lot of interest, along with a lot of headaches.

"Our main concern now is just that (dealers) get paid” for the cars they’ve sold through the program, Rankin said.

Dealers have had serious problems trying to process their sales on the government Web site, Rankin said. He said the office manager for one car dealer had worked through the night this past weekend trying to process the 60 sales made through the program and was able to complete only two.

"It’s a laborious process,” Rankin said. "It’s hard to get through.”

Rankin said many dealers had invested advertising money connected to the program, on top of the price reductions they had made in anticipating the government payments. Now, he said, they’re worried about getting their reimbursements.

Though the program has drawn praise from the National Automobile Dealers Association and many lawmakers for moving cars off of dealer lots, Inhofe cited estimates that only 50,000 cars had been sold that wouldn’t have otherwise.

"That means that taxpayers have spent $20,000 for each additional sale,” said Inhofe, of Tulsa. "The program simply feeds the myth that the government offers something for nothing when in reality, the program acts as a regressive tax. By mandating that dealers destroy perfectly good cars that are traded in, the used car market has less supply, meaning higher costs. This means that many Americans who, even with the government incentive, cannot afford to purchase a new car will end up being charged more when trying to purchase a used car. This program should be ended, not extended.”

Coburn said farmers were going to their barns to get pickups to trade in through the program.

"Americans aren’t stupid,” he said.

But he said Congress didn’t have the money to fund the program.

"We’re going to steal it from our children,” said Coburn, of Muskogee.

Coburn spokesman John Hart said the senator hopes to be able to offer amendments to the $2 billion extension "dealing with the cost and the structure of the program.”

from the oklahoma

Obama’s Russian visit left questions

2009-07-08T17:16:00.000-07:00

MOSCOW — For two days, President Barack Obama pressed the reset button with Russia.

The results: He got the expected agreement on deep cuts in nuclear arsenals, but he is leaving Moscow with few assurances of Kremlin help in solving other issues key to his foreign policy agenda.

He also is leaving behind a spark he hopes will blaze to life and thaw U.S. relations with a former superpower with a chip on its shoulder. But his two days of summitry produced no breakthroughs.

Throughout the meetings and speeches, Obama stayed on message: The United States and Russia have too many overlapping interests to move through the coming decades at odds. The time for confrontational Cold War thinking is well-past. America wants Russia to be "strong, peaceful and prosperous.”

Issues left on table
On several issues key to Obama foreign policy, the Russians were unbending, at least for now.
While they agreed to join the U.S. in reassessing the threat from Iran’s nuclear ambitions, there was no hoped-for Kremlin offer of direct intervention with Tehran.

On the flash point issue of Georgia, where the Russian army crushed the tiny country’s military a year ago, the Kremlin rejected U.S. complaints about Russian insistence that breakaway Abkhazia and South Ossetia remain free of Georgian control.

Nor did there appear to have been progress in the dispute over arms control.

The two sides did agree to far greater cooperation on Afghanistan, where Obama is bolstering U.S. troop strength in the fight against militants.

Negotiators also prepared a series of side agreements and established a commission nominally headed by Obama and Russian President Dmitry Medvedev. It is designed to quicken the pace of U.S.-Russian engagement on issues important to both countries.

by the associated press

Energy futures could face limits

2009-07-08T17:10:00.000-07:00

WASHINGTON — Federal regulators will examine whether the government should impose limits on the number of futures contracts in oil and other energy commodities held by speculative traders, the head of the Commodity Futures Trading Commission said Tuesday.

The agency will hold a public hearing later this month to gather views from consumers, businesses and market participants on the idea of new limits for energy futures contracts, CFTC Chairman Gary Gensler said in a statement. It will be the first in a series of hearings in July and August on various topics to determine how the commodities agency "should use all of its existing authorities to accomplish its mission,” he said.

The move comes against a backdrop of concern in Congress and complaints by traders over speculation in the oil futures market.

By law, the CFTC sets limits on the amount of futures contracts in agricultural products such as wheat, corn and soybeans that can be held by each market participant to protect the market against manipulation. But for energy commodities — crude oil, heating oil, natural gas, gasoline and other energy products — it is the futures exchanges themselves that set the position limits.

"This different regulatory approach to position limits for agriculture and other physically delivered commodities deserves thoughtful review,” Gensler said.

"It is incumbent upon the CFTC to ensure a fair and transparent price discovery process for all commodities.”

by the associated press

IRS temporarily stops some fines

2009-07-08T17:06:00.000-07:00

WASHINGTON — The IRS has temporarily stopped collecting penalties from some small businesses that have been hit with big fines for not disclosing the use of questionable tax shelters.

The fines, which can reach $300,000 a year, were an unintended consequence of a 2004 law aimed at big corporations that use the shelters to avoid taxes. Lawmakers asked the Internal Revenue Service last month to suspend collections while they work to change the law.

The IRS agreed to suspend collections through September on cases in which businesses gained less than $200,000 a year from the tax shelters, IRS Commissioner Doug Shulman said in a letter to lawmakers released Tuesday.

Shulman said the penalties, in some cases, "are way out of line with penalties for other similar cases of noncompliance.”

"Many of the transactions now under examination involve tax benefits that are minor when compared to the statutory penalty amounts,” Shulman said in the letter.

What the law does
The existing law imposes reporting requirements on businesses and individuals who use tax shelters that the IRS has identified as abusive. The goal is to red flag these "listed transactions” so IRS agents can more closely examine them.
The penalties for failing to disclose the transactions on tax forms are $100,000 a year for individuals and $200,000 a year for businesses. Taxpayers who use the tax shelters for both individual and business purposes face penalties of $300,000 a year.

The penalties cannot be appealed, National Taxpayer Advocate Nina Olson said in her 2008 annual report. Olson, an independent watchdog within the IRS, cited a case in which a small business owner saved $45,000 over three years from a tax shelter and was fined $900,000 by the IRS.

Lawmakers from both parties said they will work to change the law to make the penalties more in line with the offenses.

by the associated press

Do-it-yourself repairs

2009-07-08T16:55:00.000-07:00

NEW YORK — Car owners looking to trim expenses are sidestepping the mechanic and plunging into their own repairs. Or trying to, anyway. Their efforts can backfire, costing more in the end and creating do-it-yourself horror stories.

Mechanics say they’ve seen it all in recent months, including incorrectly applied brake pads and antifreeze poured into engines.

"A lot of people, they’re in dire straits,” said Pam Oakes, owner of Pam’s Motor City Automotive in Fort Myers, Fla. "They try to do this stuff at home in their driveway.”

The results can be frustrating, and sometimes outright dangerous.

When the taillight of Laura Musall’s five-year-old Nissan Altima burned out, she hoped to avoid the repair shop by letting her husband replace it at home. It seemed simple enough: Buy a bulb, pop off the cover and make the switch.

But her husband struggled to remove the plastic casing, and when he used a screwdriver to pry it off, it shattered. What came next was even worse. Her Nissan dealer wanted $250 to order a new one.

Musall, a real estate agent from Fishers, Ind., figured "10 bucks, we’d be done.” "But apparently,” she said, "it’s not a do-it-yourself thing if you don’t know what you’re doing.”

While well-intentioned, many people forget that today’s cars are vastly more complicated than models made just years ago. Most are so computer-controlled that owners can’t spot problems without access to specific tools and data programs, said Dave Striegel, owner of Elizabeth AutoCare in Elizabeth, Pa.

"They’re not able to do nearly the work that they used to do — it’s even going beyond the heads of a lot of technicians who aren’t keeping up-to-date,” Striegel said.

Remaining undeterred
Even so, some car owners remain undeterred. On Yahoo, queries for the terms "car repairs” and "salvage auto parts” are up 77 percent and 99 percent respectively in just the past month, according to the site’s data.
Other car repair search terms remain at three-year highs, reflecting "a renewal of the good old American independent spirit,” said Vera Chan, a senior editor for the site.

The urge to cut out the middleman extends to even the wealthy, said Stephen Viscusi, a New York-based author and career consultant. "We feel the need to be frugal and save money,” he said.

But that doesn’t mean repairs come easily. Viscusi tried to change the oil on his Mercedes-Benz sedan — and wound up with it all over his face, a situation he likened to an episode of "I Love Lucy.” He also struck out replacing spark plugs on his BMW.

Auto shops say there’s an easy way to save money: Just be upfront about the repairs you’ve tried at home.

Most do-it-yourselfers, perhaps out of sheer embarrassment, play coy when mechanics start asking questions about what went wrong with the car, said Paul Lambdin, owner of Cary Car Care in Cary, N.C.

To piece together what went wrong, mechanics typically have to start asking questions, and lots of them, said Oakes, of the Fort Myers repair shop.

"You play quiz master with them. … you play the 20 question game and then it comes out,” she said.

by the associated press

Pickens alternative energy plan , is put on the side

2009-07-08T16:50:00.000-07:00

NEW YORK — The past year has been tough on T. Boone Pickens and his $60 million mission to wean America off of foreign oil.

Over the past 12 months, Pickens pressed the public to rethink its use of energy. His "Pickens Plan” called for a number of changes such as investing in wind and solar energy, rebuilding the country’s electrical grid and replacing gasoline with natural gas in cars and trucks.

Pickens says he was influential in starting a national dialog on energy and helped draft legislation that would give tax incentives for natural gas-burning vehicles.

But after spending millions on television commercials and a public relations tour that took him to 74 cities and 22 town halls, his plan has run into some sizeable hurdles, most notably a crash in energy prices.

As prices plunged, the Texas billionaire’s hedge funds lost billions of dollars. Pickens also scrapped plans for the world’s biggest wind farm, and California voters rejected a natural gas initiative he backed.

"I do wonder how long that I can continue at the pace,” Pickens, 81, said Tuesday in an interview with Associated Press reporters and editors. "I know my time is limited. I’m in a hurry. I want to get this done.”

Billionaire cites progress
During the past year, Congress has approved incentive programs that will funnel billions of dollars to solar, wind and other renewable energy programs. The House of Representatives passed an energy bill that would create a cap-and-trade system for carbon dioxide emissions.
"I think we should be given credit for some part of that,” he said.

When Pickens announced his plan last year at this time, oil cost more than $130 a barrel and gasoline went for more than $4 per gallon. Crude has since fallen as low as $32.70 and now trades at $62.34.

Gasoline costs about $2.61 at the peak of the driving season.

While slumping energy prices have been a silver lining during the recession, there are some fears that the urgency to build solar, and for Pickens, wind power, is now diminished. For example, the natural gas that power companies use now costs less than half of what it did last year, making it harder for wind to compete.

The Texas oil man made a big splash last year by leasing about 200,000 acres in West Texas for a massive 1,000 megawatt wind farm. But he said Tuesday that the plan has fallen apart because of technical problems concerning transmission.

"We’re not going to be able to do them (in Texas), at this point,” he said.

Pickens said he already has 687 wind turbines on order from General Electric, and he’ll probably spread them among other projects.

The Pickens Plan also calls for building fleets of cars and trucks to burn natural gas.

But so far efforts have failed to create incentives for natural gas vehicles.

Last year, Pickens’ Clean Energy Fuels Corp. pumped $19 million into a California bond initiative that would have handed rebates to people who bought natural gas and other alternative-fuel vehicles. But critics said the measure would have steered taxpayer dollars to Pickens, who is the majority shareholder of a company that supplies natural gas for transportation, and voters rejected it.

He’s now pushing for a similar measure in Congress.

Today, Pickens will release an ad promoting natural gas as an alternative fuel for cars and trucks. He said he also will be in Washington standing next to Sens. Robert Menendez, and Harry Reid when a natural gas bill is announced.

He’s embarking on another tour across the country to remind the public that even though oil prices are lower than last year, the world still faces an energy crisis.

by the associated press

Harve Presnell dies of cancer at 75

2009-07-02T10:09:00.000-07:00

NEW YORK — Harve Presnell, whose booming baritone graced such Broadway musicals as "The Unsinkable Molly Brown” and "Annie,” has died at age 75.

Although he was best known for his roles in musical theater, Presnell also is remembered as William H. Macy’s father-in-law in the Coen brothers’ 1996 film "Fargo.”

by the associated press

President Obama , urges movement on health care reform

2009-07-02T10:05:00.000-07:00

WASHINGTON — With lawmakers on Capitol Hill struggling to reconcile clashing views on overhauling the nation’s health care system, President Obama made a new appeal to the public not to let Congress put off action on his top legislative priority.

"In order to make it happen, I’m going to need ordinary Americans to stand up and say, now’s the time,” Obama said Wednesday at a town hall-style forum at Northern Virginia Community College in the Washington suburb of Annandale, Va. "If Congress thinks that the American people don’t want to see change, frankly the lobbyists and the special interests will end up winning the day.” The president said lawmakers are often tempted to drop politically sensitive issues.

"For those who say, ‘Well, you know what, this is something that is very complicated, so we shouldn’t rush into it,’ that’s what happens in Congress all the time,” Obama said. "They have hearings, they write white papers, and then suddenly the lobbyists and the special interests start going at it. And next thing you know, another 10 years has gone by, and we still haven’t done anything.” Wednesday’s forum was the third in three weeks devoted to health care.

Debate over health care legislation is expected to move to center stage next week when lawmakers return to Washington from their July 4 recess.

But leading Republicans, including Senate Minority Leader Mitch McConnell, R-Ky., have begun to call for slower action. "We could target the things that are askew in the system and fix them without this kind of massive overhaul,” he recently said on Fox News Sunday.

Obama has said he hopes to sign a health care bill in the fall. Wednesday, he implored his audience not to let that timeline slip.

by the associated press

Python blamed for killing Florida girl’s

2009-07-02T09:57:00.000-07:00

OXFORD, Fla. — A 12-foot pet Burmese python escaped a terrarium and strangled a 2-year-old girl in her bedroom Wednesday at a central Florida home, authorities said.

Shaunnia Hare was already dead when paramedics arrived about 10 a.m., Lt. Bobby Caruthers of the Sumter County Sheriff’s Office said.

Charles Jason Darnell, the snake’s owner and boyfriend of Shaunnia’s mother, discovered the snake missing and went to the girl’s room, where he found it on the girl and bite marks on her head, Caruthers said. Darnell, 32, stabbed the snake until he could pry the child away.

"The baby’s dead!” a sobbing caller from the house screamed to a 911 dispatcher in a recording. "Our stupid snake got out in the middle of the night and strangled the baby.”

Authorities did not identify the caller and removed the person’s name from the recording.

Authorities removed the snake from the home Wednesday afternoon. Once outside, the snake was placed in a bag then inside a dog crate. The snake was still alive.

Darnell did not have a permit for the snake, which would be a second-degree misdemeanor, said Joy Hill, a spokeswoman with the Florida Fish and Wildlife Conservation Commission. He has not been charged, but Caruthers said investigators were looking into whether there was child neglect.

Hill said the snake will be placed with someone who has a permit, pending an investigation.

by the associated press

Michael Jackson stored ‘Endless’ supply of music in his vaults

2009-07-02T09:37:00.000-07:00

NEW YORK — Michael Jackson had a mountain of unreleased recordings in the vault when he died — music that is almost certain to be packaged and repackaged for his fans in the years to come.

The material includes unused tracks from studio sessions of some of Jackson’s best albums, as well as more recently recorded songs made with Senegalese R&B singer and producer Akon and Black Eyed Peas frontman will.i.am.

"There are dozens and dozens of songs that did not end up on his albums,” said Tommy Mottola, who from 1998 to 2003 was chairman and CEO of Sony Music, which owns the distribution rights to Jackson’s music. "People will be hearing a lot of that unreleased material for the first time ever. There’s just some genius and brilliance in there.”

The releases, Mottola said, "could go on for years and years — even more than Elvis.”

Since Jackson’s death Thursday, there has been an enormous, almost unprecedented demand for the King of Pop’s music. Nielsen SoundScan said Wednesday that three of his records — "Number Ones,” "Essential Michael Jackson” and "Thriller — were the best-selling albums of the week, and 2.3 million tracks of his have been downloaded in the U.S. alone.

No plans yet
When a music star of Jackson’s stature dies, labels typically comb through their archives to pull out anything they can release.
New compilations of recordings by performers such as Elvis, Tupac and Jeff Buckley still are released nearly every year.

Mottola, who has described himself as the "shepherd and gatekeeper” of Jackson’s catalog and is familiar with it better than anyone, said that for every album Jackson made — including classics like 1979’s "Off the Wall” and 1982’s "Thriller” — he recorded several tracks that didn’t make it onto the records.

(Mottola had only laudatory things to say about Jackson, who criticized Mottola in 2002 as a racist. Among those who defended Mottola at the time was the Rev. Al Sharpton.)

The details of who owns Jackson’s unreleased music and concert footage are not entirely clear. Sony Music declined to comment. A person involved with the label who requested anonymity said no new projects or compilations are being planned yet.

by the associated press

Immigration and Customs Enforcement Agency to audit 652 businesses in illegal immigrant crackdown

2009-07-02T09:30:00.000-07:00

WASHINGTON — The Obama administration launched investigations of hundreds of businesses around the country Wednesday as part of its strategy to focus immigration enforcement on the employers who hire illegal workers.

Immigration and Customs Enforcement has begun notifying businesses of plans to audit their I-9 forms — employment eligibility documents — the agency told members of Congress Wednesday.

Immigration officers served "Notices of Inspection” to 652 businesses, the Homeland Security Department said. By comparison, 503 such notices were issued to businesses last year. Businesses were chosen for inspections based on leads and other investigative work, Immigration and Customs Enforcement said.

Employers are required to keep the I-9 forms and must check the authenticity of documents provided by the employee. The Homeland Security Department said it would not release the names or locations of the businesses that are being audited because of the ongoing investigations.

"ICE is committed to establishing a meaningful I-9 inspection program to promote compliance with the law,” John Morton, Immigration and Customs Enforcement director, said in a statement.

President Barack Obama has said his administration’s strategy for stemming illegal immigration would focus on employers who hire illegal workers.

The Bush administration was criticized for deploying armed agents to raid businesses and arrest workers suspected to be working illegally.

Homeland Security Secretary Janet Napolitano has said investigations will focus on businesses that knowingly hire immigrants who cannot legally work in the U.S.

by the associated press

Congress gives GM a deadline to sell assets or lose federal funds

2009-07-02T09:26:00.000-07:00

NEW YORK — A senior member of President Barack Obama’s auto task force testified Wednesday that the U.S. government will not continue to fund General Motors Corp.’s operations if the automaker doesn’t get approval to sell its assets to a new company within the next 10 days.

"We have no intention to further fund this company if the sale order is not entered by July 10,” Harry Wilson, one of the Treasury Department officials overseeing GM’s restructuring, said while being cross-examined by an attorney for a group of GM bondholders who are opposed to the sale.

The No. 1 U.S. automaker’s government-backed plan for a quick exit from Chapter 11 hinges on the sale plan, which would allow it to leave behind many of the costs and liabilities that have made the company unprofitable.

The Detroit-based automaker, whose June 1 filing for bankruptcy protection was the fourth-largest in U.S. history, is hoping to avoid a lengthy court battle over the sale. Last month, objections from bondholders and other groups dragged out rival Chrysler LLC’s hearing on its sale for three days. This is day three of the GM hearing.

U.S. Judge Robert Gerber urged the parties involved to try and reach resolutions on as many issues as possible in order to avoid lengthy arguments, but he conceded that the process would likely carry over to today.

by the associated press

Better Auto Sales

2009-07-02T09:23:00.000-07:00

DETROIT — After a yearlong free fall in the American car market, the decline of sales slowed in June, offering hope to automakers that the bottom has been reached and more shoppers may slowly start returning to showrooms soon.

Still, sales were down 7.1 percent from May, which generally is a stronger sales month.

Overall, automakers sold 859,847 vehicles in June, a 28 percent drop from the same month last year, according to Autodata Corp.

Sales declines slowed for four of the six major carmakers, with Ford Motor Co. reporting the smallest drop of 10.7 percent. For many months, Ford and other companies have been reporting year-over-year declines of 40 percent or more.

Even Chrysler, which emerged from bankruptcy protection early in June, saw its decline shrink.

Analysts say that’s among the signs that the auto industry’s slump that began with $4 per gallon gasoline last summer could be leveling off.

"It is unlikely things will get any worse,” said Jesse Toprak, executive director of industry analysis for Edmunds.com.

The slowly improving economy and government incentives of up to $4,500 to trade in inefficient clunkers for new vehicles could lead to modest improvements in the second half of the year, he said.

In anticipation of heightened traffic at dealers and higher sales later this year, Ford has increased its production order by 25,000 vehicles for the third quarter.

"We’re making steady progress,” Jim Farley, Ford’s vice president of marketing, said in a statement. "We remain grounded, however, given challenging industry and economic conditions.”

And while Chrysler’s sales results were dismal — only 68,297 cars and trucks, many sold because of incentives of more than $4,800 per car.

"At a time when they are emerging from bankruptcy and trying to reinvent themselves, it is not a huge surprise,” Toprak said.

Affordability and rising fuel prices — from $2.28 per gallon in May to $2.64 in June — boosted sales of sales of compact cars, some hybrids and larger crossover vehicles.

Sales of fuel-efficient hybrid vehicles that run on gasoline and electricity were mixed.

Analysts had speculated that June sales, when adjusted for seasonal variances and multiplied to calculate an annual selling rate, would exceed 10 million for the first time this year.

But sales once again fell just shy of that mark at 9.7 million for June. That’s a huge reduction from more than 16 million as recently as 2007.

by the associated press

McDonald's has the Beef

2009-07-02T09:20:00.000-07:00

McDonald’s Corp. will sell a new line of bigger burgers made from Angus beef and priced at about $4 each to bring in customers looking for a beefy alternative to pricier burgers at sit-down restaurants.

The burgers will be sold in all U.S. locations for the next few months. The fast-food chain declined to specify whether the burgers will become a part of the company’s core menu.

from the wire

Wal-Mart still Top Retailer

2009-07-02T09:14:00.000-07:00

Walmart Inc. kept its crown as retail king, ranking No. 1 in U.S. sales for 2008, according to the National Retail Federation’s STORES magazine, but Oklahoma stores also made the list.

Walmart, the world’s largest retailer, posted revenue exceeding $405 billion in 2008, attributed in part to a successful re-launch of its Great Value line and attracting new customers because of the economic environment.

STORES magazine ranked the top 100 retailers by annual revenues reported in Securities and Exchange Commission filings, public statements by the companies and estimates based on Planet Retail research.

Two Oklahoma retailers also made the cut. Oklahoma City-based Love’s Travel Stops & Country Stores came in 31st place with just under $12.5 million in annual revenue, an increase of 8.6 percent. Tulsa’s QuickTrip claimed the 45th spot on the list, with about $8.64 million in revenue in 2008.

from the wire

Gene variants connected to higher schizophrenia risk

2009-07-01T18:09:00.000-07:00

WASHINGTON (AP) — A handful of typos in a mysterious region of the human genetic code are connected to a slightly higher risk of schizophrenia, new studies show.

In a first-of-its-kind look at the genetic elements of schizophrenia, a massive international effort focused on seven spots of genetic variation. Dozens of scientists then published three papers from the effort on Thursday in the journal Nature. Those genetic blips account for at most one-third of genetically caused schizophrenia.

Based on studies of identical twins, scientists figure that about half of schizophrenia is inherited with the rest having other causes.

What the studies show more than anything is that schizophrenia doesn't have a single genetic cause. It is more like a massive jigsaw puzzle and researchers just found a few end pieces, said Dr. Thomas Insel, director of the National Institute of Mental Health, which financed much of the work.

Researchers looked at the genomes of more than 50,000 people, some with schizophrenia and some without. Schizophrenia, first described 100 years ago as a split between thought and perception, includes thinking disorders, hallucinations, psychosis and odd behaviors, Insel said.

The findings have little practical immediate benefit, but "give us a little bit of insight into the biology of the disease," said one of the lead authors, Dr. Kari Stefansson, chief executive officer of deCODE Genetics in Iceland.

The risk increases found in the papers are small — a jump of between 15 and 25 percent above the normal 1 in 100 risk of developing schizophrenia. And all but one of the genetic variations are common to most of the population, so they can't be used much as a screening tool either.

What's intriguing is where five of those seven genetic variations lie.

Five are on "the short arm" of a single chromosome connected with all sorts of diseases, including ones relating to immune illnesses, such as Type 1 diabetes, said Insel, who was not part of the study teams. He calls that area "the Bermuda Triangle of the human genome."

Past studies have found an association between schizophrenia and babies born in winter and spring, hypothesizing that an immune system reaction to viral infection during pregnancy may be a factor. The location of five variants in that immune disorder-correlated region, is "provocative," said another study lead author Dr. Pablo Gejman, director of the Center for Psychiatric Genetics at NorthShore University Health Systems in Evanston, Ill.

Stefansson cautioned about seeing too much of a connection with immune disorders: "It's guilt by association; it's not really a link."

by the associated press

US cell phone service launched

2009-07-01T18:00:00.000-07:00

The world's largest commercial satellite was launched into space Wednesday, with a mission to provide phone service to cellular "dead zones" in North America.

The satellite, owned by TerreStar Corp. of Reston, Va., blasted off from Kourou in the South American territory of French Guiana shortly before 2 p.m. Eastern time, carried through pink clouds.

Half an hour later, French satellite launcher Arianespace announced that the TerreStar-1 had separated successfully from the rocket, on its way to an orbit 22,000 miles above the Earth.

There, the satellite is designed to unfurl an umbrella-like antenna of gold mesh 60 feet across, so it can pick up and relay signals from phones that are not much larger than regular cell phones.

TerreStar has shown prototypes of the phones, which are similar to BlackBerrys, and like them, would have access to data and e-mail. The phones aren't on sale yet.

TerreStar plans to have the system running before the end of the year.
To connect to the satellite, the handsets will need a clear view of the southern sky, just like a satellite dish. When that's not available, the sets will be able to connect to regular ground-based cellular networks. TerreStar has a roaming agreement with AT&T Inc.

The TerreStar-1 satellite, built by Loral Space & Communications Ltd., was originally scheduled to launch in 2007, but was delayed several times because of manufacturing problems.

The satellite is due be followed by two similar, even larger ones from a competitor, SkyTerra Communications Inc., next year.

TerreStar and SkyTerra are hoping to avoid the fate that met two pioneers in satellite telephony. Iridium and Globalstar filed for bankruptcy at the beginning of the decade, wiping out billions in investor capital after launching extensive satellite systems.

They are still in operation, providing last-resort communications for the military, forest wardens and others who can afford to buy dedicated, bulky satellite handsets for $1,000 and up.

TerreStar shares rose 17 cents, or 11 percent, to $1.70 on Wednesday, though the increase occurred before the launch of the satellite.

by the associated press

Facebook plans to make easier privacy settings

2009-07-01T17:53:00.000-07:00

NEW YORK (AP) — Facebook is overhauling its privacy controls over the next several weeks in an attempt to simplify its users' ability to control who sees the information they share on the site.

Privacy has been a central, often thorny issue for Facebook because so many people use it to share personal information with their friends and family and beyond. But as the 5-year-old social networking service has expanded its user base and added features, its privacy controls have grown increasingly complicated.

The Palo Alto, Calif.-based company said Wednesday that the new settings will give people greater control over what photos, updates and personal details they share with their friends, family and strangers on Facebook and, eventually, the wider Internet.

To make the settings easier, Facebook is consolidating its existing six privacy pages and more than 30 settings onto a single privacy page. It will also standardize the options for each setting so the choices are always the same, something that hasn't always been the case.

That means that for various pieces of content, users will be able to click on a lock icon to choose whether to show it to everyone, only their friends, friends of friends, members of professional or school networks or people on a customized list.

Previously, users had to navigate page after page to exclude, if they want, bosses or co-workers from seeing their photo albums, status updates or shared links. And because the privacy settings were dispersed on different pages, even after making a profile visible to friends only, the photos on that profile could remain public.

Facebook's chief privacy officer, Chris Kelly, said in a conference call with reporters that the changes don't have anything to do with advertising or the information Facebook is going to make available to advertisers.

Rather, he said, the site wants people "to be able to share information with as many or as few people as they choose."

One of Facebook's most notable privacy mishaps was a tracking tool called "Beacon," which in late 2007 caught users off-guard by broadcasting information about their activities at other Web sites, including their purchase of holiday gifts for those who could see the information. The company ultimately allowed users to turn Beacon off.

Other changes, too, have often met with user uproar. Earlier this year Facebook let its users vote on the site's guiding principles after tens of thousands joined online protests over who controls the information they share on the site.

To prevent another backlash, Facebook will gradually roll out the latest changes. Facebook will start by testing them out on small groups of users and tweak the final version of the controls based on feedback. Facebook said it would take more than three weeks to reach every user.

"They are learning how to listen carefully to their users," said Jules Polonetsky, co-chairman and director of the Washington-based Future of Privacy Forum and former chief privacy officer at AOL. He added that Facebook has learned from the past that suddenly making big changes, whatever they are, has not been the most effective approach.

The privacy changes come as Facebook tries to become a broadly used destination, competing not just with other social networks like Twitter and MySpace but also more established hubs like Google and Yahoo.

To do this, Facebook needs its 200 million-plus users to share content and interact with more people than their close friends and families.

"To be lots of things to lots of different kinds of people," Polonetsky said, Facebook needs to give its users, who come from different cultures, age groups and career levels, more control over what they share on the site.

The site will soon let users assign different privacy settings to each piece of information they make available, including photos, contact information and work info, as well as status updates, links and photos.

In another big change, the site is also getting rid of its regional networks. Facebook said those separate zones have led to too much confusion over which information can be widely seen or kept relatively private.

In the past, someone who joined a New York network, for example, could inadvertently make personal information available to everyone else in that network, including complete strangers.

by the associated press

Crabtree & Evelyn files for Chapter 11 protection

2009-07-01T17:49:00.000-07:00

NEW YORK (AP) — Soap and lotion seller Crabtree & Evelyn Ltd. says it filed for Chapter 11 protection on Wednesday, a victim of the recession and management missteps.

The pressure of repaying debt forced the company to file for bankruptcy, Acting President Stephen Bestwick said in a court filing. He said management changes had resulted in several shifts in strategy, hurting its wholesale business.

The company plans to use the court's protection to renegotiate leases with reluctant landlords in its effort to restructure and emerge from bankruptcy. The filing does not include operations outside the U.S.

The Woodstock, Conn.-based company reported in a court filing that it owed $46.2 million in debt and had $31.7 million in assets as of March 31. The privately held company runs 126 retail stores that sell bathroom products and gift basket items at Copley Place in Boston, Watertower Place in Chicago, The Mall at Short Hills in New Jersey, Embarcadero Center in San Francisco and Century City Mall in Los Angeles, among others.

It also sells Vera Bradley bags and wallets as well as LaSource, India Hicks Island Living and Naturals products.

The company first sold products under the Crabtree & Evelyn name in 1972 and its first retail store was opened in 1977. The store's name is derived from a short form of Crabapple Tree and the last name of John Evelyn, a Brit who wrote about conservation.

Parent company Crabtree & Evelyn Holdings Ltd. is a London-based holding company, which is in turn owned by investment holding company CE Holdings in the British Virgin Islands. CE Holdings is owned by KLKOI, another investment vehicle based in the Virgin Islands. KLKOI operates rubber plantations and manufactures oleochemicals, which are chemicals derived from oils and fats.

Other major retailers that have filed for bankruptcy during the current downturn include Steve & Barry's, Eddie Bauer, Filene's Basement, Linens 'N Things, Mervyn's and Circuit City Stores Inc.

Bestwick said he hoped the reorganization would help Crabtree & Evelyn continue its "tradition of English-style elegance."

It filed its case in the Southern District of New York.

by the associated press

SEC approves ruling on pay disclosure for TARP firms

2009-07-01T17:46:00.000-07:00

WASHINGTON (AP) — The Securities and Exchange Commission on Wednesday unanimously approved rules requiring greater transparency for executive compensation at bailed-out firms and all public companies.

In an open meeting, the panel voted 5-0 for a rule requiring firms that received government bailouts to let shareholders vote on executive pay. The SEC also voted to make all public companies give shareholders more information about pay policies, risk management and corporate governance.

Congress mandated the rule for participants in the Troubled Asset Relief Program, the $700 billion financial bailout. Known as "say-on-pay," it gives shareholders the opportunity to vote on companies' compensation practices, although the votes can be nonbinding.

The new rules must go through a two-month public comment period before they can be enacted.

The broader rule includes a range of requirements: Companies would have to describe how compensation policies relate to risk; explain the qualifications of directors, executives and nominees; and state whether compensation consultants might have conflicts of interest.

The aim is to create "better, more timely disclosure, not simply additional disclosure," SEC Chairman Mary Schapiro said at the meeting.

Responding to commissioners' concerns that proxy statements already are too long and complex for most shareholders to understand, SEC staff members said the benefit of greater transparency outweighs the problem of slightly longer filings.

The commission last approved an overhaul of executive compensation disclosure rules in 2006. That move required companies to disclose their executives' pay and perks in greater detail and required noting the date of stock option grants. At the time, corporate America was gripped by a scandal over the backdating of option awards.

Those rules took effect in late 2006 and forced much greater disclosure starting with companies' annual statements for that year.

The proposal approved Wednesday likewise addresses concerns related to current concerns in the securities markets. The financial crisis has highlighted the danger of compensation practices that reward excessive risk.

Investors also are clamoring for more transparency from boards of directors, and about risk management practices. Both would be required under the new rule.

In a separate vote, the SEC accepted a proposed New York Stock Exchange rule to prevent brokers from voting shares on behalf of their clients, since brokers do not have a direct financial interest in the companies.

Some commissioners expressed concerns about the unintended effects of the rule. They suggested that it could disenfranchise investors who are accustomed to letting brokers represent their interests.

The proposal eventually gained approval from the SEC, which must clear all stock exchange rule changes.

by the associated press

Oil prices decline

2009-07-01T17:43:00.000-07:00

NEW YORK (AP) — Oil prices fell Wednesday despite another decline in crude supply, with lingering doubts about whether people and businesses will be using more energy anytime soon.

Crude supplies have fallen in seven out of the past eight weeks, according to a government report Wednesday.

Benchmark crude for August delivery fell 58 cents to settle at $69.31 a barrel on the New York Mercantile Exchange with one trading day left in a holiday-shortened week. In London, Brent prices lost 51 cents to settle at $68.79 a barrel on the ICE Futures exchange.

All major fuel futures fell on Nymex Wednesday, and gasoline led the way. Average retail gasoline prices have now fallen for 10 straight days.

The Energy Department's Energy Information Administration said in its weekly report that the massive surplus of oil in the United States continued to shrink last week. Crude supplies fell more than some expected, losing 3.7 million barrels for the week ended June 26.

Falling supplies are part of the reason energy prices have been rising for months, but that doesn't necessarily mean energy consumption is rebounding strongly.

Some of the biggest users of energy, heavy industry and manufacturing, have cut thousands of jobs. Many of the people who have lost jobs are no longer commuting because the can't find work, meaning they aren't using as much gas.

Crude levels are falling, but not necessarily because more is being used. Imports are falling. Crude imports over the last four weeks are down nearly 800,000 barrels per day.

Oil exporting countries slashed production after the global economic downturn sent crude prices plunging from near $150 per barrel last summer to just above $30 per barrel by December.

While prices have been surging for two months, a lot of that has been driven by money from Wall Street that is using crude only to hedge against inflation.

"There are some people, like me, who think 'So, what if there's less oil? There's still plenty out there," said Tom Kloza, publisher and chief oil analyst at Oil Price Information Service.

Retail gasoline prices have slipped from their peak of $2.693 a gallon on Father's Day. Pump prices lost another 0.3 cents overnight to a new national average of $2.63 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

A gallon of regular gas is 11.8 cents more expensive than last month, but last year on this day, gasoline went for $4.09 per gallon on average.

In other Nymex trading, gasoline futures fell 4.3 cents to settle at $1.859 a gallon and heating oil for August delivery fell 2.2 to settle at $1.7657 a gallon. Natural gas for August delivery lost 4 cents to settle at $3.795 per 1,000 cubic feet.

by the associated press

Lear prepping for bankruptcy

2009-07-01T17:40:00.000-07:00

NEW YORK (AP) — Automotive parts supplier Lear Corp. said Wednesday it is preparing to file for Chapter 11 bankruptcy protection and has lined up financing to fund its operations while under court protection.

Lear, which makes automotive seating systems and electronics, said it is still negotiating with lenders and bondholders for additional support for its restructuring plan. In the meantime, the company said it has a commitment for $500 million in loans to finance its bankruptcy from a group of lenders led by J.P. Morgan and Citigroup.

Lear spokesman Mel Stephens declined to say how many of its lenders are board with the Chapter 11 plan, how much more support it is seeking or when or where the Southfield, Mich.-based company plans to file for court protection.

"We intend to complete the restructuring as quickly as possible and emerge as an even stronger and more competitive partner to our customers," Lear CEO Bob Rossiter said in a statement.

Lear said it expects to default on a $38 million interest payment that would service its 8.5 percent senior notes due 2013 and its 8.75 percent senior notes due 2016. A 30-day grace period on the payment expires on Thursday, the company said.

Lear said its operations outside the United States would be unaffected by a bankruptcy protection filing.

A filing for Lear would make it the first major automotive parts maker to seek court protection since Visteon Corp., the former parts arm of Ford Motor Co., filed for Chapter 11 in May. Parts suppliers have been battered by the economic downturn as consumers continue to shun new car purchases and automakers slash production.

Lear in particular is heavily dependent on the slumping North American and European auto markets, with 36 percent of its sales coming from North America and 49 percent coming from Europe.

Lear, which posted $13.6 billion in sales for 2008, is a key supplier for both General Motors Corp. and Ford Motor Co. The pair represent the company's two largest customers and account for a combined 40 percent of its sales.

Lear is also one of Ford's key component and service suppliers, part of Ford's Aligned Business Framework, which increases the automaker's collaboration with the companies.

Auto sales in June continued to remain troubled though the downturn that has plagued the industry for at least a year showed signs of easing, according to monthly sales reports from carmakers Wednesday. Industrywide sales fell 28 percent in June, according to Autodata Corp. Volumes are down 35 percent the first half of the year.

Shares of Lear fell 17 cents, or 35 percent, to 31 cents in after-hours trading, following a loss of 2 cents, or 4 percent, at its close Wednesday of 48 cents.

by the associated press

GM’s top executive, ‘new’ company bankcrucy

2009-07-01T17:28:00.000-07:00

NEW YORK — General Motors’ Chief Executive was grilled by a string of lawyers Tuesday about his company’s bid to sell its "good” parts into a new company and emerge from bankruptcy protection.

GM, whose June 1 filing for bankruptcy protection was the fourth-largest in U.S. history, is hoping to avoid a lengthy sale hearing that could postpone its emergence from Chapter 11. Last month, objections from a group of bondholders and others dragged out rival Chrysler LLC’s sale hearing for three days.

At a packed Manhattan courthouse Tuesday, Fritz Henderson was questioned for around five hours by attorneys for the various parties challenging the sale, including bondholders, consumer groups and unions.

Despite U.S. Judge Robert Gerber’s urging the attorneys to keep their arguments concise and to avoid redundancies, the hearing dragged on as a parade of lawyers made their way up to the podium.

"I think people have forgot why we’re here and what we have to accomplish,” Gerber said sharply. "I’m not going to deny anybody due process, but I expect the questioning to be more focused.”

Henderson wasn’t fazed by his lengthy stay on the stand, answering questions quickly and directly for the most part.

When asked about the current condition of GM, Henderson testified that June sales were "slightly better than expected” excluding fleet sales.

Fate of claims

Consumer groups and several individuals with product-related liability claims are objecting to the sale because people with pending product-related liability claims against GM will be forced to seek compensation from "Old GM,” the collection of mostly unprofitable assets leftover from the sale where there likely will be nothing left to pay their claims.

Early on in the hearing, Mark Salzberg, an attorney for a group of bondholders, questioned why GM would opt for a sale plan instead of a restructuring plan, charging that the automaker took that route to make it harder for its creditors to negotiate.

But Harvey Miller, an attorney from GM, questioned the validity of the bondholder group’s challenge, noting that it only has three members, one of which bought his bonds for 2 cents on the dollar, while the other two spent no more than 20 cents on the dollar for theirs.

Besides the bondholders, a trio of labor unions are trying to block the sale. Unlike the UAW, which brokered a deal for a stake in the company, those unions say they won’t have anything to pay for retiree health care.

Henderson said retiree benefits for the three unions cost GM about $26 million a month.

by the associated press

Walmart agrees Obama’s health insurance proposals

2009-07-01T10:15:00.000-07:00

WASHINGTON — Walmart is the latest traditionally Republican-leaning businesses to embrace key portions of President Barack Obama’s bid to overhaul health care. It’s a trend that could complicate opponents’ efforts to build a united front when Congress ramps up its work on the issue.

Walmart, the nation’s largest private employer, Tuesday endorsed the idea of requiring large companies to offer health insurance to their workers. The proposal is central to Obama’s hopes of covering the nation’s nearly 50 million uninsured and is disliked by some business groups.

Walmart was joined by a major labor union that sometimes has criticized the company’s relatively stingy employee benefits.

Change of position

The big retailer is not the only one-time opponent of health care revisions to embrace at least some aspects of Obama’s proposals. The major group representing pharmaceutical makers recently said it would reduce senior citizens’ costs for prescription drugs by $80 billion over 10 years. And major groups representing doctors, hospitals and other providers have pledged to reduce health care costs by large amounts.

Nearly all these groups opposed efforts to overhaul the nation’s health care system during the Clinton administration in 1993-94. But with better prospects for a health care bill this time, many businesses and industries want to be part of the plan.

by the associated press

Consumer agency might police American's credit

2009-07-01T09:49:00.000-07:00

WASHINGTON — President Barack Obama asked Congress on Tuesday to create an agency to police the fine print on consumer products, such as credit cards and mortgages, and determine what fees, penalties and interest rates are fair.

The Consumer Financial Protection Agency would be in charge of regulating those products in the same way other government agencies regulate the safety of drugs, food and toys.

Obama said Americans are demanding it.
"Those ridiculous contracts with pages of fine print that no one can figure out — those things will be a thing of the past,” the president said in a statement accompanying the 152-page draft bill. "And enforcement will be the rule, not the exception.”

The CFPA is part of Obama’s broader plan to increase oversight of the financial industry and eliminate regulatory gaps believed to have contributed to the economic crisis.

The agency would be dedicated to protecting consumers when buying mortgages, using credit cards and taking out high-rate "payday loans.” It also would monitor terms set on savings, checking and debit card accounts, including overdraft charges.

Warning labels?
Under the plan, lenders would be required to be up front about their products and compare them to less risky, "plain vanilla” options. The agency potentially could require a kind of warning label on such financial products as mortgages with payments that balloon in size.
The agency’s reach would not extend to investment products such as mutual funds and other services already regulated by the federal government. Instead, it would focus on regulating a market that so far mostly has escaped it. Predatory lending is blamed for contributing to the housing crisis that roiled Wall Street and resulted in a $700 billion taxpayer bailout for banks.

Limiting options?
Republicans say setting strict rules on the consumer market will limit options and potentially increase the cost of financial products as banks try to make up for lost revenue.
"The proposed CFPA appears to be premised on the idea that Washington is better at making financial decisions for all Americans than leaving that choice up to individual Americans,” said Rep. Spencer Bachus of Alabama, the top Republican on the House Financial Services Committee.

Elizabeth Warren, a Harvard University professor who long has advocated creation of a consumer-protection agency, said she envisions a system that would allow products to remain available as long as lenders are up front and concise about their terms.

"Most of the bad products were marketed by trickery,” she said.

Likewise, Treasury Department officials said legislation explicitly requires the CFPA to consider the burden any new rule would place on a financial institution and whether it would restrict consumer access to credit.

by the associated press

Google ask Newspapers To Post Videos To YouTube

2009-06-29T23:55:00.000-07:00

Never mind that many newspapers may be upset about how their content is treated on Google (NSDQ: GOOG) News. Now Google is lobbying publishers to put their video content on YouTube. In a post on the Google News blog, YouTube News Manager Olivia Ma invites any news outlet that already has its site indexed by Google News to sign up as a “news partner.” Publishers will have their videos featured on YouTube’s news channel (See screenshot above)—as well as on Google News. Ma pitches it, in part, as a way for publishers to expose their content to a wider audience—and also make money, since publishers can participate in an advertising revenue-share program.

That contrasts with Google News, where publishers do not get a cut of any of the revenue from the ads that are placed around their headlines. Still, it’s unlikely that many publishers will want to abandon other video platforms, like Brightcove, which also allow them to sell their own ads against their video content—and to link up with several ad networks.

Google had already begun to slowly integrate YouTube news videos with Google News last month, when it added videos for the first time to Google News, and the new push should further that. For Google, it’s also a free way to add more professional content to YouTube, and thus attract more premium advertisers. The company has already taken other steps in that direction, adding, for instance, new “shows” and “subscription” tabs on its home page as part of a recent redesign.

Updated: Somewhat related, YouTube has also launched a new “Reporters’ Center”, a bunch of videos from professional journalists “teaching” and giving tips and ethics training to citizen journalists on how to report the news, using video tools. Some videos: Katie Couric on how to conduct a good interview, and Bob Woodward on how to do investigative journalism. General users can also upload their own tips as well. A useful resource, for sure.

from the washington post

Comcast and wireless Internet service

2009-06-29T23:52:00.000-07:00

PHILADELPHIA (AP) — Comcast Corp. will become the first major cable TV operator to roll out wireless broadband outside of Wi-Fi hotspots as it launches the service in Portland, Ore., on Tuesday, with at least three other cities to follow this year.

Comcast will offer speeds of up to 4 Megabits per second, faster than any other comparable, non-Wi-Fi service currently being marketed. The service is for use with laptops, but not other mobile devices.

Comcast's wireless broadband, which lets users surf the Web on the go with their computers, pits it squarely against the mobile data offerings of phone companies.

But the cable operator is coming out first with the market's fastest wireless broadband, using WiMax technology. Phone companies have lined up behind a competing technology called LTE, with Verizon Communications Inc. planning to deploy it next year.

Comcast, which is the nation's largest cable operator, plans to offer the wireless service in Philadelphia, Atlanta, Chicago and other cities later this year.

The service will be carried over the 4G network of Clearwire Corp. where it's offered. Clearwire, a joint venture involving Comcast, other cable operators and technology companies, is currently in Portland and Atlanta, with plans to deploy in Las Vegas, Chicago, Charlotte, N.C., Dallas-Fort Worth, Texas, Honolulu, Philadelphia and Seattle this year.

Elsewhere, the service will use Sprint Nextel Corp.'s 3G network.

Consumers can sign up with either a plan that lets them surf wirelessly within a city using Clearwire's network, or nationally switching between 4G and Sprint's 3G network.

Comcast, along with Intel Corp., Time Warner Cable Inc., Google Inc. and Bright House Networks, have hitched their wireless Internet aspirations on WiMax. Together, they invested $3.2 billion in Clearwire last year for a one-fourth stake. Sprint owns a 51 percent stake.

Comcast High-Speed 2go Metro service over Clearwire's network is on promotion for $49.95 a month for a year, including Comcast's wired Internet home service and a Wi-Fi router. The regular price is $72.95 a month. The national version, using Sprint, costs $20 a month more.

Shares of Comcast were up 14 cents, or 1 percent, to close Monday at $14.36.

by the associated press

China filter software

2009-06-29T23:48:00.000-07:00

BEIJING (Reuters) - China's latest Internet controls have been assailed by rights advocates and Washington, and yet the real challenge to its "Green Dam" plan may be the nation's own computer market, an anarchic digital bazaar.

Starting from Wednesday, the government has ordered that personal computers sold in China must leave manufacturers with Green Dam filter software intended to block obscene images and, critics say, deter political dissent.

Such schemes sound easy enough for a one-party state, and this is just the latest Communist Party initiative to control the Internet, which has about 300 million users in China, according to the China Internet Network Information Center.

But a walk through Zhongguancun district in northwest Beijing, hub of the nation's digital market, and the hurdles to such controls seem as numerous as the shops and hawkers selling computers, software and pornography.

For all the domestic and international uproar about Green Dam, many retailers here who will be selling computers packaged with it were either oblivious or dismissive.

"What's Green Dam?," said Wu Baobao, a woman in her 20s who was selling Dell laptops in the raucous Hailong electronics mall.

"When you buy a computer after July 1 it will come with the software," she added after asking a colleague in a neighbouring stall. "But don't worry ... we can take it out easily."

Multi-nationals have for years fretted about the inability of the Chinese government to stamp out pirate software sold for a fraction of the cost of legitimate copies.

Now that unruly market may also frustrate censors and ensure Green Dam ends up more often junked or ignored than used.

"The Green Dam plan is a serious violation of market rules. Governments shouldn't impose a particular brand of software," said Mao Shoulong, professor of public policy at Renmin University, just down the road from Zhongguancun.

"But in practice the impact will be limited," said Mao. "It's optional software, and you can't easily control such a fragmented retail sector. Big companies will follow orders, but who can just order around thousands of small ones?"

Zhongguancun in Beijing's university district promotes itself as China's "Silicon Valley." Microsoft, Google and plenty of other digital giants have research labs or big offices there.

But the digital retail sector that has sprung up since the 1980s resembles more of a vast, multi-storey bazaar, with big-name retailers jammed up against stalls and furtive hawkers.

Until the financial crisis hit, business was booming. In 2008, Zhongguancun recorded 60 billion yuan ($8.8 billion) in sales of digital products. That was 4.5 percent more than in 2007, ending a long run of double-digit growth, according to the Zhongguancun Electronic Trade Chamber of Commerce.

The district has 3,147 registered electronics retailers who last year sold 2.4 million personal computers, the Chamber told Reuters. But there may be even more uncounted stalls.

The district has attempted to clean up, and pirate software is not as openly sold as a few years ago. But it is certainly still there, as is the pornography Beijing wants to block.

On street curbs, dozens of people, mostly ragged women clutching babies or small children, approach passersby urgently whispering that they can sell pornographic DVD discs. The babies are meant to deter police from carrying out body searches.

A brisk walk with one of the women through a warren of dirt-floor alleys and run-down brick huts soon brings the prospective customer to stashes of luridly titled videos.

Yang Fuying, a gangly salesman in the Beijing Silicon Valley Computer City, said business was too tough to spare much thought about the government's Green Dam plans.

"Mid-year is always a low season, and the financial crisis has made things worse," said Yang. "We'll have to tell customers about the software, but I don't think it will have much impact. You can either tear it out or dump the disc. So what?"

from the washington post

Charging standard for Phones ?

2009-06-29T23:45:00.000-07:00

BRUSSELS (AP) — No more asking around the office for the right sort of charger. At least that's what European Union and cell phone makers are hoping.

The world's leading mobile phone makers announced Monday that they will ensure that their data-enabled phones and chargers will all work together, as of next year.

EU Industry Commissioner Guenter Verheugen said a standardized charger will cut costs for manufacturers and reduce the number of chargers thrown away when consumers buy new phones.

Though the agreement applies to the EU, it's likely that the standardization will apply to phones and chargers sold outside the member countries.

Nokia Corp., Samsung Electronics Co., LG Electronics Inc., Sony Ericsson, Apple Inc., Motorola Inc., Research in Motion Ltd. and NEC Corp. committed to developing a standard for phone charging based on the Micro-USB interface. Together, they account for more than 80 percent of the world market for cell phones.

Several of those companies already make phones that charge through Micro-USB ports, but they don't guarantee that they will work with chargers made by other companies.

"What we are doing here is we are agreeing that any external power supply will be able to charge other manufacturers' phones," said Tony Graziano, technical director for DigitalEurope, which represents digital technology associations and companies that do business in Europe.

This doesn't mean that all new data-enabled phones will come with Micro-USB ports. Graziano said manufacturers can satisfy the terms of the agreement by producing an adapter. Apple, for instance, has consistently used a proprietary connector for its iPhone and could produce an adapter that plugs into the phone to accept a Micro-USB charger.

Bridget Cosgrove, director general of DigitalEurope, said the group is "optimistic" other countries and regions across the world will adopt the same universal charger soon.

Consumer rights groups called for more ambitious plans.

"You could have extended this to different small appliances, such as MP3 players, small digital cameras and PDAs," said Gabriele Fleischer from the Consumers' Council in Berlin.

Texas Instruments Inc. and Qualcomm Inc., two U.S. companies that make components for cell phones, also signed the agreement.

by the associated press

Car sales are up for June

2009-06-29T23:41:00.000-07:00

DEARBORN, Mich. (AP) — Citing better-than-expected sales and traffic at dealerships, Ford Motor Co. said Monday it plans to increase third-quarter production by 25,000 units — marking the automaker's second production hike in recent weeks.

Ford spokesman Mark Truby said that will bring total quarterly production to 485,000 units, a year-over-year increase of 16 percent or 67,000 units. Last month the company said it would raise third-quarter production by 42,000 units.

The boost affects all models of Ford, Lincoln, Mercury vehicles, with more emphasis being placed on Mustangs, pickup trucks and the Ford Focus compact car, Truby said.

"We had pretty well lowered production in recent quarters to meet demand," Truby said. "Now as we're seeing market share increases and showroom activity, we're ramping up production to meet that demand."

The increase comes as Ford's top sales analyst, George Pipas, said the company's June sales were "good" compared with the overall industry. The Dearborn, Mich.-based automaker could see a year-over-year decline of 10 to 20 percent, which could be the lowest among all major automakers, he said.

"This will be our lowest decline of this year," Pipas added.

Automakers, which are due to report June U.S. sales on Wednesday, have seen sales fall 37 percent over the first five months of the year. Pipas said U.S. auto sales may have halted their month-to-month declines in June and could be down less than 30 percent for the first time since September of last year.

As bad as it sounds, a decline of less than 30 percent could be a welcome relief, as automakers and suppliers have trimmed production and other costs to adjust to lower consumer sales.

"The important takeaway is that we're not going backward, we're not slipping back," said Pipas during a sales preview talk with reporters. "It suggests the worst is behind us, not just the economy, but we may have seen the low point for the year."

Pipas said individual regions of the country are showing sales improvements compared with June 2008, another sign that the auto market has bottomed out and is recovering. While sales in the Great Lakes states are improving, they're still slow in California and Florida, two areas hit hard by the decline in the housing market, Pipas said.

Pipas joined other industry analysts in predicting that June sales could surpass a 10 million seasonally-adjusted annual selling rate for the first time this year.

Last week J.D. Power and Associates predicted that automakers would sell 914,400 vehicles in June, 26 percent less than in June of last year and 1 percent lower than the 924,064 sold in May.

Pipas said May typically is a stronger sales month than June, but he was unsure if this June would surpass May figures.

He said federal "cash for clunkers" legislation recently signed into law could boost sales later in the year, and noted that consumer confidence is improving, suggesting that the worst is over with the economy and auto sales.

Shares for Ford rose 3 percent, or 17 cents, to close Monday at $5.78.

by the associated press

Laws to national banks

2009-06-29T23:39:00.000-07:00

WASHINGTON (AP) — The Supreme Court on Monday ruled that states can apply some of their own laws to big national banks operating within their borders, a decision proponents called a huge win for consumers and for states seeking more power to regulate financial activities.

The high court ruled that a state attorney general cannot on his own issue a subpoena against a bank that has branches in that state and others. However, the court also said that national banks are subject to some state laws under the National Banking Act, and an attorney general can go to court to enforce those laws.

"What this decision today says is that states have the ability to enforce their own laws (against national banks) as long as they follow state due process procedures, which generally mean issuance of a subpoena which can be challenged in court," said lawyer John Cooney, a former assistant solicitor general and deputy general counsel at the Office of Management and Budget.

Officials say the 5-4 decision opens the door for states to do their own investigations of national banks, as long as they can convince a judge that investigations are needed.

New York Attorney General Andrew Cuomo called the decision "a huge win for consumers across the nation."

"I am pleased that the court has turned back efforts by the nation's largest banks to prevent the efforts of New York and other states to protect consumers from predatory financial practices," Cuomo said. "With this decision, the court has recognized that fair lending and consumer protection — the cornerstones of a sound economy — require the cooperative efforts of both the states and the federal government."

The state of New York had asked the Supreme Court to overturn a federal appeals court decision that blocks states from investigating the lending practices of national banks with branches within its borders. It was supported by the other 49 states.

Eliot Spitzer, then New York's attorney general, wanted to investigate whether minorities were being charged higher interest rates on home mortgage loans, a practice that is prohibited under various state and federal laws. But federal judges said Spitzer could not enforce state fair-lending laws against national banks or their operating subsidiaries by issuing subpoenas and bringing enforcement actions against them.

"Here, the threatened action was not the bringing of a civil suit, or the obtaining of a judicial search warrant based on probable cause, but rather the attorney general's issuance of subpoena on his own authority," said Justice Antonin Scalia, who wrote the opinion for the court. "That is not the exercise of the power of law enforcement 'vested in the courts of justice,'" which the National Banking Act allows.

The Clearing House Association, which represents the banks, said the attorney general was interfering with the federal government's supervisory powers.

The 2nd U.S. Circuit Court of Appeals in New York City had ruled that the responsibility for such investigations rests with the Office of the Comptroller of the Currency, a part of the Treasury Department, and other federal agencies.

Comptroller of the Currency John C. Dugan said he was disappointed by the court's ruling.

"I want to stress that the OCC is absolutely committed to strong oversight and enforcement of the fair lending laws, and that the OCC and the states share a common goal of ensuring fair access to financial services and fair treatment of consumers and businesses by all financial firms," Dugan said. "We look forward to working with the states to ensure that these important objectives are met."

Chief Justice John Roberts and Justices Clarence Thomas, Samuel Alito and Anthony Kennedy dissented in part, saying they would have ruled with the New York-based appeals court.

"Without a uniform regulation and enforcement of the laws that apply to national banks, which often includes state law, those institutions will face a patchwork of duplicative and conflicting federal and state regulation and enforcement actions," said Edward L. Yingling, president and chief executive officer of the American Bankers Association. "This will make it difficult to serve consumers in today's hi-tech, mobile society where people and bank services move constantly across state lines."

The case is Cuomo v. The Clearing House Association, 08-453.

by the associated press

Judge should decide Tuesday on Stanford's bond

2009-06-29T23:36:00.000-07:00

HOUSTON (AP) — A federal judge says he will decide by Tuesday afternoon on whether to revoke a bond for Texas financier R. Allen Stanford that would let him be free while he awaits trial on charges he swindled investors out of $7 billion.

U.S. District Judge David Hittner heard more than four hours of arguments Monday in which prosecutors asked him to revoke an order granting Stanford a $500,000 bond. They argued his international ties make him a serious flight risk.

But Dick DeGuerin, Stanford's attorney, says his client, who is broke because all his assets have been seized, has a very strong incentive to stay: to clear his name and restore his finances.

by the associated press

Paulson to testify July 16

2009-06-29T23:33:00.000-07:00

WASHINGTON (AP) — Former Treasury Secretary Henry Paulson will testify next month before a House committee that's investigating whether he and other government officials pressured Bank of America Corp. to acquire Merrill Lynch in a deal that cost taxpayers $20 billion.

The House Oversight and Government Reform Committee has scheduled the hearing for July 16, and a spokeswoman for Paulson on Monday confirmed he will attend.

The government is exploring allegations that Paulson and Federal Reserve Chairman Ben Bernanke threatened to oust Bank of America's CEO Kenneth Lewis and the bank's board members if they abandoned the takeover after discovering losses at Merrill.

The panel also is investigating whether Bernanke and Paulson urged Bank of America to keep quiet about Merrill's losses.

Bernanke, who testified before the panel last week, denied the accusations. Paulson also has denied them.

Lewis has testified that Paulson and federal regulators made clear that if Charlotte, N.C.-based Bank of America reneged on its promise to buy Merrill, he and the bank's board members would be fired.

Bank of America agreed in September to acquire Merrill Lynch. Regulators in January provided Bank of America, which already had received $25 billion from the government's bailout program, an extra $20 billion to help it cope with rising losses related to the acquisition.

by the associated press

GM and Chrysler's bankruptcy

2009-06-29T23:31:00.000-07:00

A summary of developments in the Chapter 11 bankruptcy cases of General Motors Corp. and Chrysler LLC:

GENERAL MOTORS — DAY 29

WHERE DOES IT STAND?: Monday marked Detroit-based GM's 29th day under court protection.

GM said Monday it's ending its joint venture with Toyota Motor Corp. at a Fremont, Calif., manufacturing plant as it continues to shrink its operations under bankruptcy protection.

GM said it was unable to reach an agreement with Toyota about a new product plan at the facility. The plant, called New United Motor Manufacturing Inc., or Nummi, currently produces the Pontiac Vibe for GM and the Corolla and Tacoma for Toyota.

GM announced it was phasing out the Pontiac brand earlier this year. The facility will cease production of GM vehicles in August, the company said.

Late last week, the automaker said in court filings that it has agreed to take on responsibility for future product liability claims.

In a concession to consumer groups and state officials who had threatened to block the sale because of product liability concerns, the new company will now assume responsibility for future claims involving vehicles made by the old company.

Consumers with pending cases against the automaker or who haven't filed suit yet in connection with a past incident, will still need to seek damages from the old company where there will likely be nothing left to pay their claims.

WHAT'S NEXT?: A hearing on GM's plan to sell its assets to a new government-controlled company and emerge from Chapter 11 is scheduled for Tuesday. GM CEO Fritz Henderson is expected to testify.

CHRYSLER

WHERE DOES IT STAND?: Auburn Hills, Mich.-based Chrysler Group LLC emerged from Chapter 11 earlier this month after a new company was created by the sale of most of the automaker's assets to a group led by Italy's Fiat Group SpA.

WHAT'S NEXT?: Chrysler assets not sold to Fiat, including eight plants, remain under Chapter 11 protection. Hearings to decide what to do with these so-called bad assets and to settle claims by the company's creditors will continue. The next hearing is scheduled for Tuesday.

by the associated press

J&J unit gets $1.67 billion

2009-06-29T23:29:00.000-07:00

A unit of drugmaker Johnson & Johnson says a federal jury has returned a $1.67 billion verdict against Abbott Laboratories in a patent infringement suit over the companies' rheumatoid arthritis drugs.

Abbott's best-selling drug, Humira, competes with the drug Remicade, made by Centocor, a unit of New Brunswick, N.J.-based J&J. Centocor and New York University had filed a patent infringement suit against Abbott Park, Ill.-based Abbott in April 2007 in the Eastern District of Texas.

Abbott spokesman Scott Stoffel says the company is "disappointed in this verdict," and confident it will "prevail on appeal."

Humira has been key to Abbott's success story in recent years, racking up approvals for half a dozen uses, including psoriasis and Crohn's disease. Abbott booked $4.5 billion in Humira sales in 2008.

by the associated press

Rebels of nigerian drive up Oil

2009-06-29T23:26:00.001-07:00

A small group of insurgents in Nigeria's oil-rich Niger Delta helped drive up oil prices around the world yesterday by announcing a strike against one of Royal Dutch Shell's two main export terminals in the West African nation.

Spurning a Nigerian government offer of amnesty, members of the Movement for the Emancipation of the Niger Delta (MEND) have continued a series of attacks on oil installations. The group and its allies have now shut down a total of about 900,000 barrels a day, according to Argus Global Markets, an industry newsletter. In an e-mail yesterday, the insurgents claimed to have set fire to Shell's Forcados terminal with a "massive explosion" and to have sunk a Nigerian military patrol boat with more than 20 soldiers on board.

News of the attack helped prop up oil prices, which rose $2.33 a barrel, or 3.4 percent, to $71.49 a barrel on the New York Mercantile Exchange yesterday.

Prices rose despite a new International Energy Agency forecast warning of sluggish increases in world crude oil supplies over the next few years, but adding that demand would be even more sluggish. The group said that supplies through 2014 would rise 1.5 million barrels a day less than previously expected, but that oil consumption would be 3 million barrels a day less than the IEA had previously forecast.

"Whether we end up facing a supply crunch again by mid-decade, or with a more comfortable buffer of supply flexibility, depends largely on the pace of economic recovery and government action on efficiency", said Nobuo Tanaka, IEA executive director.

For now, however, oil supplies are plentiful, many analysts noted. World inventories are high and demand for petroleum products is weak because of the global economic slowdown. As a result of falling oil consumption and new capacity added in Saudi Arabia and Angola, there is about 6 million barrels a day of spare oil production capacity worldwide.

But the Nigerian attacks have eaten up a little bit of that cushion and have damaged the interests of several international oil companies, including Royal Dutch Shell, Chevron and the Italian oil giant ENI.

Shell, which operates and owns 55 percent of a joint venture in the marshy Niger Delta region, has suffered a series of attacks that cut output from its Forcados terminal to 25,000 barrels a day from nearly 200,000 barrels a day earlier this year and more than 400,000 barrels a day before attacks in February 2006, according to Argus Global Markets.

The attacks have also cut into the Nigerian government's oil revenues. "With Nigeria's ever increasing budget deficits, the country cannot tolerate this decline in crude production for much longer," Sebastian Spio-Garbrah, an analyst with the Eurasia Group, said in a report on the region.

Nigerian President Umaru Yar'Adua recently offered to grant amnesty to insurgents who turned in weapons and renounced "militancy." The offer is open for 60 days.

In an e-mail response to questions yesterday, a MEND spokesman who uses the name Jomo Gbomo said: "We do not need amnesty. What we need is justice." He said that at least one leader of a loosely affiliated group had accepted. He called the person "a political thug."

In an earlier note, he had said that the Nigerian government was offering large sums of money to entice groups into accepting the amnesty offer. "Only those who are willing to sell their birthright for a bowl of porridge will accept while the rest of us will continue the struggle until justice is achieved," he wrote.

Spio-Garbrah said the amnesty would likely fail because the Nigerian government "has a historical credibility problem in the Delta." The oil-rich region has long complained that the federal government does not share enough proceeds from oil.

Shell spokespeople in the United States could not be reached for comment, but Bloomberg News quoted a Nigerian-based Shell spokesman as confirming the attacks.

from the washington post

Summer sales

2009-06-29T23:22:00.000-07:00

NEW YORK — As consumers get ready to celebrate July Fourth, many merchants already have dismissed summer as a washout.

Macy’s flagship store has racks of summer tops, swimwear and dresses marked down as much as 50 percent, while luxury retailer Bergdorf Goodman is slashing prices on designer goods by as much as 70 percent. Meanwhile, piles of clothing, as well as barbecue grills, tents and gardening tools, are bypassing stores and heading straight to liquidators as merchants try to conserve their cash.

Such deep discounting so early in the season is great news for bargain hunters, but it’s a worrisome sign that shows a further weakening in retail sales since the end of May.

Consumers’ confidence in the economy, which had surged in April and May, is projected to be unchanged for June when The Conference Board releases figures today. And major retailers will release June sales results next week.

While unusually rainy weather across a broad swath of the country has dampened business, some analysts wonder whether shoppers are waking up to the harsh reality that the economy won’t be getting better soon — even as consumer spending makes up 70 percent of economic activity. That doesn’t bode well for merchants, who need to get rid of summer inventory quickly to make room for fall goods.

Consumers’ confidence has been rebounding since February, fueled in part by the stock market rise.

by the associated press

Ruth Madoff speaks about Bernie Madoff

2009-06-29T23:17:00.000-07:00

NEW YORK — Ruth Madoff — memorably christened "The Loneliest Woman in New York” in a recent New York Times headline — finally spoke out after her notorious husband got a 150-year sentence that probably makes certain she’ll never see him again outside of prison.

"I am breaking my silence now, because my reluctance to speak has been interpreted as indifference or lack of sympathy for the victims of my husband Bernie’s crime, which is exactly the opposite of the truth,” Madoff said in a statement issued through her lawyer.

Ruth Madoff, 68, hasn’t been charged with a crime. But a judge’s order has stripped her of $80 million in assets including a penthouse apartment where she still lives. That’s left her with $2.5 million that couldn’t be linked to the fraud.

Ruth Madoff, though not at the courthouse, later expressed her feelings.

"I am embarrassed and ashamed,” she said. "Like everyone else, I feel betrayed and confused. The man who committed this horrible fraud is not the man whom I have known for all these years.”

by the associated press

Sentence of 150 years for Bernard Madoff

2009-06-29T23:05:00.000-07:00

NEW YORK — Two weeks after Norma Hill and her husband invested their life savings with Bernard Madoff, she came to the then-trusted money manager with news her spouse suddenly died.

Madoff "put his arm around my shoulder and assured me my money was safe and I should not worry,” she wrote.

In the end, the widow lost everything.

U.S. District Judge Denny Chin cited Hill’s letter as one of the most stirring examples of an "extraordinarily evil” fraud, one worthy of a staggering sentence for Madoff: 150 years behind bars.

The sentence went far beyond the 12 years suggested by Madoff’s lawyers and virtually guaranteed that, at age 71, the financier-turned-felon would die while imprisoned. Chin said the term was meant to symbolically fit the crime — a multibillion-dollar fraud that’s been called the largest in history.

"Here, the message must be sent that Mr. Madoff’s crimes were extraordinarily evil and that this kind of irresponsible manipulation of the system is not merely a bloodless financial crime that takes place just on paper, but it is instead … one that takes a staggering human toll,” Chin said.

The sentence capped a 90-minute hearing in an ornate courtroom in Manhattan that turned into a tense showdown between a group of angry, tearful victims and Madoff, who sat silently at a defense table before apologizing with a mechanical calm.

"I will turn and face you,” he said. "I’m sorry. I know that doesn’t help you.”

Location is unknown
It was unclear where Madoff, who was returned to a downtown jail, will end up spending time. Chin said he would recommend a facility in the Northeast, but explained that it was up to federal prison officials determine an exact location and level of security.
The sentencing concluded a stunning fall from grace for Madoff. Clients of the former Nasdaq chairman — from Florida retirees to celebrities such as Steven Spielberg, actor Kevin Bacon and Hall of Fame pitcher Sandy Koufax — for decades flocked to him seeking investment returns that defied market fluctuations.

But late last year, Madoff made a dramatic confession: Authorities say he pulled his sons aside and told them of a massive Ponzi scheme.

Madoff pleaded guilty in March to securities fraud and other charges, saying he was "deeply sorry and ashamed.” He insisted that he acted alone, describing a separate wholesale stock-trading firm run by his sons and brother as honest and legitimate.

Aside from an accountant accused of cooking Madoff’s books, no one else has been criminally charged. But the family and the brokerage firms who recruited investors have come under scrutiny.

by the associated press

CEO Steve Jobs is back on the JOB

2009-06-29T22:56:00.000-07:00

SEATTLE — Apple Inc. co-founder and CEO Steve Jobs is back at his office a few days a week after taking a 5,-month medical leave and getting a new liver.

Jobs, 54, will work from home on days he doesn’t work from Apple’s Cupertino, Calif., headquarters, company spokesman Steve Dowling said Monday.

Dowling did not say exactly when Jobs returned to the office.

The state of Jobs’ health and the timing of his return have been watched closely by investors and the media, because few CEOs are considered as instrumental to their companies’ success as Jobs has been to Apple.

He is seen as the visionary behind Apple’s popular iPod music players and the iPhone, which left far more experienced mobile phone makers scrambling to catch up.

The Apple chief was diagnosed with a rare form of pancreatic cancer called an islet cell neuroendocrine tumor. He had surgery in 2004 and announced then that he was cured.

Health questions
Last year, Jobs’ dramatic weight loss prompted new questions about his health, which Apple only intensified by saying in December that the CEO would not deliver the opening keynote at the Macworld conference.
In early January, Jobs said in a statement that he was suffering from an easily treated hormone imbalance, but he reversed course less than two weeks later, saying his medical condition was more complex than he thought.

He announced he would take a leave of absence until the end of June.

Methodist University Hospital Transplant Institute in Memphis, Tenn., said last week that Jobs had received a liver transplant.

Medical experts who were not involved in Jobs’ treatment have told The Associated Press that cancer cells not removed in the original surgery could have spread to Jobs’ liver.

The hospital would not say when the transplant took place, but in a statement said Jobs was recovering well and his prognosis is good.

A top producer
Since Jobs returned to Apple in 1997 after a 12-month hiatus, the company has expanded from a niche computer maker to become the top producer of portable media players and an increasingly important player in the cell phone business.
Job’s insistence on elegant design, and his ability to persuade consumers to spend more for it, has also given Apple’s Mac computers a boost.

But under the direction of Apple’s chief operating officer, Tim Cook, the company had continued to release well-received products during Jobs’ leave, including updated laptops with lower entry-level prices, updated Mac software and a faster iPhone with many longed-for features.

Apple sold more than a million of the new iPhone 3GS during its first three days on the market.

Stock issues
News and rumors about Jobs’ health have sent Apple stock soaring and sinking, but the company has largely kept investors in the dark about the details of the CEO’s condition and care.
Federal rules around what information Apple must disclose to shareholders aren’t specific on the matter of executive health unless the information would affect a reasonable investor’s decision to buy or sell a stock.

by the associated press

Ulysses solar probe to go dark

2009-06-28T23:44:00.000-07:00

WASHINGTON (AP) — NASA and the European Space Agency are about to pull the plug on a robotic solar probe that just wouldn't quit. The Ulysses probe was launched from the space shuttle Discovery in 1990. It was supposed to last five years. But it's now nearing 19 years, 5.8 billion miles and still going.

Sixteen months ago, the two space agencies announced that Ulysses was freezing up and about to die in a matter of weeks. Somehow it kept operating, sending important science information about an extraordinarily quiet year for the sunspots and solar wind.

That will end on Tuesday when the space agencies turn off Ulysses' transmitter. Officials say issues with power, location and antennas make it no longer useful.

by the associated press

Sony's Comeback

2009-06-28T23:42:00.000-07:00

Sony (NYSE: SNE) may be developing a new phone that would better compete with the iPhone and be offered as an alternative to the PlayStation Portable. The device would likely go beyond the “Aino,” which Sony Ericsson (NSDQ: ERIC) unveiled last month, and allows users to tap into their PlayStation 3 while on the go.

Japan’s Nikkei business daily reported this weekend that Sony plans to set up a project team as early as next week that would develop a new product that combines the PSP and Sony Ericsson’s mobile phones, Reuters reports. The device was being referred to as “a cellphone-game gear hybrid.”

For years, there’s been some questions as to whether the phone manufacturer, which is a joint venture between Sony and Ericsson, would have access to the Playstation brand. The Aino last month provided the first evidence that Sony Ericsson phones could at least use the brand and tap into some of the gaming console’s features. How far the two will go together to create a gaming-focused device remains to be seen, but to be sure the two companies are likely considering everything in the hopes of finding a product that will boost the handset-maker’s marketshare.

from the washington post

NASA. launches weather satellite

2009-06-28T23:37:00.001-07:00

Fla., June 28 (UPI) -- NASA says a satellite it launched in Florida this weekend will bolster weather-forecasting capabilities and monitor changes in the environment.

The Geostationary Operational Environmental Satellite, known as GOES-O, lifted off Saturday without a hitch from Cape Canaveral aboard a Delta IV rocket and will be placed in its final orbit July 7.

The space agency said in a written statement that all systems were functioning properly.

GOES-O is the second in the GOES-N series of environmental weather satellites. Its designation will change to GOES 14 once it is operational.

CBS News said the satellite's advanced imaging will help weather forecasters track small-scale weather phenomenon, including storms capable of producing tornadoes.

"The increased resolution and accuracy that these these satellites will present will help us pinpoint what's happening, and if we know what's happening, we can do a better job of making short-term and long-term forecasts of where it's going to be," said Joe Schaefer, director of the U.S. Storm Prediction Center in Norman, Okla.

from upi.com

Venus and Mars

2009-06-28T23:31:00.000-07:00

As the nation celebrates another birthday, see the spangled Venus and a dim Mars in July before dawn's early light.

Mars, our neighboring red planet, rises about 3 a.m. in the northeastern sky, followed shortly by a brilliant Venus. Both can be seen high in the east before sunrise in the constellation Taurus, but the differences are striking. Venus, at a negative fourth magnitude, is very bright; Mars is much less so at first magnitude and is even harder to see in light-polluted urban areas. By the end of July, Venus is seen lower in the eastern heavens.

Late night with Jupiter: The largest planet in the solar system rises in the east-southeast about 11 p.m. After midnight you should see it snuggled between the constellations Aquarius and Capricornus. It's a negative second magnitude, very bright and easily seen from the city. By 4 a.m., Jupiter is high in the southwest.

Still loitering in the constellation Leo, see ringed Saturn high in the western sky after sundown. The planet remains visible at first magnitude. By month's end, the planet will be noticeably lower in the west after dusk.

Although it won't be visible in the United States, a total solar eclipse will occur over Asia and the Pacific Ocean -- for 6 minutes and 39 seconds -- on July 22. Eclipse expert Fred Espenak, of the NASA/Goddard Space Flight Center, offers details at http://eclipse.gsfc.nasa.gov/eclipse.html.

It's been 40 years since the lunar module Eagle landed on the moon with less than a half-minute of fuel remaining. After landing, Apollo 11 astronaut Neil Armstrong took his small step for man and giant leap for mankind July 20, 1969. A number of events noted below celebrate the anniversary.

Down-to-Earth Events

-- July 5 -- Astronomer Matthew Burger discusses "Europa: Ice, Oceans and Life?" at the open house at the University of Maryland Observatory, College Park. View the night sky afterward, weather permitting. 9 p.m. 301-405-6555; http://www.astro.umd.edu/openhouse.

-- July 11 and July 25 -- Planets and Messier objects and constellations, oh my! The Astronomical Society of Greenbelt hosts a star party at the observatory at Northway Fields Park in Greenbelt. 9 p.m. http://www.greenbeltastro.org.

-- July 16 -- Family Day -- "Countdown to the Moon!" -- at the National Air and Space Museum, the Mall. Find out about lunar missions past and future. Meet moon researchers and see 3-D, high-definition images of the moon's surface. 10 a.m. - 3 p.m. http://www.nasm.si.edu/.

July 16 -- "Alan Bean: Painting Apollo, First Artist on Another World" opens, featuring the artistic works of Apollo 12 astronaut Bean, in the Flight in the Arts Gallery (211), National Air and Space Museum, the Mall. He will sign copies of his book, "Painting Apollo," from 11 a.m. to 2 p.m. http://www.nasm.si.edu/.

-- July 19 -- Meet Apollo 11 astronauts Buzz Aldrin and Michael Collins and Apollo 12 astronaut Bean as each signs his book at the Space Race Gallery (114), National Air and Space Museum, the Mall. Aldrin's book is "Magnificent Desolation: The Long Journey Home from the Moon"; Collins's, "Carrying the Fire: An Astronaut's Journeys"; and Bean's, "Painting Apollo." 11 a.m. -- 2 p.m., http://www.nasm.si.edu/ .

-- July 19 -- No tickets remain for this year's John H. Glenn Lecture, "40th Anniversary of Apollo 11," but the event can be seen on NASA-TV, http://www.nasa.gov/multimedia/nasatv/index.html. The Apollo 11 crew, former Johnson Space Center director Chris Kraft and former astronaut Glenn will discuss the historic mission at the National Air and Space Museum's Lockheed Martin IMAX Theater, 8 p.m. http://www.nasm.si.edu.

-- July 20 -- "The Apollo Legacy: The Moon and Beyond." Journalist Nick Clooney moderates a discussion with astronauts Aldrin, Bean, Apollo 16's Charlie Duke, space shuttle astronaut John Grunsfeld, and Laurie Leshin, deputy director of the Goddard Space Flight Center. 2 p.m. at the Newseum, 555 Pennsylvania Ave. NW. The event can be seen on NASA-TV, http://www.nasa.gov/multimedia/nasatv/index.html.

-- July 20 -- Sean O'Neill answers the question, "If We Can't See Black Holes, How Do We Know That They Exist?" at an open house of the University of Maryland Observatory, College Park. Weather permitting, enjoy the heavens through a telescope afterward. 9 p.m. 301-405-6555; http://www.astro.umd.edu/openhouse.

-- July 25 -- Behold the bountiful heaven in a dark, summer night sky. Astronomer Sean O'Brien of the National Air and Space Museum provides a cosmic tour at Sky Meadows State Park near Paris, Va. Parking: $4. Arrive before dark. 8:30-11 p.m. 540-592-3556; http://www.nasm.si.edu/events/skywatching.

-- July 25 -- Heavenly visions: "Exploring the Sky" at Rock Creek Park, presented by the National Park Service and the National Capital Astronomers. Meet near the Nature Center in the field south of Military and Glover roads NW. 9-11 p.m. 202-895-6070.

-- July 26 -- Step up to the stars as the Astronomical Society of Greenbelt presents "sidewalk astronomy." The public can view the night sky through member telescopes at the Roosevelt Center in Greenbelt, near Crescent Road and Centerway. 7 p.m. http://www.greenbeltastro.org.

from the washington post

Greener cars

2009-06-28T23:24:00.000-07:00

Newer is not necessarily greener, and fuel economy is not the last word on emissions ["Cash for Clunkers," editorial, June 23]. Roughly 10 percent of a car's lifetime emissions is produced in manufacturing; an additional 5 percent comes from recycling the vehicle at the end. Often, junking an old car for a new one is less environmentally sound than driving a lower- mileage vehicle a few years longer.

The driver of a decade-old midsize sedan who scraps it two years earlier than planned will not so much as break even environmentally unless the car is driven more than 20,000 miles per year. Even then, buying a used vehicle is often the more prudent choice, financially and environmentally.

"Cash for Clunkers" will not guide people toward more fuel-efficient vehicles; even many sport-utility vehicles qualify. It simply puts more people in new cars.

Bad for the environment, bad for the budget, but good for the auto industry. Washington's stake in Detroit does appear to make a difference.

from the washington post

GM to Allow few Product Liability Claims

2009-06-28T23:22:00.000-07:00

General Motors will assume responsibility for product liability claims filed after the carmaker emerges from bankruptcy protection, a concession that removes a potential obstacle to the Obama administration's plan for the company's quick restructuring.

Under the deal reached by the administration, GM and state attorneys general, the automaker will accept claims arising from defective-vehicle accidents that occur after it emerges from Chapter 11 proceedings. Consumers could file the claims even if their vehicles were made by the "old" GM. However, those with past claims would have to pursue the GM left behind in bankruptcy with nothing but unwanted assets, debts and other liabilities. That means these consumers are likely to recover little, if anything.

Under GM's original restructuring plan, the automaker was to have sold its valuable assets to a new GM "free and clear" of liens, including existing and future liability claims on cars the old GM produced. Consumer watchdogs and many state attorneys general, including Maryland's, have objected, saying such a sale would deprive individuals of "key legal rights."

The modification, outlined in court papers filed by GM late Friday, is a partial victory for the consumer groups and attorneys general, who took their case to Congress and pressured the Obama administration to make the automaker accept all product liability claims. GM acquiesced only on future claims; case law on that issue is unsettled and could have held up the quick bankruptcy proceedings sought by the Obama administration. The federal government, which has committed more than $50 billion to the restructuring, is to take a 61 percent stake in the new GM.

A hearing on the sale is scheduled for tomorrow.

In a court filing, GM noted that it was making the amendment "to alleviate certain concerns that have been raised on behalf of consumers" even though it was not legally obligated to do so.

Consumer groups welcomed the amendment but said the automaker, along with Chrysler, should do more. After bankruptcy proceedings similar to those being pursued by GM, Chrysler's assets were sold to a new entity led by Italian automaker Fiat, free of existing and future product liability claims.

On Friday Rep. André Carson (D-Ind.) introduced legislation that would require automakers to purchase liability insurance if they are owned by the federal government or have federal loans. This insurance must protect against past and future claims, even after a bankruptcy filing.

"Congress still needs to step in and do something for Chrysler victims," said Joanne Doroshow, executive director of the Center for Justice and Democracy. "That bankruptcy is over. The only way for victims to get help is if there's a law that establishes it."

from the washington post

Yahoo CEO promises shareholders , things will get better

2009-06-27T21:42:00.000-07:00

SANTA CLARA, Calif. (AP) — Yahoo CEO Carol Bartz assured shareholders that the slumping Internet company will "get our mojo back" as she tries to end a three-year slump that confounded her two predecessors.

Bartz made the pledge Thursday during her first shareholder meeting since Yahoo hired her six months ago.

In the mostly amiable one-hour meeting in Santa Clara, Bartz also told shareholders she won't talk publicly about Yahoo's on-again, off-again talks with Microsoft unless the two rivals make a deal.

Yahoo Inc. rejected a $47.5 billion takeover bid from Microsoft Corp. last year, infuriating many of its shareholders. Microsoft has since explored buying Yahoo's search engine, but Bartz has downplayed that possibility.

by the associated press

Court order set to strip Madoff of $171 billion

2009-06-27T21:39:00.000-07:00

NEW YORK (AP) — Bernard Madoff would be stripped of all his possessions under a $171 billion forfeiture order handed down only days before prosecutors seek to put the disgraced financier away in prison for the rest of his life.

U.S. District Judge Denny Chin entered the preliminary order Friday, ruling that Madoff must give up his interests in all property, including real estate, investments, cars and boats.

The forfeiture represents the total amount that could be connected to Madoff's fraud, not the amount stolen or lost, and the order made clear that nothing prevents other departments or entities from seeking to recover additional funds.

A call to Madoff's lawyer, Ira Sorkin, after hours Friday was not immediately returned. In a court filing in March, Sorkin said the government's forfeiture demand of $177 billion was "grossly overstated — and misleading — even for a case of this magnitude."

The 71-year-old Madoff pleaded guilty in March to charges that his exclusive investment advisory business was actually a massive Ponzi scheme. Federal prosecutors say Madoff orchestrated perhaps the largest financial swindle in history.

Acting U.S. Attorney Lev Dassin, who released a copy of the order Friday night, plans to seek a 150-year prison term at Madoff's sentencing Monday. Sorkin has argued in court papers for a 12-year term.

According to Friday's order, the government also settled claims against Madoff's wife. Under the arrangement, the government obtained Ruth Madoff's interest in all property, including more than $80 million-worth that she had claimed was hers, prosecutors said. The order left her $2.5 million in assets.

The agreements strip the Madoffs of all their interest in properties belonging to them, including homes in Manhattan, Montauk, N.Y., and Palm Beach, Fla., worth a total of nearly $22 million. The Madoff's must also forfeit all insured or salable personal property contained in the homes.

Other seized assets include accounts at Cohmad Securities Corp., valued at almost $50 million, and at Wachovia Bank, valued at just over $13 million, and tens of millions of dollars in loans extended by Madoff to family, employees and friends.

The judge's order also authorized the U.S. Marshals Service to sell the Manhattan co-op, properties in Montauk and Palm Beach and certain cars and boats.

At the time of Madoff's arrest, fictitious account statements showed thousands of clients had $65 billion. But investigators say he never traded securities, and instead used money from new investors to pay returns to existing clients.

Prosecutors said the total losses, which span decades, haven't been calculated. But 1,341 accounts opened since December 1995 alone suffered losses of $13.2 billion, they said.

"The sheer scale of the fraud calls for severe punishment," the prosecutors wrote in response to the defense motion seeking lighter punishment.

Prosecutors said federal sentencing guidelines allow for the 150-year term, and any lesser sentence should still be long enough to send a forceful message and "assure that Madoff will remain in prison for life."

The government's papers quoted from letters to Chin written by victims of the scheme who are suffering severe hardships. Madoff "ruined lives," one letter said. "He deserves no mercy."

But Sorkin argued in filings that his client deserved credit for his voluntary surrender, full acceptance of responsibility and meaningful cooperation efforts.

"We seek neither mercy nor sympathy," Sorkin wrote.

He urged the judge to "set aside the emotion and hysteria attendant to this case" as he determines the sentence.

by the associated press

Michael Jackson, remains a moneymaking machine

2009-06-27T20:56:00.000-07:00

LOS ANGELES — Michael Jackson spent the last years of his life buried in debt. But the King of Pop’s death is likely to yield a financial bonanza more lucrative than any comeback tour ever could, as fans snap up his music and memorabilia and perhaps one day get the chance to tour his Neverland home.

"Quite frankly, he may be worth more dead than alive,” said Jerry Reisman, general counsel for the Hit Factory, a recording studio where Jackson produced his best-selling album "Thriller.”

Jackson’s death at age 50 leaves a multitude of questions about a financial empire that included his own music, as well a 50 percent stake in a library that held the rights to songs by the Beatles. But Jackson reportedly had $400 million in debts, and it isn’t known how his estate will be divided and who the beneficiaries will be.

This much is clear: Jackson’s heirs, music labels and opportunists will probably be mining his legacy for decades to come.

In that way, his death may parallel that of the music industry’s original King — Elvis Presley, who died in 1977 at age 42.

Like Jackson, Presley hadn’t had a hit album in years. At the end of his life, he was mostly relying on royalties from his past hits and doing shows in Las Vegas. But in death he became a moneymaking phenomenon.

Presley’s estate was valued at just $4.9 million at the time of his death. In 2005, a company run by media entrepreneur Robert F.X. Sillerman paid $100 million for 85 percent of the estate and a 90-year lease on his Memphis mansion, Graceland.

By some estimates, Jackson’s estate could be worth more than $1 billion. Besides the master recordings of his own music, Jackson owned half of Sony/ATV Music Publishing, a jewel estimated to be worth $2 billion by itself. The 750,000-song catalog includes music by the Beatles, Bob Dylan, Neil Diamond, Lady Gaga and the Jonas Brothers.

Debts come first
Creditors will get first crack at the estate.
"I think the first question is, `Is there anything left after you pay off the debts?’” said Robert Rasmussen, the dean of law at the University of Southern California.

Jackson might have shielded some of his estate from creditors and ensured that his children were taken care of by placing a life insurance policy and other assets in an irrevocable trust, said Steve Hartnett, associate director of education for the American Academy of Estate Planning Attorneys.

The pop star left behind three children: Michael Joseph Jackson Jr., known as Prince Michael, 12; Paris Michael Katherine Jackson, 11; and Prince Michael II, 7. The elder children were born to ex-wife Deborah Rowe, while the youngest is his biological son, born to a surrogate mother.

Other potential beneficiaries include Jackson’s parents, his five brothers, three sisters and a long list of nieces and nephews. His children’s nanny was believed to be close to Jackson.

The contents of Jackson’s will have not been released. Typically, a will becomes public within about 30 days of a person’s death.

by the associated press

Big oil takes new role

2009-06-27T20:53:00.000-07:00

HOUSTON — International oil companies poised for a return to Iraq find themselves in an unfamiliar spot, preparing to assist rather than lord over drilling operations and taking risks that at first glance don’t appear worth the effort.

The bigger risk, however, might be failing to seize whatever opportunity presents itself in a country with the world’s third-largest oil reserves.

Iraq desperately needs oil revenue for reconstruction, and it wants to double its daily crude output within the next four to five years.

On Monday, the country’s Oil Ministry is set to auction off service contracts that in total may pay up to $16 billion over 20 years to the dozens of oil companies that have qualified to bid.

How will it work?
When international oil companies agree to work in a country, they’re typically awarded a portion of the oil that’s pulled from the ground. That’s how they produce profits and increase reserves, a vital asset. They don’t normally work for fees alone.
But in Iraq, the goal will be to get their foot in the door and eventually use their vast sums of capital and know-how to wrangle a greater stake in the developments — namely, a share of the production.

"Right now, they’ll take whatever is available,” said Fadel Gheit, an energy analyst at Oppenheimer & Co. "But this is not their business. Their business is to be in charge. They’re not spectators. They’re players.”

With an estimated 115 billion barrels of proven reserves — behind only Saudi Arabia and Iran — Iraq could provide a rare opportunity for international producers that are finding it harder and more expensive to gain access to new oil.

"The bigger picture is this could lead to other things,” said Brian Youngberg, an analyst at Edward Jones. "I’d think that’s what their plans are: to get more of a piece of the action down the road.”

The technical-service contracts that are likely to be sought by Exxon, Royal Dutch Shell PLC, Chevron Corp. and 30 other oil companies hardly seem worth the risk, at least for the largest producers.

There’s still no law governing oil revenue in Iraq. There’s also a serious rift between the semiautonomous Kurdish region, which has two of the six oil fields that are up for bid, and the central government in Baghdad.

Each has accused the other of setting up illegal contracts with overseas oil companies.

by the associated press

Obama says , Washington can’t miss opportunity

2009-06-26T21:52:00.000-07:00

WASHINGTON — President Barack Obama pushed urgently Thursday for passage of legislation to confront global warming, billing it as a job-creating machine rather than the costly "job killer” Republicans denounced.

Obama said Washington must not miss the opportunity to work on cleaning the air, creating new "green” energy jobs and moving the nation away from its reliance on fossil fuels such as oil, coal and natural gas.

The bipartisan Congressional Budget Office said while households on average would spend $770 more a year on energy in 2020, their annual net cost is likely to be $175 because of energy efficiency or money flowing back in form of direct relief or indirect allowances to businesses and local governments. It said poor households would save $40 a year.

A separate analysis by the Environmental Protection Agency said consumer utility bills would be 7 percent lower by 2020 because less energy will be used as a result of efficiency and other provisions in the bill. It estimated the bill’s impact on household energy costs at between $80 and $111 a year.

Under the bill, at least 85 percent of the allowances would be given away, especially to energy intensive sectors of the economy.

by the associated press

China likely to deny buyer’s bid to acquire Hummer

2009-06-26T21:46:00.000-07:00

BEIJING — China’s planning agency is likely to reject a Chinese company’s bid to acquire General Motors Corp.’s Hummer unit on the grounds that its hulking SUVs conflict with Beijing’s energy-saving goals, state radio reported.

The National Development and Reform Commission also is likely to say the Chinese buyer, a maker of construction machinery, lacks the expertise to run Hummer, China National Radio said late Thursday. It cited no source for the information.

Foreign acquisitions in China require regulatory approval. The government has said environmental criteria have risen in importance in vetting potential industrial projects.

Sichuan Tengzhong Heavy Industrial Machinery Corp., a private company, emerged as the surprise prospective buyer of Hummer this month after GM sought court protection from its creditors. Both companies refused to say how much the Chinese company offered.

Hummer is one of the best-known brands that a Chinese company has tried to buy.

by the associated press

New York budget-price flights

2009-06-26T21:41:00.000-07:00

DALLAS — LaGuardia Airport is the smallest of the three major airports in the New York area, with just two main runways. Planes often sit in long lines on the tarmac, waiting their turn to take off.

So why would Southwest Airlines, a carrier that boasts about its on-time prowess, want to go there? In many ways, it’s because it has to.

Southwest prospered by offering low fares to leisure travelers whose only other affordable option was a car trip. It flew primarily to America’s secondary airports where costs are low and productivity is high because incoming planes can land, drop off passengers, take on the next group and get back in the air quickly.

On Sunday, Southwest starts service at LaGuardia, one of the nation’s most congested airports. This should bring cheaper ticket prices to New York area vacationers flying to Chicago, Baltimore and beyond. But the move is also part of a risky transition that Southwest knows it has to make to win the loyalty of business travelers who increasingly will dictate its future prospects for success.

Southwest outlived early rivals by sticking to a core philosophy: Give people low fares and great service.

The Dallas-based carrier still sees itself as an underdog today, even as it serves 65 cities and carries more than 100 million U.S. passengers per year, more than any other airline.

There still are no first-class cabins and no assigned seats on Southwest, giving it the air of a carrier for penny-pinching vacationers.

"We’re very dependent on business travelers, so we’re not a leisure airline like some of our smaller competitors are,” CEO Gary C. Kelly countered in an interview. He said company surveys show that in normal times at least 40 percent of his customers are traveling on business.

Changing the model
Airlines covet business travelers because they make repeat trips and often pay higher fares for booking at the last minute.
Southwest needs that revenue now. The Dallas-based airline has been profitable for 36 straight years but has been in the red since last fall. Traffic is down and costs are rising.

While it’s cutting flights across its system, Southwest also is entering New York and three other big cities, including Boston’s Logan Airport.

Robert Crandall, who competed against Southwest when he ran American Airlines in the 1980s and ’90s, said Southwest has stuck to a well-defined business model of low fares and low costs at secondary airports.

"Going into LaGuardia is a change to that model,” Crandall said, "but they’ve decided they don’t have any choice — they need the (passenger) volume to grow.”

by the associated press

The value of the dollar

2009-06-26T21:37:00.000-07:00

NEW YORK — Oil prices jumped above $70 a barrel Thursday after the government said that the economy may be faring better than previously thought.

Benchmark crude for August delivery added $1.56 to settle at $70.23 a barrel on the New York Mercantile Exchange. In London, Brent prices increased $1.45 to settle at $69.78 a barrel on the ICE Futures exchange.

The value of the dollar again is playing a strong role in the price of crude.

Crude prices have fallen off after peaking above $73 a barrel earlier this month as the dollar strengthened.

Most experts agree prices on Nymex, and at the local gas station, hit levels that weren’t supported by meager demand for energy.

They blame investment money that has flowed into the market, using oil as a hedge against inflation.

Retail gasoline prices fell for the first time in nearly two months Monday, and have fallen every day since. The national average lost another 0.9 cents to $2.667 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service.

A gallon of gas is 24.2 cents more expensive last month, but it’s still cheaper than last year when prices topped $4 a gallon.

Stores of natural gas, a key energy source for power plants, also continued to build as manufacturers slowed production and major employers trimmed operations.

The government reported Thursday that natural gas supplies rose again last week, though less than analysts expected.

In other Nymex trading, gasoline for July delivery rose 5.58 cents to settle at $1.8983 a gallon and heating oil gained 3.82 cents to settle at $1.7763 a gallon. Natural gas for July delivery advanced 8.3 cents to settle at $3.844 per 1,000 cubic feet.

by the associated press

Pressuring bank buyout

2009-06-26T21:33:00.000-07:00

WASHINGTON — Federal Reserve Chairman Ben Bernanke told Congress Thursday he didn’t pressure Bank of America into acquiring Merrill Lynch in a deal that ultimately cost taxpayers $20 billion.

Bernanke told a House committee investigating the matter that he did not threaten action against Bank of America’s CEO Kenneth Lewis or the bank’s board members if they decided to abandon the takeover.

"I did not tell Bank of America’s management that the Federal Reserve would take action against the board or management” if they decided to invoke a clause in the acquisition contract in an attempt to stop the deal, Bernanke told the House Oversight and Government Reform Committee. "Moreover, I did not instruct anyone to indicate to Bank of America that the Federal Reserve would take any particular action under those circumstances.”

Earlier this month, Lewis testified that his job was threatened after he expressed second thoughts about the deal. Lewis said then-Treasury Secretary Henry Paulson and federal regulators made clear that if Charlotte, N.C.-based Bank of America Corp. reneged on its promise, that he and the bank’s board members would be ousted.

Bernanke said no member of the Fed ever urged Bank of America to keep quiet about Merrill Lynch’s financial problems. Not divulging that information would have violated Lewis’ fiduciary duty to shareholders.

"Neither I nor any member of the Federal Reserve ever directed, instructed or advised Bank of America to withhold from public disclosure any information relating to Merrill Lynch, including its losses, compensation packages or bonuses or any other related matter,” the Fed chief said.

It marked Bernanke’s first public comments since the House committee launched an investigation earlier this year into whether he or other government officials bullied Bank of America to combine the two financial powers after Lewis found out about Merrill’s financial woes.

The committee’s ranking member Darrell Issa, R-Calif., accused the Fed of having "deliberately kept other regulators in the dark regarding the negotiations with Bank of America. The Federal Reserve’s cover-up of important information and willingness to exclude key regulatory partners” such as the Securities and Exchange Commission and the Office of the Comptroller of the Currency "raises troubling questions,” he said.

Rep. Jason Chaffetz, R-Utah, said of Bernanke’s denial that he threatened Lewis’ job: "With all due respect, I’m just not buying that.”

by the associated press

Texas billionaire R. Allen Stanford pleaded not guilty

2009-06-26T21:29:00.000-07:00

HOUSTON — Texas billionaire R. Allen Stanford pleaded not guilty Thursday to charges he swindled investors out of $7 billion as part of a massive investment scam.

Stanford entered his plea during his arraignment in federal court. The financier was indicted on charges that his international banking empire was really just a Ponzi scheme.

Laura Pendergest-Holt, Gilberto Lopez and Mark Kuhrt, three executives with the now defunct Houston-based Stanford Financial Group who were indicted along with their former boss, also entered not guilty pleas.

At a bond hearing shortly after the executives’ arraignment, prosecutors argued Stanford should be held without bond as he awaits trial on fraud charges because he might have access to billions of dollars in secret funds.

Prosecutor Paul Pelletier said investigators found a secret Swiss account Stanford controlled that was drained of more than $100 million in December 2008.

Jeffrey Ferguson, a forensic examiner hired to review the records of Stanford Financial Group and its affiliated bank on the Caribbean island of Antigua, testified nearly $1.2 billion of the $7 billion Stanford and his co-defendants are accused of bilking from investors can’t be accounted for.

In court documents filed Thursday, prosecutors also said Stanford faces a potential life sentence, has access to a private jet and has an international network of wealthy acquaintances who would help him, including one who recently agreed to give him $36,000 to pay his lease on a Houston apartment for a year.

Dick DeGuerin, Stanford’s attorney, argued in court documents that Stanford is not a flight risk and highlighted his charity efforts, including his work with a foundation for single mothers in Antigua as examples of his strong character.

by the associated press

Big oil prepares comeback in Iraq

2009-06-26T21:23:00.000-07:00

BAGHDAD — More than three decades after they were booted from the country by Saddam Hussein, international oil companies are poised for a return to Iraq, where next week they will bid for a slice of the country’s vast crude reserves.

Iraq needs the expertise of internationals that can develop its dilapidated oil and gas industry. The country lacks the oil revenues needed for reconstruction after a U.S.-led war.

Yet a constitutional fight pitting Oil Minister Hussain al-Shahristani against the parliament and the semiautonomous Kurdish government threatens to undercut the bidding process.

Discord over the two days of bidding scheduled to begin Monday lies in a struggle between Iraq’s various religious and ethnic factions over control of one of the world’s largest proved reserves of oil — an estimated 115 billion barrels. And the debate in Baghdad is tinged with a troubled past that includes some of same international companies now back at the table.

Exxon Mobil, Royal Dutch Shell, Repsol, the China National Petroleum & Chemical Corp. and Russia’s Lukoil and other approved companies, have been asked to put up a total of $2.6 billion for what the ministry calls "soft loans.”

In return, they will have the right to develop Iraq’s main oil fields, which could net the companies a total of $16 billion. The companies also must shoulder the costs of creating a national oil and gas joint-venture.

In return, Iraq has offered limited access, through the service contracts, to its oil fields that hold 43 billion barrels of reserves. But the contracts provide little in the way of security, physically or contractually, to big oil companies.

by the associated press

Economy sees progress

2009-06-26T21:16:00.000-07:00

WASHINGTON — Despite persistent layoffs, the economy seems to be faring better than it was at the start of the year.

The Labor Department said Thursday that new jobless claims jumped unexpectedly last week. And the number of people continuing to receive unemployment aid rose more than expected.

The figures indicate that jobs remain scarce even as the economy shows some signs of recovering from the longest recession since World War II.

A revised reading on gross domestic product said the economy posted a 5.5 percent annualized decline from January through March. That was slightly better than the 5.7 percent estimate made a month ago. Economists generally think the economy is shrinking at a slower pace — about 2 percent — in the current quarter.

The main forces behind the small upgrade in the first quarter: Businesses didn’t cut stockpiles of goods as much, and imports dropped more than previously estimated.

Initial claims for jobless benefits rose last week by 15,000 to a seasonally adjusted 627,000. Economists had expected a drop to 600,000.

Most economists still expect initial unemployment insurance claims to decline slowly in coming months as the recession bottoms out.

by the associated press

New Mexico spaceport launch

2009-06-21T21:16:00.000-07:00

UPHAM, N.M. (AP) — A multimillion-dollar spaceport is moving toward construction in the New Mexico desert, a big step for commercial space development and tourists who will suit up for $200,000 suborbital flights.

Gov. Bill Richardson and other dignitaries staged a ceremonial groundbreaking Friday at the remote site of Spaceport America in Sierra County.

"Today will be a signal that America needs to regain its leadership in space, both in national space and commercial space," said Gov. Bill Richardson. "Today is historic because New Mexico leads the nation in commercial space."

From a 10,000-foot runway, spacecraft will take flight attached to an airplane, then break free and rocket 62 miles into space before returning to the New Mexico site. Flights will last about two hours and include five minutes of weightlessness.

George Nield, a Federal Aviation Administration official who oversees commercial space transportation, said seven spaceport licenses have been issued in the U.S.

California has two licenses while New Mexico, Florida, Virginia, Alaska and Oklahoma each have one.

Richardson said the New Mexico site — about 45 miles north of Las Cruces — is ahead, largely because of a partnership with Virgin Galactic, a British company that plans to take the tourists into space.

Virgin Galactic officials said Friday that 300 customers have made down payments to get launched into space. The company aims to begin taking tourists into space by December 2010.

New Mexico is making a $200 million investment in the project. Virgin Galactic, owned by British billionaire Sir Richard Branson, is investing $250 million and will be the spaceport's anchor tenant.

Lina Borozdina-Birch, who attended Friday's ceremony, is a 40-year-old chemist from San Diego and among the first to sign up for a flight.

"I'm so excited. Until this point in my life, it's been like a science fiction novel," she said of the prospect of going to space.

Her dream began as she was growing up in the Soviet Union at the time when the country was locked in a space race with the United States. Borozdina-Birch said she mortgaged her home to afford the $200,000 ticket.

The spaceport will operate like an airport where aerospace companies can lease building and hangar space, said Virgin Galactic president Will Whitehorn.

The company's system also will accommodate satellite launches, he said, and scientists can take off from the site to follow experiments they launch into space.

During the ceremony, about a dozen people dressed as Spanish conquistadors walked across the open plain, where construction of the runway is scheduled to begin next month.

They carried Spanish colonial flags, spears and muskets, evoking images of colonists who came through the area on the Camino Real in the 17th century.

One of the actors presented Richardson with a scroll, symbolizing the connection between the explorers of the past and those of the future.

The ceremony also featured the liftoff of model rockets by students attending a space camp.

The runway is slated for completion next summer. The terminal and hangar should be ready for tenants in December 2010.

by the associated press

FCC exclusive cell phone deals

2009-06-21T21:14:00.000-07:00

NEW YORK (AP) — Regulators will investigate whether exclusive cell phone deals, such as the one that locks the iPhone to AT&T, are good for consumers.

The acting chairman of the Federal Communications Commission, Michael Copps, has instructed the commission's staff to review exclusivity arrangements.

"In the fast-changing wireless handset market ... we must ensure that consumers are able to reap the benefits that a robust and innovative competitive marketplace can bestow," Copps said Thursday at an industry conference in Washington.

Carriers generally negotiate exclusive deals that last six months to a year, after which other carriers can also sell the phone model to their customers. By launching with only one carrier, the manufacturer gets a higher price or extra promotional spending on the phone.

Apple Inc.'s iPhone is a much-noted exception. Dallas-based AT&T Inc. has been the sole U.S. carrier since Cupertino, Calif.-based Apple launched the first model two years ago, frustrating consumers who want to use it on another carrier.

Handset exclusivity was one of the subjects of a Senate Committee on Commerce, Science and Transportation hearing this week.

Barbara Esbin, senior fellow at the Progress & Freedom Foundation, a think tank that generally opposes government intervention, told the committee that exclusive arrangements help manufacturers bring new devices to market quickly and gives the carriers incentives to promote and subsidize them.

Competing U.S. carriers have found touch-screen phones from other manufacturers to compete with the iPhone, but none has come close to equaling that phone's cachet. The third model, the 3G S, went on sale Friday.

Verizon Wireless offered a few months ago to shorten its exclusive periods for new cell phones from LG and Samsung to six months, from as long as a year, to give small rural carriers a better chance to sell up-to-date phones.

The rural carriers rejected the offer as insufficient.

by the associated press

New iPhone goes on sale

2009-06-21T21:11:00.000-07:00

NEW YORK (AP) — The new iPhone went on sale Friday morning, greeted by much smaller lines and less hoopla than previous models.

A few hundred people were in line just before the 7 a.m. opening of Apple Inc.'s flagship store on Manhattan's Fifth Avenue, a fraction of the people who lined up around the block for last year's launch.

That launch turned into a debacle as Apple's servers failed to cope with the load of new customers trying to activate their phones. People who already had iPhones were trying to install a software update on the same day, adding to the pressure.

This year, Apple and AT&T Inc., the phone's U.S. carrier, defused the drama by taking pre-orders for the new phone online. That means fewer prospective buyers had a reason to stand in line, in theory speeding up the activation process.

Apple also released its software update for previous customers two days early. There were only scattered reports of problems with that upgrade.

While activation seems to have proceeded more smoothly this year, posts on blogs, Twitter and Apple's own support forums indicated it may take as long as two days for some iPhones to be operational.

The devices must be plugged into a computer and activated before users can call, send text messages or surf the Web using their cellular data plan. Apple and AT&T servers are both involved in the activation process.

Some people reported receiving a message warning activation will take up to 48 hours due to high volume.

Apple spokesman Steve Dowling declined to provide details on the situation. AT&T spokesman Mark Siegel declined to comment.

The new model is called the 3G S. AT&T said it had taken pre-orders for "hundreds of thousands" of the phones. Apple sold one million units of the older model, the 3G, in the first three days last year.

For new customers signing a two-year contract with AT&T, the 3G S costs $199 or $299 depending on the memory capacity. Compared to the 3G, it has a faster processor and an upgraded camera.

Owners of the previous model, the iPhone 3G, will have to pay more than that. Most of them are not eligible for the new-customer pricing because AT&T subsidizes the cost of the phone and requires customers to "pay off" the subsidy through their monthly service fees before it will subsidize a new phone.

In line at the Fifth Avenue store, Brandon Dennie, 27, was not put off by the prospect of having to pay the unsubsidized price of $599 for the new phone. He's had a 3G for only six months, so he didn't qualify for the lowest price.

He's creating his own subsidy by selling his old phone for $200 to a colleague, and he has an Apple gift card.

"I want the video option and the speed," Dennie said.

In its two-year life, the iPhone range has revolutionized phone design and given AT&T a leg up on its rivals in recruiting customers willing to pay high monthly fees.

Competitors have started to catch up to some of the iPhone's signature features, like a user interface that's designed from the ground up to be navigated with finger touches. In particular, Palm Inc.'s Pre, which came out two weeks ago, has generated a lot of buzz and favorable reviews.

But the iPhone is still the king of smart phones. Pacific Crest analyst James Faucette estimated that exclusive carrier Sprint Nextel Corp. sold 90,000 to 100,000 Pres in the first week of sale, far lower than expected sales of the 3G S.

To grab even more market share, Apple is now selling the older 3G for a lower price: $99 with a two-year contract.

At an AT&T store in the New York borough of Queens, there were three people in line at 5:45 a.m. Sarah Gates and Ed Phyfe, the couple who were first in line, didn't know about the pre-order option until it was too late, and wanted to be sure to get phones from the small stock set aside for walk-ins.

"We got Sprint smart phones since just before the first iPhone came out, and we immediately regretted it," said Gates, 33. She has nothing against Sprint Nextel Corp., but the Motorola Q phones were awful, she said.

"I feel kind of bad to leave Sprint ... but I don't like any of the phones they have half as much the iPhone," she said.

Apart from the U.S., the phone went on sale Friday in Canada, France, Germany, Italy, Spain, Switzerland and the U.K. Other countries will get it throughout the summer.

by the associated press

Yahoo $34M for layoffs

2009-06-21T21:05:00.000-07:00

SUNNYVALE, Calif. (AP) — Yahoo Inc. says laying off nearly 700 workers will cost between $30 million and $34 million in severance pay and other related expenses.

The layoffs, which affect about 5 percent of Yahoo's workers worldwide, were announced in April.

They were the first significant cuts since new CEO, Carol Bartz, joined Yahoo in January, but mark the Sunnyvale-based company's third round of reductions in the past 16 months.

Yahoo says it will also gain between $7 million and $8 million related to forfeited stock and options. In all, the company says it expects to write down $22 million to $27 million in the current second quarter.

Yahoo disclosed the charges in a Securities and Exchange Commission filing Friday.

by the associated press

GM asset sale

2009-06-21T21:02:00.000-07:00

NEW YORK (AP) — A group of General Motors Corp. bondholders and some of the automaker's labor unions filed objections Friday to GM's plan to sell its assets to a new company that can emerge from bankruptcy protection.

Their opposition, along with additional objections filed by consumer groups, a handful of states and cities, and individual retirees, shareholders and bondholders, threatens to put the brakes on what has so far been a speedy trip through the Chapter 11 process.

The Unofficial Committee of Family & Dissident GM Bondholders claim they are being treated unfairly compared with the automaker's other stakeholders and deserve more than the 10 percent stake in the new company that they would receive if the sale goes through.

In its motion, the bondholders group accused GM and the U.S. government of unjustly speeding the case through the bankruptcy process at the expense of the bondholders and dividing the new company's assets "among a few select favored classes."

"GM's bondholders appear to be the most disfavored and discriminated class in the scheme," the group wrote, pointing to the larger 17.5 percent stake the United Auto Workers union is slated to get under the sale.

The group claims to represent about 1,500 bondholders with holdings worth more than $400 million. It's also asking the court to grant it permission to form a formal committee that would be able to negotiate with GM separately from larger bank and investment firm bondholders. A hearing on that request is scheduled for Tuesday.

GM spokeswoman Renee Rashid-Merem declined to comment on the group's objection, saying that the company doesn't discuss specific claims or possible outcomes that will be determined by the bankruptcy court.

As part of GM's restructuring plan, the automaker wants to sell the bulk of its assets to a new company in which the U.S. government will take a 60 percent ownership stake. The Canadian government would get 12.5 percent of the new GM, with the UAW taking a 17.5 percent share and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.

The support of bondholders is seen as a key step toward moving the bankruptcy process along quickly and allowing GM to meet its goal of emerging from court oversight in 60 to 90 days.

The day before GM's June 1 bankruptcy protection filing, a group of ad hoc institutional bondholders said that 54 percent of the automaker's bondholders had agreed to exchange their shares of automaker's $27 billion in unsecured bonds for the 10 percent stake and warrants to purchase a greater stake in the new company later.

Chrysler LLC also tried to hammer out a deal in the days leading to its April 30 Chapter 11 filing, but it faced heavy resistance from debtholders representing a fraction of its $6.9 billion in secured debt.

That group objected to Chrysler's plan to sell the bulk of its assets to Italy's Fiat Group SpA, and took the case all the way to the U.S. Supreme Court before the sale ultimately went through. Attorneys for consumer groups and people with product liability lawsuits against Chrysler also appealed the sale to the high court.

Several of the same consumer groups are also objecting to the GM sale, because like in the case of Chrysler, the new company would not be responsible for product liability claims related to vehicles produced and sold by the old company.

Consumers would be left to file claims against the assets remaining after the sale, and it is unlikely that there will be anything left to pay those claims.

Meanwhile, the IUE-CWA, United Steelworkers and International Union of Operating Engineers claimed Friday that the GM sale will ultimately take away the health care benefits of their 50,000 retirees.

Before it filed for bankruptcy protection, GM reached a deal to give the UAW a stake in the new company to help fund retiree heath care benefits, but no such agreement has been reached with the other unions.

"If GM succeeds in leaving behind these union-represented retirees and dependents, they will be left with only an unsecured claim against old GM for more than $3 billion in retiree health care and hundreds of millions more for retirement life insurance," the unions said in their objection.

Rashid-Merem said discussions related to the non-UAW health care benefits are ongoing, and the company hopes to reach final decisions about their future soon.

A hearing on the sale of GM's assets to the new government-led entity is scheduled for June 30. The deadline to file objections with the court was 5 p.m. Friday.

by the associated press

Yue Yuen Industrial 1H Net Profit

2009-06-21T20:59:00.000-07:00

HONG KONG (Dow Jones)--Yue Yuen Industrial (Holdings) Ltd. (0551.HK), the world's largest athletic footwear maker by output, said Sunday its first-half net profit rose 4.0% from a year earlier on increased sales despite a difficult business environment.

The company said its net profit for the six months ended March 31 rose to US$217.7 million from US$209.3 million a year earlier.

Yue Yuen, a unit of Taiwan's Pou Chen Corp. (9904.TW), said revenue for the period rose 9.7% to US$2.55 billion from US$2.32 billion.

The company proposed a first-half dividend of HK$0.34, unchanged from a year earlier.

Yue Yuen, which makes shoes for brands such as Nike Inc. and Adidas-Salomon AG, produced 129.9 million pairs of shoes in its first half, up 1.6% from a year earlier.

The shoe maker said revenue in the April-May period dropped 1.6% from a year earlier, but it expects footwear sales to stabilize on the performance of its brand-name customers, and sales for its retail operations in China to be steady on healthy consumer spending in the country.

from the wall street journal

Balancing Act

2009-06-21T20:51:00.000-07:00

The Federal Reserve's policymaking committee meets tomorrow and Wednesday and will grapple with a somewhat different situation than it faced at its last meeting, at the end of April. Since then, the financial system has continued to repair itself, and the economy, while very weak, continues to show signs of bottoming out later this year.

What has changed most since then is a steep rise in long-term interest rates, which is pushing up long-term borrowing rates, especially for mortgages. That could stand in the way of a nascent stabilization in the housing market.

It also creates a conundrum for Fed Chairman Ben S. Bernanke and his colleagues. They still view the economy to be in perilous shape and are inclined to do whatever they can to support it. That would suggest that they should expand their purchases of Treasury bonds and mortgage-backed securities to try to push long-term rates back down.

But not so fast. For one thing, Fed leaders view much of the rise in rates as reflecting the return of financial conditions to a more normal place. So that's a healthy thing -- and if the rise really does choke off growth excessively, rates will come back down in a self-regulating fashion.

More worrisome, part of the rise in rates may be caused by fears that the Fed will allow inflation to get out of control down the road and that it will print money to finance government deficits. To the degree that those fears are out there, expansion of the Fed programs could be counterproductive, sending rates up rather than down.

So, in the view of most Fed watchers, we're unlikely to see any major new action to bolster the economy out of the Fed's meeting, results of which will be released Wednesday.

Meanwhile, some major data are coming out this week -- figures for May durable-goods orders on Wednesday, May personal income and consumption on Friday, and the final revision of first-quarter gross domestic product data on Thursday.

from the washington post

Xstrata Merger with Anglo American

2009-06-21T20:46:00.000-07:00

Xstrata, an exporter of coal used by power plants, on Sunday proposed a merger with Anglo American to gain access to iron ore mines and control of the world’s biggest platinum producer.

“A merger of these two world-class companies with complementary assets is highly compelling” and would provide “enhanced scale and financial flexibility to fund future growth,” Xstrata said in a statement.

The combination with Anglo would allow Xstrata to save money by joining operations. Xstrata, based in Switzerland, has been on an acquisition spree in which the company has spent more than $28 billion in the last six years on nickel, copper, coal and platinum assets. A combination would create a company with a market value of about £41 billion ($68 billion).

Talks are “at a very preliminary stage, and there is no certainty that any transaction will be forthcoming,” Anglo American, which is based in London, said in a statement on Sunday. It did not disclose terms of a possible deal.

Glencore International, a raw materials supplier that holds a 35 percent stake in Xstrata, supports a deal, The Sunday Telegraph reported.

Anglo American rose 2.7 percent, to 1,623 pence in London on Friday, valuing the company at £21.4 billion. The stock has gained 5 percent this year. Xstrata climbed 4.1 percent, to 681 pence, valuing the company at £20 billion. The shares have jumped 88 percent this year, giving it a market value of £20 billion.

Analysts at Citigroup said in a June 18 report that an Xstrata and Anglo American combination “makes strategic sense and could create synergies of up to $750 million per annum.” A merged company “would be a global leader in base metals, platinum, ferrochrome and coal,” they wrote.

Xstrata said in its statement that a “combination would create a premier portfolio of operations diversified across multiple commodities and geographies.”

The deal would also “significantly increase shareholder returns,” it said.

Goldman Sachs and UBS are advising Anglo American, while Deutsche Bank and JPMorgan Cazenove are advising Xstrata.

from the new york times

Shoppers find bargains in style

2009-06-19T23:35:00.000-07:00

NEW YORK — With luxury retailers in a major slump, this is a great time to find deals on luxury handbags, apparel and accessories. Here are five ways to capitalize on the luxury sector’s woes.

• ONLINE SAMPLE SALES. Sample sales in out-of-the-way locations have been fixtures in New York and other cities where designers are based for years. Now, as unsold luxury goods pile up, they’ve gone online. At Gilt.com, Gilt Groupe Inc. gives members access to designer clothing at discounts up to 70 percent. RueLaLa.com offers bargains on items ranging from Gucci to Waterford. Shopittome.com searches Web sites of high-end stores such as Nordstrom and Saks Fifth Avenue for its subscribers and e-mails them when products, brands and sizes they specify are on sale.

• OUTLET STORES. Luxury brands’ factory and outlet stores are going back to their roots and selling unsold higher-end inventory in addition to cheaper merchandise made specifically for outlets. This lets luxury makers like Coach Inc. avoid lowering prices at retail locations quite as far as they might.

• DEPARTMENT STORE DEALS. Among the worst-performing retailers during the recession have been luxury department stores, while 70 percent off sales may be a thing of the past, there are still deals to be found, particularly on clearance. David Wolfe, creative director at The Doneger Group Inc., which advises stores on apparel buying, says finding deals on luxury items at department stores depends on comparison shopping and seeking quality — not just discounts.

"The trick to that is buy things that are classically designed, not the hot item of the season,” he said. "If something is so identifiable, even though you may get it at bargain price, you will be sorry in six months that you own it.”

• HOLD OFF. Wolfe also says patience may pay off this year in lower prices for high-end luxury apparel and accessories. "There are reports that some designers are lowering their prices 20 to 30 percent this season,” he said, which will show up in stores in a few months.

• SHOP CONSIGNMENT STORES. The stigma is definitely off used clothing and items that have been previously owned but never worn. As consumers rethink purchases and look for cash in their closets, there has been an influx of goods at consignment stores, where luxury goods sell for a fraction of their retail price. Some consigned goods are available online, too, at sites such as constylement.com, but the competition is tough.

"Now it’s not just respectable, it’s almost like a sport,” Wolfe said.

by the associated press

The Google tricycle

2009-06-19T23:33:00.000-07:00

PHILADELPHIA — Coming soon to a campus near you — the Google tricycle.

A pedicab-like vehicle mounted with an 8-foot-high camera has been rolling around the pedestrian walkways of the University of Pennsylvania to collect panoramic images of the campus for Google Maps’ Street View feature, which gives users detailed, street-level views of map locations on the Internet.

Google Inc. has been using car-mounted cameras to prowl streets in the U.S. and around the world.

The human-powered version allows coverage of pedestrian-only areas on campuses, in public parks and at theme parks, as well as hiking and bicycling trails, as Google seeks to expand coverage of its online maps.

The effort comes as Google faces complaints from many individuals and institutions that have been photographed around the world. Since launching in 2007, Street View has expanded to more than 100 cities worldwide.

Offering opportunity
Danny Sullivan, editor-in-chief of the industry news site Search Engine Land, called the new effort a good public relations move by Google.
"This is a nice way for them to say ‘Hey, look, Street View: It’s really warm and fuzzy,’” Sullivan said. "It’s not just about taking pictures of people’s houses. We can find these footpaths that people want to go on and walking areas, places people will like.”

The 250-pound vehicle, which resembles the pedicabs that carry tourists around Philadelphia and other cities, has the cyclist pumping the pedals up front, with the camera mounted on a tower in the back. On the rear is a red generator along with a large white chest that contains the computer recording the digital images.

by the associated press

GM closes Venezuela plant

2009-06-19T23:29:00.000-07:00

CARACAS, Venezuela — General Motors Corp.’s Venezuelan affiliate temporarily shuttered a local assembly plant Friday, suspending all car production in Venezuela and boosting fears that the closure could further slow sputtering economic growth.

GM suspended operations for at least three months at its auto assembly plant in Venezuela’s central Carabobo state, affecting 1,600 full-time employees who will see their salaries cut to minimum wage during the shutdown. A smaller plant that produces trucks will continue operating.

Car sales have soared in Venezuela in recent years as high oil prices fueled a consumer spending boom. In March, the sector employed 40,000 people and indirectly created another 100,000 jobs, according to Venezuela’s Automotive Chamber.

GM is the country’s largest automaker, producing more than half of the 54,000 cars assembled in the first five months of 2009, according to the chamber.

But auto output had already declined by 9.7 percent this year through May as government currency controls restricted imports, pushing GM to close its doors.

The controls, imposed by President Hugo Chavez in 2003, have prevented GM from getting the dollars it needs to import car parts, stalling sales and leaving the company with $1.2 billion in debts to foreign suppliers.

But lower oil prices, now 51 percent below July’s peak, have left crude-reliant Venezuela without its main source of foreign currency, making it more reluctant to part with dollar reserves and forcing it to cut back on dollar sales to importers.

GM’s operations could be halted for more than three months if the company doesn’t get permission to buy dollars soon, GM’s Venezuela chief Ronaldo Znidarsis said.

The government plans to sell auto manufacturers $2.5 billion in dollars this year so they can buy car parts, Trade Minister Eduardo Saman said.

Local businessmen worry that GM’s shutdown will slow other sectors of Venezuela’s economy, said Tulio Hidalgo, president of the Carabobo state chapter of the Fedecamaras business chamber.

by the associated press

Nestle issues recall on cookie product

2009-06-19T23:26:00.000-07:00

NEW YORK — Federal authorities are investigating a new outbreak of a bacteria-triggered illness, this time related to a sweet treat treasured by the heartbroken and children-at-heart — packaged raw cookie dough.

The federal Centers for Disease Control said its preliminary investigation shows "a strong association” between eating raw refrigerated cookie dough made by Nestle and the illnesses of 65 people in 29 states whose lab results have turned up E. coli bacteria since March.

About 25 of those people have been hospitalized, but no one has died. E. coli is a potentially deadly bacterium that can cause bloody diarrhea, dehydration and, in the most severe cases, kidney failure.

Nestle USA recalled all of its Toll House refrigerated cookie dough products after the U.S. Food and Drug Administration advised consumers to throw away any Nestle Toll House cookie dough products in their homes and asked retailers, restaurateurs and other foodservice operations not to sell or serve any of the refrigerated cookie dough.

Customers also can return any recalled product where they bought it for a full refund. The recall does not affect other Toll House products, including ice cream that contains raw Toll House dough.

"This has been a very quickly moving situation,” said Roz O’Hearn, spokeswoman for Nestle’s baking division, adding the company took action within 24 hours of learning of the health problem.

Spokeswoman Laurie MacDonald for Nestle USA in Glendale, Calif., a unit of Switzerland-based Nestle SA, said the company has temporarily stopped making the refrigerated dough products while the FDA investigates its factory.

"We hope to resume production as soon as possible,” she said.

41% market share
Nestle holds a 41 percent share of the prepared cookie dough market.
The recall includes refrigerated cookie bar dough, cookie dough tubs, cookie dough tubes, limited edition cookie dough items, seasonal cookie dough and Ultimates cookie bar dough. Nestle said about 300,000 cases of Nestle Toll House cookie dough are affected by the recall, which covers chocolate chip dough, gingerbread, sugar, peanut butter dough and other varieties.

The FDA said consumers should not try to cook the dough, even though it would be safe to eat if cooked, because the bacteria could move to their hands and to countertops and other cooking surfaces.

Raw cookie dough is so popular that it has spawned more than 40 groups on Facebook, complete with postings that read like love notes.

by the associated press

Oil industry more spending on lobbying

2009-06-19T23:24:00.000-07:00

HOUSTON — Oil and gas companies have accelerated their spending on lobbying faster than any other industry, training their gusher of profits on Washington to fight new taxes on drilling and slow efforts to move the nation off fossil fuels.

The industry spent $44.5 million lobbying Congress and federal agencies in the first three months of this year, on pace to shatter last year’s record. Only the drug industry spent more.

Last year’s total of $129 million was up 73 percent from two years earlier. That’s faster than any other major industry, according to data from the Center for Responsive Politics.

From the late 1990s through the first half of this decade, the oil industry spent roughly $50 million to $60 million a year on lobbying. It ramped up lobbying in 2006, when Democrats retook Congress, and further as President Barack Obama took office.

"They’re under attack, they’re ramping up their operations and they’ve got money to spend,” said Tyson Slocum, who runs the energy program at watchdog group Public Citizen. "They’re in much better position than other industries to draw upon financial resources for their lobbying effort.”

Billions of dollars in oil profits in recent years have made the industry a target for new and higher taxes on exploration and drilling. Oil companies and refiners are also trying to blunt the effect of costly climate change legislation pushed by Obama.

While most oil and gas executives acknowledge the nation needs cleaner energy, they say lawmakers are misguided about how quickly it can happen. They warn that taxes and tighter rules on exploration could cripple the industry before new technology is developed.

Lobby sees success
Sean Brodrick, a natural resources analyst at Weiss Research Inc., cited the coal lobby as an example of one that’s already had some success with the Obama administration.
He noted a futuristic coal-burning power plant in Illinois that languished under the Bush administration has now found favor with Obama Energy Secretary Steven Chu.

The Energy Department will commit more than $1 billion to the project under an agreement announced last week.

"I think (the Obama administration) will make some accommodations,” Brodrick said. "They may speak really tough before these laws are enacted, but you watch, I bet the energy companies will have some effect in actually shaping how these laws finally come out of the big sausage factory.”

by the associated press

Air travelers’ options

2009-06-19T23:20:00.000-07:00

MINNEAPOLIS — As if charging $15 to check a bag weren’t enough, two airlines are asking for $5 more beginning this summer if you pay for that at the check-in counter — a fee on top of a fee.

Of course, you could always pay your baggage fee from home. The airlines call it the "online discount.”

If airlines can get away with that, what’s next? Rather than raise fares in the middle of a recession, they’re piling on fees to make money — fees for bags, fees to get through the line faster, even fees for certain seats.

United Airlines alone expects to rake in more than $1 billion this year in fees ranging from baggage to accelerated frequent-flier awards. That makes up more than 5 percent of its revenue.

The most likely new fees are those that some airline, somewhere, has tried.

How are fees made?
Fees usually originate with one or two airlines, and competitors watch to see whether passengers accept them or revolt. For instance:
→US Airways and United are hitting passengers up for $5 to pay their baggage fees at the airport instead of online. United implemented the fee June 10, while US Airways will put it into effect July 9.

→If you want to select an exit row seat on AirTran and enjoy the extra legroom, expect to cough up $20.

→Allegiant Air, a smaller national discount airline, charges a $13.50 "convenience fee” for online purchases, even though most other carriers encourage purchases direct from their Web site.

→European discounter Ryanair charges for something everyone has to do if they want to fly: check in. It’s 5 euros, or about $6.75, to check in online, double for passengers who pay at the airport. Ryanair plans to eliminate airport check-in desks.

→Spanish airline Vueling charges a fee to pick a seat. Any seat at all. A "basic” seat behind the wing runs 3 euros. For 30 euros, travelers can choose an aisle or window seat and guarantee that the middle seat will remain empty.

"They need to chill out with those,” said a frustrated Jim Engineer, a public relations executive waiting for a flight out of New York’s LaGuardia. "Charging for a glass of water and seats just translates into unhappy customers.”

Passengers are finding it’s a lot easier for the airlines to add the fees than to take them away.

"They’re going to keep nudging them up until they run into market resistance,” said Ed Perkins, a contributing editor at the Web site Smarter Travel.

That’s what happened at US Airways.

It tried for seven months to charge for soda and water but gave up in March after no other airlines took up the idea. And Delta scaled back a plan to charge $50 to check a second bag on all international flights. Instead, the charge will apply only on flights to Europe.

by the associated press

Gas reserves

2009-06-19T19:45:00.000-07:00

COLUMBUS, Ohio — The country’s natural gas reserves are much bigger than previously thought, according to a report released Thursday.

Thanks to new technology that has allowed producers to drill for gas in shale rock, the Potential Gas Committee in Golden, Colo., said that the country’s estimated reserves are 35 percent higher than just two years ago and have reached the highest level since the group started tracking the information 44 years ago.

The report comes as natural gas is being touted as a way to help reduce U.S. dependence on foreign oil and cut emissions.

"Our knowledge of the geological endowment of technically recoverable gas continues to improve with each assessment,” John Curtis, professor of geology and geological engineering at the Colorado School of Mines and the committee director, said in a statement. "Furthermore, new and advanced exploration, well drilling and completion technologies are allowing us increasingly better access to domestic gas resources — especially ‘unconventional’ gas — which, not all that long ago, were considered impractical or uneconomical to pursue.”

The committee estimated the country’s total natural gas resources at 2,074 trillion cubic feet, an increase of 542 trillion cubic feet from its last report.

The report is similar to a study prepared last summer for the natural gas-backed American Clean Skies Foundation that found the country had 2,247 trillion cubic feet of natural gas reserves — a 118-year supply at 2007 production levels. The U.S. consumes about 20 trillion cubic feet of natural gas per year.

Natural gas is used to generate about a fifth of the nation’s electricity as well as to heat homes. Those who are pushing natural gas the hardest, like Texas oilman T. Boone Pickens, have promoted natural gas as a transportation fuel that could be used to reduce dependence on foreign oil.

by the associated press

Jobless benefits

2009-06-19T19:41:00.000-07:00

WASHINGTON — On the surface, the government seemed to signal Thursday that more Americans are finding jobs: The number of people receiving unemployment aid fell for the first time since January.

Fewer people are receiving jobless aid because more of them have exhausted their standard unemployment benefits, which typically last 26 weeks.

Analysts warn that unemployment will stay high into 2010.

by the associated press

Obama's new financial system rules

2009-06-18T11:44:00.000-07:00

WASHINGTON — President Barack Obama proposed sweeping new "rules of the road” for the nation’s financial system Wednesday, casting the changes as a critically important response to the economic crisis and the greatest regulatory transformation since the Great Depression.

Obama blamed the financial crisis on "a culture of irresponsibility” that he said had taken root from Wall Street to Washington to Main Street, and he said regulations crafted to deal with the depression of the 1930s had been "overwhelmed by the speed, scope and sophistication of a 21st century global economy.”

The Obama plan would give new powers to the Federal Reserve to oversee the entire financial system and would also create a new consumer protection agency to guard against credit and other abuses that played a big role in the current crisis.

With Obama’s proposal, the central bank hopefully will be able deal with the kinds of problems that were allowed to build to such an extent that they ended up overwhelming the system last year, resulting in the collapse of some of America’s largest financial institutions.

Two lawmakers whose committees will play a major role said they would move quickly.

"There will be maybe some debate … but I think we’re all seeking the same results,” said Sen. Chris Dodd, D-Conn., chairman of the Senate Banking Committee.

He has advocated an alternative plan to strip the Federal Reserve of its regulatory role entirely and create a new consolidated bank regulator who would assume the roles that the Fed and Federal Deposit Insurance Corp. now play in helping regulate state-chartered banks.

"There’s not a lot of confidence in the Fed at this juncture,” Dodd said.

No other options
Asked about Dodd’s criticism of the Federal Reserve, Treasury Secretary Timothy Geithner told reporters at a briefing that the administration had looked at a range of alternatives to giving the Fed expanded powers as a systemic risk regulator and had come to the conclusion that "we do not believe there is a plausible alternative.”
Lawrence Summers, head of the president’s National Economic Council, said that those who believed this power should not reside with the Fed had the responsibility to make the case for some other agency.

The Federal Reserve’s expanded authority and the rest of the new rules would reach into currently unregulated regions of the financial markets such as hedge funds and exotic instruments like credit default swaps.

The plan, laid out in an 88-page white paper, was the result of extensive consultations with members of Congress, regulators and industry groups and represented a compromise from bolder ideas that the administration had examined but ended up abandoning because of heavy opposition.

The regulatory overhaul would eliminate only one agency, the Office of Thrift Supervision, generally considered a weak link among current banking regulators. The beleaguered OTS oversaw the American International Group, whose business insuring exotic securities blew up last fall, prompting a $182 billion federal bailout. OTS also oversaw other high-profile blowups like Countrywide Financial Corp., IndyMac Bank and Washington Mutual Inc.

by the associated press