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‘From The Brink Of Extinction’

by AP on May 28, 2011

Huffington Post…

WASHINGTON — Vice President Joe Biden on Saturday credited the Obama administration’s intervention for the American auto industry’s recovery from “the brink of extinction” and pointed to Chrysler’s early repayment of the federal loan that saved it from disaster. “This announcement came six years ahead of schedule – and just two years after Chrysler Corp. emerged from bankruptcy,” Biden said in the administration’s weekly radio and Internet address. “It’s a sign of what’s happening throughout the American automobile industry.” Biden also said that General Motors, which went through bankruptcy and has come back strong, announced in the past week that its Detroit Hamtramck factory in Michigan will run three shifts for the first time in its 26-year history. “You know, that’s 2,500 more good, paying jobs,” he said. Biden, who provided the weekly address because President Barack Obama was traveling in Europe, credited the efforts of the Obama administration for the resurgence of the auto industry through its assistance. “Because of what we did, the auto industry is rising again,” Biden said. “Manufacturing is coming back. And our economy is recovering and it’s gaining traction.” Obama will visit a Chrysler plant in Toledo, Ohio, next Friday to discuss the carmaker’s recovery. Chrysler announced Tuesday the repayment of $5.9 billion in U.S. loans and $1.7 billion in loans from the governments of Canada and Ontario. It covers most of the federal bailout money that saved the company after it nearly ran out of cash in 2009 and went through a government-led bankruptcy. GM and Chrysler were on the verge of collapse in the final days of the Bush administration after Congress failed to approve an emergency loan package. The Bush administration gave the companies $17.4 billion in loans and required them to develop a restructuring plan by mid-February 2009. Obama’s administration pumped billions more into the carmakers later that spring but won concessions from industry stakeholders, allowing them to push GM and Chrysler through bankruptcy court in the summer of 2009. The Republicans’ weekly address focused on the party’s plan to create jobs. House Majority Leader Eric Cantor, R-Va., said boosting employment requires cutting taxes, reducing regulations, completing bogged-down trade agreements with several countries and expanding energy exploration in the United States. “All of these elements will help encourage growth and long-term economic stability,” Cantor said. “By putting in place policies that encourage businesses to expand, innovators to innovate and allows leaders to lead, we will not only begin to put our budget on a path to balance, but we’ll get Americans working again.” ___ Online Array Array

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‘From The Brink Of Extinction’

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Cardiac Network Changes Board of Directors and Principal Officers

by on May 16, 2011

SAN FRANCISCO, CA–(Marketwire – May 16, 2011) – Cardiac Network, Inc. ( PINKSHEETS : CNWID ) confirms the announcement made on May 9 th , 2011 that a new Board of Directors had been voted in by a majority vote of the company’s stockholders. The new Board Members are: Chairman of the Board Malcolm Gulden, Secretary of the Board Brian Calhoun, and Director Richard Owens. Cardiac Network’s former CEO and President Michael Swartzburg has stepped down to pursue other interests, the Board of Directors designated new corporate executive officers. Malcolm Gulden has taken over the role of Chief Executive Officer, and Brian Calhoun has assumed the position of President, in order to focus the company’s expansion, revenues, and new strategic initiatives.

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Cardiac Network Changes Board of Directors and Principal Officers

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Japan Nuclear Plant Crisis Could Last Months

April 3, 2011

TOKYO — Engineers pinned their hopes on chemicals, sawdust and shredded newspaper to stop highly radioactive water pouring into the ocean from Japan’s tsunami-ravaged nuclear plant Sunday as officials said it will take several months to bring the crisis under control, the first time they have provided a timetable. Concrete already failed to stop the tainted water spewing from a crack in a maintenance pit, and the new mixture did not appear to be working either, but engineers said they were not abandoning it. The Fukushima Da-ichi plant has been leaking radioactivity since the March 11 tsunami carved a path of destruction along Japan’s northeastern coast, killing as many as 25,000 people and knocking out key cooling systems that kept it from overheating. People living within 12 miles (20 kilometers) of the plant have been forced to abandon their homes. The government said Sunday it will be several months before the radiation stops and permanent cooling systems are restored. Even after that happens, there will be years of work ahead to clean up the area around the complex and figure out what to do with it. “It would take a few months until we finally get things under control and have a better idea about the future,” said Nuclear and Industrial Safety Agency spokesman Hidehiko Nishiyama. “We’ll face a crucial turning point within the next few months, but that is not the end.” His agency said the timetable is based on the first step, pumping radioactive water into tanks, being completed quickly and the second, restoring cooling systems, being done within a matter of weeks or months. Every day brings some new problem at the plant, where workers have often been forced to retreat from repair efforts because of high radiation levels. On Sunday, plant operator Tokyo Electric Power Co. announced it had found the bodies of two workers missing since the tsunami. Radiation, debris and explosions kept workers from finding them until Wednesday, and then the announcement was delayed several days out of respect for their families. TEPCO officials said they believed the workers ran down to a basement to check equipment after the magnitude-9.0 earthquake that preceded the tsunami. They were there when the massive wave swept over the plant. “It pains us to have lost these two young workers who were trying to protect the power plant amid the earthquake and tsunami,” TEPCO Chairman Tsunehisa Katsumata said in a statement. On Saturday, workers discovered an 8-inch (20-centimeter) crack in a maintenance pit at the plant and said they believe water from it may be the source of some of the high levels of radioactive iodine that have been found in the ocean for more than a week. This is the first time they have found radioactive water leaking directly into the sea. A picture released by TEPCO shows water shooting some distance away from a wall and splashing into the ocean, though the amount is not clear. No other cracks have been found. The radioactive water dissipates quickly in the ocean but could be dangerous to workers at the plant. Engineers tried to seal the crack with concrete Saturday, but that effort failed. So on Sunday they went farther up the system and injected sawdust, three garbage bags of shredded newspaper and a polymer – similar to one used to absorb liquid in diapers – that can expand to 50 times its normal size when combined with water. The polymer mix in the passageway leading to the pit had not stopped the leak by Sunday night, but it also had not leaked out of the crack along with the water, so engineers were stirring it in an attempt to get it to expand. They expected to know by Monday morning if it would work. Meanwhile, tens of thousands of people are still living in shelters, 200,000 households do not have water, and 170,000 do not have electricity. Running water was just restored in the port city of Kesennuma on Saturday, and residents lined up Sunday to see a dentist who had flown in from the country’s far north to offer his services. Many were elderly and complaining of problems with their dentures. Overhead and throughout the coastal region, helicopters and planes roared by as U.S. and Japanese forces finished their all-out search for bodies. The effort, which ended Sunday, is probably the final hope for retrieving the dead, though limited operations may continue. It has turned up nearly 50 bodies in the past two days. In all, more than 12,000 deaths have been confirmed, and another 15,500 people are missing. ___ Associated Press writers Mayumi Saito, Noriko Kitano and Shino Yuasa in Tokyo and Jay Alabaster in Kesennuma contributed to this report.

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Will Marshall: Labor Boosted by Proposed Merger

March 24, 2011

America’s embattled labor movement hasn’t had much to celebrate lately, so it’s worth noting when a major union welcomes a business mega-merger. The Communications Workers of America strongly endorsed AT&T’s proposed $39 billion acquisition of T-Mobile. Deals this big — the merger would create the nation’s largest mobile-phone carrier, with about 39 percent of the market — have to run a bruising, multiple-agency regulatory gauntlet. Some consumer groups worry that it will reduce competition in the lucrative telecommunication sector, dampening incentives for innovation and possibly pushing up consumer prices. No doubt the deal merits close scrutiny. But having one of America’s largest private unions (700,000 strong) in its corner can’t hurt AT&T’s chances. C.W.A. represents 42,000 AT&T wireless workers and regards the company as reasonably friendly to unions. The merger gives it a better shot at organizing T-Mobile workers in the U.S. and in Germany (the company is owned by Deutsche Telekom, whose stock zoomed after the announcement.) For those workers, being absorbed into AT&T will mean “better employment security and a management record of full neutrality toward union membership and a bargaining voice,” said C.W.A. president Larry Cohen. This rare bit of good news for organized labor follows successful efforts by Republican governors in several states to curtail public workers’ right to collective bargaining. Although polls show majorities of Americans are opposed to denying bargaining rights, high profile battles in Wisconsin, Indiana and New Jersey have drawn the public’s attention to the adverse impact on state budgets of generous compensation schemes for state employees, especially pension and health care benefits. This is a huge problem for organized labor, which in recent decades has experienced growth only in the public sector. The picture is especially dismal in the private sector, where less than eight percent of workers are unionized. If they are going to reverse their long pattern of decline, U.S. labor unions need to redefine their economic role and relevance to American workers in a post-industrial economy. Cohen’s statement pointed to a mission that would be good for both U.S. workers and employers: building modern infrastructure to underpin America’s ability to win in global markets. “For more than a decade, the United States has continued to drop behind nearly every other developed economy on broadband speed and build out,” he said. In fact, a big national infrastructure push represents common ground on which big labor and big business can meet. In an “odd couple” pairing last week, AFL-CIO President Rich Trumka and Tom Donahue, head of the U.S. Chamber of Commerce, showed up to endorse a new proposal for a national infrastructure bank. Drafted by a bipartisan group of U.S. Senators including John Kerry, Mark Warner and Kay Baily Hutchinson, the bank would leverage billions of private investments in new transport, energy and water projects. If labor and business can get behind an ambitious project for “internal national building,” our equally polarized political parties surely should be able to follow their example. And that bodes well for an American economic comeback.

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Jury Hears Details Of Intel Leak In Insider Trading Case

March 22, 2011

NEW YORK (By Jonathan Stempel and Grant McCool) – A former Intel Corp executive testified that he shared company secrets with his friend, hedge fund founder Raj Rajaratnam, the central figure in the biggest Wall Street insider trading trial in decades. Rajiv Goel, the second friend-turned-government-witness to take the witness stand at trial in Manhattan federal court, told the jury on Tuesday that he tipped off the Galleon Group founder because they were close friends and “Mr Rajaratnam helped me financially a few times.” Sri Lankan-born Rajaratnam, 53, is the most prominent defendant in the largest U.S. hedge fund insider trading case in history. Prosecutors have accused him of illegally making $45 million based on tips from corporate insiders. The one-time billionaire has denied wrongdoing, and said his trades were based on his own research and publicly available information. He faces up to 20 years in prison if convicted of securities fraud. Twenty-six people have been charged in the probe, and 19, including Goel, have pleaded guilty. He has yet to be sentenced. The trial began March 8 with testimony from an FBI agent who monitored phone taps and from star government witness Anil Kumar, a former McKinsey & Co executive who was another longtime friend of Rajaratnam and who said he had leaked client secrets. Goel, who worked at Intel from 2000 until his arrest along with Rajaratnam and Kumar in October 2009, testified that he was obligated under company policy to keep information confidential. “I violated my obligations,” Goel said under questioning by federal prosecutor Reed Brodsky. He also said: “I shared it (company information) with Mr. Rajaratnam.” Indian-born Goel, 52, is expected to testify for two or three days and he will be cross-examined by one of Rajaratnam’s defense lawyers. Goel admitted in his plea proceeding last year and at trial on Tuesday that he tipped Rajaratnam about a big wireless network transaction involving Clearwire Corp. Also on Tuesday, a current Intel executive testified that confidential details about Clearwire were leaked before the announcement of the deal. Prosecutors argued that Rajaratnam, who is on trial on charges of trading on illicit stock tips, bought 125,800 Clearwire shares based on inside information. They contend that his March 24, 2008, purchase came two days before news reports of a possible 4G WiMax venture between Clearwire and Sprint Nextel Corp, involving $1 billion of capital from Intel. The venture was announced on May 7, 2008. In his second day of testimony, Intel Vice President Sriram Viswanathan said Goel would have been dismissed immediately from his job for discussing details of a possible Sprint-Clearwire partnership, including capital commitments from Intel, Comcast Corp and Google Inc. Viswanathan also said Goel also would not have been authorized to disclose that Intel had held a board meeting on the matter. Those details were disclosed to the jury through phone taps of conversations between Rajaratnam and Goel. The case is U.S. v Rajaratnam et al, U.S. District Court, Southern District of New York, No. 09-01184. (Reporting by Jonathan Stempel and Grant McCool, editing by Matthew Lewis and Gerald E. McCormick) Copyright 2010 Thomson Reuters. Click for Restrictions .

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U.S. Approves First Deepwater Drilling Permit In Gulf Since BP Spill

March 1, 2011

NEW YORK — The U.S. has approved the first deepwater drilling permit in the Gulf of Mexico since BP’s massive oil spill. The Bureau of Ocean Energy Management, Regulation and Enforcement announced Monday that it issued a permit to Noble Energy Inc. to continue work on its Santiago well about 70 miles southeast of Venice, La. Drilling will resume nearly one year after BP’s blowout created the worst offshore spill in U.S. history. Noble started drilling the well four days before the Deepwater Horizon oil rig exploded on April 20. The project was put on hold on June 12 after the U.S. placed a moratorium on exploration in waters deeper than 500 feet. No new deepwater permits had been issued since the moratorium was lifted in October. Regulators have been under pressure from the oil industry and some lawmakers to get drilling projects started again in the Gulf while ensuring that new safeguards are in place. That pressure increased last week as the price of oil spiked above $100 per barrel and the price of gasoline hit its highest level in two and a half years. Environmental groups want the government to hold off on permits and force oil companies to further study the effects of drilling on fragile marine habitats. At 6,500 feet below the surface, Noble’s well is deeper than BP’s blown out Macondo well. In a worst-case scenario, the company told regulators its well could spill nearly 3 million gallons of oil per day into the Gulf. At its peak, the BP well spilled 2.6 million gallons per day. Noble had drilled to a depth of 13,585 feet before the moratorium and has about 5,400 feet to go. The permit is for a “bypass” well, which allows the driller to take a slightly different path than previously expected. Drilling is expected to recommence in April. Director Michael Bromwich said that Noble demonstrated it is capable of containing a well blowout, a key requirement for permit approval. Noble contracted with the Helix Well Containment Group to use its emergency capping stack to stop the flow of oil in case it loses control of the well. Another emergency containment solution, offered by a consortium led by Exxon Mobil Corp., was announced earlier this month. “We expect further deepwater permits to be approved in coming weeks and months based on the same process that led to the approval of this permit,” Bromwich said. The U.S. has approved other permits for new wells, including 37 in shallow water, since the moratorium was lifted. It also has approved 22 other applications for activity on deepwater wells that were not suspended by the moratorium. The approval comes as Interior Secretary Ken Salazar heads to the Capitol this week to defend his agency’s budget request. He is expected to be pressed by lawmakers concerned with rising gasoline prices about how slowly new permits have been issued. Sen. David Vitter, R-La., a vocal critic of the slowdown in offshore drilling permits, said Monday that “while one deepwater permit is a start, it is by no means reason to celebrate.” Vitter wants 15 deepwater permits issued before he releases a hold on the nomination of President Obama’s pick to head the Fish and Wildlife Service. House Natural Resources Committee Chairman Doc Hastings, R-Wash., urged regulators to push other applications through quickly. Noble’s project alone “will not ease the economic pain being inflicted on Gulf families.” Bromwich denied that politics played a role in the timing of the announcement. He said there are eight applications currently pending for deepwater wells. The Obama administration is seeking a $12 million increase in the former Minerals Management Service budget to hire hundreds of new oil and gas inspectors, engineers, scientists to oversee industry operations; conduct detailed engineering reviews; and more closely review oil spill response plans. Much of the money would come from higher fees and royalty rates on oil and gas companies. ___ Associated Press Writer Dina Cappiello contributed to this story from Washington D.C.

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Intel to Build $5B Chipmaking Facility Near Phoenix

February 22, 2011

Intel Corp. will spend more than $5 billion to build a new chip manufacturing facility at its site in Chandler, AZ. Intel President and CEO Paul Otellini made the announcement Friday during a visit by President Barack Obama to Intel’s Hillsboro, OR facility. Named Fab 42, the Arizona plant will be the most advanced high-volume semiconductor manufacturing facility in the world. Construction will begin in the middle of this year and is expected to…

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Video: Intel to Build $5 Billion Plant, Hire 4,000 Workers

February 18, 2011

Feb. 18 (Bloomberg) — Intel Corp., the world’s largest chipmaker, said it will build a new $5 billion plant in Arizona and hire 4,000 workers in the U.S. this year. Chief Executive Officer Paul Otellini made the announcement during a visit by President Barack Obama to a company facility in Hillsboro, Oregon. Dominic Chu and Hans Nichols report on Bloomberg Television’s “Street Smart.” Bloomberg’s Matt Miller also speaks. (Source: Bloomberg)

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The Day The Music Died

February 10, 2011

NEW YORK — These days, guns are more popular than guitars, at least when it comes to video games. The company behind “Guitar Hero” said Wednesday that it is pulling the plug on one of the most influential video game titles of the new century. Activision Blizzard Inc., which also produces the “Call of Duty” series, is ending the “Guitar Hero” franchise after a run of more than five years. The move follows Viacom Inc.’s decision in November to sell its money-losing unit behind the “Rock Band” video games. Harmonix was sold to an investment firm for an undisclosed sum. Harmonix, incidentally, was behind the first “Guitar Hero” game. Game industry analysts have long lamented the “weakness in the music genre,” as they call it – that is, the inability of game makers to drum up demand for the products after an initial surge in popularity in the mid-2000s. Music games are often more expensive than your typical shoot-’em-up game because they require guitars, microphones and other musical equipment. While extra songs can be purchased for download, this hasn’t been enough to keep the games profitable. Activision’s shares tumbled after the announcement, but investors appear more concerned with the company’s disappointing revenue forecast than the demise of the rocker game. As far as investors go, discontinuing an unprofitable product isn’t the end of the world, even if “Guitar Hero” fans disagree. “In retrospect it was a $3 billion or more business that everybody needed to buy, so they did, but they only needed to buy it once,” said Wedbush Morgan analyst Michael Pachter. “It’s much like ‘Wii Fit.’ Once you have it, you don’t need to buy another one.” “Guitar Hero” was iconic and often praised for getting a generation weaned on video games into music. But its end after a mere half a decade is a big contrast to other influential video game franchises, such as the 25-year-old Mario series from Nintendo. “Call of Duty” first launched in 2003, two years before “Guitar Hero.” In a conference call, Activision said its restructuring will mean the loss of about 500 jobs in its Activision Publishing business, which has about 7,000 employees. But the company’s overall work force numbers are not going to change much because it is hiring people elsewhere. Activision did better than expected in the fourth quarter, which ended in December, but that already was anticipated. After all, it launched “Call of Duty: Black Ops” in November. That game, which is mostly set during the Vietnam War, made $1 billion after just six weeks in stores. Its latest “World of Warcraft” game has also been doing well. Bobby Kotick, Activision’s CEO, said the company’s big franchises “have larger audience bases than ever before and we continue to see significantly enhanced user activity and engagement for our expanding online communities.” Revenue from so-called “digital channels” – that is, downloads, subscriptions and extra game content sold online – now accounts for 30 percent of the company’s total revenue. Activision said Wednesday it lost $233 million, or 20 cents per share, in the latest quarter, compared with a loss of $286 million, or 23 cents per share, in the same period a year earlier. Net revenue fell to $1.43 billion from $1.56 billion. Its adjusted earnings of 53 cents per share were better than last year’s 49 cents and beat analysts’ expectations of 51 cents, according to FactSet. Revenue that’s been adjusted to account for games with online components was $2.55 billion, up slightly from $2.50 billion a year earlier and above analysts’ $2.25 billion forecast. For the current quarter, which ends in March, Activision forecast adjusted earnings of 7 cents per share, and adjusted revenue of $640 million. Analysts are looking for earnings of 10 cents per share on higher revenue of $771 million. Activision Blizzard also said its board authorized a new $1.5 billion stock buyback plan. And it declared an annual dividend of 16.5 cents, an increase of 10 percent from the dividend it issued in February 2010, its first ever. Shares of the Santa Monica, Calif.-based company, which is majority-owned by France’s Vivendi SA, tumbled 87 cents, or 7.4 percent, to $10.82 in after-hours trading. The stock had closed the regular session down 19 cents at $11.69.

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King & Spalding Expands Litigation Practice on West Coast With Addition of 14-Member Team of Trial Lawyers

February 9, 2011

SAN FRANCISCO, CA–(Marketwire – February 9, 2011) – King & Spalding continued its focused growth with the announcement today of the addition of a 14-member team of trial lawyers from Filice Brown Eassa & McLeod to its West Coast litigation practice.

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Andrew Winston: Wal-Mart Plays With Our Food

January 31, 2011

Every week, 140 million people — about the population of England and Germany combined — shop in a Wal-Mart store. Soon, all of these people will be eating healthier, and the environmental impact of their food will be lessened. That’s because in recent months, the world’s largest grocer (and company) has started to fundamentally change the food on its shelves. Wal-Mart’s recent announcements continue a five-year campaign to green the supply chain, but they add in some interesting new twists as well. The entire agricultural sector, and everyone who, well, eats, will feel the ripples of these moves. Some of Wal-Mart’s initiatives increase profitability while hitting sustainability goals; for others, the societal benefits are real, but the business benefits are not as clear, at least on the surface. Three initiatives in particular demonstrate a strategic focus on food sustainability. (1) In October, Wal-Mart announced that it would double the amount of locally-sourced produce on its shelves . There’s some legitimate debate about whether shortening distances alone really reduces the environmental footprint (a fascinating new study says that cutting back on meat is far more effective in lowering impact than buying local). But Wal-Mart says the initiative will reduce spoilage and increase shelf-life. Those changes, by reducing the total amount of food needed, will certainly reduce overall environmental impacts throughout the value chain. As is the case with most of Wal-Mart’s sustainability initiatives, this one fits the company’s mission and strategy perfectly. It will reduce environmental impacts, but also reduce logistics and supply chain costs (in part because what’s noticeably absent from this announcement is anything about increasing sales of organic food, which usually costs more). Wal-Mart can pass on these operating savings to customers, so it all fits nicely within the company’s normal business model. But some more recent announcements are not as clear-cut on the business side. (2) Last week, Wal-Mart said it will both lower the prices of fruit and vegetables (saving customers $1 billion) and reduce the amount of saturated fat, sugar, and salt in its private label products . On the latter point, Wal-Mart was not the first to the table, with companies such as Kraft and Pepsi setting similar goals last year. It’s more of a stretch to fit this announcement neatly into a sustainable/profitable business framework. The sustainability benefits are real — on the green side, reducing ingredients like sugar should have sizable ripple effects up the supply chain in saved energy and water. The business benefits are in there also, but are fuzzier. Improving health of course fits a social goal, but it also demonstrates caring for your customers, which can drive loyalty, sales, and brand value. It’s also not purely cheeky to suggest that keeping your customers alive longer, and healthier, will help your bottom line. (3) The third recent announcement falls much more clearly in the pure corporate social responsibility world. In a fascinating display of smart philanthropy, Wal-Mart is helping the hungry by helping food banks lower their energy bills . The company donated $2 million to 16 food banks to, in the company’s words , “upgrade their lighting, refrigeration or heating and air conditioning with equipment that performs better, uses less energy and costs less to operate.” Wal-Mart estimates annual energy savings of $625,000, which will buy 300,000 more meals every year from now on. The $2 million donation is in reality dwarfed by Wal-Mart’s own $2 billion of cash and in-kind donations to reduce hunger. But I hope that this extremely clever model of philanthropy — where you give a gift that keeps on giving — will take hold even more. Lowering the footprint and operating costs for non-profits is pure win-win. In short, as is always the case, sustainability initiatives do not fit neatly into one box within a company. Are they for social good or to make money? The answer is, invariably, yes. Again, pressing its supply chain to do more, faster, is what Wal-Mart has always done, but in recent years the pressure has been focused on sustainability. All these food initiatives expand on that approach, but also show Wal-Mart “walking the walk” and finding opportunities for smart philanthropy to round out the story. It’s a robust strategy for covering many angles on the sustainable food movement. The benefits to all possible bottom lines are substantial. If Wal-Mart and the other companies in its supply chain succeed in reducing fat, sugar, and salt in food; improving access to food for the poor; and sourcing it locally and using less energy to do so, both the planet and its inhabitants will be healthier. This post first appeared at Harvard Business Online .

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GM Hurrying Its Electric Volt To Market

January 27, 2011

WASHINGTON — General Motors’ top car designer says the company will accelerate distribution of the Chevrolet Volt electric car so it’s sold in every U.S. state by the end of this year. Design chief Ed Welburn made the announcement Thursday in a speech at the Washington, D.C., auto show. Previously, GM had said the $41,000 Volt would be sold in every state by sometime next year. Volt sales began in December in California, New York, New Jersey, Connecticut, Washington, D.C., and Texas. It’s scheduled to go on sale in Michigan next. GM plans to make 10,000 Volts this year. Welburn says the company is looking at ways to increase production and expand use of the technology. The Volt can go about 35 miles on battery power before a gas generator kicks in.

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Walmart To Make And Sell Healthier Foods

January 20, 2011

WASHINGTON — Wal-Mart, the nation’s largest grocer, says it will reformulate thousands of products to make them healthier and push its suppliers to do the same, joining first lady Michelle Obama’s effort to combat childhood obesity. The first lady accompanied Wal-Mart executives Thursday as they announced the effort in Washington. The company plans to reduce sodium and added sugars in some items, build stores in poor areas that don’t already have grocery stores, reduce prices on produce and develop a logo for healthier items. “No family should have to choose between food that is healthier for them and food they can afford,” said Bill Simon, president and CEO of Wal-Mart’s U.S. division. As the largest grocer in the United States, Wal-Mart’s size gives it unique power to shape what people eat. The grocery business is nearly twice the size of No. 2 competitor Kroger. The company also has massive influence on products made by other manufacturers and sold at the store. Mrs. Obama said the announcement has “the potential to transform the marketplace and help Americans put healthier foods on their tables every single day.” “We are really gaining some momentum on this issue, we’re beginning to see things move,” she said. Wal-Mart plans to reduce sodium by a quarter and cut added sugars in some of its private label products by 2015. It also plans to remove remaining industrially produced trans fats. A number of food makers have made similar moves, lowering sodium in their products based on shopper demand and increasing scrutiny by health groups. Bumble Bee Foods, General Mills Inc., Campbell Soup Co., PepsiCo Inc. and Kraft Foods Inc. all announced sodium reductions to their products in this spring alone. Food makers say they are trying to reduce sodium gradually, making it a more palatable change to its customers and giving the industry time to reformulate products. Most said they support efforts to curb sodium in American’s diets but are waiting to see if the Food and Drug Administration decides to mandate a reduction. Wal-Mart said it would reduce prices on fruits and vegetables by $1 billion a year by attempting to cut unnecessary costs from the supply chain. The company also said it would work to reduce price premiums on healthier items made with more expensive ingredients. “Our customers often ask us why whole wheat pasta sometimes costs more than regular pasta made by the same manufacturer,” said Wal-Mart’s Andrea Thomas, senior vice president of sustainability. Mrs. Obama has a history of working with Wal-Mart. She once served on the board of Westchester, Ill.-based TreeHouse Foods Inc., a food supplier for the store, but resigned in 2007 while her husband was campaigning for the presidency. Barack Obama had criticized the store over wages and benefits it pays employees.

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Obama Allows Chevron, Shell And 11 Others To Resume Offshore Drilling Without Further Review

January 4, 2011

WASHINGTON — The Obama administration said Monday it will allow 13 companies to resume deepwater drilling without any additional environmental scrutiny, just months after saying it would require strict reviews for new drilling in the wake of the BP oil spill. The government said it was not breaking its promise to require environmental reviews because the 13 companies – which include Chevron USA Inc. and Shell Offshore Inc. – had already started drilling the wells without detailed environmental studies. Drilling was suspended last year when the administration imposed a months-long moratorium following the BP spill. The ban was lifted in October, but drilling has not yet resumed in waters deeper than 500 feet in the Gulf of Mexico. U.S. officials said the 13 companies must comply with new policies and rules before resuming activity at 16 Gulf of Mexico wells. All but three are exploratory wells – the same type BP was drilling when the blowout of the Deepwater Horizon rig occurred. The April 20 explosion killed 11 workers and set off the worst offshore oil spill in U.S. history. “For those companies that were in the midst of operations at the time of the deepwater suspensions (last spring), today’s notification is a significant step toward resuming their permitted activity,” said Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement. The decision is a victory for the drilling companies, which in the past had routinely won broad waivers from rules requiring detailed environmental studies. After the BP disaster, the Obama administration pledged it would require companies to complete environmental reviews before being allowed to drill for oil. The administration has been under heavy pressure from the oil industry, Gulf state leaders and congressional Republicans to speed up drilling in the Gulf of Mexico, which has come to a near halt since the moratorium on deepwater drilling was imposed last spring. The delay is hurting big oil companies such as Chevron Corp. and Royal Dutch Shell PLC, which have billions of dollars in investments tied up in Gulf projects that are on hold. Smaller operators such as ATP Oil & Gas Corp., Murphy Exploration & Production Co.-USA, and Noble Energy Inc., also have been affected. A federal report said the moratorium probably caused a temporary loss of 8,000 to 12,000 jobs in the Gulf region. Bromwich and other officials stressed that the policy announced Monday was not a reversal of its previous plans not to grant waivers known as categorical exclusions for deepwater projects. Instead officials characterized the action as a sort of grandfather clause that applies only to companies that had already begun drilling before the BP blowout. In August, Bromwich instructed his staff not to grant categorical exclusions for drilling plans that involve use of a blowout preventer similar to the one that failed to stop the BP spill. But the August directive did not specify that any companies would be exempted under a grandfather provision. “This decision was based on our ongoing review of environmental analyses in the Gulf and was in no way impacted by a singular company,” said Melissa Schwartz, a spokeswoman for Bromwich. Bromwich said in a statement that the new policy will accommodate companies whose operations were interrupted by the five-month moratorium on deepwater drilling, while ensuring that the companies can resume previously approved activities. William Snape, senior counsel for the Center for Biological Diversity, an environmental group, called the announcement “another sad chapter in agency denial that anything is wrong.” Snape said Bromwich and his boss, Interior Secretary Ken Salazar, seem to want dangerous oil and gas drilling to go on in the Gulf and Alaska “without any meaningful public scientific review of the risks learned from the BP disaster.” But Randall Luthi, president of the National Ocean Industries Association, called the announcement “a positive development for an industry that has been anxiously waiting to get back to work.” Marathon Oil Co. said it was seeking to obtain permits for deepwater drilling, including one project that was suspended by the moratorium. In an e-mailed statement, Marathon said it is working with the ocean energy bureau on the permits and is optimistic the company will receive approval. The firms will not be required to complete a detailed review under the National Environmental Policy Act, but they must comply with new policies and regulations set up in the wake of the BP spill, Bromwich said. The 13 companies won’t be required to revise their exploration plans if an updated estimate of the most oil that would be released in an uncontrolled spill is less than the amount included in spill-response plans on file with the bureau. If the worst-case discharge estimate is higher, “further reviews will be conducted,” according to the statement. The 13 companies that received the notice are: ATP Oil & Gas Corp.; BHP Billiton Petroleum (GOM) Inc.; Chevron USA Inc.; Cobalt International Energy; ENI U.S. Operating Co. Inc.; Hess Corp.; Kerr-McGee Oil & Gas Corp.; Marathon Oil Co.; Murphy Exploration & Production Co.-USA; Noble Energy Inc.; Shell Offshore Inc.; Statoil USA E & P Inc.; and Walter Oil & Gas Corp. ___ Associated Press writers Dina Cappiello in Washington and Harry R. Weber in New Orleans contributed to this story.

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U.S. Identifies Best Places For Solar Projects

December 16, 2010

LOS ANGELES — A draft plan identifying prime areas for solar energy projects on public lands in the Southwest was released Thursday by the Interior Department in an effort to speed up development. The draft identifies 24 so-called solar energy zones in California, Nevada, Colorado, Utah, New Mexico and Arizona that have the highest potential for solar development with the fewest environmental impacts. The plan announced during a conference call in Washington, D.C., also proposes to open an additional 21 million acres of land to potential solar development. “The steps taken today help ensure that the United States will lead the world in energy technologies critical for meeting our energy goals and for sustaining economic growth,” said Henry Kelly, principal deputy assistant secretary for energy efficiency and renewable energy with the Department of Energy. Federal officials said there will be a 90-day public comment period and a series of public meetings in the Southwest, as well as Washington. The final report, which aims to reduce conflicts and delays later in the process, will be released in 2011, according to Interior Secretary Ken Salazar. The solar industry welcomed the draft report, which had been in the works since 2008. “This announcement builds on the solar industry’s momentum over the past year surpassing all of last year’s growth through the third quarter, as well as the approval of the first eight utility-scale solar projects on public lands,” said Rhone Resch, the head of the Solar Energy Industries Association. “To put this in perspective, 74,000 permits were issued for oil and gas drilling on public lands over the past twenty years.” Congress in 2005 gave the Interior Department a goal to approve 10,000 megawatts, or about 5 million homes’ worth during peak hours, of renewable energy on public lands by 2015. Although the Bureau of Land Management opened federally owned lands in 2005 to solar development, an examination of records and interviews of officials by The Associated Press showed the program operated a first-come, first-served leasing system that quickly overwhelmed its small staff. The system also enabled companies, regardless of solar industry experience, to squat on land without any real plans to develop it. Increasing the approval of solar projects has been a key goal for the Obama administration. The Interior Department identified 14 of the most promising solar projects on federally owned land on a list to be fast-tracked. Federal officials predict that solar projects could one day contribute up to 24,000 megawatts of electricity – enough to keep 16 million homes powered at peak use. Conservationists poring over the draft report’s estimated 10,000 pages said they are pleased the federal government is finally outlining a program to more quickly approve good solar projects. The Department of Energy on Thursday also announced efforts to fund up to $50 million to test and demonstrate cutting-edge solar technologies. Many environmentalists, like Alex Daue, renewable energy coordinator at The Wilderness Society, however, said they are concerned about the proposal to open additional acreage beyond the vetted zones. “The opportunity here is to speed responsible development and limit impact,” he said. “Why not focus on areas with the best chance of success and the least environmental impact?”

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Euro on Hold as ECB Announcement Draws Near

December 2, 2010

Euro on Hold as ECB Announcement Draws Near

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King & Spalding Expands Its Finance Practice With Addition of Three Partners in Charlotte

November 19, 2010

CHARLOTTE, NC–(Marketwire – November 19, 2010) – The international law firm King & Spalding continued its strategic growth with the announcement today of the addition of three partners from Moore & Van Allen to its finance practice. 

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Video: Labour’s Johnson Says U.K. Cuts ‘A Reckless Gamble’

October 21, 2010

Oct. 21 (Bloomberg) — U.K. Shadow Chancellor of the Exchequer Alan Johnson talks about the outlook for the U.K. economy following the announcement of the government’s public spending cuts. He speaks with Francine Lacqua on Bloomberg Television’s “On The Move.”

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Scott Paul: Obama Acts to Investigate U.S. – China Trade Absurdity

October 16, 2010

All praise from here for President Obama’s courageous decision Friday to proceed with an investigation of China’s opportunistic and illegal trade practices in the clean energy sector. Those of us dedicated to supporting U.S. workers, U.S. jobs and U.S. manufacturing owe him an enormous debt of gratitude. The Administration deserves a tremendous amount of credit for considering this case on its merits, rather than letting some overarching philosophy dictate the outcome. Demonstrating a willingness to challenge China’s cheating could make a huge difference for American workers and businesses in the clean energy manufacturing sector. And if the Administration’s efforts with China are successful, the ultimate result will be more American jobs. Friday’s decision , announced by United States Trade Representative Ron Kirk, was in response to a United Steelworkers (USW) Section 301 unfair trade complaint against China. In his announcement, Kirk said, “We take the USW’s claims very seriously, and we are vigorously investigating them.” He said his office would use the next 90 days – the time period called for under World Trade Organization (WTO) laws – to investigate the practices detailed in the USW petition. The Steelworkers – one of our stakeholders – stepped up to the plate while many others have been reluctant to do so in the face of Chinese pressure. Here was the union’s reaction Friday. This week’s trade numbers sure helped drive home the fact of the absurdity of our trading relationship with China: a record-breaking $28 billion trade deficit with China driving a total August deficit of $46.3 billion. China did not get to this superior position by playing on a level playing field, and the USW’s petition, a 5,800 page report, details the more than 80 Chinese laws, regulations and practices that are designed to crush clean energy manufacturing and other green technology in the U.S. As the August numbers help show, China’s plan is working. China has set prices to undercut the U.S. and other competitors, set discriminatory technology laws and regulations, demanded that foreign companies transfer valuable technology, and has provided massive subsidies to Chinese companies, causing serious damage to U.S. interests. The numbers also help put in perspective how futile U.S. clean energy plans and proposals will be unless China adheres to international trade laws. The Brookings Institution, American Enterprise Institute and the Breakthrough Institute issued a joint report this week calling on the government to invest $25 billion a year in “military procurement, R&D, and a new network of university-private sector innovation hubs to create an energy revolution.” That’s all fine, but just comparing the numbers – a trade deficit of $28 billion a month versus a proposed U.S. investment of $25 billion a year – shows the futility of the effort until the U.S. regains balance in its trading relationship with China. As I wrote in November 2009, “American voters have a visceral response to jobs shipped overseas, a trend that Obama said he would address as a candidate. Less than a year out from the mid-term elections, this looms as a major political problem, as well as an economic one.” That mid-term election is a lot closer now and until today the fundamentals had not changed. The president’s decision to stand up against China’s highly aggressive and illegal trade practices is a huge win for American workers, and he deserves our hearty thanks. # # #

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Harvard Business School Receives $50M Gift From Indian Conglomerate

October 14, 2010

BOSTON — Harvard Business School has received a $50 million gift from India’s Tata Group, the largest gift from a foreign donor in the school’s 102-year history. Harvard says the gift from the international conglomerate will fund a new academic and residential building on the business school’s Boston campus for its executive education programs. Ratan Tata, chairman of Tata Sons Ltd. and a graduate of the school’s advanced management program, made the announcement Thursday with business school Dean Nitin Nohria and Boston Mayor Thomas Menino. Harvard hopes to break ground next spring for the new Tata Hall.

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Mentor Graphics Backs Open PDK Initiative

October 14, 2010

WILSONVILLE, OR–(Marketwire – October 14, 2010) – Mentor Graphics Corporation ( NASDAQ : MENT ) today reinforced its support for the work of the Open PDK (Process Design Kit) Coalition with the announcement that Linda Fosler, director of marketing for the Deep Submicron Division, will serve as Open PDK Coalition Vice-Chair. 

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Corinthian Colleges COO Steps Down

October 12, 2010

SANTA ANA, Calif. — Corinthian Colleges Inc. said Tuesday its president and chief operating officer plans to resign from the company effective Oct. 31 after nearly two years with the for-profit education company. Shares fell 45 cents, or 7.1 percent, to $5.88 in midday trading following the announcement. The company said Matt Ouimet is leaving to pursue other opportunities. He joined the company in January 2009. “The decision to resign has not been an easy one, but for personal reasons I have chosen to pursue other opportunities,” Ouimet said in a statement. The company said it has no immediate plans to fill his post.

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China Housing Market: Government Moves To Curb Lending Again

September 30, 2010

SHANGHAI — China has tightened limits on mortgage lending and plans to roll out a new tax on home sales, acting once again to cool a property market that some fear is frothing into a bubble. The required downpayment for a first home purchases rises to 30 percent, up from 20 percent, while purchases of second homes will require a 50 percent downpayment, up from 40 percent. Loans for purchases of third homes are banned, said the announcement on the government’s website. In line with many investors’ expectations, the government also said it would introduce a trial property tax in some major cities. Shanghai, Beijing, Shenzhen and Chongqing are expected to be among the cities where the tax will be rolled out first, state media have said. The moves reflect growing unease over the failure of repeated efforts to fully bring under control a property market that has shot out of reach of most ordinary Chinese and is viewed as a threat both to political stability and to the financial system. Though China’s overall economy has entered what many economists are calling a “soft-landing,” with forecasts for roughly 9 percent growth in the last quarter of the year, real estate remains a wild card. “The housing problem affects people’s livelihood and apart from being an economic problem also affects social stability,” the government statement said. “Excessively high housing prices make it difficult for families to find homes, increase financial risks and are an obstacle to coordinated economic development.” Authorities have sought repeatedly to cool the market by discouraging housing purchases for investment purposes, particularly speculative buying, that has helped drive prices out of reach for many city dwellers. The recent gains in the value of China’s currency, the yuan, are also believed to be drawing in illicit flows of investment from overseas, adding to upward pressures on prices. “Together, the yuan’s appreciation and booming housing prices are thought to have contributed to the frothiness in the property market, perhaps risking an inflationary spiral or financial crisis,” said Hui Qiangjian, a senior researcher at E-house R&D Institute in Shanghai. The newest actions followed news that real estate dealings had surged since mid-August, pushing prices higher. Overall, housing prices in 70 major Chinese cities rose 9.3 percent in August from the year before. In some cities prices are spiking to new records: The average price per square meter for an apartment along Beijing’s Fourth Ring Road, on the city’s outskirts, is about 34,000 yuan (nearly $5,100), according to city government statistics. That compares with an average annual per capita income of less than 30,000 yuan ($4,500) and much more modest income of 12,000 yuan ($1,800) per capita for the lowest fifth of urban dwellers. “By putting economic stability ahead of people’s financial gains, the restrictions may, hopefully help cool the prices in the short term,” Hui said. The government is also seeking to discourage property developers from hoarding land, or newly built housing, thus constraining supply, while waiting for prices to rise further. Since worries over what the government might do had been weighing on investor sentiment, the relatively moderate new measures relieved some of that concern, and prompted a round of bargain hunting following recent sell-offs of property shares. Share prices for major developers surged, with Poly Real Estate up 8.9 percent to 12.36 yuan. Industry leader China Vanke jumped 7.6 percent to 8.40 yuan. The benchmark Shanghai Composite Index, meanwhile, gained 1.7 percent to 2,655.66. ___ Associated Press researcher Ji Chen contributed to this report.

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Video: Juckes Says Euro May Rally Further After Spanish Budget

September 24, 2010

Sept. 24 (Bloomberg) — Kit Juckes, head of foreign-exchange research at Societe Generale SA, talks about the announcement of Spain’s new budget and the outlook for the euro. He speaks with Linzie Janis on Bloomberg Television’s “Countdown.”

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Mars, IBM & USDA Successfully Map Chocolate Genome

September 15, 2010

Two competing studies have unlocked the cacao tree’s complete genome, which could yield a stable supply of chocolate beans and could one day lead to tastier, more nutritious candy bars. Mars, the company behind M&Ms and Milky Way, spent $10 million on a project, which also involved the U.S. Agriculture Department and computer megalith IBM, to produce the Cacao Genome Database. As of today, the genome map will be available on the Web, free of cost, for interested readers, scientists and chocolate manufacturers. But the announcement from that consortium is expected to be met by a similar one from Hershey, which worked with the French government and Pennsylvania State University to create its own version of the cacao tree genome.

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Trustmark Voluntary Benefit Solutions Announces New Sales and Marketing Leader

September 14, 2010

LAKE FOREST, IL–(Marketwire – September 14, 2010) –  Trustmark Voluntary Benefit Solutions, a leading provider of employee benefits, announces the promotion of Daniel Johnson, 53, to Vice President of Sales and Marketing. Previously at Trustmark, Johnson was Vice President of National Account Sales. Alex Moral, Trustmark’s Senior Vice President, made the announcement.

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Cuba To Cut 500,000 Government Workers, Reduce Restrictions On Private Enterprise

September 13, 2010

HAVANA — Cuba announced Monday it will cast off at least half a million state workers by early next year and reduce restrictions on private enterprise to help them find new jobs – the most dramatic step yet in President Raul Castro’s push to radically remake employment on the communist-run island. Castro suggested during a nationally televised address on Easter Sunday that as many as 1 million Cuban workers – about one in five – may be redundant. But the government had not previously laid out specific plans to slash its work force, and the speed and scope of the coming cutbacks were astounding. Cuba’s official work force is 5.1 million – meaning nearly 10 percent of all employees could soon be out of a government job. Workers caught off guard by the announcement said they worried whether the tiny private sector could support so many new jobs, a sentiment echoed by some analysts. “For me the problem is the salaries, that’s the root of it,” said Alberto Fuentes, a 47-year-old government worker. “If they fire all of these people, how can they all become self-employed?” The layoffs will start immediately and continue through April 2011, according to a statement from the nearly 3 million-strong Cuban Workers Confederation, which is affiliated with the Communist Party and the only labor union allowed by the government. Eventually the state will only employ people in “indispensable” areas such as farming, construction, industry, law enforcement and education. To soften the blow, the statement – which appeared in state newspapers and was read on television and radio – said the government would increase private-sector job opportunities, including allowing more Cubans to become self-employed. They also will be able to form cooperatives run by employees rather than government administrators, and increasingly lease state land, businesses and infrastructure. The announcement was short on details of how such a major shift could be achieved, but its intent appeared to deal a body-blow to the decades-old social safety net upon which the island’s egalitarian society is built. Castro has long complained that Cubans expect too much from the government, which pays average monthly salaries of just $20 but also provides free education and health care and heavily subsidizes housing, transportation and basic food. Because unemployment is anathema in a communist society, state businesses have been forced to carry many people who do almost nothing. “Our state cannot and should not continue supporting businesses, production entities and services with inflated payrolls, and losses that hurt our economy are ultimately counterproductive, creating bad habits and distorting worker conduct,” the union said. Even before the announcement, interviews with scores of workers across several government sectors showed that layoffs were already under way – with many complaining the state was not doing enough to find them new jobs. Larry Birns, director of the Washington-based Council on Hemispheric Affairs, said a series of small changes – such as allowing the unrestricted sale of cell phones, privatizing some state-run barbershops, licensing more private taxis and distributing fallow land to private farmers – have moved Cuba toward economic reform since July 2006, when serious intestinal illness nearly killed Fidel Castro and forced him to cede power to Raul. While none of those were blockbusters, Birns said, Monday’s revelation has the potential to be one. “Cuba is rapidly becoming like any other country,” he said. “It is not going back. These are big changes.” Some Cubans also said they supported the changes, hoping that even a small dose of private enterprise would go a long way in a country where state mismanagement has led to frequent shortages of everything from potatoes to toothpaste. “There are many things that are deficient now including services, which, of course, the private sector will improve on,” said Moraima Santos, a 65-year-old employee in the Office of the City of Havana Historian. “I completely support the government giving private employment licenses. That’s going to benefit a lot of people.” Others were skeptical. Arch Ritter, an expert on the Cuban economy at Carleton University in Ottawa, Canada, said the cutbacks rely too heavily on a work force unaccustomed to going into business for itself. “To imagine that the private sector is going to absorb so many people is a bit of a stretch,” he said. “It’s going to be a major problem for the country.” Building on his April remarks, Castro warned in August that layoffs would be coming and said Cuba would expand private enterprise on a small scale, increasing the number of jobs where Cubans could go into business for themselves. Monday’s announcement also said Cuba will overhaul its labor structure and salary systems to emphasize productivity so that workers are “paid according to results.” Castro has said repeatedly he is seeking to reform the pay system to hold workers accountable for production, but change has been slow in coming. Currently the state employs 95 percent of the official work force. Unemployment last year was 1.7 percent and hasn’t risen above 3 percent in eight years – but that ignores thousands of Cubans who aren’t looking for jobs because wages are so low. The labor overhaul comes less than a week after Fidel Castro caused a stir around the globe when he was quoted by visiting American magazine writer Jeffrey Goldberg as saying Cuba’s communist economy no longer works. Castro later said that while he was not misquoted, his words were misinterpreted – and that he meant to say capitalist reforms could never work in Cuba. Goldberg said Monday he was surprised by Fidel Castro’s claim, since he has made similar statements before. He said economic reforms such as the one announced Monday prove the Cuban government realizes the need for change. “Not only has he said things like this before, but the on-the-ground reality is that it is a truism that the Cuban model is not working, and that is why they are starting this large-scale experiment with privatization,” Goldberg told reporters. ___ Associated Press writer Andrea Rodriguez contributed to this report.

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Federal Reserve Worried About Recovery, Takes Small Steps

August 10, 2010

WASHINGTON — As recently as two months ago, the Federal Reserve sounded optimistic about the economic recovery. Now the central bank is clearly more worried, and economists say there’s not much more it can do to help. The Fed said Tuesday that it would spend a relatively small amount of money – about $10 billion a month, economists estimate – buying government debt. The move is designed to drive interest rates on mortgages and corporate borrowing at least a little lower and help the economy grow faster. In a statement after a one-day meeting, the Fed said the pace of the recovery “has slowed in recent months.” After its last meeting in late June, the Fed was rosier, saying that the recovery was “proceeding” and the job market actually improving. The decision to buy government debt, using proceeds from Fed investments in mortgage bonds, was a shift from earlier this year, when the Fed was laying out plans to roll back some of the measures it took during the financial crisis. At that time, the Fed was also preparing a strategy to begin raising interest rates again, a step taken to keep a growing economy from overheating. Now, though, the Fed has decided to keep its benchmark interest rate near zero. “I don’t think they are going to raise interest rates until it is very clear that unemployment is moving definitively lower and that doesn’t look likely until late 2011,” said Mark Zandi, chief economist at Moody’s Analytics. Economists pointed out that buying $10 billion of government debt in a $14 trillion economy is a relatively small move, and they said they did not expect it to have a dramatic impact. “The Fed talked loudly but carried a small stick,” said Joel Naroff, president of Naroff Economic Advisors. He said that while the financial system has the money to lend, banks are unwilling or unable to find suitable loans to make. Until they do, he said, “the recovery will be softer than anyone hoped for and there may be little the Fed can do about it.” With interest rates so low, Congress, economists note, has more power than the Fed to stimulate the economy. But with midterm elections nearing, Congress is divided on whether the best move is short-term government spending, tax cuts or some combination. On Tuesday, the House, called back from its summer break for a one-day session, pushed through a $26 billion bill to protect 300,000 teachers, police and other workers from layoffs this year. President Barack Obama signed it almost immediately. The Fed action also came on a day when new figures showed worker productivity in the U.S. dropped this spring for the first time in more than a year – a sign that companies that want to grow may need to hire more people. Investors reacted positively to the Fed statement. Stocks were down sharply before the announcement but made up ground after it was announced at mid-afternoon. The Dow Jones industrial average finished down about 55 points. Treasury prices rose slightly because the Fed plan would reduce the amount of government debt on the market for others to buy. The Fed said it would buy two-year and 10-year Treasurys by using the proceeds from debt and mortgage-backed securities it bought from Fannie Mae and Freddie Mac. It said that it would buy additional government debt as its existing Treasury bonds mature. The effect is that the Fed will keep its $2.3 trillion balance sheet steady – rather than rolling it back, as it had hoped to do as the economy improved – while shifting its holdings out of mortgage securities and into more government debt. “The news is positive but not meaningful,” said John Merrill, chief investment officer of Tanglewood Wealth Management in Houston. “The money is a pittance.” The central bank said it expects to start buying the government debt Aug. 17 and planned to publish details Wednesday. From March 2009 to this March, the Fed bought up $1.25 trillion in mortgage securities and $175 billion in debt from Fannie Mae and Freddie Mac. The goal of these purchases was to drive down mortgage rates and bolster the crippled housing market. The Fed also bought $300 billion of government debt between March and October 2009. The Fed’s balance sheet has stayed at roughly $2.3 trillion since March. Economists are skeptical that cheaper credit or even more government aid will get Americans shopping more and businesses to hire. They also say some jobs in construction and other housing-related fields, and in manufacturing, will never return to pre-recession levels – a shift in the basic structure of the economy. High unemployment, lackluster income growth, sagging home values and tight credit are all restraining the pace at which Americans are spending, usually a major source of powering the economy. ___ AP Business Writers Martin Crutsinger in Washington, David Pitt in Des Moines, and Bernard Condon in New York contributed to this report.

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GM’s Chevy Volt Production To Be Boosted By 50 Percent To Meet Demand

July 30, 2010

DETROIT — General Motors said Friday that it is boosting production capacity for its new Chevrolet Volt due to strong public interest in the electric car that goes on sale this year. GM will now have a production capacity of 45,000 vehicles in 2012, up from previous plans for 30,000 vehicles. The automaker made the announcement as President Barack Obama toured the Volt production facility in Detroit. The federal government sank $50 billion into GM as part of the broader rescue of the auto industry, giving taxpayers a majority stake in the nation’s largest auto company. The Volt, priced at $41,000, can go 340 miles on a single battery charge, according to GM. The vehicle is powered purely by the battery in the first 40 miles, and then uses a small tank of gasoline to create an additional charge for the remaining 300 miles. Chevrolet dealers began taking orders this week for the 2011 model. GM recently raised the number of launch markets for the Volt from three to seven.

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2011 Ford Explorer REVEALED: Can This New Model Save The SUV? (PHOTOS)

July 26, 2010

The 2011 Ford Explorer has just been revealed, and there are some big expectations — and big hype — driving the announcement. (SCROLL DOWN FOR PHOTOS) Mashable reports that Ford is relying on a large Facebook campaign to push the new model, which is expected to cost about $30,000 . The company hopes to convince buyers to pay more for less engine power , Bloomberg reports. USA Today calls it “an evolved SUV” and notes that Ford will heavily promote the new model’s improved fuel efficiency. Here’s more on Ford’s strategy from the AP: Ford begins a marketing campaign Monday for the 2011 Ford Explorer, which will be in dealerships this winter. It’s an important vehicle for the automaker. Ford says the Explorer is its best-known product after the Mustang. “Explorer is really still the backbone of the brand,” Ford’s marketing chief Jim Farley said recently at a gathering to introduce the Explorer to the media. The new Explorer has been completely redesigned. The most obvious difference: It’s built on a car platform, not a truck one, so it sits lower to the ground and has a smoother, more fuel-efficient ride. Ford is taking a risk with customers who expect a truck-like SUV. The new Explorer will have less towing capacity than the outgoing model – 5,000 pounds, versus 7,115 pounds – and it won’t offer a V-8 engine. “Ford’s challenge is to match the idea of the Explorer to this product,” said Aaron Bragman, an analyst with IHS Automotive. “It’s a good test for Ford to determine what an SUV is these days.” Trends in the market suggest most buyers aren’t looking for the power of traditional SUVs and would prefer a more fuel-efficient vehicle. Ford’s top U.S. sales analyst George Pipas said that a decade ago, 85 percent of all SUVs sold were truck-based; last year, just 23 percent were.

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Todd A. Solomon: Will More Corporations Adopt the Practice of Tax Gross-Ups for Domestic Partner Benefits?

July 19, 2010

In the wake of the news that Google has decided to offer a tax gross-up for its employees who are covering same-sex partners under Google’s health plan, one wonders whether this will create a trend that will spread to other major corporations in the United States. By way of background, a tax gross-up is essentially an agreement to pay taxes on behalf of an employee who is subject to federal and state income taxes and payroll taxes simply because his partner covered under the health benefit plan is of the same sex. This tax result is required due to the Federal Defense of Marriage Act, which was passed in 1996 and defines marriage as one man and one woman as husband and wife for all purposes of federal law. Many of the nation’s largest corporations have signed on to a coalition to support federal legislation that would eliminate this tax result (see list of corporations on the Coalition for Business Tax Act, www.hrc.org ). However, Google has taken its support of same-sex couples one step further by agreeing to equalize the domestic partner benefits tax inequity that federal law has created. Since this announcement on July 1, Google has received a great deal of media attention and support for its decision (and rightfully so, as providing a tax gross-up is still a cutting edge practice that only a select handful of companies, including Cisco and Kimpton Hotels, have entered into). Maybe more important in the long run than the news of Google’s decision is whether this practice will trickle into other major corporations. Nearly 60 percent of the Fortune 500 companies and over 80 percent of the Fortune 100 companies currently offer domestic partner benefits, but very few of these corporations offer a tax gross-up. My educated guess for the reason why this is the case is because tax gross-up is a fairly expensive out-of-pocket gesture and can be reasonably complicated for payroll and benefits departments to administer. In addition, given how many times federal legislation has been proposed that would rectify this tax result, I would expect that many employers have been holding their collective breath waiting for the federal government to eliminate the tax inequity. Given that the most recent legislative proposal dropped out of the healthcare reform act prior to passage, perhaps employers will realize that Congress may not soon eliminate this tax inequity and others will follow Google’s lead and announce a tax gross-up. But only time will tell.

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Unemployment Extension Standoff To Continue For At Least Another Week

July 12, 2010

Senate Democrats will remain one vote short of the 60 needed to reauthorize unemployment benefits for the long-term jobless at least until the end of the week, as West Virginia Gov. Joe Manchin says he wants to wait until the state legislature has cleared up the law on how to fill the Senate seat left behind by the late Robert Byrd (D-W.Va.). Manchin previously said that he could name a replacement as soon as the beginning of the week, but on Monday his office told HuffPost he’d make his announcement by Sunday at the latest and Friday at the earliest. “He intends to make the appointment by week’s end,” a spokesman said. Senate Majority Leader Harry Reid (D-Nev.) has repeatedly said that Senate Democrats need Byrd’s replacement to break the filibuster by Republicans and Nebraska Democrat Ben Nelson, whose approval — had he decided to give it — would have ended the endless debate that has already cut off unemployment checks to some 2.1 million people. By the time Byrd’s replacement is sworn in, more than 2.5 million people who’ve been out of work for longer than six months will have missed checks they would have received had Congress reauthorized the stimulus programs it allowed to lapse at the end of May. President Obama’s 2009 stimulus bill and subsequent legislation gave the unemployed up to 99 weeks of benefits in some states. With the federally-funded extended benefits lapsed, in most states the unemployed are eligible for only 26 weeks of state-funded benefits. The congressional holdup owes to the Republican Party’s and Ben Nelson’s insistence that the $33 billion cost of extending the benefits not be classified as “emergency spending” and added to the deficit — even though the cost of extended unemployment benefits has, throughout the 20th century, always been classified as emergency spending during times of recession. Some Democrats view the new-found deficit concern as an effort to crater the economy and make the November midterm elections difficult for Democrats; others also see it as an effort to fundamentally undermine unemployment insurance. That’s the view espoused by Jon Kyl (R-Ariz.), who on Monday told HuffPost he sees unemployment benefits as a “necessary evil.” Kyl and other Republicans have signaled they will not insist that revenue lost to tax cuts for the wealthy be offset by spending costs elsewhere. It’s a matter of reducing the size of the government: “The money does not belong to the government,” Kyl said. “And yet that’s what this kind of a rigid pay-go rule would assume, that the money belongs to the government and, therefore, if you’re going to deny the government some of that revenue through a tax cut, you have to make the government whole because the government can never lose any money. That would mean that you could never reduce the size of government.”

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Australia Regulator Sets July 22 for Findings on BHP, Rio Iron-Ore Venture

June 18, 2010

By Elisabeth Behrmann June 19 (Bloomberg) — Australia’s competition regulator will announce on July 22 its findings on a proposal by BHP Billiton Ltd . and Rio Tinto Group to combine Western Australia iron ore operations, the regulator said on its website . Both companies this month responded to information requests from the Australian Competition and Consumer Commission after the regulator delayed announcing its findings from May 27. Rio and BHP , the world’s second- and third-largest iron ore exporters, propose combining Australian operations in a 50- 50 venture to save at least $10 billion in costs. Some European and Asian steelmakers oppose the plan on concern it might reduce competition in the iron-ore market. The venture, agreed to in June last year, will also be reviewed by the European Commission and requires shareholder approval as well. Besides regulatory hurdles, higher iron ore prices since the announcement and Australia’s proposed 40 percent tax on mining profits may alter the deal, analysts say. Under the proposed terms, BHP agreed to pay Rio $5.8 billion to equalize its contribution of assets to the venture. JPMorgan Chase & Co said in a March report that Rio could ask for between $7.5 billion to $9.8 billion based on higher iron ore price estimates. Combined Value “The fundamentals of putting the two businesses together are still there,” UBS AG analyst Glyn Lawcock said today by phone. “The joint venture is the biggest project for both companies with the biggest upside potential, compared with other project options.” The combined value of the entity is estimated at about $135 billion, Lawcock said. Since Australia’s government announced its tax proposal on mining profits, Rio Tinto and BHP Billiton have campaigned against the levy and want the government to exclude existing projects and reconsider the rate. “Uncertainty revolving around the resources tax has made the tie-up less palatable,” said ANZ Banking Group Ltd. Senior Commodity Strategist Mark Pervan by phone. “Valuation parameters would have changed.” The tax is due to start in 2012, with legislation to be put to parliament in late 2011 if the center-left government is re-elected at a national ballot due by April. To contact the reporter on this story: Elisabeth Behrmann in Sydney at ebehrmann1@bloomberg.net

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BP’s Dividend SUSPENDED — And Stock Rallies

June 16, 2010

After intense public pressure, BP’s dividend has been suspended, according to multiple news reports today. The AP reports that “BP Chairman Carl-Henric Svanberg made the announcement Wednesday after emerging from the White House where he and other BP executives met for four hours with President Barack Obama.” Today, President Obama was able to get BP to agree to place $20 billion in escrow to pay out victims claims, a fund that will be overseen by Obama’s “pay czar” Kenneth Feinberg. Analysts predicted that the dividend suspension would happen, according to a Bloomberg report earlier this morning. In addition to the $20 billion victims’ fund, BP still has a significant amount of cash and lines credit it can draw from to pay for cleanup costs, Bloomberg reports: “BP had $5 billion of cash available, $5.25 billion of credit lines it hadn’t used and another $5.25 billion of stand- by bank facilities, BP said in an investor conference call June 4. Fitch said yesterday it expects BP’s lenders to allow the company to use the credit lines if needed. BP generated $27.7 billion in cash flow from operations last year and posted profit of $6 billion in the first quarter…The company has spent about $1.6 billion on containing and cleaning up the spill so far.” As you’ll see from the below chart, BP’s shares have rallied on the news of the $20 billion victims fund and the dividend suspension.

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Marfrig Pays $1.26 Billion for Chicken Nugget-Manufacturer Keystone Food

June 14, 2010

By Helder Marinho June 15 (Bloomberg) — Marfrig Alimentos SA , Latin America’s second-largest beef producer, agreed to pay $1.26 billion for Keystone Foods LLC, the world’s first company to mass produce boneless chicken nuggets. Marfrig signed an agreement with Lindsay Goldberg LCC to buy all the shares in closely held West Conshohocken, Pennsylvania-based Keystone, the Sao Paulo-based company said yesterday in a regulatory filing. The transaction is subject to regulatory approval, Marfrig said. Buying Keystone gives Marfrig access to a supplier to international food and restaurant companies such as McDonald’s Corp. and Campbell Soup Co. Marfrig has sought to expand production through acquisitions in the past three years. “Adding the resources and the experience of Keystone Foods and its management, we will be expanding businesses of the Marfrig group with the scale and a sustainable supply chain that are necessary to achieve significant growth opportunities in the industry and to serve the needs of our global customers,” said Marcos Antonio dos Santos , Marfrig’s chief executive officer and chairman, in a statement. Marfrig announced the agreed acquisition of Ballymena, Ireland-based O’Kane Poultry Ltd. for 26 million pounds ($38.3 million) on May 25. In January, it concluded the takeover of Seara Alimentos SA from Minneapolis-based Cargill for $705.2 million. Chicken Nuggets Keystone produces more than 1.6 billion pounds of poultry products and 388 million pounds of beef products a year and distributes them to about 30,000 restaurants in 13 countries including the U.S., France, Australia, South Korea and Israel, according to its website . The company said it was the world’s first organization to mass produce boneless chicken nuggets, according to the site. Marfrig plans to sell 2.5 billion reais ($1.38 billion) of five-year convertible-local bonds “to finance this acquisition and at the same time maintain the flexibility in its balance sheet,” Marfrig said. Current shareholders will have priority to buy the bonds. Marfrig rose 0.3 percent to 16.85 reais yesterday in Sao Paulo trading before the announcement. The shares have fallen 12 percent this year. Sao Paulo-based JBS SA is the world’s biggest beef producer. To contact the reporter on this story: Helder Marinho at hmarinho@bloomberg.net

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Resolution Says It’s in Talks About Axa U.K. Life Insurance Transaction

June 11, 2010

By Mark Rohner June 12 (Bloomberg) — Resolution Ltd., the U.K. buyout firm founded by Clive Cowdery, said it’s in talks on a potential acquisition of Axa SA’s British life insurance operations. “If implemented, this transaction would result in the acquisition by Resolution of the majority of Axa’s life assurance operations in the U.K., including its businesses in the risk areas of protection and annuities and also its group pensions business,” Guernsey, Channel Island-based Resolution said in an e-mailed statement yesterday. Resolution intends to consolidate the U.K. businesses of Axa, France’s biggest insurer, with its Friends Provident operations, the statement said. Resolution said the announcement was “in response to recent press speculation” and there is “no certainty these discussions will result in a transaction.” The Telegraph reported yesterday that Cowdery was offering 2.5 billion pounds ($3.6 billion) for Axa’s U.K. life insurance businesses, without saying where it got the information. To contact the reporter on this story: Mark Rohner in Washington at mrohner@bloomberg.net

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Michael Dell, SEC Are in Settlement Talks Related to PC Maker’s Intel Ties

June 10, 2010

By Ian King June 10 (Bloomberg) — Dell Inc. said Chief Executive Officer Michael Dell is in talks with the U.S. Securities and Exchange Commission to settle allegations related to the company’s relationship with Intel Corp. The settlement would “involve alleged violations of negligence-based fraud provisions of the federal securities laws, as well as other non-fraud based provisions,” Round Rock, Texas-based Dell said in a statement today. Dell fell in extended trading . Discussions relate to the relationship between Dell, the third-largest computer maker, and Intel , the world’s biggest manufacturer of semiconductors, Dell said without elaborating. The investigation probably concerns the way Dell accounted for bulk discounts offered by Intel in so-called soft dollars, said Ashok Kumar , a Rodman & Renshaw Inc. analyst in San Francisco. “There are some gray areas, but I don’t think it’s any egregious or anti-competitive behavior,” said Kumar who has a “market perform” rating on Dell stock that he said he doesn’t own. “It’s just aggressive pricing and shouldn’t be taken in any other light.” Any settlement wouldn’t result in Michael Dell being barred from serving a director and officer of a public company, according to the filing. Talks between SEC staff and the CEO got under way recently. Report Delayed SEC spokesman John Nester declined to comment. Dell spokesman David Frink said the company wouldn’t comment further on current investigations. Intel declined to comment, said spokesman Tom Beermann . Starting in 2005, the SEC began an investigation of Dell’s financial reporting that resulted in a restatement of results, the firing of workers and changes in corporate governance policies. Dell today also delayed filing its quarterly report as it revises financial results to book a $100 million liability. The reserve anticipates the conclusion of a settlement with the SEC in which Dell will neither admit nor deny any wrongdoing, Dell’s Frink said. Dell dropped as much as 4 percent to $12.55 in extended trading, after the announcement. The shares had risen 29 cents to $13.07 at 4 p.m. New York time in Nasdaq Stock Market trading . The stock has declined 9 percent this year. To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net .

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Michael Dell, SEC in Intel-Related Settlement Talks

June 10, 2010

By Ian King June 10 (Bloomberg) — Dell Inc. said Chief Executive Officer Michael Dell is in talks with the U.S. Securities and Exchange Commission to settle allegations related to the company’s relationship with Intel Corp. The settlement would “involve alleged violations of negligence-based fraud provisions of the federal securities laws, as well as other non-fraud based provisions,” Round Rock, Texas-based Dell said in a statement today. Dell fell in extended trading. Discussions relate to the relationship between Dell, the third-largest computer maker, and Intel, the world’s biggest manufacturer of semiconductors, Dell said without elaborating. Any settlement wouldn’t result in Michael Dell being barred from being a director and officer of a public company. Starting in 2005, the SEC began an investigation of Dell’s financial reporting that resulted in a restatement of results, the firing of workers and changes in corporate governance policies. Talks between SEC staff and the CEO got under way recently, according to the statement. Dell also delayed filing its quarterly report as it revises financial results to book a $100 million liability. The reserve anticipates the conclusion of a settlement with the SEC in which Dell will neither admit nor deny any wrongdoing, Dell spokesman David Frink said. Intel declined to comment, said Tom Beermann . Dell sank 2.2 percent to $12.79 in extended trading, after the announcement. The shares had risen 29 cents to $13.07 at 4 p.m. New York time in Nasdaq Stock Market trading. The stock has declined 9 percent this year. To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net .

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BHP, Xstrata Group Offers $4 Billion for Australian Coal Railroad Network

May 25, 2010

By Elisabeth Behrmann and Ben Sharples May 26 (Bloomberg) — BHP Billiton Ltd., Xstrata Plc and 11 other coal miners in Australia bid A$4.85 billion ($4 billion) for the nation’s biggest coal railroad network as they seek to speed expansion. The group is committed to expanding the network to support growth and has arranged an acquisition loan of A$1.35 billion and A$2.05 billion for capital spending, Nick Greiner , Chairman of the Queensland Coal Industry Rail Group, said in an e-mailed statement. The 13 miners including Rio Tinto Group and Peabody Energy Corp. want to boost shipments from Australia, the largest coal exporter, to feed demand from steel mills in Asia and benefit from higher prices. The bid is an alternative to Queensland state Premier Anna Bligh ’s plan for an initial public offering this year of the non-passenger assets, which includes coal tracks and trains. “This is about control of infrastructure build,” UBS AG analyst Glyn Lawcock said in Sydney before the announcement. Rail constraints in Queensland’s Bowen Basin will persist for as long as two years, hindering export growth, Deutsche Bank AG said in March, citing an independent report. To contact the reporters on this story: Elisabeth Behrmann at Ebehrmann1@bloomberg.net ; Ben Sharples in Melbourne at bsharples@bloomberg.net

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Ford Said to Add About 40 Jobs at Michigan Factory for Electric Vehicles

May 22, 2010

By Keith Naughton May 22 (Bloomberg) — Ford Motor Co. , working to electrify a quarter of its lineup, is adding about 40 jobs to a factory in Michigan as part of a plan to introduce four such models by 2012, two people familiar with the plan said yesterday. Mark Fields , the automaker’s president of the Americas, plans to announce the jobs and the next stage of Ford’s electric-vehicle strategy in a ceremony May 24 at an engine factory in Ypsilanti, Michigan, said the people, who asked to not be identified disclosing details prior to the announcement. Ford has cut almost half of its North American jobs since 2006. Ford will begin selling two electric vehicles and two new hybrids by 2012 and expects such models to be 10 percent to 25 percent of its worldwide fleet in a decade, the Dearborn, Michigan-based automaker has said. Automakers are developing models powered all or in part by electricity to meet U.S. government fuel-economy standards. “Ford has a good pedigree in electric vehicles,” Michael Robinet , an auto-industry analyst with CSM Worldwide in Northville, Michigan, said in a telephone interview. “Ford’s been at the forefront of layering in this new technology. It bodes well for their future.” Also at the ceremony will be Michigan Governor Jennifer Granholm , a Democrat, and Bob King , nominated as the next president of the United Auto Workers union, Ford said in a media advisory. “All I know is it’s another good-news event,” Liz Boyd , a spokeswoman for Granholm, said in an e-mail. John Stoll, a Ford spokesman, declined to comment. Hybrid Models Ford now sells four hybrid models and plans to introduce a gasoline-electric version of its Lincoln MKZ sedan, the brand’s best-selling model, this year. It also is rolling out in the U.S. electric versions of the Transit Connect van this year and Focus small car in 2011. The electric models will come out 6 to 12 months later in Europe, Ford said. U.S. rules require an average companywide fuel economy rating of 35.5 miles per gallon in 2016, up from 25 mpg now. Ford has eliminated 47 percent of its North American workforce since 2006, bringing the total to 70,000 by the end of the first quarter. It has cut costs and overhauled its model lineup to become less dependent on sport-utility vehicles and pickups. The automaker ended three years of losses to post a $2.7 billion net profit last year as the U.S. auto market fell to its lowest level in 27 years. Its U.S. sales are up 33 percent this year on models such as the Fusion hybrid. Ford rose 46 cents, or 4.3 percent, to $11.26 yesterday in New York Stock Exchange composite trading. The shares have risen 12.6 percent this year. To contact the reporter on this story: Keith Naughton in Southfield, Michigan, at Knaughton3@bloomberg.net .

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Abbott Laboratories to Buy Piramal Healthcare Solutions for $2.12 Billion

May 20, 2010

By Colin Keatinge (Corrects $400 to $400 million in second paragraph.) May 21 (Bloomberg) — Abbott Laboratories said it will buy Piramal Healthcare Ltd.’s Healthcare Solutions unit for $3.72 billion to become the biggest drug company in India. Shares of the Indian company fell after the announcement. Abbott will pay $2.12 billion initially and $400 million annually over the next four years, the Abbott Park, Illinois- based drugmaker said in a statement today. The Piramal purchase builds on Abbott’s acquisitions in emerging countries to tap demand as growth slows in the U.S., the world’s largest pharmaceutical market. Piramal dropped 4.8 percent to 543 rupees as of 11:34 a.m. in Mumbai trading, and India’s benchmark Sensitive Index lost 1.2 percent. To contact the reporter on this story: Colin Keatinge at ckeatinge@bloomberg.net

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Obama’s Director of National Intelligence Blair Announces His Resignation

May 20, 2010

By Nicholas Johnston May 20 (Bloomberg) — National Intelligence Director Dennis Blair is resigning as the top manager of U.S. spy agencies, a U.S. official said. Blair is poised to offer his resignation to President Barack Obama tomorrow, the official said, speaking on condition of anonymity because the announcement hasn’t been made public. The administration already has been interviewing potential replacements, the official said. Republican lawmakers have been critical of the Obama administration’s intelligence efforts in the battle against terrorism following two failed attacks: the Christmas Day attempt to blow up an airliner bound for Detroit from Amsterdam and the unsuccessful car bomb attack in New York’s Times Square on May 1. Blair’s pending resignation was reported earlier by ABC News. Blair, 63, is a retired admiral who was picked by Obama last year for the job of overseeing the 16 U.S. intelligence agencies, which have a combined budget of $47.5 billion. Congress created the position of national intelligence director in 2004 after the U.S. spy network failed to thwart the Sept. 11 terrorist attacks. To contact the reporter on this story: Nicholas Johnston in Washington at Njohnston3@bloomberg.net ;

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Healthscope’s Private-Equity Suitors Raise Takeover Offer to $1.5 Billion

May 19, 2010

By Angus Whitley May 20 (Bloomberg) — Healthscope Ltd.’s private-equity suitors raised their buyout offer by 4.5 percent to A$1.82 billion ($1.5 billion) to try to win support from the directors of Australia’s second-largest hospital owner. The A$5.75 per-share offer is being considered by the board, Healthscope said in a statement today. The bidders were given the chance to revise their May 14 bid after a “careful review” of the proposal, Healthscope said. TPG Inc. and Carlyle Group are said to be bidding for Healthscope, the Australian newspaper reported on May 14, without saying where it got the information. Healthscope shareholders should “take no action,” the company said in its statement. “A further announcement in regard to this matter will be made in due course.” One in 17 Australian babies is born at a Healthscope hospital, according to the company’s 2009 annual report. Healthscope runs the Gribbles pathology chain in Australia, New Zealand, Malaysia, Singapore and Mauritius. It owns or operates 43 hospitals in Australia. Healthscope closed at A$5.18 yesterday in Sydney. Macquarie Group Ltd. and Credit Suisse Group AG are said to be advising the group, the Age reported. To contact the reporter on this story: Angus Whitley in Melbourne at awhitley1@bloomberg.net .

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Iran Sanctions Draft Accord Reached at UN on Nuclear Program, Clinton Says

May 18, 2010

By Viola Gienger May 18 (Bloomberg) — U.S. Secretary of State Hillary Clinton said the permanent member states of the United Nations Security Council have reached a draft accord on sanctions designed to pressure Iran over its nuclear program. “This announcement is as convincing an answer to the efforts undertaken in Iran in the past few days as any we could provide,” Clinton told the Senate Foreign Relations Committee when asked to react to a deal with Iran brokered by Brazil and Turkey. To contact the reporter on this story: Viola Gienger in Washington at vgienger@bloomberg.net

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Nintendo Forecasts Annual Profit Will Drop to Lowest Level in Four Years

May 6, 2010

By Pavel Alpeyev May 6 (Bloomberg) — Nintendo Co. , the world’s largest maker of video-game players, forecast profit will fall to the lowest in four years as sales of the company’s flagship Wii console decline. Net income will probably drop 13 percent to 200 billion yen ($2.1 billion) in the 12 months ending March 2011, after declining 18 percent a year earlier, the Kyoto, Japan-based company said in a statement today. The outlook falls short of the 220.9 billion yen average of 21 analyst estimates compiled by Bloomberg. Nintendo projected the number of motion-sensing Wii consoles sold will drop for a second year, outweighing an increase portable DS player sales, as the company faces mounting competition from Sony Corp., Microsoft Corp. and Apple Inc. President Satoru Iwata plans to introduce a 3-D model of the handheld DS and a heart-rate-tracking “Vitality Sensor” accessory for the Wii this fiscal year to revive earnings growth. “Nintendo investors will need to be patient this year,” said Eiji Maeda , a JPMorgan Chase & Co. analyst. “Although the company will strengthen its software lineup for the Wii during the first half, the real contributions from the 3DS will probably materialize next year.” Operating profit, or sales minus the cost of goods sold and administrative expenses, will probably fall 10 percent to 320 billion yen as revenue declines 2.4 percent to 1.4 trillion yen, the company said. Those forecasts compare with the average analyst estimates for 349.1 billion yen in operating income and 1.39 trillion yen in revenue. Sales of the Wii will probably slide to 18 million units in the period, after declining for the first time last fiscal year, Nintendo said. Sales of the DS handheld will rise to 30 million, the company said. Yusuke Tsunoda , an analyst at Tokai Tokyo Securities Co., forecast in a March 24 report that sales of the Wii would probably fall 5 percent to 20 million units this fiscal year, while DS sales may decline 2.4 percent to 27 million units. Nintendo faces more competition than when it began sales of the Wii in 2006 and was the only major producer of motion- sensing personal gaming machines. Sony and Microsoft are now planning to introduce their own motion-sensing accessories for their video-game consoles, while Apple’s iPhone and iPad machines are being increasingly used for gaming. Nintendo fell 3.3 percent to close at 30,650 yen in Osaka trading before the announcement, narrowing its gain this year to 39 percent. The benchmark Nikkei 225 Stock Average has added 1.4 percent this year.

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Obama Plans to Announce Choice of Yellen, Raskin, Diamond to Fed’s Board

April 28, 2010

By Hans Nichols and Scott Lanman April 28 (Bloomberg) — President Barack Obama plans to announce his choice of Federal Reserve Bank of San Francisco President Janet Yellen tomorrow as vice chairman of the Fed Board of Governors, according to two people familiar with the decision. The president will also name Sarah Bloom Raskin , Maryland’s commissioner of financial regulation, and Peter Diamond , an economics professor at the Massachusetts Institute of Technology, for the two remaining open seats on the seven-person board, according to the people, who spoke on condition of anonymity before the announcement. The nominations are subject to Senate confirmation. Yellen, 63, would replace Donald Kohn , a 40-year Fed veteran who announced in March that he would leave the board June 23. She served as President Bill Clinton’s chief economist in the 1990s and has been supportive of keeping interest rates low. Yellen would gain a permanent vote on monetary policy, instead of having a vote one year out of every three as a regional Fed chief. All governors have a vote on rate decisions. Raskin, an attorney, was appointed in August 2007 as Maryland’s top banking regulator. She was previously managing director of Promontory Financial Group, a consulting firm, and worked at the New York Fed and as a counsel for the Senate Banking Committee. She graduated from Harvard Law School in 1986. Her husband, Jamie Raskin , is a law professor and a Democratic Maryland state senator. Diamond, a specialist in taxation and behavioral economics who turns 70 tomorrow, has written widely on overhauling entitlement programs. His 2003 book “Saving Social Security” was co-written with Peter Orszag , director of the Office of Management and Budget. He joined MIT’s faculty in 1966. To contact the reporters on this story: Hans Nichols in Washington at hnichols2@bloomberg.net ; Scott Lanman in Washington at slanman@bloomberg.net

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FOMC Minutes: Fed To Keep Interest Rates Low For An ‘Extended Period’

April 28, 2010

By JEANNINE AVERSA, AP: Wrapping up a two-day meeting, the Fed in a 9-1 decision retained its pledge to hold rates at historic lows for an “extended period.” Doing so will help energize the recovery. The Fed offered a more upbeat view of the economy even as it noted that risks remain. It said the job market is “beginning to improve,” an upgrade from its last meeting in mid-March. It observed then that the unemployment situation was merely “stabilizing.” The Fed also noted that consumer spending has “picked up,” an improvement from its last observation that spending was expanding at a “moderate pace.” Even with the improvements, the Fed said there was reason to be cautious. High unemployment, sluggish income gains and tight credit is still dampening consumer spending, a major contributor to economic activity. Commercial real estate remains fragile. And though housing activity has edged up, it is still at depressed levels. Bank lending continues to shrink. Investors showed little reaction to the Fed’s statement. The Dow Jones industrial average was relatively unchanged after the announcement. Prices for Treasurys continued to slip following the announcement. The yield on the 10-year note, which moves inversely to its price, edged up to 3.77 percent, from 3.75 percent just before the announcement. READ the entire statement from the Federal Reserve: Federal Reserve Press Release Release Date: April 28, 2010 For immediate release Information received since the Federal Open Market Committee met in March suggests that economic activity has continued to strengthen and that the labor market is beginning to improve. Growth in household spending has picked up recently but remains constrained by high unemployment, modest income growth, lower housing wealth, and tight credit. Business spending on equipment and software has risen significantly; however, investment in nonresidential structures is declining and employers remain reluctant to add to payrolls. Housing starts have edged up but remain at a depressed level. While bank lending continues to contract, financial market conditions remain supportive of economic growth. Although the pace of economic recovery is likely to be moderate for a time, the Committee anticipates a gradual return to higher levels of resource utilization in a context of price stability. With substantial resource slack continuing to restrain cost pressures and longer-term inflation expectations stable, inflation is likely to be subdued for some time. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period. The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to promote economic recovery and price stability. In light of improved functioning of financial markets, the Federal Reserve has closed all but one of the special liquidity facilities that it created to support markets during the crisis. The only remaining such program, the Term Asset-Backed Securities Loan Facility, is scheduled to close on June 30 for loans backed by new-issue commercial mortgage-backed securities; it closed on March 31 for loans backed by all other types of collateral. Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; James Bullard; Elizabeth A. Duke; Donald L. Kohn; Sandra Pianalto; Eric S. Rosengren; Daniel K. Tarullo; and Kevin M. Warsh. Voting against the policy action was Thomas M. Hoenig, who believed that continuing to express the expectation of exceptionally low levels of the federal funds rate for an extended period was no longer warranted because it could lead to a build-up of future imbalances and increase risks to longer run macroeconomic and financial stability, while limiting the Committee’s flexibility to begin raising rates modestly.

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Fed Repeats Pledge to Maintain Low Rates, Sees Improvement in Labor Market

April 28, 2010

By Craig Torres April 28 (Bloomberg) — The Federal Reserve restated its intention to keep the benchmark interest rate near zero for an “extended period” and said the labor market is “beginning to improve.” “Economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period,” the Federal Open Market Committee said in a statement today in Washington. Chairman Ben S. Bernanke is contending with an economy that’s been growing for almost a year without an increase in inflation or a decline in unemployment below 9.7 percent. While consumer spending is recovering along with business investment, credit to households remains tight. A surge in corporate profits last quarter was led by demand from overseas and lower labor costs, according to results from Standard & Poor’s 500 companies that have reported earnings this month. “With substantial resource slack continuing to restrain cost pressures and longer term inflation expectations stable, inflation is likely to be subdued for some time,” the FOMC said. Treasury notes remained lower after the decision. Stocks and the dollar were little changed. Spending, Employment Officials also said growth in household spending has “picked up recently.” The job market is “beginning to improve,” according to the statement. Last month, the FOMC said the labor market “is stabilizing.” U.S. central bankers have kept the benchmark lending rate in a range of zero to 0.25 percent since December 2008. Their purchases of $1.25 trillion in mortgage-backed securities, which ended last month, boosted the balance sheet to a record $2.34 trillion, creating concern among some officials that aggressive monetary stimulus could lead to imbalances later. Kansas City Fed President Thomas Hoenig dissented for the third straight meeting. He said “that continuing to express the expectation of exceptionally low levels of the federal funds rates for an extended period was no longer warranted because it could lead to the buildup of future imbalances and increase risks to longer-run macroeconomic and financial stability” and limiting the ability to increase rates “modestly.” Gross domestic product grew at a 3.3 percent annual pace in the first quarter, according to the median forecast of economists surveyed by Bloomberg News ahead of an April 30 report from the Commerce Department. After a 5.6 percent expansion in the prior three months, such growth would mark the best back-to-back performance since the last six months of 2003. Markets Improve Conditions in financial markets have also improved. Raytheon Co., the world’s largest missile maker, and the finance unit of Royal Dutch Shell PLC led a drop in U.S. industrial company debt yields to 129 basis points more than similar- maturity Treasuries last week, according to Bank of America Merrill Lynch index data. The spread is one basis point tighter than it was on Aug. 9, 2007, when BNP Paribas SA halted withdrawals from three investment funds near the start of the credit crisis. Industrial company spreads widened 1 basis point yesterday to 130 basis points. A basis point is 0.01 percentage point. Economists have raised forecasts from earlier this month as reports showed consumer spending climbed, inventories rose and businesses invested in new equipment. The median estimate of analysts polled from April 1 to April 8 called for a 3 percent growth rate. Retail sales increased 1.6 percent last month, more than anticipated and the biggest gain in four months, according to figures from the Commerce Department. Stocks of companies that rely on discretionary spending are up. Shares of Chipotle Mexican Grill Inc., a Denver-based Mexican restaurant chain, are up about 55 percent year-to-date. Shares of Starbucks Corp ., based in Seattle, have risen 14.5 percent. Jobless Rate For all the positive news, economists surveyed by Bloomberg News expect non-farm payrolls to rise by just 175,000 this month, not enough to lower the unemployment rate from 9.7 percent, where it stood in March. Slack in labor markets and resulting weak wage pressures have held down consumer prices. The consumer price index minus food and energy rose at a 1.1 percent pace for the 12 months ending March, down from 1.3 percent in February. “The Fed is going to be pretty cautious until we start seeing 300,000 gains in private monthly payrolls,” Julia Coronado , senior U.S. economist at BNP Paribas SA in New York, said before the announcement. “Without a stronger turn into job growth, and without credit creation, it doesn’t look like we would accelerate much from here.” Inflation Outlook Officials brought a fresh set of forecasts to today’s meeting. Their outlook for inflation and unemployment, which will be disclosed in three weeks when minutes are released, will offer insights into their estimates of how fast the economy will use up spare capacity. About 80 percent of S&P 500 companies to have posted first- quarter earnings have topped analysts’ projections, according to data compiled by Bloomberg. Some companies are positioning for a sustained increase in demand. Caterpillar Inc. , based in Peoria, Illinois and the world’s largest maker of construction equipment, posted its first earnings increase in seven quarters on April 26, exceeding analysts’ estimates. Eastman Chemical Co. , the biggest U.S. maker of plastics for water bottles, topped analysts’ estimates with first-quarter earnings and its second-quarter forecast. Jim Rogers , chief executive officer of the Kingsport, Tennessee-based company, said April 23 that its output will rise after first-quarter sales jumped 39 percent to $1.56 billion. Sales Forecast Macy’s Inc., the second-largest U.S. department-store chain, boosted its annual profit and sales forecasts yesterday. Sales at stores open at least a year will rise as much as 3.5 percent, Chief Financial Officer Karen Hoguet said at an analyst meeting in New York. The Cincinnati-based retailer earlier predicted a gain of 2 percent at most. “We are at the early stages of gaining confidence that the recovery is sustainable,” Alan Ruskin , global head of currency strategy at RBS Securities Inc., said before the announcement. “The virtuous cycle of generating jobs through consumption is just starting up, but demand is still vulnerable to a change in financial conditions, if for example the market’s attention shifts to disturbing U.S. fiscal accounts.” Bernanke expressed concerns yesterday about the long-term prospects for the economy, telling a White House commission on the budget deficit that budget deficits may eventually drive up interest rates . The failure to achieve a sustainable fiscal plan in the U.S. would “sap the nation’s economic vitality, reduce our living standards and greatly increase the risk of economic and financial instability,” he said. To contact the reporter on this story: Craig Torres in Washington at ctorres3@bloomberg.net

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Obama to Wall St.: Stop Fighting, Embrace Overhaul

April 22, 2010

By Roger Runningen and Hans Nichols April 22 (Bloomberg) — President Barack Obama called on the financial industry to drop its “furious efforts” to fight his regulation plan, saying a failure to impose tougher rules on the market will put the U.S. economic system at risk. The U.S. was almost dragged into a second Great Depression by “a failure of responsibility — from Wall Street to Washington,” Obama said today in the text of a speech he’s delivering at Cooper Union in New York, about two miles from Wall Street. “Some on Wall Street forgot that behind every dollar traded or leveraged, there is a family looking to buy a house, pay for an education, open a business, or save for retirement,” Obama told an audience of about 700 people, including financial industry executives, local officials, consumer advocates, faculty and students. “What happens here has real consequences across our country.” Obama repeated the arguments he’s been making for overhauling financial industry regulations over the past two years, a drive that is nearing its final stages. His push to get the legislation through Congress got a boost when Democrats and Republicans resumed negotiations after weeks of trading accusations. The effort was also helped by the administration’s ramped-up lobbying campaign and the announcement last week by the Securities and Exchange Commission that it is suing Goldman Sachs Group Inc. for alleged fraud linked to derivatives. Benefits of Overhaul Obama said financial firms as well as taxpayers will benefit by the imposition of new standards to prevent “reckless risk-taking,” the creation of a mechanism to unwind institutions whose failure threatens the financial system, and a more transparent market for trading derivatives. He criticized the “battalions of financial industry lobbyists descending on Capitol Hill” to influence the legislation. Obama also sought to directly rebut charges by congressional Republicans that the legislation would guarantee future government bailouts of failing firms. “There is a legitimate debate taking place about how best to ensure taxpayers are held harmless in this process,” he said. “But what is not legitimate is to suggest that we’re enabling or encouraging future taxpayer bailouts, as some have claimed. That may make for a good sound bite, but it’s not factually accurate.” New Regulator At issue is legislation sponsored by Senate Banking Committee Chairman Christopher Dodd , which may come to the Senate floor as early as next week. It would set up an independent regulator within the Federal Reserve to guard consumers against abuse and deception in such instruments as mortgages, credit cards or loans. It would also create the mechanism to dismantle systemically important financial firms when they fail, and strengthen oversight of derivatives and hedge funds. The House has already passed its version of the regulatory-overhaul legislation, and the House and Senate would have to merge their bills. To give the address, Obama returned to the site where, during the 2008 presidential campaign, he outlined his proposals for a new regulatory regime. “I take no satisfaction in noting that my comments have largely been borne out by the events that followed,” he said. To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net Hans Nichols in New York at Hnichols2@bloomberg.net

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Intel Sales Forecast Tops Estimates as PC Recovery Holds Up; Shares Climb

April 13, 2010

By Ian King April 13 (Bloomberg) — Intel Corp. , the world’s biggest chipmaker, forecast second-quarter sales that topped analysts’ predictions, citing growing worldwide demand for personal computers. Sales will be $10.2 billion, plus or minus $400 million, the company said today in its quarterly earnings statement. Analysts had estimated $9.72 billion on average, according to a Bloomberg survey. Profitability also remains buoyant, prompting Intel to increase its full-year gross margin forecast to about 64 percent from roughly 61 percent. The forecast follows record first- quarter sales, fueled by consumers ordering laptops. Analysts expect demand to increase further in the second half as more businesses upgrade their computer networks. “They’re very strong numbers,” said Cody Acree , an analyst at Williams Financial Group in Dallas. “It’s well above what anyone was expecting.” Intel rose 88 cents, or 3.9 percent, to $23.65 in late trading following the announcement. The shares, which gained 12 percent this year, closed at $22.77 on the Nasdaq Stock Market. Last Quarter First-quarter net income climbed to $2.44 billion, or 43 cents a share, from $629 million, or 11 cents, a year earlier. Analysts projected 38 cents a share. Revenue increased 44 percent to $10.3 billion, compared with the average estimate of $9.85 billion. In January, the Santa Clara, California-based company forecast sales of $9.7 billion, plus or minus $400 million. It predicted gross margin , or the percentage of sales remaining after deducting the cost of production, of about 61 percent. It came in at 63 percent. Intel leads off two weeks of earnings reports by the largest U.S. technology companies, including International Business Machines Corp., Google Inc. and Microsoft Corp. Intel supplies more than 80 percent of the world’s PC processors, making its sales a barometer of computer industry demand. Notebook shipments jumped 37 percent in the first quarter from a year earlier and account for 61 percent of the market, according to El Segundo, California-based ISuppli Corp. Intel is profiting from the relative weakness of its main rival, Advanced Micro Devices Inc., according to Tristan Gerra , an analyst at Robert W. Baird & Co. in Milwaukee. Intel also has a new chip lineup, which it released in the first quarter. “Intel is in front of the best product cycle in years,” said Gerra, who has an “outperform” rating on the stock and doesn’t own it. “On top of that, we believe that Intel is gaining market share.” To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

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