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Oil Continues Climbing as Recovery Makes Most-Accurate Forecasters Bullish

December 21, 2009

By Grant Smith and Rachel Graham Dec. 21 (Bloomberg) — Oil’s biggest annual rally since 1999 is poised to continue with gains of 20 percent next year as the global economy recovers and OPEC curtails production, the most accurate crude forecasters say. Societe Generale SA’s Mike Wittner and Hannes Loacker at Raiffeisen Zentralbank Oesterreich AG, whose predictions this year that were within 9 percent of market levels, now say oil will end 2010 near $88 a barrel, up from current prices of about $73 in New York. The median Wall Street estimate is for an increase to $83. Oil is set to rise as China and India lead the world economy from its biggest economic shock since World War II, while the Organization of Petroleum Exporting Countries caps output, Wittner and Loacker said. Analysts say OPEC will keep supply targets unchanged at a meeting in Luanda, Angola, tomorrow, even as the International Energy Agency predicts fuel consumption will rise 1.7 percent next year. “With global demand growing and OPEC holding production flat, stockpiles are going to come down, and that’s bullish for prices,” said Wittner, 48, the head of oil market research at Societe Generale in London. Commodities will also benefit from the weak dollar and U.S. interest rates close to zero percent, he said. Oil futures jumped 5 percent last week, the first weekly gain in a month, after Iranian forces occupied an oil well in neighboring Iraq, raising concern tensions between the two OPEC nations would disrupt supplies. The Iranian troops left the field Dec. 19, Iraq’s deputy minister of oil Abdul Kareem al- Luaibi told reporters in Baghdad yesterday. CIA Analysis Wittner, an energy analyst at the U.S. Central Intelligence Agency during the 1980s and the IEA in Paris between 1997 and 2002, said purchases by hedge funds and investors seeking protection from inflation will support prices. “In contrast to some other banks, we acknowledge quite openly, and believe, that non-fundamental factors do play a role in setting oil prices,” said Wittner, who also worked at Koch Supply and Trading Co. and the Credit Agricole SA brokerage, Calyon, before joining SocGen in October 2007. Loacker, 33, said he expects OPEC to keep production at current levels “for a good portion of 2010,” supporting prices. Oil futures have risen 64 percent this year because of OPEC’s output cut and economies recovering from the first global recession since World War II. The IEA’s forecast for increased consumption in 2010 would be the first in three years. Higher oil prices will reward producers from Saudi Arabia to Exxon Mobil Corp., while hurting airlines that the International Air Transport Association forecast will lose $5.6 billion next year. ‘Getting Scarce’ “Resources are getting scarce, especially if we go out two to three years from now,” said Gordon Kwan , an analyst at Mirae Asset Securities in Hong Kong, who worked in Alaska as an engineer at BP Plc’s Prudhoe Bay, the biggest U.S. oil field. Prudhoe Bay and its satellites pumped 357,360 barrels a day on Dec. 17, according to Alaska’s Department of Revenue . In the 1980s, daily production was 1.5 million barrels a day. “Right now scarcity is not a popular word because there’s plenty of inventory in the tanks,” Kwan said. “But once we have a synchronized global economic recovery, maybe 2011 onward, then we’ll see the word scarce coming into the picture.” Monthly oil contracts for late 2010 trade between $75 and $80, limiting the potential returns for investors. A 20 percent rally from current levels would lag behind the 57 percent gain in 2007 and 40 percent in 2005. Last year, oil started at $99.62 and rose as high as $147.27 before crashing and ending the year at $44.60 a barrel. Commerzbank Forecast The third most-accurate oil forecaster, Commerzbank AG senior analyst Eugen Weinberg , predicts oil will fall to $59 in the fourth quarter of 2010 because OPEC will increase supplies. “Next year, I see risk from the downside,” Weinberg said. “OPEC discipline is receding, and I think this will continue.” Until there’s evidence of improved demand in developed nations “and real discipline from OPEC, then prices have increased prematurely,” Weinberg said. For the Bloomberg survey, analysts’ forecasts between December 2008 and January 2009 were compared with actual prices. The average total for the 21 analysts surveyed was off by 18 percent, with Economist Intelligence Unit, Natixis Bleichroeder Inc., JPMorgan Chase & Co. and Deutsche Bank AG farthest away. Deutsche Bank predicts a decline of 18 percent to an average of $60 a barrel a year from now as the dollar strengthens. ‘Downward Pressure’ “In all likelihood the dollar will be putting downward pressure on the oil market, or at least take away a support,” said Deutsche Bank Chief Energy Economist Adam Sieminski in Washington. OPEC will probably make no changes to output quotas when it meets tomorrow in Luanda, according to a Bloomberg News survey of 36 analysts last week. Last month the group pumped about 2 million barrels a day less than it did a year earlier as it works through a promised 4.2 million barrel-a-day supply cut. The group will maintain output levels, Angolan Oil Minister and OPEC President Jose Maria Botelho de Vasconcelos told state radio station Radio Nacionale de Angola. Members from Algeria, Kuwait, Libya and Qatar have also signaled no need to change quotas, while Iran and Nigeria said the group’s target is unlikely to be altered. Venezuela wants to keep prices above $70. According to Loacker, who joined Raiffeisen seven years ago, an OPEC decision to hold supply little changed at a time of rising consumption will tighten supplies as output from countries outside the organization lags behind estimates. “Some forecasts are too optimistic” on non-OPEC supply growth, he said. “There is potential for less good surprises in production.” To contact the reporters on this story: Grant Smith in London at gsmith52@bloomberg.net Rachel Graham in London rgraham13@bloomberg.net

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London Banker Exodus to Geneva Runs Into Housing Shortage, 44% Income Tax

December 20, 2009

Dec. 21 (Bloomberg) — Geneva, touted as a haven for London bankers facing heavier U.K. taxes, may lure fewer than predicted thanks to a housing shortage, crowded schools and a 44 percent income-tax rate. Barclays Plc President Robert Diamond this month joined a chorus of financial leaders in arguing that the U.K.’s 50 percent tax on bonuses would drive bankers away from London. The Swiss Private Bankers Association said the “arbitrary” tax will boost the allure of Geneva, whose bankers oversee about 10 percent of the world’s foreign-held private wealth. “It’s a joke, it’s lobbying,” said Tim Dawson , an analyst at Geneva-based brokerage Helvea AG . “People are dreaming if they think the London investment banking world is going to move. There is more office space in Canary Wharf than in the whole of Switzerland,” he said, referring to London’s second financial district. Chancellor of the Exchequer Alistair Darling said this month that banks awarding discretionary bonuses of more than 25,000 pounds would have to pay a one-time levy of 50 percent. That followed earlier decisions to boost the top tax rate to 50 percent and rescind special breaks for residents whose tax home is outside the country. That’s making the U.K. a “hostile environment” for wealthy people and many are considering relocating to rival financial centers, said Caroline Garnham, a partner at London- based law firm Lawrence Graham LLP who advises on tax planning. No ‘Huge Masses’ The numbers choosing Switzerland will be small, and banks with Swiss roots, such as Credit Suisse Group AG and UBS AG, will probably find it easiest to move workers, said Stefan Schuermann , an analyst at Zurich-based Vontobel Holding AG. “I don’t expect huge masses; there is going to be some inflow,” Schuermann said. “You don’t easily move just because of tax issues if you have a family.” Those keen to settle in Geneva, a city of less than 200,000 on the doorstep of ski resorts such as Verbier, Chamonix and Megeve, will face housing constraints. Just 92 detached houses were vacant throughout the canton, which includes suburbs and outlying villages, on June 1 as population growth outpaced expansion of the property market, according to figures from the canton’s statistic office. Geneva’s vacancy rate for all types of accommodation stood at 0.21 percent, compared with 0.66 percent in Zurich and 2.3 percent in London. ‘Pressure on Services’ The median price of a four-bedroom house in Geneva was 1.62 million Swiss francs ($1.57 million) in the third quarter. The average price of a property in Kensington and Chelsea, London’s most expensive borough, was 790,946 pounds ($1.28 million) in October, according to Land Registry data. “The pressure on services might become an issue,” said Glen Millar, a Geneva-based consultant at Kinetic Partners LLP, which says it is looking to relocate 15 hedge-fund firms to Switzerland from London after the U.K. announced a higher tax rate in April. “For that reason, arrivals may remain a trickle.” More than 65,000 people, known as frontaliers, commute into Geneva from neighboring France each day, according to cantonal figures, both for work and to pay less for housing. At the International School of Geneva , where fees can total 28,000 francs a year, applications for next September are almost double the number of likely vacancies, said admissions director John Douglas. The school, whose alumni include former Indian Prime Minister Indira Gandhi and retired U.S. Army General Norman Schwarzkopf , plans to add 600 places by 2012. “It’s increasingly difficult to get places,” Douglas said. “It’s not just tax but location and quality of life. Hedge funds are part of the picture.” Competing With Melting Pots And it isn’t just Geneva. Switzerland struggles to compete with the day-to-day attractions of London, a city whose population almost matches that of the whole country. Switzerland “cannot match the force of attraction and integration of international melting pots like New York or London for hiring talent from all over the world,” the Swiss Federal Council said in a Dec. 16 report outlining strategies required to keep the country’s financial centers competitive. While each Swiss canton sets its own tax rate, allowing local officials to negotiate individual tax deals with wealthy immigrants, those rules are coming under pressure. Zurich, Switzerland’s biggest city and the home of UBS and Credit Suisse, will abolish special tax privileges for foreign millionaires on Jan. 1. The canton’s top rate of income tax is 40.3 percent. “Some of the German-speaking cantons around Zurich are able to offer tax rates that never exceed 20 percent, but people don’t want to move there, they prefer the lifestyle around Geneva,” said Thierry Boitelle, a partner specializing in tax at law firm Altenburger . “From a tax point of view it doesn’t make sense to locate 100 people here.” Hedge Funds Altenburger advises clients to relocate only those functions that “add value,” while leaving back office and administration jobs in cheaper locations. With Swiss firms overseeing a quarter of the world’s offshore private wealth, it may make sense for private equity and hedge fund managers to move to Switzerland, said Millar at Kinetic. BlueCrest Capital Management Ltd., a London-based hedge fund firm that oversees about $15.4 billion, plans to open a Geneva office as increased taxes and regulation make London less attractive, a person familiar with the situation said last month. It follows Brevan Howard Asset Management LLP, Europe’s largest hedge fund manager, which said in September it may open an office in Switzerland. Finding a Way The country has added 10 to 20 single-manager hedge funds over the past two years, according to the Swiss Funds Association . Switzerland’s 136 hedge funds managed $17.3 billion at the end of June, compared with 828 overseeing $263.2 billion in the U.K., according to Eurohedge. “Limiting the income of investment managers, in addition to taxing them a lot, might encourage them to come to Switzerland,” said Frédérique Bensahel, a partner at the law firm FBT who advises hedge funds that have moved to Geneva. “It’s true that housing is extremely difficult and expensive and the schools are very full, but when you have a good project you will find a way.” Altenburger receives six to 10 relocation inquiries a month at its offices in Geneva and Zurich, with about two turning into actual moves, Boitelle said. “It’s not a wave but a steady stream,” he said. “If you’re coming from London, Geneva is a small village.” For Related News and Information: Bloomberg Funds & Holdings Home Page: FUND Most-read hedge fund news: MNI HEDGE Hedge Fund Rankings: WHF Top Fund News: TOP FUND

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Tiger Woods Sponsors Distance Themselves From Golfer

December 12, 2009

When Tiger Woods’ break from golf ends, he’s unlikely to regain his crown as one of the world’s most valuable pitchmen, even if he gets back to winning tournaments and convinces people he’s changed. America loves comeback stories, but his future ad opportunities are likely to be limited to sports product endorsements, significantly reducing his earnings power. That was the takeaway from Gillette’s announcement Saturday that it won’t feature Woods in its ads for an unspecified period of time. It was the first major sponsor to distance itself from Woods since he announced late Friday he is taking an indefinite leave from golf to work on his marriage after allegations of infidelity surfaced in recent weeks. Woods’ time-out and request for privacy may give sponsors the cover they need to pull their ads indefinitely and distance themselves from allegations that Woods had trysts with multiple women. AT&T said it is evaluating its relationship with the golfer. Representatives from Accenture won’t say what its plans are regarding Woods, whom the consulting firm has used to personify its claimed attributes of integrity and high performance. But its Web site no longer displays on its home page an image of the golfer that had been there as recently as Thursday. Companies often use athletes and celebrities in image ads not to sell products but to ride the coattails of their perceived qualities in the hope that it will rub off on them. Those kinds of ads are now likely gone forever for Woods as Tiger Inc. has self-destructed, costing him hundreds of millions in future endorsement fees. Before the Nov. 27 car accident that exposed Woods’ alleged serial infidelity, 91 percent of the opinions expressed about him on the Internet were positive, according to Zeta Interactive. As of Saturday, Woods’ positive rating online had fallen to just 41 percent. That’s bad news for Accenture. The global consulting and outsourcing firm lauded its connections with Woods in a 2006 news release, saying its “Go on, be a Tiger” campaign had boosted its image significantly. “The world associates Tiger with high performance. He embodies the relentless pursuit of perfection,” James E. Murphy, Accenture’s chief marketing and communications officer, was quoted as saying in that release. The company didn’t return requests for comment Saturday. Gillette, which uses the slogan “The best a man can get,” said it won’t air advertisements featuring Woods or include him in public appearances. Woods was hired by Gillette in 2007 and has been in ads for Gillette Fusion Power razors with titles like “Phenom” and “Champions” with other stars including tennis great Roger Federer and soccer player Thierry Henry. “This is supporting his desire to step out of the public eye and we’re going to support him by helping him to take a lower profile,” said Damon Jones, a spokesman for Gillette, a unit of Cincinnati-based Procter & Gamble. He wouldn’t say when – or if – the company would resume ads with Woods. Woods hasn’t been seen in a prime-time television commercial since a Gillette spot on Nov. 29, according to research firm Nielsen Co. No companies have cut ties altogether to Woods in the weeks since his marital troubles came to light, tarnishing the image of a man who spent 13 years in the public eye carefully cultivating a good guy image. But with the 33-year-old’s decision to leave golf – at least temporarily – they’re now forced to consider their future with him. “They’re going to hedge, they’re going to buy some time to determine whether or not the situation will turn,” said Rick Burton, former chief marketing officer of the United States Olympic Committee and now a sports marketing professor at Syracuse University. Woods’ agent, Mark Steinberg, said Friday it would be “premature and inappropriate” to talk about Woods’ specific business relationships. “Each sponsor has unique considerations and ultimately the decisions they make we would fully understand and accept.” Woods’ array of endorsements helped him become the first sports star to earn $1 billion, according to Forbes. Michael Jordan, Woods’ closest contemporary, is a distant second at $800 million, amassed during and after an NBA career that spanned nearly 20 years. Basketball star LeBron James has made public his desire to be the next athlete to earn $1 billion. Woods’ time-out could mean more room for James and other athletes to snatch up more endorsements. Nike Inc. said late Friday it supports his decision. Gatorade, a unit of PepsiCo Inc., said previously it supports Woods and said Saturday it has no updated comment. EA Sports has been selling Tiger Woods video golf games for a decade, and its next edition featuring him comes out in six months, giving it time to see what happens. Watch maker Tag Heuer did not return a call Saturday. All of these companies are examining their relationships with him, said Jonathan Bernstein, president of Bernstein Crisis Management. He expects they are commissioning research to see how much damage – if any – Woods’ scandal is doing to their brands. The answer to that may lie in the nature of the product being pitched. “The ones that would stand to lose the least are sports,” Bernstein said. “The connection with a watch company or a clothing company is much more tenuous and probably more subject to damage than connections to Nike.” A Wisconsin middle school already has learned Tiger Inc. may not be worth as much as it was a month ago. The band at the Clintonville middle school had expected to raise $1,600 from an autographed photo of Woods that was auctioned off Dec. 5. Instead, most of the people just shook their heads as they walked by the picture, which finally sold for $300. “The faces they were making, saying ‘Are you kidding? Why would you do this?’” said Adam Englebretson, athletic director for the Clintonville district’s high school. Woods’ earnings prowess also has been cut short. “The sponsors who want to sign him up may be different,” said Larry L. Smith, president of the Institute for Crisis Management. “It may be somebody who wants to market only to men or only to the avid golfer. There may be fewer cross-generational or cross-demographic sponsors.” Even for Nike, which built its golf business that generates $650 million a year in revenue around Woods, the timing of the scandal couldn’t be worse. “Nike Golf is Tiger Woods,” said Mike Paul, president of MGP & Associates PR. “This is the time of year that they should be selling golf clubs for Christmas.” Mary Le Beau is among the golfers now reluctant to buy Nike equipment or apparel tied to Tiger. “There’s so many choices that you don’t have to give up any quality to go with your conscience,” said the 52-year-old marketer from Green Bay, Wis. Others at risk of becoming collateral damage include: the television networks that drove up the bidding to show golf tournaments and other professional golfers who have benefited from the quadrupling of prize money since Woods joined the PGA tour in 1996. The PGA’s contracts with TV broadcasters NBC and CBS expire in 2012, with negotiations on a new deal likely to begin during the second half of next year. As a measure of Woods’ importance to the PGA, the average television rating fell by nearly 50 percent for a host of 2008 tournaments that Woods missed while he was recovering from knee surgery, according to Nielsen Co. Expect Americans to root for him when – and if – he does come back, now that he’s positioned himself as less than the champion he’s always been known for being. “We always root for the underdog,” Smith said. “We all think that everybody has a chance to be successful. It depends how hard somebody is willing to work and what sacrifices they’re willing to make.” Woods is golf to so many people. But even without him, people won’t lose their interest, said Gary Lynch, sales associate at New York Golf Center. “Icons come and go,” he said. “This is a big story because of the financial aspect involved and because he set himself up to be a saint.” ___ Emily Fredrix reported from Milwaukee. AP Business Writers Michael Liedtke in San Francisco; Rachel Beck, Damian Troise, Stephen Manning and Mae Anderson in New York; Sarah Skidmore in Portland, Ore.; and Ryan Nakashima in Los Angeles contributed to this report.

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Obama Will Rally Senate Democrats in Effort to End Impasse on Health Care

December 6, 2009

By Laura Litvan Dec. 6 (Bloomberg) — President Barack Obama plans to head to the U.S. Capitol to press Senate Democrats to agree on health legislation as lawmakers struggle to resolve disputes over issues including a proposed government-run insurance plan. Democrats met throughout yesterday to seek an alternative to Senate Majority Harry Reid’s plan to create the new national program to cover the uninsured. Opposition within his party leaves Reid at risk of falling four votes short of the 60 he needs to pass the legislation, the most sweeping overhaul of the nation’s health-care system in more than four decades. Obama’s scheduled visit comes as the bill’s backers need a jolt to come together, said Massachusetts Democrat John Kerry . “We have to talk about how to put the final pieces together,” Kerry said. “It’s good to hear from the president now, because it’s getting to that stage where you have to come to a decision with your heart as well as your head.” Reid called the rare weekend session to meet his deadline of getting a bill by year-end. Republicans, unified in opposition, forced the Democrats yesterday to reiterate their support for cutting more than $40 billion in home health-care services funding under Medicare. It was the latest Republican effort to highlight the bill’s potential impact on the elderly. Senate Minority Leader Mitch McConnell of Kentucky said Republicans see the debate stretching into 2010 and that they gain the more the public learns. Republicans say Obama’s visit reflects a weakening Democratic position. ‘Wrong Direction’ “The vote tally must be going in the wrong direction,” said Senator Richard Burr , a North Carolina Republican. The $848 billion Senate bill would make the biggest changes to the health system since creation of the government Medicare program for the elderly in 1965. The 10-year measure is designed to cover 31 million uninsured people and curb medical costs . Like a $1 trillion bill that the U.S. House passed on Nov. 7, the Senate plan would require all Americans to get health coverage or pay a penalty. It would expand the Medicaid health program for the poor, set up insurance-purchasing exchanges and provide subsidies for those who need help buying policies. Reid, a Nevada Democrat, is working behind closed doors to settle issues ranging from how strictly to prohibit federal funding for abortions to how to shape the so-called public option. Insurers’ Compensation An amendment targeting insurance executive pay, proposed by Arkansas Democrat Blanche Lincoln , may come up for a vote today. It would cap tax-deductible salaries at $400,000 instead of the current national limit of $1 million. The legislation before the Senate already has a $500,000 cap. The lawmakers postponed the vote yesterday. The Senate also turned back a Republican bid to restore the home health services funding. The Republicans are trying to draw attention to the impact on the elderly from some $400 billion in proposed Medicare savings. Debate could come as early as tomorrow on a bipartisan amendment that would allow imports of lower-cost prescription drugs from countries such as Canada, a proposal that is opposed by Eli Lilly & Co. and other drugmakers. That proposal was drafted by North Dakota Democrat Byron Dorgan and Maine Republican Olympia Snowe . Senator Ben Nelson , a Nebraska Democrat, this week will offer an amendment preventing federal funds from being used for abortions in an effort to bring the legislation in line with what the House passed. Nelson is threatening to oppose the bill without the language. Public Option He also joins three other senators in the Democratic caucus who say they won’t back a bill that has a public option. The public option has been a lightning rod in the debate since Democrats began drafting the legislation in the spring. All Republicans in both chambers oppose creation of the government program, which many say could crowd out private insurers and become a precursor for a government takeover of health care. Senate Democrats Lincoln and Mary Landrieu of Louisiana and Independent Joe Lieberman of Connecticut join Nelson in opposing such a program. Snowe participated in one small meeting yesterday of Senate Democratic moderates. She said she and Kerry are reviving her proposal to have a national government insurance program only as a fallback, and utilized in states where there is evidence private insurance isn’t affordable enough for people with lower incomes. It may be offered as an amendment on the floor, she said. Can’t Back Reid Snowe said she won’t back what Reid has put on the Senate floor because the public program is in the legislation, with a state opt-out. Senator Mark Begich , an Alaska Democrat, said senators are discussing other approaches centering on requiring states where insurance premiums are deemed too high to provide an alternative to private insurance that would be provided by a non-profit entity. “My biggest concern is the cost to the government at the back end,” Begich said of the public option. Arkansas Democrat Lincoln said the government should be out of the picture completely. “We want to increase options and choices for our constituents,” she said. “I think we can get there.” To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net

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Obama Seeks to Rally Senate Democrats to Break Impasse on Health-Care Plan

December 5, 2009

By Laura Litvan Dec. 6 (Bloomberg) — President Barack Obama plans to head to the U.S. Capitol today to press Senate Democrats to agree on health legislation as lawmakers struggle to resolve disputes over a proposed government-run insurance plan and other issues. Democrats met throughout yesterday to seek an alternative to Senate Majority Harry Reid’s plan to create the new national program to cover the uninsured. Opposition within his party leaves Reid at risk of falling four votes short of the 60 he needs to pass the legislation, the most sweeping overhaul of the nation’s health-care system in more than four decades. Obama’s scheduled visit comes as the bill’s backers need a jolt to come together, said Massachusetts Democrat John Kerry . “We have to talk about how to put the final pieces together,” Kerry said. “It’s good to hear from the president now, because it’s getting to that stage where you have to come to a decision with your heart as well as your head.” Reid called the rare weekend session to meet his deadline of getting a bill by year-end. Republicans, unified in opposition, forced the Democrats yesterday to reiterate their support for cutting more than $40 billion in home health-care services funding under Medicare. It was the latest Republican effort to highlight the bill’s potential impact on the elderly. Senate Minority Leader Mitch McConnell of Kentucky said Republicans see the debate stretching into 2010 and that they gain the more the public learns. Republicans say Obama’s visit reflects a weakening Democratic position. ‘Wrong Direction’ “The vote tally must be going in the wrong direction,” said Senator Richard Burr , a North Carolina Republican. The $848 billion Senate bill would make the biggest changes to the health system since creation of the government Medicare program for the elderly in 1965. The 10-year measure is designed to cover 31 million uninsured people and curb medical costs . Like a $1 trillion bill that the U.S. House passed on Nov. 7, the Senate plan would require all Americans to get health coverage or pay a penalty. It would expand the Medicaid health program for the poor, set up insurance-purchasing exchanges and provide subsidies for those who need help buying policies. Reid, a Nevada Democrat, is working behind closed doors to settle issues ranging from how strictly to prohibit federal funding for abortions to how to shape the so-called public option. Insurers’ Compensation An amendment targeting insurance executive pay, proposed by Arkansas Democrat Blanche Lincoln , may come up for a vote today. It would cap tax-deductible salaries at $400,000 instead of the current national limit of $1 million. The legislation before the Senate already has a $500,000 cap. The lawmakers postponed the vote yesterday. The Senate also turned back a Republican bid to restore the home health services funding. The Republicans are trying to draw attention to the impact on the elderly from some $400 billion in proposed Medicare savings. Debate could come as early as tomorrow on a bipartisan amendment that would allow imports of lower-cost prescription drugs from countries such as Canada, a proposal that is opposed by Eli Lilly & Co. and other drugmakers. That proposal was drafted by North Dakota Democrat Byron Dorgan and Maine Republican Olympia Snowe . Senator Ben Nelson , a Nebraska Democrat, this week will offer an amendment preventing federal funds from being used for abortions in an effort to bring the legislation in line with what the House passed. Nelson is threatening to oppose the bill without the language. Public Option He also joins three other senators in the Democratic caucus who say they won’t back a bill that has a public option. The public option has been a lightning rod in the debate since Democrats began drafting the legislation in the spring. All Republicans in both chambers oppose creation of the government program, which many say could crowd out private insurers and become a precursor for a government takeover of health care. Senate Democrats Lincoln and Mary Landrieu of Louisiana and Independent Joe Lieberman of Connecticut join Nelson in opposing such a program. Snowe participated in one small meeting yesterday of Senate Democratic moderates. She said she and Kerry are reviving her proposal to have a national government insurance program only as a fallback, and utilized in states where there is evidence private insurance isn’t affordable enough for people with lower incomes. It may be offered as an amendment on the floor, she said. Can’t Back Reid Snowe said she won’t back what Reid has put on the Senate floor because the public program is in the legislation, with a state opt-out. Senator Mark Begich , an Alaska Democrat, said senators are discussing other approaches centering on requiring states where insurance premiums are deemed too high to provide an alternative to private insurance that would be provided by a non-profit entity. “My biggest concern is the cost to the government at the back end,” Begich said of the public option. Arkansas Democrat Lincoln said the government should be out of the picture completely. “We want to increase options and choices for our constituents,” she said. “I think we can get there.” To contact the reporters on this story: Laura Litvan in Washington at llitvan@bloomberg.net

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Third-Quarter GDP Number Revised Down

November 24, 2009

WASHINGTON (AP) — The economy is growing modestly, with consumers too wary about spending to invigorate the recovery. That’s the picture that emerged from reports Tuesday on the economy and the confidence of consumers, who power 70 percent of it. Unemployment and tight credit have sapped shoppers’ willingness and ability to spend freely as retailers enter their crucial holiday season. And Americans are expected to grow more cautious about spending next year. That would make for a plodding recovery. The economy grew at a 2.8 percent rate last quarter, a significant revision of initial figures putting the growth rate at 3.5 percent. Forecasts for the current quarter are for similarly lackluster growth before a drop-off next year. “It’s hardly a rip-roaring recovery,” said Stuart Hoffman, chief economist at PNC Financial Services. “Usually coming out of a recession you get growth more like a rodeo bull — at a pace of 6 or 7 percent in the early quarters of recovery. That isn’t happening. It is coming out of the stalls more like a fat cow.” New York Times columnist Paul Krugman sounded more dire . “This is really quite grim. At this growth rate it’s far from clear that we’re doing anything to reduce the output gap — the gap between what the economy could produce and what it’s actually producing. Correspondingly, there’s no reason now for even a bit of optimism on unemployment.” The Commerce Department’s revised estimate of gross domestic product for July through September was less than the 3.5 percent growth rate foreseen just a month ago. And the estimate for GDP — the value of goods and services produced in the United States — was a tad less than the 2.9 percent growth rate that economists surveyed by Thomson Reuters had expected. The main factors behind the downgrade: Consumers didn’t spend as much. Commercial construction weakened. And imports exerted more of a drag on the economy. Businesses also trimmed more of their stockpiles, further restraining growth. At the same time, the Conference Board’s latest survey of consumer confidence found gloom among shoppers. “I really won’t be spending money on Christmas,” said Ivan Horne, 47, of Tampa, Fla., who has been out of work for about a year. “I’m barely able to make enough to survive.” An Associated Press-GfK poll released this week found that 93 percent of Americans say they’ll spend less this holiday season or about the same as last year. Also Tuesday, the Standard & Poor’s/Case-Shiller home price index of 20 major cities suggested that the summer’s trend of rising home prices is slowing. And analysts expect prices to dip again this winter as foreclosures rise. The tepid reading on economic growth and consumer confidence caused stocks to retreat from their 13-month highs. Over the past few months, though, the stock market has surged. A rally on Monday carried the Dow up 133 points to its highest point in just over a year. In part, stocks have been powered by a weak dollar and low interest rates. Lower rates let companies and investors borrow cheaply. They also cause some to shift money out of cash and bonds and into investments that promise higher returns, such as stocks. Stocks also have benefited from higher corporate profits. Companies have managed to squeeze out more profits without the cost of higher production or payrolls. They’ve done so by boosting their workers’ productivity and drawing down their existing stockpiles of goods. The GDP report showed the economy finally started to grow again from July through September, after a record four straight losing quarters. Yet growth probably won’t be strong enough to quickly drive down the nation’s unemployment rate, now at 10.2 percent. For the current quarter, some analysts think economic growth will slow to around a 2.5 percent pace, but it could hit a pace of around 3 percent if holiday sales turn out better than expected. Though cautious, consumers are holding up despite high personal debt, a tight job market and hard-to-get credit. A government report out Wednesday is expected to show consumer spending rose 0.5 percent in October, compared with a 0.5 percent drop in September. Incomes, the fuel for future spending, are expected to edge up 0.2 percent, after being flat. Many economists say they think the economy will weaken again next year. Some project growth at a pace of around 1 percent as the benefits of the $787 billion stimulus package fade and consumers keep tightening. “I think when the bills come in January, you’ll see consumers pull back,” said Brian Bethune, economist at IHS Global Insight. “It’s going to be a slow-motion recovery.” In the third quarter, the Cash for Clunkers rebates and an $8,000 tax credit for first-time homebuyers juiced up sales of cars and homes. The clunkers program ended in August. But the tax credit has been extended and expanded beyond first-time buyers. It’s unclear whether the recovery can endure after government supports are gone. If consumers clam up, the economy could tip back into recession.

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Palin’s Chances in Future Presidential Run May Require `Pygmalion Project’

November 20, 2009

By Heidi Przybyla Nov. 20 (Bloomberg) — Sarah Palin is trying for a second chance at a first impression. The 2008 Republican vice presidential candidate and former Alaska governor has blitzed back into the spotlight with a promotional tour for her memoir, “ Going Rogue: An American Life ,” that may mark the first steps of a political comeback. She has done interviews with Oprah Winfrey and Barbara Walters , and the autobiography ranks No. 1 in sales on Amazon.com . The success of the book provides a measure of her potential for a comeback. Palin, 45, has also demonstrated her ability to connect with grassroots activists in her party who play an outsize role in the presidential-nominating process. So far, that hasn’t translated into broader appeal: 60 percent of Americans say they believe Palin isn’t qualified to be president, a Nov. 12-15 ABC News/Washington Post poll found. Still, she hasn’t ruled out a run for the White House in 2012. “That certainly isn’t on my radar screen right now,” Palin told Walters. “When you consider some of the ordinary turning into extraordinary events that have happened in my life, I am not one to predict what will happen in a few years.” Since her book tour began this week, wagers on Intrade.com set her prospects of winning the Republican nomination at 22 percent, just behind former Massachusetts Governor Mitt Romney and Minnesota Governor Tim Pawlenty . ‘Everyday Americans’ In the interviews, Palin said she and her family represent a counterweight to the Washington elite, who don’t understand the concerns of “everyday Americans.” No U.S. president has hailed from Alaska, which is better known for its Trans-Alaska Pipeline System and oil companies with operations there such as Exxon Mobil Corp. and ConocoPhillips . Her husband, Todd, worked for oil company BP Plc on the state’s North Slope. There are precedents for a comeback. Ronald Reagan became president after losing the Republican nomination in 1976. Richard Nixon returned to public life after losing his 1960 presidential campaign and his bid for California governor in 1962, when he told reporters, “You won’t have Nixon to kick around anymore.” Much like Reagan, Palin’s support comes from the grassroots and not Republican political leaders in Washington. Redeeming Herself “She’s not going to drive that bus through Washington,” said Tucker Eskew , a counselor to Palin during the campaign. “It’ll go through suburban Florida and Midwestern heartland villages and a lot of Web sites.” Calls to Palin’s political action committee weren’t immediately returned. Nationally, the Post poll shows 43 percent of Americans view Palin favorably, compared with 52 percent who regard her unfavorably. “She wants to redeem herself, but it’s still an open question whether she wants to reinvent herself as a presidential candidate” like Reagan, said Bruce Buchanan , a presidential historian at the University of Texas in Austin. Activists such as the Tea Party Patriots, who identify with Palin’s limited-government philosophy, and Smart Girl Politics, a group that promotes politically conservative women, could be at the core of any Palin rebound. Taking in Cash Her ability to raise money will also be key: Palin’s political action committee took in $732,868 in its first six months and had $456,667 in the bank at the end of June, Federal Election Commission reports show. She scored a $1.25 million advance for her memoir, according to a disclosure statement. The book is more personal than political, delving into her teenage daughter’s pregnancy, her special-needs child with Down syndrome and her life in Alaska. She also criticizes members of 2008 Republican presidential candidate John McCain’s team. Much of Washington’s Republican “establishment” remains skeptical, said Ed Goeas , a former adviser to McCain. “There’s a certain amount of elitism in this town,” he said. “Most of middle America did not go to an Ivy League school and they work hard and play by the rules: Those are the people that she connected with.” Francisco Gonzalez, the lead organizer of an anti-big government Tea Party protest in Tallahassee, Florida, said Palin’s popularity in the grassroots “is very strong.” Book Signings Palin has had book signings so far in Michigan and Indiana. Still, most Republicans said it isn’t clear whether that prominence will provide enough strength for Palin to make a run at the presidency. Her book’s popularity won’t be enough to recast her image, said Ron Kaufman , a former senior adviser to 2008 Republican presidential candidate Romney. “Once you’re painted into the picture fairly or, mostly unfairly, changing that perception is the hardest thing to do,” Kaufman said. Nixon is an exception. In 1968, he positioned himself to lead the party to victory as rising opposition to the Vietnam War led President Lyndon Johnson to give up a bid for re- election. Buchanan said Palin is unlikely to ride to the top of the ticket on the current administration’s woes and her grassroots support alone. “She would have to be somebody’s Pygmalion project,” he said. To contact the reporter on this story: Heidi Przybyla at hprzybyla@bloomberg.net .

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New Orleanians Find Reason to Let Good Times Roll: Ann Woolner

November 19, 2009

Commentary by Ann Woolner Nov. 20 (Bloomberg) — Picture Hurricane Katrina without the broken levees, with minor flooding that quickly drained, with no folks chopping through the attics of New Orleans in desperate hope of rooftop rescue. So it might have been if the U.S. Army Corps of Engineers hadn’t flunked its job so completely and so repeatedly. This week U.S. District Judge Stanwood Duval Jr . ordered the Corps to pay five flood victims $720,000, a pittance compared with what they should get. But the law makes it nearly impossible to win a case against the Corps, so the fact they won anything makes the ruling monumental. However small, the award speaks to the vast scope of the Corps’ negligence. The ruling, 156 pages long and meticulous in its recounting of events and evidence, could help 100,000 victims or more collect, too. To understand why such a puny sum makes such a huge statement, consider that a 1928 law immunizes the government against claims that its flood-control projects don’t work. So last year Duval ruled he could do nothing to force the government to compensate plaintiffs for the collapse of its various flood-control structures. That he wished he could was clear. He cited the “catastrophic failure of the Corps to fulfill its mission” and lamented that under the 1928 law “gross incompetence receives the same treatment as simple mistake.” Shipping Shortcut But that wasn’t the end of the case. The plaintiffs say the Corps made the devastation worse by building a canal as a shipping shortcut and letting it deteriorate. That’s what sent much of the flood waters over the Lower 9th Ward of New Orleans and nearby St. Bernard Parish. Seventy-six miles long, the Mississippi River-Gulf Outlet, known locally as MR-GO or Mr. Go, connects New Orleans’s inner harbor with the Gulf of Mexico. The beauty of it, from the plaintiffs’ standpoint, is that it was built for navigation. That means it isn’t protected by the 1928 law , which only immunizes the Corps for flood-control projects gone bad. Even then, the Corps won some immunity because the channel’s construction was a matter of government “policy.” Any issues related to its design or construction are off limits. So, let’s recap to ponder the breadth of the government’s immunity, according to an obviously reluctant Duval. Even if the Corps knew its levees, pumps and drainage canals couldn’t protect New Orleans against hurricane-driven flooding, no flooding&cle;, no matter the extent of its negligence, it was safe from liability. Legal Cover Likewise the Corps had legal cover for anything related to the way even the navigation channel was built. Still, that wasn’t the end of the case. So massive were the government’s failures that some of them slipped out from under the generous protection of the law. The Corps could still be sued for the way it operated and maintained MR-GO. And the government made such a horrific mess of it that it created a breach of a critical levee. The constant pounding of ships’ waves against the banks of the canal so degraded them that the channel’s width had doubled and, in some places, tripled. Its levees had sunk to dangerously low heights. The Corps knew by 1988 that the ever-worsening condition of MR-GO “threatened human life” and had ideas how to fix it. And yet, the Corps “did not act in time to prevent the catastrophic disaster,” Duval wrote. Degraded Wetlands The channel degraded wetlands, which made the area more vulnerable to hurricane damage. In various parts of MR-GO, critical shoring up either never happened or was too late or too flimsy to be of much help, wrote Duval, who presided over a month-long trial in April. All the Corps wanted to do was keep the channel open to deep-water shipping, paying no attention to human or environmental consequences. The Corps claimed at trial that any weaknesses of MR-GO weren’t to blame for the flooding. After the ruling, the Justice Department said it would review the matter before commenting. The puny awards to the plaintiffs don’t reflect the vast damage the Corps did, or that the judge found its top expert “prevaricated” or that government claims directly contradicted proven facts. The degree to which plaintiffs won compensation depended on how much of their flood damage could be attributable to the levee breach caused by MR-GO’s condition. Some got none, some got partial compensation, some got it all. The government will no doubt appeal. And perhaps a higher court will find even the Corps’ gross negligence in maintaining MR-GO to be immunized somehow. But the ruling should motivate Congress and the Obama administration to stop defending the indefensible and settle with the Corps’ Katrina victims. ( Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.) To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net .

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Bentley’s $273,000 Speed Demon Is Slow to Drink Biofuel: Jason H. Harper

November 19, 2009

Review by Jason H. Harper Nov. 19 (Bloomberg) — The elite are in trouble. Those exotic carmakers who produce fewer than 10,000 cars a year are looking at future fuel regulations and are realizing they need a plan. Fast. Coming up with an alternative-fuel powertrain is a big leap, especially since it’s harder than ever to move $200,000 cars right now. So it is with Bentley, the once-English brand now owned by Volkswagen Group . Its best-selling models are the souped-up Speed models of its Continental GT coupe and convertible. Now, the follow-up is the uber-alpha-zoom-zoom model, the $273,000 Continental Supersports, which hits 60 in 3.7 seconds and has a top speed of 204 mph. Best throw a bone to the environmentalists, though, no matter how small or lame. So the Supersports is flex-fuel capable, meaning it can also burn bio-fuel that comes from renewable sources like corn and sugar cane, versus just the high-octane stuff at the pump. Problem solved. Well, not quite. E85 biofuel is exceedingly rare outside of the Midwest — owing to smaller corn supplies and local politics — and I can’t imagine Amex Black cardholders demanding it at their local stations. Anyway, you won’t be able to buy one of those flex- fuel vehicles in the U.S. for quite some time — just the regular old petrol-burning version. At a recent press conference about the Supersports’s flex- fuel capabilities, nobody once mentioned that pertinent point. It wasn’t until pressing representatives that I realized my black-on-black test car had a standard, if amazingly powerful, Bentley twin-turbo W-12. If you put ethanol in there, bad things would happen. Gasoline Fueled The holdup, the company says, is the U.S. approval process. The first 200 models sent here will be normal engines, and it will presumably take some time to sell them. Basic flex-fuel technology is not new. General Motors has used it for years, and for the 2010 model year, all full-size trucks and SUVS from both GM and Ford can run on ethanol. Other high-ticket automakers are also looking to the future. Ferrari says it will build a hybrid. Rolls-Royce’s chief has said he would like to see an electric Phantom. It’s too bad about the Supersports’S poor green credentials, because in the plain, old, Old-World world, the vehicle is phenomenal. “This is our interpretation of a supercar,” Christophe Georges , Bentley’s president and chief operating officer, told me. “Performance-wise it competes with the Ferrari 599 and Aston Martin DBS, but it’s still a Bentley.” Refined Comfort By that he means comfort is an imperative, as are the reserved but formidable looks. As for the supercar claim, the Supersports is certainly not your average loll-around-town Bentley. Powered by the W-12, which puts out a walloping 621 horsepower and 590 pound-feet of torque, this 5,000-pound machine moves to 60 mph about as fast as a Ferrari F430. I had simply expected a more powerful version of the GT Speed, yet the Supersports is so thoroughly revised as to become something else. Versus the Speed, the Supersports loses the back seats and 243 pounds; has a reworked all-wheel-drive system and keener front suspension; boasts the largest carbon-ceramic brakes ever made on a production car; and comes with a faster automatic transmission. The result is almost unbelievable drive quality. It’s the picture of poise. Over hundreds of miles of rolling hills, wet pavement, gravel and bumpy parts of New Jersey, which haven’t seen a work crew since the first season of the “Sopranos,” the chassis never felt unsettled. Not once. Eating Asphalt This car positively gobbled asphalt, seemingly shoving it into the mesh grill and expelling it out the fat elongated twin tailpipes. In a sense it reminded me of the Nissan GTR, a sports car legendary for its ability to smooth out driver error and crappy roads. It feels a bit effortless. Consider it speed with the Bentley touch. Even around town you can sense the power, a low undulating throb akin to walking in the foyer of the White House. Press on the gas pedal and it doesn’t shove you back in the seat like a Bugatti Veyron or Dodge Viper; rather the digital speedometer begins silkily rolling through numbers. While my bank account tells me that there are 273,000 reasons I couldn’t own this car, the most important one is the fact I’d be on first-name terms with every police officer north of the Mason-Dixon line. Flared Haunches Its styling differences are subtle. The Supersports is wider in the rear, the haunches a bit more flared, the tail pipes wider. There’s no badging at all, no obvious sign that you’ve anted up an extra $80,000 or so over the regular Continental GT. The interior is stunning, a mix of shiny metal, quilted Alcantara and carbon-fiber weave. The seats are actual racing seats which adjust manually and offer pincer-tight bolstering and hard padding. Many drivers will find them uncomfortable. By the standards of yesteryear, the Supersports is a fabulous machine. As a herald of the green future, it falls on its butt. The 2010 Bentley Continental Supersports at a Glance Engine: Twin-turbo W-12 with 621 horsepower and 590 pound- feet of torque. Transmission: six-speed automatic. Speed: 0 to 60 mph in 3.7 seconds. Gas mileage per gallon: 13 city; 24 highway. Price as tested: $274,615. Best feature: Incredible handling and speed, hard-core enthusiast’s interior. Worst feature: its eco cred is more like a PR stunt. Target buyer: The road burner who mostly is concerned with only one type of green. ( Jason H. Harper writes about autos for Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: Jason H. Harper at Jason@JasonHharper.com .

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Massacre at Fort Hood Prompts U.S. Army to Re-Examine Stress on Soldiers

November 7, 2009

By Jeff Bliss and Viola Gienger Nov. 7 (Bloomberg) — The shooting that killed 13 people on a U.S. Army base in Texas has spurred the Obama administration to re-examine the stresses on a military force that has been at war for eight years. In the aftermath of Major Nidal Malik Hasan allegedly shooting fellow soldiers at Fort Hood Army Base on Nov. 5, officials said they are redoubling efforts to study the impact of multiple redeployments and battlefield experiences. “We have been trying very hard to understand the effects of stress, to understand the causes of everything from domestic violence to suicide to other crimes,” Army Secretary John McHugh told reporters at the base yesterday. In 2008, the trend of military suicide rates being historically lower than the civilian population reversed, according to the National Institutes of Mental Health. The stresses of repeated and longer deployments are “important potential contributors,” the institute says on a Web page outlining the study. For the first nine months of this year, the Army reported 117 suspected suicides among active-duty personnel, with 81 confirmed and 36 cases in which the cause of death hasn’t yet been determined. That compares with 103 suicides in the year- earlier period. President Barack Obama talked with Defense Secretary Robert Gates about military morale hours after the Fort Hood shooting, White House spokesman Robert Gibbs said yesterday. “That’s something that’s on their minds and Admiral Mullen’s as well,” he said, referring to Mike Mullen , chairman of the U.S. Joint Chiefs of Staff. Army ‘Stretched’ General George Casey , the U.S. Army chief of staff, said that the demands of the Afghanistan and Iraq wars have “stretched” the Army. Still, he said, “it’s way too early” to say whether the shooting signals that the Army isn’t big enough to do the job being asked of it. McHugh said that Hasan, an Army psychiatrist, hadn’t indicated he needed help before he entered a crowded medical processing center with two handguns and opened fire. “You have an alleged actor, who did not reach out, who in fact did not do a lot of things” to indicate he was troubled, McHugh said. The Army’s Criminal Investigation Command and the Federal Bureau of Investigation are probing what triggered the attack in which, along with the 13 deaths, 30 people suffered wounds that required their hospitalization. Colonel John Rossi, the deputy commander at the base, said at a press conference last night that 23 of the wounded remained hospitalized. Hasan’s Condition Hasan was shot and wounded by a Fort Hood police officer. Rossi said Hasan was moved yesterday to Brooke Army Medical Center in San Antonio. He “was intubated and not able to converse,” Rossi said. Federal authorities seized Hasan’s computer early yesterday, said U.S. Representative Michael McCaul , a Texas Republican. The authorities also searched his apartment in nearby Killeen, Texas, said Hilary Shine, a spokeswoman for the city. Investigators are examining materials Hasan had with him during the shooting and evidence recovered from his vehicle, which was found parked on the base, a military official told the Associated Press. Senator Kay Bailey Hutchison , a Texas Republican, said she was told by Fort Hood authorities the suspect was about to be deployed to Iraq or Afghanistan and had been “very upset and angry” in the past few days. War on Islam Hasan, 39, regularly described the war on terrorism as “a war against Islam,” according to a doctor who was in a graduate program with him. While studying for a master’s degree in public health in 2007, Hasan used a presentation for an environmental health class to argue that Muslims were being targeted by the U.S. anti-terror campaign, said Val Finnell, a classmate. “He was very vocal about the war, very upfront about being a Muslim first and an American second,” Finnell, 41, a preventive medicine doctor in Los Angeles, said in an interview yesterday. “He was always concerned that Muslims in the military were being persecuted.” Hasan was a devout Muslim and had sought for several years to be discharged from the military, the Washington Post reported, citing his aunt. Noel Hasan told the paper her nephew endured name-calling and harassment about his faith for years after the Sept. 11, 2001, attacks on New York and the Pentagon. Hasan’s family doesn’t know what prompted the shooting, said Nader Hasan, a cousin who lives in Virginia, in an e- mailed statement yesterday. ‘Mortified’ “Our family is filled with grief for the victims and their families involved,” the statement said. “We are mortified and there is no justification, whatsoever, for what happened. Everyone is asking why this happened — and the answer is that we simply do not know. We cannot explain, nor do we excuse or understand what happened.” The family has spoken with the FBI and will continue to cooperate, according to the statement. The Virginia Board of Medicine lists Hasan as a licensed physician with a primary practice at the Darnall Army Medical Center at Fort Hood. It says he completed a residency in psychiatry at the Walter Reed Army Medical Center in Washington in 2007 and a fellowship in disaster and preventive psychiatry in 2009. McCaul said Hasan’s experience at Walter Reed, where many soldiers wounded in Afghanistan and Iraq are treated, may have played a role in his behavior. ‘Poor Evaluation’ “The picture I am seeing is an individual who had a poor evaluation at Walter Reed,” McCaul said. “He obviously snapped.” McCaul, a member of the House Homeland Security Committee, also said that Hasan’s professional problems and reservations about the war may have played a role in the shootings. He said shooting witnesses told him that Hasan said, “Allahu Akbar,” or God is great, as he fired. “We are getting the picture of a guy who’s maybe internally radicalizing himself,” he said. General Will Grimsley , deputy commander of III Corps, said Hasan fired only one weapon, a Belgian-make semi-automatic machine pistol with an extended magazine. He said Hasan reloaded and fired more than 100 rounds. Investigators are still finding shell casings, he said. Hasan also carried a .357 magnum handgun but apparently didn’t fire it, Grimsley said. Weapon Ownership Rossi, at his press conference last night, said the weapons weren’t issued by the military. They were owned by Hasan and bought locally. Rossi also told reporters it didn’t appear there were incidents of so-called friendly fire striking anyone during the shootout. Military officials praised the quick actions of soldiers and civilian officers who responded to the shooting and tended to the wounded and dying. Kimberly Munley, a civilian police officer, was credited with firing the shots that hit Hasan and stopped the rampage. Munley was wounded as she exchanged gunfire with Hasan and was in stable condition as of last night, Rossi said. Some of the 138 soldiers graduating from college extension courses at a ceremony 164 feet (50 meters) away from the shootings ran in their caps and gowns to offer aid after hearing gunfire, Casey said. Rescued Buddies One private heard gunshots, “went back after his buddies, and with the help of others, dragged four badly wounded individuals into his pickup truck and drove them to the emergency room,” he said. Hasan transferred to Fort Hood in July, said Colonel Kimberly Kesling, deputy commander of clinical services at the medical center. She told reporters she helped oversee Hasan and had no indication he was unstable. McCaul said the FBI six months ago saw a Web posting by a “ Nidal Hasan ” that interested them. The posting equated suicide bombers with a soldier throwing himself on a grenade to save the lives of his comrades. Officials are trying to confirm whether Hasan was the author of the postings. Future Probes Lawmakers said if the postings turn out to be Hasan’s, they want to probe why more wasn’t done to monitor him. “I am absolutely concerned about the actions that either were taken or were not taken,” said Representative Sheila Jackson Lee , a Texas Democrat who serves on the Homeland Security Committee. Jackson Lee, a subcommittee chairwoman on the panel, said she would press for a “full investigation” that may involve several House committees. McHugh said that in the wake of the shooting, Army officials will be looking into better ways to identify early signs of a soldier having problems. “We have to understand what caused that suspect to act in the way in which he did and derive back from that programs that can make a difference,” he said. To contact the reporters on this story: Jeff Bliss in Washington jbliss@bloomberg.net ; Viola Gienger in Washington at vgienger@bloomberg.net .

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New Bill Would Keep Public In The Dark About Threats To Financial System

November 6, 2009

Members of Congress and the general public may not be told of “potential emerging threats to the stability of the financial system,” thanks to a Thursday vote by a House panel shepherding the bill that’s supposed to end “too big to fail.” An amendment offered by Rep. Gregory Meeks (D-N.Y.) and unanimously approved by a voice vote in the House Financial Services Committee specifically deletes a provision in the Financial Stability Improvement Act of 2009 . The two draft versions of the bill originally called for the proposed overseer of threats to the entire financial system to prepare an annual report to Congress describing, among other things, “significant financial market developments and potential emerging threats to the stability of the financial system.” But on Thursday, Meeks’ amendment deleted that language and instead compels the council to describe: “Significant financial and regulatory developments, including insurance and accounting regulations and standards, and assesses the impact of those developments on the stability of the financial system.” Thus, “potential emerging threats” was replaced by “financial and regulatory developments.” Groups advocating for financial reform criticized the move. “Instead of looking out and actually trying to protect the system, the goal appears to be to make sure we have the regulatory structure that is most amenable to corporate interests of anywhere in the world,” said Heather Slavkin, senior legal and policy adviser at AFL-CIO. “It’s a complete shift in the purpose and goal of the [systemic risk regulator]. Barbara Roper, director of investor protection at the Consumer Federation of America, said of Meeks’ amendment, “that language is a prescription for a race to the bottom in terms of regulation.” During Thursday’s debate, Rep. Mel Watt, a senior Democrat on the committee, also expressed concern about another aspect of Meeks’ amendment. The amendment additionally calls for the council to monitor international developments in financial, insurance and accounting regulations, and to specifically identify those that may “place United States financial services firms or United States financial markets at a competitive disadvantage.” “Part of what we’re addressing here when we deal with systemic risk is a race to the bottom,” said Watt, of North Carolina. “We need to be careful not to leave the impression that competitive disadvantage trumps safety and soundness.” During the debate, Meeks defended his amendment: We must work with our counterparts around the world to elevate the playing field to a higher global standard, monitor international regulatory developments to ensure that our firms remain globally competitive and to prevent international regulatory shopping, and the inevitable buildup of systemic risk outside our borders, outside of our regulatory reach, and beyond our capacity to act. As happened domestically with individual regulators in the years leading up of the financial crisis, it is quite possible for the members of the council to become so focused on the domestic trees that they fail to see the forest of the international regulatory landscape and its evolution. This amendment would explicitly require them to monitor this global landscape, its impact on the competitiveness of the American financial sector, as well as any new emerging pockets of systemic risks which could spill over into our economy, triggering another financial crisis. In June the Obama administration released a white paper outlining its plan to reform the way banks and financial firms are regulated. There were gaps in the system, simply put, which played a role in the collapse last fall. In that paper, the administration called for the formation of the council. It would identify “emerging systemic risks” and “emerging risks in firms and market activities.” It would also “identify gaps in regulation and prepare an annual report to Congress on market developments and potential emerging risks.” The bill that emerged calls for a council to oversee risks to the entire financial system, which includes firms and activities that pose such a risk. The firms that required billions in taxpayer funds to keep them afloat, like Citigroup and AIG , and those that ultimately flopped, like Lehman Brothers and Bear Stearns , are the kind of financial companies the bill would target. The activities include some of the things that worsened the crisis last fall, like firms’ unfunded liabilities — which ultimately were paid by taxpayers, like the billions paid out to honor AIG’s derivatives contracts . Now, the bill in Chairman Barney Frank’s Financial Services committee does call for this proposed council to look for and address such dangers; however, Meeks’ amendment deleted the provision that the information be relayed to Congress, and thus the public. In an interview, Meeks’ legislative director, Milan Dalal, said the bill’s original language of “potential emerging threats” was “very dangerous. The purpose is to make the language clearer and more concise.” Dalal added that regulators may “have different definitions of ‘threats’” and that Meeks’ amendment does not necessarily preclude the council from reporting to Congress and the public threats that exist to the financial system. “It’s not just threats. We’re trying to make it so the regulators have more information to look at,” he said. “We’re looking at developments as well. “There might be a new development that we might want to take into account, like ‘Oh, England is doing something that we think we should take a look at as well, and consider implementing. It may not be a threat that’s going on over there, but it’s something that we might want to consider as well.” CFA’s Roper remains skeptical. “You do start to get the picture that the legislation responding to a crisis that was brought about by lax regulation will perpetuate that same approach.”

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Google-Fueled Droid Attacks IPhone With Flash: Tech by Rich Jaroslovsky

November 5, 2009

Commentary by Rich Jaroslovsky Nov. 6 (Bloomberg) — “It’s kind of heavy, isn’t it?” Those are the first words people seem to utter when they heft a Droid smart phone. And the answer is, yeah, it is –maybe because so much is packed into it. Start with the ambitions of Google Inc. , whose Android 2.0 operating system powers it, and Verizon Wireless, which is backing it in the U.S. with a huge marketing campaign. And don’t forget the prayers of Motorola Inc. , the humbled former wireless-phone king, which is betting its future on Android. Well, they can relax. Weight notwithstanding, the Droid may be the best smart phone not made by Apple Inc. And if it doesn’t convert legions of iPhone addicts, it still provides a terrific alternative for Verizon customers, as well as for non-U.S. users when it appears later this month as the Motorola Milestone . The Droid was the standout among three new phones I’ve been trying out. The others, both BlackBerrys from Research In Motion Ltd. , will find devotees among RIM’s faithful customer base and those who must carry a BlackBerry for business reasons. But it’s hard to see them winning many new fans. This is a golden era for smart phones, which are really pocket computers that can surf the Web, retrieve e-mail, run programs and play video and games. The iPhone, with its ease of use and 100,000 applications, sets the bar. But there are some things it doesn’t allow that Droid does: running programs simultaneously, replacing the battery, correctly displaying Web sites that use Adobe Systems Inc .’s Flash multimedia technology. And U.S. iPhone users are locked into AT&T Inc. ’s network, which is inferior to Verizon’s in much of the country. Chunkier Than iPhone The Droid will cost $199.99, after a $100 rebate, on a two- year contract; it shouldn’t be confused with a cheaper phone made by HTC Corp. that Verizon confirmed today it is launching as the “Droid Eris.” Compared with the iPhone, the Droid is longer, thicker, narrower and, at 6 ounces, 25 percent heavier. (Six ounces may not seem like much, but you definitely feel the difference.) The touch screen, which provides the sensation of physically pushing a button, is particularly dazzling, offering noticeably sharper resolution. Your first look at the Droid’s slide-out keyboard might not be encouraging: The keys are flat and undifferentiated. But typing proves surprisingly easy; they are large enough so you can use your fingertip, rather than the fingernail that I had to resort to on, say, Palm Inc. ’s Pre. Too Much Navigating Less useful is the five-way navigation pad, which requires too much pressure and constant monitoring of the screen to see what it is highlighting. I found myself using my finger on the screen for scrolling, highlighting and selecting, even if I was using the physical keyboard for typing. Also problematic is the camera. On paper, it looks great, boasting 5 megapixels and flash. But a lag between pressing the shutter and taking the picture meant that even slow-moving subjects yielded unsatisfying results. The Droid features a Google Maps app that includes turn-by- turn navigation, and it is the first phone to make use of “Éclair,” Google’s name for version 2.0 of its open-source Android operating system . Previous encounters with Android on devices such as the myTouch 3G from Deutsche Telekom AG’s T- Mobile unit left me lukewarm. Éclair, though, has a more finished feel. 10,000 Apps Its window-shade metaphor — slide the top shade down for alerts, the bottom one up for apps — works well with the Motorola hardware, and the number of available apps, now more than 10,000, is steadily climbing. Android seems well on its way toward establishing itself as an important platform for developers. Multitouch — the pinch and expand gestures that let you shrink or magnify what’s on the screen — is missing from the Droid but apparently will be enabled for the non-U.S. Milestone version, which will be available from carriers including Vodafone Group Plc , Verizon Communications Inc. ’s partner in Verizon Wireless, and Telefonica SA’s O2. The iPhone’s margin in apps and its seamless user experience still make it the best smart phone out there. But the wireless world is big enough for more than one excellent phone; in the Droid, it has another. Research in Motion’s new BlackBerry Storm2 isn’t excellent, but it’s a considerable improvement over its predecessor. The original Storm, released a year ago, was the first BlackBerry without a physical keyboard, and reviewers savaged it: The New York Times memorably labeled it the “ BlackBerry Dud ” for its sluggish performance, lack of WiFi and buggy software. BlackBerry Contender The Storm2 fixes a lot of things, adds some new features and generally allows BlackBerry to at least figure in any discussions about touch-screen smart phones. The most interesting feature of the Storm2 is a screen whose entire surface serves as a button, providing a tactile click when you press it, much like the touchpad on the current- model MacBook. (The clickiness goes away when the phone’s off.) If you’re like me, you’ll quickly banish the optional keyboard layouts that put more than one letter on a key. The touch-to-highlight, press-to-type system isn’t half-bad, though it would take a lot more practice before I could match my speed on either the iPhone or a traditional physical-keyboard BlackBerry. Positives for the Storm2 include WiFi (hooray!). Negatives are a clunky Web browser and many fewer apps than are available for the iPhone and Android devices. The Storm2 is available in the U.S. from Verizon for $179.99 on a two-year contract, and in Europe and South Africa through Vodafone. Finally, if you’re old-school BlackBerry — as in, “I’ll give up my physical keyboard when they pry it from my cold, dead fingers” — there’s the Bold 9700 , the newest iteration of the classic e-mail machine. Smaller and lighter than the previous Bold, it replaces the familiar trackball with a trackpad that makes scrolling easier. The new Bold goes on sale this month from AT&T and T-Mobile in the U.S. for $199 on a two-year contract, and from carriers including Vodafone and T-Mobile internationally. The T-Mobile version, for an extra fee, allows voice calls over WiFi networks. ( Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Rich Jaroslovsky in New York at rjaroslovsky@bloomberg.net .

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Google-Fueled Droid Attacks IPhone With Flash: Rich Jaroslovsky

November 5, 2009

Commentary by Rich Jaroslovsky Nov. 6 (Bloomberg) — “It’s kind of heavy, isn’t it?” Those are the first words people seem to utter when they heft a Droid smart phone. And the answer is, yeah, it is — maybe because so much is packed into it. Start with the ambitions of Google Inc. , whose Android 2.0 operating system powers it, and Verizon Wireless, which is backing it in the U.S. with a huge marketing campaign. And don’t forget the prayers of Motorola Inc. , the humbled former wireless-phone king, which is betting its future on Android. Well, they can relax. Weight notwithstanding, the Droid may be the best smart phone not made by Apple Inc. And if it doesn’t convert legions of iPhone addicts, it still provides a terrific alternative for Verizon customers, as well as for non-U.S. users when it appears later this month as the Motorola Milestone . The Droid was the standout among three new phones I’ve been trying out. The others, both BlackBerrys from Research In Motion Ltd. , will find devotees among RIM’s faithful customer base and those who must carry a BlackBerry for business reasons. But it’s hard to see them winning many new fans. This is a golden era for smart phones, which are really pocket computers that can surf the Web, retrieve e-mail, run programs and play video and games. The iPhone, with its ease of use and 100,000 applications, sets the bar. But there are some things it doesn’t allow — running programs simultaneously, replacing the battery, correctly displaying Web sites that use Adobe Systems Inc .’s Flash multimedia technology — that Droid does. And U.S. iPhone users are locked into AT&T Inc.’s network, which is inferior to Verizon’s in much of the country. Chunkier Than iPhone The Droid will cost $199.99, after a $100 rebate, on a two- year contract; it shouldn’t be confused with a cheaper phone made by HTC Corp. that Verizon is reportedly launching as the “Droid Eris.” Compared with the iPhone, the Droid is longer, thicker, narrower and, at 6 ounces, 25 percent heavier. (Six ounces may not seem like much, but you definitely feel the difference.) The touch screen, which provides the sensation of physically pushing a button, is particularly dazzling, offering noticeably sharper resolution. Your first look at the Droid’s slide-out keyboard might not be encouraging: The keys are flat and undifferentiated. But typing proves surprisingly easy; they are large enough so you can use your fingertip, rather than the fingernail that I had to resort to on, say, Palm Inc.’s Pre. Less useful is the five-way navigation pad, which requires too much pressure and constant monitoring of the screen to see what it is highlighting. I found myself using my finger on the screen for scrolling, highlighting and selecting, even if I was using the physical keyboard for typing. Shutter Lag Also problematic is the camera. On paper, it looks great, boasting 5 megapixels and flash. But a lag between pressing the shutter and taking the picture meant that even slow-moving subjects yielded unsatisfying results. The Droid is the first phone to make use of “Éclair,” Google’s name for version 2.0 of its open-source Android operating system . Previous encounters with Android on devices such as the myTouch 3G from Deutsche Telekom AG’s T-Mobile unit left me lukewarm. Éclair, though, has a more finished feel. Its window-shade metaphor — slide the top shade down for alerts, the bottom one up for apps — works well with the Motorola hardware, and the number of available apps, now 10,000, is steadily climbing. Android seems well on its way toward establishing itself as an important platform for developers. Screen Features Multitouch — the pinch and expand gestures that let you shrink or magnify what’s on the screen — is missing from the Droid but apparently will be enabled for the non-U.S. Milestone version, which will be available from carriers including Vodafone Group Plc , Verizon Communications Inc.’s partner in Verizon Wireless, and Telefonica SA’s O2. The iPhone’s margin in apps and its seamless user experience still make it the best smart phone out there. But the wireless world is big enough for more than one excellent phone; in the Droid, it has another. Research in Motion’s new BlackBerry Storm2 isn’t excellent, but it’s a considerable improvement over its predecessor. The original Storm, released a year ago, was the first BlackBerry without a physical keyboard, and reviewers savaged it: The New York Times memorably labeled it the “ BlackBerry Dud ” for its sluggish performance, lack of WiFi and buggy software. The Storm2 fixes a lot of things, adds some new features and generally allows BlackBerry to at least figure in any discussions about touch-screen smart phones. The most interesting feature of the Storm2 is a screen whose entire surface serves as a button, providing a tactile click when you press it, much like the touchpad on the current- model MacBook. (The clickiness goes away when the phone’s off.) Touch and Press If you’re like me, you’ll quickly banish the optional keyboard layouts that put more than one letter on a key. The touch-to-highlight, press-to-type system isn’t half-bad, though it would take a lot more practice before I could match my speed on either the iPhone or a traditional physical-keyboard BlackBerry. Positives for the Storm2 include WiFi (hooray!). Negatives are a clunky Web browser and many fewer apps than are available for the iPhone and Android devices. The Storm2 is available in the U.S. from Verizon for $179.99 on a two-year contract, and in Europe and South Africa through Vodafone. Finally, if you’re old-school BlackBerry — as in, “I’ll give up my physical keyboard when they pry it from my cold, dead fingers” — there’s the Bold 9700 , the newest iteration of the classic e-mail machine. Smaller and lighter than the previous Bold, it replaces the familiar trackball with a trackpad that makes scrolling easier. The new Bold goes on sale this month from AT&T and T-Mobile in the U.S. for $199 on a two-year contract, and from carriers including Vodafone and T-Mobile internationally. The T-Mobile version, for an extra fee, allows voice calls over WiFi networks. ( Rich Jaroslovsky is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Rich Jaroslovsky in New York at rjaroslovsky@bloomberg.net .

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David Adkins: Ending the Great Recession: It’s Going to Take More Than Just Stimulus

October 30, 2009

With $150 billion spent to date, the White House estimates that the Recovery Act has saved or created roughly one million jobs. This figure includes 650,000 direct jobs saved or created by state governments and contractors as well as an estimate prepared by the White House’s Council of Economic Advisers that stimulus spending created another 350,000 indirect jobs. Citizens across the country will soon be able to log on to www.recovery.gov to see how many of these jobs have come to their states and neighborhoods. Unfortunately, this data provides only an incomplete picture on where we have come so far in addressing the Great Recession, while offering little guidance on where we need to go next. State leaders have already begun to release their own estimates on the role the stimulus has played in combating unemployment. Maryland Governor Martin O’Malley reports that 14,000 Marylanders owe their jobs to stimulus spending. However, two-thirds of these jobs are the result of indirect effects of stimulus spending in the state rather than direct positions created or saved from specific projects. No matter how the data is diced, it will not end the political debate over the merits of what amounts to the largest domestic spending program in American history. Proponents will assert that with just a fifth of the spending and tax cuts in the stimulus out the door we are well on our way to creating or saving the 3.5 million jobs promised by the president. Opponents will point to the modest numbers of direct jobs created by the stimulus and the mounting federal deficit. Both camps make good arguments, but in debating the point we risk losing sight of a bigger challenge. Congressional Quarterly reported this week that job growth in America has been stagnant for almost a decade. The big unemployment numbers we are now posting are as much a product of an economy that is failing to come up with new engines of growth as they are about layoffs in construction firms or manufacturing plants. While the Recovery Act has made some important investments in economic sectors, such as green energy and biotechnology, that may ultimately prove to be strong engines of job growth, it is increasingly clear that exports will also need to be a big part of the picture. The traditional growth path for start-up companies has been to start selling locally, expand into regional or national markets, and only then turn your attention to markets overseas. Meanwhile similar start-ups in Europe or Canada focus internationally from the moment they set up shop — often with substantial government help. As we debate what government’s response should be to combating a still-growing unemployment rate we might want to take a page from our international competitors. According to a recent World Bank study, governments that invest in export promotion — programs designed to help small businesses find markets for their product overseas — generate as much as 40 dollars in new exports for every dollar they spend. This message has not been lost on America’s state governments who collectively spend almost $100 million each year on export promotion and investment attraction. This is a significant sum when you consider both the dire budget challenges faced by states and the fact that the entire budget for the U.S. Foreign and Commercial Service — the federal government’s global marketing arm — is just $240 million. The ultimate solution to the Great Recession may lie in growing the pie at home by building markets abroad. Fortunately, the costs involved in helping small businesses succeed in the global market place are a drop in the bucket compared to the eye popping price tag of the Recovery Act.

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Fortune’s Stanley Bing: This Is It! The Biggest (Secular) Dead Guy Ever!

October 27, 2009

Today is This Is It Day in Los Angeles. All the theaters at the swank new multiplex downtown are devoted to the premiere of Michael Jackson’s new posthumous movie, a lovely, gift-wrapped sausage made up of everything they could find on the floor after the Grade A beef left the factory. A host of the dead man’s stuff is also going to be sold today, including gloves, jackets, psychotically reverent oil paintings of the royal duke himself, gloves, vehicles, and gloves. Sixty percent of all Fandango activity is now said to be dedicated to fans going online for tickets to the picture, which will run in London for almost as long as he was supposed to. His management company AEG, as you recall, scheduled that never-ending gig in a vain attempt to recoup some of the money they had sunk into the King of Pop. I will always believe that it was the pressure of knowing he had to go out and do that job that drove the sleepless, terrified entertainer to what was, in effect, an assisted suicide. But AEG has to be happy now. You can almost feel the money gushing into their pockets. And given the state of his debt load, I believe it’s quite possible that his handlers will get to keep it all, with a little left over on the side for the kids, for optical reasons. Yes, when This Is It and associated projects are through, it’s quite clear that Michael Jackson will take his place as the most successful dead man of all time, leaving aside a number of religious figures who continue to generate significant revenue each year for their associated organizations. Prior holders of the crown include: — Elvis, who continues to attain in death the kind of annual financial performance that often eluded him in life; — Lenin, whose embalmed body was on display in the Kremlin for decades; — Shakespeare, who died so long ago that, while his plays have produced better ROI than most hedge funds, unfortunately makes nothing for himself and his heirs. Alive, Michael Jackson was a problem for the guys at AEG. Dead? He’s the best investment in the history of the business. You can almost hear them thinking, “Hey! Why didn’t we think of this sooner?” Who knows? Perhaps they did.

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Dean Baker: The American Bankers Association’s 15 Minutes of Fame in Chicago

October 26, 2009

Like termites, the American Bankers Association (ABA) does most of its damage in the dark. But, the ABA is getting a brief period in the limelight this week as a result of the Showdown in Chicago. The Showdown is a series of protests organized by a number of community groups and labor unions at the ABA’s annual convention. The protests are designed to call attention to the fact that the big banks, many of whom are in existence today only because of a taxpayer funded bailout, are now paying out huge bonuses to their executives. They are also spending money by the bucketful on lobbyists to obstruct meaningful financial reform. Meanwhile, tens of millions of people have lost their jobs and/or their homes due to the recession brought on by the banks’ recklessness. More than 1500 people took part in the first day of the showdown, as protesters confronted the bankers at their 1920s swing ball. Prior to crashing the ball, the protesters listened to a series of speakers condemn the bankers’ take the money and run business strategy. The list of speakers at the Showdown includes Richard Durbin, the Senate Majority Whip, and Sheila Bair, the head of the Federal Deposit Insurance Corporation. When it comes to passing meaningful reform, the ABA is well-positioned to win the inside game in Congress. They have the team of lobbyists and campaign dollars needed to stay on top of the details of legislation and to press their agenda with Congress. Those seeking to rein in the power of the big banks are seriously outgunned in Washington. However, the picture looks different outside the beltway. This is why the TARP went down to defeat on the initial House vote last September. Hundreds of thousands of people called their representatives in Congress to express outrage over the plan to hand banks hundreds of billions of dollars with almost no strings attached. The Showdown in Chicago is tapping into this same sense of popular outrage. It is very important first step. There will have to be many other showdowns in other parts of the country to win a victory over the big banks (and hopefully making them much less big), but this Showdown has gotten their attention. The big banks have a hard case to argue. Why should a country that supposedly idolizes the market have banks that are so big that the government is obligated to bail them out if they get into trouble? That is why Senator Durbin spoke at the Showdown. That is why Sheila Bair spoke at the Showdown. Even former Federal Reserve Board chairman Alan Greenspan argued for breaking up too big to fail banks. We just have to force Congress to get behind the effort to break up the banks. A few more successful showdowns can get Congress to see the light.

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Fortune’s Stanley Bing: Things That Don’t Work: The Universal Remote

October 26, 2009

I got a Universal Remote. Have any of you ever had one that worked? This one didn’t. Doesn’t. Won’t. I’ve had them in the past. But sometimes when you have an object that disappoints you, you try again a few years later. Like, a while back I tried to set up a wireless network in my apartment. It was a PC thing, with routers and PCMCIA cards and stuff like that. Didn’t work at all. Sputtered a lot. Died at inopportune times. I hated it. More recently, I got a Mac with built in Airporter. Got an Airport Extreme to go along with it. Bingo. Wireless up the wazoo. Love it. Some things, however, never change. I think I’ve already told you about my hate/hate relationship with Bluetooth. From the fact that my ear was not built to take the little dinglething in stride to the obnoxious anti-linking situation with whatever cell phone I seem to possess, my tooth will never be blue. I’ve tried three times. Three strikes is out in any game I care about. Now there’s this Universal Remote here. It’s supposed to tie together my little sound system with my DVD player and cable box. I am supposed to press B, which will turn on all my components, then press CBL for cable, DVD for DVD (duh) and AMP for the sound system. Simple? No question. I put my other remotes in a drawer with tremendous satisfaction, put batteries in the Universal Remote and voila. Ready to roll. Except it wasn’t. I didn’t. Roll, I mean. I pressed B. Everything went on. The TV said “Video 2 NO SIGNAL” and there was no picture. The sound was fine. The cable box was on. But I think a picture is part of the whole deal, don’t you? I pressed some other buttons. Now the sound went out too. So I went to the cabinet and got out my poor, disrespected TV remote. Cycled through the Inputs. Found the right HD button to restore the picture. Then I took out the remote associated with my sound system and got that up and running again, too. Pretty soon it was all back to normal. Then I put my new Universal Remote into a drawer. I’ll take it out in a couple of months and see if I’m smart enough to get it working then. Perhaps I won’t have a cocktail beforehand, like I did last night. You want to be sharp when you’re operating heavy machinery.

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AT&T Sues Samsung, LG, AU, Says They Fixed Prices on Mobile Phone Displays

October 21, 2009

By Joel Rosenblatt (Corrects number of resold handsets in last paragraph.) Oct. 21 (Bloomberg) — AT&T Inc. sued Samsung Electronics Co. , LG Display Co., AU Optronics Corp. and other manufacturers of liquid-crystal displays over claims they colluded to fix prices of their panels sold in the U.S. AT&T , the biggest U.S. phone carrier, filed the complaint yesterday in federal court in San Francisco. The lawsuit claims Samsung, the world’s biggest maker of liquid-crystal displays, and more than six other display makers “formed an international cartel illegally to restrict competition in the United States in the market for LCD panels.” “The conspiracy included communications and meetings in which defendants agreed to eliminate competition and fix the prices of LCD panels that were ultimately incorporated into LCD products that they knew would be sold in California and the United States,” according to the complaint. In March, Hitachi Displays Ltd. , a unit of Japan’s Hitachi Ltd. which isn’t named in AT&T’s suit, became the fourth company to plead guilty in a global U.S. display panel price-fixing investigation. LG Display , the world’s second-largest liquid-crystal- display maker, Chunghwa Picture Tubes and Sharp Corp. , all three of which were named in the AT&T case, agreed to plead guilty in November to the U.S. claims and pay $585 million in criminal fines. AT&T’s case relies on the Justice Department’s investigation. Shares Fall Samsung shares fell 1.9 percent to 738,000 won as of 12:04 pm in Seoul while shares of LG Display fell 1.7 percent to 32,350 won. AU Optronics shares fell 1.8 percent to NT$32.1 as of 11:04 am in Taipei. AU Optronics will consult its lawyers before commenting, spokeswoman Yawen Hsiao of the Taiwanese company said today. Seoul-based LG Display hasn’t received details of the lawsuit and can’t comment its spokesman Park Sang Bae said today. Samsung spokeswoman Lee Soo Jeong wasn’t immediately available for comment. AT&T, based in Dallas, argues its AT&T Mobility unit purchased more than 300 million mobile wireless handsets for resale to its customers. The prices of those handsets were artificially inflated because of the price-fixing, the carrier said. The case is AT&T v. AU Optronics, 09-04997, U.S. District Court, Northern District of California (San Francisco). To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net .

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AT&T Sues Samsung, LG, AU; Says They Fixed Prices on Mobile Phone Displays

October 20, 2009

By Joel Rosenblatt Oct. 21 (Bloomberg) — AT&T Inc. sued Samsung Electronics Co. , LG Display Co., AU Optronics Corp. and other manufacturers of liquid-crystal displays over claims they colluded to fix prices of their panels sold in the U.S. AT&T , the biggest U.S. phone carrier, filed the complaint yesterday in federal court in San Francisco. The lawsuit claims Samsung, the world’s biggest maker of liquid-crystal displays, and more than six other display makers “formed an international cartel illegally to restrict competition in the United States in the market for LCD panels.” “The conspiracy included communications and meetings in which defendants agreed to eliminate competition and fix the prices of LCD panels that were ultimately incorporated into LCD products that they knew would be sold in California and the United States,” according to the complaint. In March, Hitachi Displays Ltd. , a unit of Japan’s Hitachi Ltd. which isn’t named in AT&T’s suit, became the fourth company to plead guilty in a global U.S. display panel price-fixing investigation. LG Display , the world’s second-largest liquid-crystal- display maker, Chunghwa Picture Tubes and Sharp Corp. , all three of which were named in the AT&T case, agreed to plead guilty in November to the U.S. claims and pay $585 million in criminal fines. AT&T’s case relies on the Justice Department’s investigation. Shares Fall Samsung shares fell 1.9 percent to 738,000 won as of 12:04 pm in Seoul while shares of LG Display fell 1.7 percent to 32,350 won. AU Optronics shares fell 1.8 percent to NT$32.1 as of 11:04 am in Taipei. AU Optronics will consult its lawyers before commenting, spokeswoman Yawen Hsiao of the Taiwanese company said today. Seoul-based LG Display hasn’t received details of the lawsuit and can’t comment its spokesman Park Sang Bae said today. Samsung spokeswoman Lee Soo Jeong wasn’t immediately available for comment. AT&T, based in Dallas, argues its AT&T Mobility unit purchased more than 300 mobile wireless handsets for resale to its customers. The prices of those handsets were artificially inflated because of the price-fixing, the carrier said. The case is AT&T v. AU Optronics, 09-04997, U.S. District Court, Northern District of California (San Francisco). To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net .

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Freakonomics Guys Flunk Science of Climate Change: Eric Pooley

October 20, 2009

Commentary by Eric Pooley Oct. 20 (Bloomberg) — Steven D. Levitt and Stephen J. Dubner are so good at tweaking conventional wisdom that their first book, “ Freakonomics ,” sold 4 million copies. So when Dubner, an old friend, told me their new book would take on climate change, I was rooting for a breakthrough idea. No such luck. In “ SuperFreakonomics ,” their brave new climate thinking turns out to be the same pile of misinformation the skeptic crowd has been peddling for years. “Obviously, provocation is not last on the list of things we’re trying to do,” Dubner told me the other day. This time, the urge to provoke has driven him and Levitt off the rails and into a contrarian ditch. Their breezy take on global warming unleashed a barrage of highly detailed criticism from economists and climate experts , including a scientist who is misrepresented in the book. Dubner wonders why everyone is so angry. In part, it’s because the book’s blithe remedies — “We could end this debate and be done with it, and move on to problems that are harder to solve,” Levitt told the U.K. Guardian newspaper — are an insult to the thousands of scientists who have devoted their careers to this crisis. One of the injured parties is Ken Caldeira , a climate scientist at Stanford University who is quoted (accurately) as saying that “we are being incredibly foolish emitting carbon dioxide.” Then Dubner and Levitt add this astonishing claim: “His research tells him that carbon dioxide is not the right villain in this fight.” Provocative, Untrue That’s provocative, but alas, it isn’t true. Caldeira, like the vast majority of climate scientists, believes cutting carbon dioxide and other greenhouse-gas emissions is our only real chance to avoid runaway climate change. “Carbon dioxide is the right villain,” Caldeira wrote on his Web site in reply. He told Joe Romm , the respected climate blogger who broke the story , that he had objected to the “wrong villain” line but Dubner and Levitt didn’t correct it; instead, they added the “incredibly foolish” quote, a half step in the right direction. Caldeira gave the same account to me. Levitt and Dubner do say that the book “overstates” Caldeira’s position. That’s a weasel word: The book claims the opposite of what Caldeira believes. Caldeira told me the book contains “many errors” in addition to the “major error” of misstating his scientific opinion on carbon dioxide’s role. Why does this matter? Because there’s a titanic battle going on over whether and how to reduce carbon emissions, and this soon-to-be bestseller tries to convince people that we don’t need to do so. Dubner and Levitt trumpet their “wrong villain” line in their table of contents and promotional material . On National Public Radio the other day, Levitt said , “The real problem isn’t that there’s too much carbon in the air.” Multiple Villains “SuperFreakonomics” never identifies the “right villain,” so I called Dubner and asked. “I don’t think anybody knows for sure,” he told me. Then he acknowledged that the chapter’s most newsworthy claim “could have been better phrased, as ‘carbon dioxide is not the only villain.’” That’s a huge admission. No climate scientist believes carbon dioxide is the only villain: methane, nitrous oxide and other gases need to be reduced too. But that basic truth wouldn’t have drawn attention. It wouldn’t have given Levitt a bold contrarian line for NPR. Dubner and Levitt acknowledge that the planet has warmed but pretend that cutting emissions is a hopelessly old-school response. “It’s not that we don’t know how to stop polluting the atmosphere,” they write. “We don’t want to stop.” They ignore the fact that U.S. emissions have dropped 9 percent since 2007 — not just because of the recession but also thanks to energy efficiency and cleaner fuels. Chance of Catastrophe They exaggerate the cost of climate action and underestimate the likelihood of runaway global warming, pretending that the “relatively small chance of worldwide catastrophe” isn’t worth getting bothered about. They dismiss global warming as a “religion” and rehash the so-called “global cooling” scare of the 1970s, a favorite skeptic myth . (A handful of scientists warned of a coming ice age, a false alarm in no way comparable to today’s scientific consensus on warming.) They trumpet the “little-discussed fact” that the average global temperature has decreased in recent years. This is accurate according to one set of global data — the other shows an increase — but scientists say it proves nothing. Imagine the Dow climbing to 14,000, with a wobble to 13,950. That’s what global temperatures have done. Even with small fluctuations, this decade is by every measure the hottest in recorded history. The second hottest is the 1990s. The third hottest is the 1980s. Get the picture? Levitt and Dubner don’t. Shooting Sulfur Dioxide Having downplayed the problem, they try to solve it with a set of silver-bullet technologies known as geoengineering. One would shoot millions of tons of sulfur dioxide 18 miles into the air to artificially cool the planet. This could work; it also could have dire unintended consequences. Caldeira, who is researching the idea, argues that it can succeed only if we first reduce emissions. Otherwise, he says, geoengineering can’t begin to cope with the collateral damage, such as acidic oceans killing off shellfish. Levitt and Dubner ignore his view and champion his work as a permanent substitute for emissions cuts. When I told Dubner that Caldeira doesn’t believe geoengineering can work without cutting emissions, he was baffled. “I don’t understand how that could be,” he said. In other words, the Freakonomics guys just flunked climate science. ( Eric Pooley , a former managing editor of Fortune magazine who is writing a book about the politics of global warming, is a Bloomberg News columnist. The opinions expressed are his own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Eric Pooley at epooley2@bloomberg.net

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Non-Christians May Find This Cross Hard to Bear: Ann Woolner

October 14, 2009

Commentary by Ann Woolner Oct. 14 (Bloomberg) — U.S. Supreme Court Justice Antonin Scalia , that towering intellect of the conservative legal movement, sounded appallingly ignorant last week. The question centered on the constitutionality of a Christian cross on government land to memorialize the American dead of World War I. Scalia first suggested during oral argument that the cross is fine because it’s less a religious symbol than the “most common” marker for graves. Can he be serious? Scalia didn’t stop there. When an American Civil Liberties Union lawyer pointed out that crosses never appear in Jewish cemeteries, Scalia reverted to bully mode. “I don’t think you can leap from that to the conclusion that the only war dead that that cross honors are the Christian war dead. I think that’s an outrageous conclusion,” Scalia declared. Did he believe his own words? He “seems to evaporate the real meaning of the cross,” says the Reverend John Pawlikowski , who teaches social ethics at the Catholic Theological Union in Chicago and directs its Catholic-Jewish studies program. The priest finds that surprising, given Scalia’s devotion to Catholicism. Scalia not only diluted the sacred meaning of the cross to Christians but brushed off the religious convictions of everyone else. Hundreds of thousands of non-Christians served in World War I. To memorialize the Jews, Muslims and other non-Christians who gave their lives for their country with a Christian cross doesn’t honor them. For many of their families, it insults them. Either Scalia is willfully ignorant or completely disingenuous. A Big Deal Though I can’t imagine he is one of them, clearly there are Christians who honestly don’t see what the big deal is about. They believe most church-state disputes are political correctness run amuck, obstacles to the free exercise of religion, the result of an erroneous parsing of constitutional language or some combination of those three. Why get so worked up over a cross in the Mojave Desert or school-sponsored prayer in classrooms? Most Americans are Christians, after all, and the rest of us should simply get used to it. This column is for them. I make no attempt to say which religion, if any, is the True One. Nor do I discount the abundant good works of people of faith. I’m in no position to say which religions have been the most violent or most tolerant toward non-believers. There is a lot of finger-pointing to go around. Viewing the Controversy The point is to try to offer the majority a minority way of viewing the controversy. For starters, imagine the reaction if prayers spoken by public officials at government events declared that we still await the coming of the Messiah . The first coming. That would be blasphemy to many Americans, and clearly unconstitutional. However certain Christians are that Jesus was the Messiah, Jews are just as certain he wasn’t . Yet we are considered hypersensitive if we (yes, we) cringe when someone prays for us in the name of Jesus Christ. (In my inter-faith family, spoken prayers now end like this: In Jesus’ name some of us pray.) So let’s say that as a minority, you learned long ago to slough off that sort of thing, realizing people are well-meaning when they pray and intend no offense. Resort to Violence And yet, as a minority you know that discounting other people’s religion has a rather nasty history . Through millennia, Christians have been seeking out non-believers for conversion or worse. Periodically, they resort to violence. Under the banner of Christianity and the sign of the cross, Christians for centuries tortured and murdered those who refused to convert. They did it to Jews and Muslims during the Crusades and to those whose conversions were deemed insincere during the Spanish Inquisition. Christians have chased Jews out of their native countries, driven religious practices underground, moved Jews into ghettos, forced attendance at conversion services and destroyed synagogues, shops and homes, all out of religious conviction. As for the Holocaust, Adolph Hitler killed 6 million Jews for racial, not religious, reasons, it’s true. But how did he get so far? “Christian anti-Semitism provided an indispensible seedbed for the success of Nazism on the popular level,” writes Pawlikowski. No Holocaust I don’t equate a cross in the American desert with the Holocaust. Nor do I hold my contemporaries responsible for the acts of their ancestors, and I know that many Christians have throughout history risked their own skins to save Jews. The Catholic Church and some denominations have acknowledged and even denounced their intolerant pasts. But even today, members of the Church of Jesus Christ of Latter Day Saints vicariously baptize the Jewish dead among others who in life chose not to join the church. Mormons see the practice as bestowing a blessing. They have baptized thousands of Holocaust victims, not to mention Nazi hunter Simon Wiesenthal, scientist Albert Einstein , artist Marc Chagall , lyricist Irving Berlin and Israel’s first prime minister, David Ben-Gurion, according to genealogist Bernard Kouchel. Jewish outrage prompted some curtailing of the practice, but not an end to it. There is nothing government can do about that, nor should it. But if you want to begin to understand why Jews get nervous if government favors a religion, it’s all a part of the picture. What unsettles me more than a cross in the Mojave is the realization that millions of Americans don’t understand why it might be worrisome. For a Supreme Court justice to convey such ignorance is, to use his word, outrageous. ( Ann Woolner is a Bloomberg News columnist. The opinions expressed are her own.) Click on “Send Comment” in the sidebar display to send a letter to the editor. To contact the writer of this column: Ann Woolner in Atlanta at awoolner@bloomberg.net .

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Goldman Sachs, Intel Profits May Lead Earnings `Pulse’ After Record Drop

October 6, 2009

By Adam Satariano and Beth Jinks Oct. 6 (Bloomberg) — Goldman Sachs Group Inc. , JPMorgan Chase & Co. and Intel Corp. may this quarter lead companies worldwide to the first profit increases in more than two years, ending the longest earnings recession on record. Buoyed by finance and semiconductors, profits at the world’s biggest companies are projected to grow 63 percent in the final three months of 2009, snapping nine straight quarterly declines. In the third quarter just completed, earnings for companies in the S&P 500 Index may drop 23 percent from a year ago, when a lending freeze led to the worst financial crisis since the 1930s, according to analysts’ estimates compiled by Standard & Poor’s and Bloomberg. Alcoa Inc . is the first member of the Dow Jones Industrial Average to report on Oct. 7. “Most management teams are seeing a pulse in their business,” said Lawrence Creatura , a portfolio manager at Federated Clover Investment Advisors, which oversees $407 billion. “Last year at this time markets were rigid with fear, as was the consumer. It’s going to be pretty easy to do better than that even if the economy is firing on one cylinder.” The fourth-quarter may be an “inflection point” that signals a turn in profit, said Creatura, who is based in Rochester, New York. JPMorgan, Goldman Sachs and Intel’s fourth-quarter gains will be marked by easy comparisons to last year, when credit markets seized and banks choking on billions of dollars in real- estate losses stopped lending. U.S. gross domestic product shrank 5.4 percent a year ago and consumer spending stalled. Financials First Analysts project S&P 500 financial companies’ fourth- quarter earnings will more than double from a year ago, when five of the six biggest banks reported a loss of more than $1 billion, according to estimates compiled by Bloomberg. Financial institutions worldwide have reported more than $1.6 trillion in credit losses and writedowns since 2007, Bloomberg data show. Goldman Sachs and JPMorgan, both based in New York, and other banks are benefiting from lower funding costs and more lending. The companies also face fewer writedowns on secured debt as home prices halt their descent, said David Dietze , president and chief investment strategist at Point View Financial Services in Summit, New Jersey. “Real estate is your key collateral behind many of these banks’ loans, and if collateral values start to stabilize, that should help stem the tide of write-offs,” said Dietze, who helps manage more than $100 million. If that happens, “Earnings growth will be phenomenal.” Jobs Picture For the third quarter, the largest financial companies will likely report higher earnings than a year ago, when New York- based JPMorgan took about $5.8 billion of writedowns and credit provisions, and banks began feeling the effects of the September collapse of Lehman Brothers Holdings Inc. Morgan Stanley is expected to post the first gain from continuing operations in a year, while Citigroup Inc. ’s operating loss is expected to shrink, according to analysts. For others it will take longer. The Oct. 2 report of accelerating job losses in the U.S., the world’s biggest economy, signals that unemployment, now at 9.8 percent, will remain a drag on consumer spending. Federal Reserve Chairman Ben S. Bernanke said Oct. 1 that U.S. economic growth will be insufficient to lower the unemployment rate below 9 percent by the end of 2010. United Parcel Service Inc. , the world’s largest package- shipping firm, handles half of all deliveries in the U.S. and is unlikely predict an increase in domestic volume for the final months of 2009 when it reports third-quarter results on Oct. 22, said David Campbell , an analyst at Thompson Davis & Co. in Richmond, Virginia. Production Cycle Farther back in the production cycle profits are turning around, as reflected in rising global stock prices. Improving sales at Intel, the world’s largest semiconductor manufacturer, point to a recovery that extends beyond the thawing financial companies. Semiconductor earnings in the fourth quarter are projected to more than triple from last year, when electronics manufacturers slashed orders. Intel, based in Santa Clara, California, is projected to report fourth-quarter profit almost doubled to 35 cents a share, the average of 26 estimates , after an estimated 23 percent drop in the period just ended. That hoped-for recovery, along with the fact that 72 percent of S&P 500 Index companies exceeded analysts’ average profit estimates for the second quarter, helped lift the benchmark index to a 15 percent July-September gain, the second- straight gain of that magnitude. ‘Some Recovery’ Europe’s Dow Jones Stoxx 600 Index advanced 18 percent last quarter, and the benchmark MSCI Asia Pacific surged 14 percent in the quarter, following a 28 percent gain in the second. “There is some form of recovery taking hold,” said Michael Shinnick , who helps manage $6 billion, including Intel shares, at South Bend, Indiana-based Wasatch Advisors Inc. “There was just an absolute seize-up in the market last year.” U.S. technology demand will begin to increase in the fourth quarter, followed by a global recovery in 2010, research firm Forrester Inc. said Sept. 29. Sales and profit at Microsoft Corp. , the world’s biggest software maker, probably fell to an almost three-year low in the third quarter. Both are projected to resume growth in the final three months of the year, aided by the Redmond, Washington-based company’s release of the Windows 7 operating system. Spotty Turnaround International Business Machines Corp. , reporting on Oct. 15, and Apple Inc. , on Oct. 19, are expected by analysts to post increased third-quarter profit. SAP AG, the world’s largest maker of business-management software, may say net income increased 17 percent in the quarter as cost cuts took hold. Outside of finance and semiconductors, fourth-quarter profit for the S&P 500 Index companies may be spotty. Investors need to be careful that stock prices aren’t overvalued compared to company earnings, said John Carey , portfolio manager at Pioneer Investment Management in Boston. “You always have to compare business results with share prices and be sure that one hasn’t gotten ahead of the other,” said Carey, who helps oversee $200 billion in assets. Consumer demand won’t fully recover until 2011, leading U.S. retailers to slash expenses and inventories. Those moves should help the companies exceed analysts’ pessimistic estimates, said Ken Perkins , president of Retail Metrics LLC, a research firm based in Swampscott, Massachusetts. Lower Costs “Some consumers are carefully dipping their toes in the water, but the job market is a real headwind,” Perkins said. Analysts expect Wal-Mart Stores Inc. , the world’s largest retailer, to post a 15 percent gain in fourth-quarter net income after steady profit in the third for the Bentonville, Arkansas- based merchant. Retailers earn a third or more of their profit in the final three-month period of the year. Last year’s holiday season was the worst in four decades. Consumer products companies will get a break in the fourth quarter as commodity costs and advertising rates have declined and economic contraction has slowed, Ali Dibadj , a New York- based analyst with Sanford C. Bernstein & Co., wrote in a research note Sept. 29. Colgate-Palmolive Co. , the world’s biggest maker of toothpaste, will post a 16 percent gain in third-quarter profit and a 21 percent rise in the fourth quarter, analysts project. Baoshan Iron For steelmakers, “the good news is right around the corner,” said John Wong , a fund manager with CQS UK LLP in London, which manages the New City Natural Resources Fund. The industry is facing easy comparisons this quarter and into 2010 after construction and production collapsed last September. “The fourth quarter year-on-year will look much better, and the first quarter next year will look even better again because first quarter 2009 was a complete disaster,” Wong said. Baoshan Iron & Steel Co. , the world’s third-biggest steelmaker, may earn 0.18 yuan a share in the third quarter, up sixfold from the previous three months, as the government’s stimulus spending boosted prices and demand, according to China International Capital Corp. Profit a year earlier was 0.16 yuan. Ma Guoqiang , president of the Shanghai-based company, said Aug. 31 steel prices will reverse recent declines because there’s “healthy” demand and the global economy is recovering. Toyota Motor Corp ., Honda Motor Co. and Nissan Motor Co., Japan’s three largest automakers, may report lower earnings for the three months ended Sept. 30 as a stronger yen offset gains from government incentives in the U.S., Europe and Japan. Samsung’s Profit Toyota City-based Toyota may post a net loss of 140.5 billion yen ($1.6 billion) in the quarter, according to a Bloomberg survey of three analysts. Honda may report a profit of 2.44 billion yen and Nissan may post net income of 11.8 billion yen, according to the survey. South Korea’s Samsung Electronics Co., the world’s largest maker of televisions, may report third-quarter profit more than doubled to 3.24 trillion won ($2.8 billion) as the weaker won helped increase the value of overseas earnings, according to the median estimate in a Bloomberg survey of 14 analysts The won has lost about 13 percent of its value against the yen in the 12 months ended Sept. 30. Siemens AG , Europe’s largest engineering company, may return to profit after a year-earlier loss, Sanford C. Bernstein analyst Martin Prozesky predicts. Net income at the Munich-based company may reach 1.29 billion euros, he estimates, after a loss of 2.47 billion euros a year earlier. Energy Prices A turnaround will be harder for energy companies. Third- quarter profit at Exxon Mobil Corp., Chevron Corp. and ConocoPhillips , the largest U.S. oil companies, and Royal Dutch Shell Plc and BP Plc , Europe’s biggest, probably fell after the recession sapped fuel demand, leaving crude-oil prices more than 50 percent below the record set in July 2008. Chinese oil demand, one of the forces that spurred last year’s record surge in energy prices and lifted earnings for producers, isn’t going to be as strong as anticipated, said Barry R. James of the James Advantage Funds in Dayton, Ohio. “The amount of consumption they would have won’t be quite as much, plus the rest of the world economy is at stall speed,” said James, who holds Exxon , Chevron and Conoco among the almost $2 billion in investments. Airline revenue probably won’t rise until mid-2010 at the earliest, Helane Becker , an analyst at Jesup & Lamont Securities in New York. Group losses were $1 billion or more for each of the past four quarters. Government Stimulus UPS, based in Atlanta and considered a proxy for U.S. economic health, has had six straight quarters of shrinking domestic volume and may post its seventh in the third quarter as businesses and consumers shipped less, said analyst Campbell of Thompson Davis. “We’re still in a downturn,” Campbell said. “Things have definitely improved, but we’re a few quarters away from growth.” Government stimulus spending will boost companies that depend on public works, analysts say. The U.S. government is spending $787 billion to jumpstart the economy, including $48.1 billion for transportation projects. Analysts expect sales at Caterpillar Inc. , the world’s largest maker of construction equipment to sales to rebound in the final three months of the year. Fourth-quarter earnings per share may jump to 34 cents, excluding some items, from an estimated 4 cents in the just-ended period, during which Caterpillar expanded temporary factory shutdowns and continued to cut other costs, analysts predict. Global Economy Dealers slashed inventories and customers didn’t buy as many bulldozers and excavators this year, marking the worst decline in Caterpillar’s markets since the 1930s. The Peoria, Illinois-based company’s quarterly loss from January to March was its first in 16 years. Dow Chemical Co. , the largest U.S. chemical maker, is benefiting from lower costs for oil- and gas-based raw materials, spending cuts and slowly expanding global demand, said Richard Vanden Boogard , who helps oversee $47 billion at Victory Capital Management. The global economy is recovering faster than most forecasters expected earlier in the year, Vanden Boogard said. Among Europe’s drugmakers, Basel, Switzerland-based Novartis AG probably grew faster than the overall pharmaceutical industry during the third quarter, said Birgit Kulhoff , an analyst at Rahn & Bodmer in Zurich. Profit excluding some items for the period is estimated to rise to $2.22 billion from $2.09 billon a year earlier, according to Bloomberg estimates. Net income at London-based GlaxoSmithKline Plc probably rose to 1.57 billion pounds ($2.5 billion) from 1.03 billion pounds a year earlier. The U.K. company’s respiratory medicines helped drive third-quarter growth, while the impact of patent expirations may have eased, Kulhoff said. “Six months ago, if you tried to envision these headlines, people would say, ‘You are crazy,’ but here we are,” Vanden Boogard said. “The big question is, what are headlines going to be six to nine to months from now? Will they be saying demand is even better? I think it will be better.” To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net Beth Jinks in New York at bjinks1@bloomberg.net

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Christmas Discovery on Cancer, Aging Brings Nobel to Two Women Scientists

October 6, 2009

By John Lauerman, Michelle Fay Cortez and Rob Waters Oct. 6 (Bloomberg) — It was Christmas Day, 1984, and Carol Greider , a 23-year-old first-year graduate student at the University of California, Berkeley, couldn’t stay away from the lab where she and assistant professor Elizabeth Blackburn were trying to untangle a genetic mystery. Greider had been testing an enzyme, one of the proteins that start chemical reactions in the body, and was impatient to check results. What she saw was “the first clear evidence” of how cells make telomeres, small parts of human DNA that allow genes to be replicated without the loss of protein-making information, Greider said in an interview yesterday. Her comments came just hours after she and Blackburn became the first two women to share a Nobel Prize for medicine. The enzyme, which Greider and Blackburn named “telomerase” is key to controlling unbridled cellular growth, the hallmark of cancer, as well as to age-linked disease, subsequent research has found. Blackburn, already an established scientist at age 35, often debated with her student how best to proceed. In the end, they created scientific history. “A brave student was needed to make this project drive along, and Carol was very willing to do that,” Blackburn said yesterday in an interview. “It was a great, fun kind of adventure because we didn’t know the answer. There was no chart telling us what to do.” Greider, now 48, is a molecular biologist with her own lab at Johns Hopkins University in Baltimore. Blackburn, 60, is at the University of California, San Francisco . The two women shared the Nobel Prize for Physiology or Medicine with Jack Szostak , 56, of Harvard Medical School in Boston, who began collaborating with Blackburn on the telomere research in 1980. Sharing the Prize The three scientists will share the 10 million Swedish kronor ($1.4 million) prize equally, the Nobel Assembly in Stockholm said. Blackburn said the honor for her and Greider is “a hopeful sign” for women. In the future, people will say, “Oh yes, it’s not too unusual to have women getting Nobel prizes,” Blackburn said in an interview. “Two got one this year. I hope it becomes very normal.” Research over the past decade suggests that telomeres are just one component in the complicated process of aging, said Leonard Guarente , a researcher at Massachusetts Institute of Technology, in Cambridge, Massachusetts. On the other hand, cancer cells, which divide and grow indefinitely, may be highly dependent on telomerase, he said. Combating Cancer “The biology of telomerase is critical to the cancer cell,” said Guarente, a scientific adviser to London-based GlaxoSmithKline Plc’s Sirtris Pharmaceuticals unit, the developer of anti-aging drugs, in a telephone interview. “Understanding this and developing ways to intervene may be one of the viable ways to combat cancer.” Diseases that have been linked to defects in telomerase activity include inherited forms of aplastic anemia, when the bone marrow doesn’t produce enough blood cells, and genetic forms of skin and lung ailments. The most intense research has been in cancer, where malignant cells have the ability to divide indefinitely, and in aging, which has been linked to short telomeres. Merck & Co ., a drugmaker based in Whitehouse Station, New Jersey, and Menlo Park, California-based biotechnology company Geron Corp . began testing a cancer vaccine last year that targets telomerase in patients with solid tumors, including lung and prostate cancer. Geron is testing another telomerase inhibitor in breast and plasma cell cancer. Repeating Pattern Blackburn, born on the island of Tasmania in Australia, became curious about telomeres in 1970s. She found they had a repeating pattern of six DNA building blocks, called bases, and wanted to find out how they were made. “The DNA was acting in ways that were completely unprecedented according to the textbooks, and so we knew something new was going on,” she said yesterday in an interview in San Francisco. The collaboration between her and Harvard’s Szostak began when Blackburn was studying a single-celled organism, called Tetrahymena , with an unusually large nucleus that made it easy to observe the DNA. Blackburn was studying the telomeres at the end of their chromosomes, trying to understand their structure. Szostak heard Blackburn present her findings at a medical meeting in 1980, and the two decided to combine their efforts. Blackburn isolated the DNA sequence from the single-cell pond organism, which Szostak linked to genetic strands called mini- chromosomes he had been working with. DNA Cap Blackburn’s DNA cap, now called a telomere, protected the mini-chromosome from damage, the researchers found. That was when Greider entered the picture, looking for the unknown enzyme that could be responsible for making telomeres. A native of Davis, California, Greider had overcome dyslexia to study biochemistry, according to her biography in the Proceedings of the National Academy of Sciences . The student worked 12-hour days and learned DNA cloning techniques to find the enzyme. She and Blackburn frequently debated research problems. They would eventually learn that the enzyme seen by Greider that Christmas day allows the entire chromosome to be copied before cell division begins. “This really is a tribute to curiosity-driven basic science,” Greider said yesterday in a press conference at John Hopkins. “We didn’t know at the time that there were any particular disease implications, we were just interested in the fundamental biology.” Stopwatch on Lifespan Some scientists hypothesized that telomeres, in effect, put a stopwatch on the lifespan of an organism by limiting the number of times that its cells can replicate before DNA damage ensues. Michael West founded Menlo Park-based Geron in 1990 with the goal of extending extend human life expectancy into the hundreds of years. “I used to say at Geron that between 5 and 95 percent of human aging is in the telomere,” said West, now president and chief executive officer of BioTime Inc ., in Alameda, California. “Now I’d say it’s probably about 80 percent.” MIT’s Guarente credited Blackburn for making the study of telomeres one of the scientific fields that is most friendly to women. About half of the researchers in the field are women, said Titia de Lange, a professor of cell biology and genetics at Rockefeller University in New York, who studies aging. “It would be great if, in the future, women got 50 percent of all the awards,” she said in a telephone interview. “What’s needed is gender equality in the upper echelons of science.” 800 Nobelists More than 800 people have been awarded Nobel Prizes from 1901 through 2008, and 36 of them have been women, according to the Nobel Web site . The relative lack of prizes for women discourages young female researchers, said Phoebe Leboy, president of the Association for Women in Science , in Washington. “It’s one of the major issues faced by women in science,” she said in a telephone interview. “When a really bright graduate student wants to work with someone, they’re looking for someone with power and prestige.” With fewer prizes, women are less likely to get the top students, who are more likely to write ground-breaking papers, working for them, Leboy said. She has a grant for $800,000 to study why women are often shut out of science prizes and how to correct it. “When scientists are sitting around a table thinking about who deserves an award, a lot of the guys don’t think of women,” she said. “Men have been habituated not to think about women when they think of prizes.” Persistent Bias While women’s status in the laboratory has improved over the past few years, there are still many signs of persistent bias, said Gioia De Cari, who got a master’s degree in mathematics at MIT in the late 1980s. She had dropped writing a one-woman play about her experiences in male-dominated academia until she heard that former Harvard University President Lawrence H. Summers said in January 2005 that innate differences might explain women’s lack of success in math and science. “I thought, ‘Maybe this isn’t so passé,’” she said in telephone interview. “He was an unlikely muse for a woman playwright.” De Cari’s play, “ Truth Values: One Woman’s Romp Through MIT’s Male Math Maze ,” will be performed at the City University of New York Graduate Center for one night, Oct. 9, in Manhattan. To contact the reporters on this story: John Lauerman in Boston at jlauerman@bloomberg.net ; Rob Waters in San Francisco at rwaters5@bloomberg.net ; Michelle Fay Cortez in London at mcortez@bloomberg.net .

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Goldman, JPMorgan, Intel Give Profit `a Pulse’ After Record Two-Year Drop

October 6, 2009

By Adam Satariano and Beth Jinks Oct. 6 (Bloomberg) — Goldman Sachs Group Inc. , JPMorgan Chase & Co. and Intel Corp. are expected this quarter to lead companies worldwide to the first profit increases in more than two years, ending the longest earnings recession on record. Buoyed by finance and semiconductors, profits at the world’s biggest companies are projected to grow 63 percent in the final three months of 2009, snapping nine straight quarterly declines. In the third quarter just completed, earnings for companies in the S&P 500 Index may drop 23 percent from a year ago, when a lending freeze led to the worst financial crisis since the 1930s, according to analysts’ estimates compiled by Standard & Poor’s and Bloomberg. Alcoa Inc . is the first member of the Dow Jones Industrial Average to report on Oct. 7. “Most management teams are seeing a pulse in their business,” said Lawrence Creatura , a portfolio manager at Federated Clover Investment Advisors, which oversees $407 billion. “Last year at this time markets were rigid with fear, as was the consumer. It’s going to be pretty easy to do better than that even if the economy is firing on one cylinder.” The fourth-quarter may be an “inflection point” that signals a turn in profit, said Creatura, who is based in Rochester, New York. JPMorgan, Goldman Sachs and Intel’s fourth-quarter gains will be marked by easy comparisons to last year, when credit markets seized and banks choking on billions of dollars in real- estate losses stopped lending. U.S. gross domestic product shrank 5.4 percent a year ago and consumer spending stalled. Financials First Analysts project S&P 500 financial companies’ fourth- quarter earnings will more than double from a year ago, when five of the six biggest banks reported a loss of more than $1 billion, according to estimates compiled by Bloomberg. Financial institutions worldwide have reported more than $1.6 trillion in credit losses and writedowns since 2007, Bloomberg data show. Goldman Sachs and JPMorgan, both based in New York, and other banks are benefiting from lower funding costs and more lending. The companies also face fewer writedowns on secured debt as home prices halt their descent, said David Dietze , president and chief investment strategist at Point View Financial Services in Summit, New Jersey. “Real estate is your key collateral behind many of these banks’ loans, and if collateral values start to stabilize, that should help stem the tide of write-offs,” said Dietze, who helps manage more than $100 million. If that happens, “Earnings growth will be phenomenal.” Jobs Picture For the third quarter, the largest financial companies will likely report higher earnings than a year ago, when New York- based JPMorgan took about $5.8 billion of writedowns and credit provisions, and banks began feeling the effects of the September collapse of Lehman Brothers Holdings Inc. Morgan Stanley is expected to post the first gain from continuing operations in a year, while Citigroup Inc. ’s operating loss is expected to shrink, according to analysts. For others it will take longer. The Oct. 2 report of accelerating job losses in the U.S., the world’s biggest economy, signals that unemployment, now at 9.8 percent, will remain a drag on consumer spending. Federal Reserve Chairman Ben S. Bernanke said Oct. 1 that U.S. economic growth will be insufficient to lower the unemployment rate below 9 percent by the end of 2010. United Parcel Service Inc. , the world’s largest package- shipping firm, handles half of all deliveries in the U.S. and is unlikely predict an increase in domestic volume for the final months of 2009 when it reports third-quarter results on Oct. 22, said David Campbell , an analyst at Thompson Davis & Co. in Richmond, Virginia. Production Cycle Farther back in the production cycle profits are turning around, as reflected in rising global stock prices. Improving sales at Intel, the world’s largest semiconductor manufacturer, point to a recovery that extends beyond the thawing financial companies. Semiconductor earnings in the fourth quarter are projected to more than triple from last year, when electronics manufacturers slashed orders. Intel, based in Santa Clara, California, is projected to report fourth-quarter profit almost doubled to 35 cents a share, the average of 26 estimates , after an estimated 23 percent drop in the period just ended. That hoped-for recovery, along with the fact that 72 percent of S&P 500 Index companies exceeded analysts’ average profit estimates for the second quarter, helped lift the benchmark index to a 15 percent July-September gain, the second- straight gain of that magnitude. ‘Some Recovery’ Europe’s Dow Jones Stoxx 600 Index advanced 18 percent last quarter, and the benchmark MSCI Asia Pacific surged 14 percent in the quarter, following a 28 percent gain in the second. “There is some form of recovery taking hold,” said Michael Shinnick , who helps manage $6 billion, including Intel shares, at South Bend, Indiana-based Wasatch Advisors Inc. “There was just an absolute seize-up in the market last year.” U.S. technology demand will begin to increase in the fourth quarter, followed by a global recovery in 2010, research firm Forrester Inc. said Sept. 29. Sales and profit at Microsoft Corp. , the world’s biggest software maker, probably fell to an almost three-year low in the third quarter. Both are projected to resume growth in the final three months of the year, aided by the Redmond, Washington-based company’s release of the Windows 7 operating system. Spotty Turnaround International Business Machines Corp. , reporting on Oct. 15, and Apple Inc. , on Oct. 19, are expected by analysts to post increased third-quarter profit. SAP AG, the world’s largest maker of business-management software, may say net income increased 17 percent in the quarter as cost cuts took hold. Outside of finance and semiconductors, fourth-quarter profit for the S&P 500 Index companies may be spotty. Investors need to be careful that stock prices aren’t overvalued compared to company earnings, said John Carey , portfolio manager at Pioneer Investment Management in Boston. “You always have to compare business results with share prices and be sure that one hasn’t gotten ahead of the other,” said Carey, who helps oversee $200 billion in assets. Consumer demand won’t fully recover until 2011, leading U.S. retailers to slash expenses and inventories. Those moves should help the companies exceed analysts’ pessimistic estimates, said Ken Perkins , president of Retail Metrics LLC, a research firm based in Swampscott, Massachusetts. Lower Costs “Some consumers are carefully dipping their toes in the water, but the job market is a real headwind,” Perkins said. Analysts expect Wal-Mart Stores Inc. , the world’s largest retailer, to post a 15 percent gain in fourth-quarter net income after steady profit in the third for the Bentonville, Arkansas- based merchant. Retailers earn a third or more of their profit in the final three-month period of the year. Last year’s holiday season was the worst in four decades. Consumer products companies will get a break in the fourth quarter as commodity costs and advertising rates have declined and economic contraction has slowed, Ali Dibadj , a New York- based analyst with Sanford C. Bernstein & Co., wrote in a research note Sept. 29. Colgate-Palmolive Co. , the world’s biggest maker of toothpaste, will post a 16 percent gain in third-quarter profit and a 21 percent rise in the fourth quarter, analysts project. Baoshan Iron For steelmakers, “the good news is right around the corner,” said John Wong , a fund manager with CQS UK LLP in London, which manages the New City Natural Resources Fund. The industry is facing easy comparisons this quarter and into 2010 after construction and production collapsed last September. “The fourth quarter year-on-year will look much better, and the first quarter next year will look even better again because first quarter 2009 was a complete disaster,” Wong said. Baoshan Iron & Steel Co. , the world’s third-biggest steelmaker, may earn 0.18 yuan a share in the third quarter, up sixfold from the previous three months, as the government’s stimulus spending boosted prices and demand, according to China International Capital Corp. Profit a year earlier was 0.16 yuan. Ma Guoqiang , president of the Shanghai-based company, said Aug. 31 steel prices will reverse recent declines because there’s “healthy” demand and the global economy is recovering. Toyota Motor Corp ., Honda Motor Co. and Nissan Motor Co., Japan’s three largest automakers, may report lower earnings for the three months ended Sept. 30 as a stronger yen offset gains from government incentives in the U.S., Europe and Japan. Samsung’s Profit Toyota City-based Toyota may post a net loss of 140.5 billion yen ($1.6 billion) in the quarter, according to a Bloomberg survey of three analysts. Honda may report a profit of 2.44 billion yen and Nissan may post net income of 11.8 billion yen, according to the survey. South Korea’s Samsung Electronics Co., the world’s largest maker of televisions, may report third-quarter profit more than doubled to 3.24 trillion won ($2.8 billion) as the weaker won helped increase the value of overseas earnings, according to the median estimate in a Bloomberg survey of 14 analysts The won has lost about 13 percent of its value against the yen in the 12 months ended Sept. 30. Siemens AG , Europe’s largest engineering company, may return to profit after a year-earlier loss, Sanford C. Bernstein analyst Martin Prozesky predicts. Net income at the Munich-based company may reach 1.29 billion euros, he estimates, after a loss of 2.47 billion euros a year earlier. Energy Prices A turnaround will be harder for energy companies. Third- quarter profit at Exxon Mobil Corp., Chevron Corp. and ConocoPhillips , the largest U.S. oil companies, and Royal Dutch Shell Plc and BP Plc , Europe’s biggest, probably fell after the recession sapped fuel demand, leaving crude-oil prices more than 50 percent below the record set in July 2008. Chinese oil demand, one of the forces that spurred last year’s record surge in energy prices and lifted earnings for producers, isn’t going to be as strong as anticipated, said Barry R. James of the James Advantage Funds in Dayton, Ohio. “The amount of consumption they would have won’t be quite as much, plus the rest of the world economy is at stall speed,” said James, who holds Exxon , Chevron and Conoco among the almost $2 billion in investments. Airline revenue probably won’t rise until mid-2010 at the earliest, Helane Becker , an analyst at Jesup & Lamont Securities in New York. Group losses were $1 billion or more for each of the past four quarters. Government Stimulus UPS, based in Atlanta and considered a proxy for U.S. economic health, has had six straight quarters of shrinking domestic volume and may post its seventh in the third quarter as businesses and consumers shipped less, said analyst Campbell of Thompson Davis. “We’re still in a downturn,” Campbell said. “Things have definitely improved, but we’re a few quarters away from growth.” Government stimulus spending will boost companies that depend on public works, analysts say. The U.S. government is spending $787 billion to jumpstart the economy, including $48.1 billion for transportation projects. Analysts expect sales at Caterpillar Inc. , the world’s largest maker of construction equipment to sales to rebound in the final three months of the year. Fourth-quarter earnings per share may jump to 34 cents, excluding some items, from an estimated 4 cents in the just-ended period, during which Caterpillar expanded temporary factory shutdowns and continued to cut other costs, analysts predict. Global Economy Dealers slashed inventories and customers didn’t buy as many bulldozers and excavators this year, marking the worst decline in Caterpillar’s markets since the 1930s. The Peoria, Illinois-based company’s quarterly loss from January to March was its first in 16 years. Dow Chemical Co. , the largest U.S. chemical maker, is benefiting from lower costs for oil- and gas-based raw materials, spending cuts and slowly expanding global demand, said Richard Vanden Boogard , who helps oversee $47 billion at Victory Capital Management. The global economy is recovering faster than most forecasters expected earlier in the year, Vanden Boogard said. Among Europe’s drugmakers, Basel, Switzerland-based Novartis AG probably grew faster than the overall pharmaceutical industry during the third quarter, said Birgit Kulhoff , an analyst at Rahn & Bodmer in Zurich. Profit excluding some items for the period is estimated to rise to $2.22 billion from $2.09 billon a year earlier, according to Bloomberg estimates. Net income at London-based GlaxoSmithKline Plc probably rose to 1.57 billion pounds ($2.5 billion) from 1.03 billion pounds a year earlier. The U.K. company’s respiratory medicines helped drive third-quarter growth, while the impact of patent expirations may have eased, Kulhoff said. “Six months ago, if you tried to envision these headlines, people would say, ‘You are crazy,’ but here we are,” Vanden Boogard said. “The big question is, what are headlines going to be six to nine to months from now? Will they be saying demand is even better? I think it will be better.” To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net Beth Jinks in New York at bjinks1@bloomberg.net

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Carrie Fisher Riffs on Paul Simon, Princess Leia, Booze, Pills: John Simon

October 5, 2009

Review by John Simon Oct. 5 (Bloomberg) — There are two antithetical ways of viewing Carrie Fisher’s autobiographical monodrama, or monocomedy, “Wishful Drinking” on Broadway. It is like a head charming in profile, but seen full face rather plain and even slightly vulgar. If you know little or nothing about Fisher’s life as daughter of singer Eddie Fisher and actress Debbie Reynolds , stepdaughter of Elizabeth Taylor , you’ll find the evening revelatory and entertaining. If, alas, you already know too much about her — if you have followed Fisher through various writings, interviews, television and film work — you may find the show a bit too self-indulgent and saying nothing new. True, there is a kicky lecture about her and her family’s sundry entanglements — marriages, divorces, remarriages, redivorces and less sanctioned relationships. It’s delivered with the aid of a large board complete with arrows and headshots of the persons involved, with the star wielding a pointer to spear or smack their visages. So many rich, restless and reckless people tangled in webs — what sheer voyeuristic and there-but-for-the-grace-of-God delight! But other matters, stretched over sizable chunks of this two-hour show, are less satisfying. Fisher may be the Amundsen of bipolar exploration and a native analyst of substance abuse, but isn’t there something a bit self-serving about making hay to such extent of one’s foibles or, not to mince words, defects? Pampered Life I am prepared to feel compassionate toward people whom poverty and hopelessness have driven into addiction. I take a dimmer view of a person whom riches and pampering have surrounded from cradle to middle age, who could claim the best rehab centers as habitats yet, for all this, is still fighting her demons with white kid gloves in the limelight of our most prestigious arenas. To give her due credit, she makes fun of herself, often quite amusingly, sprinkled with just the finest dusting of pathos. There is smart, vengeful riffing on her marriage and after-marriage to the singer and songwriter Paul Simon . Still, hers has been one of the more applauded acts in American celebrity life: the confessed sinner who tells all but can afford to tell it laughingly, and to vociferous encouragement from the audience even during her show, and with thunderous standing ovations at the end. Even her picture in the program shows her at her youthful best, whereas what confronts us on the stage could easily be a retired lady wrestler. One wonders how really clever is a woman who has to end up in bed with a husband in order to figure out he is gay? Moreover, her humor, too, is often formulaic. Consider the reliance on words like “now” and “so,” or making some jolly, boisterous statement and then, in a throwaway aside, wryly undercutting it. Well, live and let live. There are obviously enough people who vicariously thrive on Fisher’s heart-on-sleeve exploits and aired dirty laundry. I myself cannot help turning away from “Wishful Drinking” in wistful shrinking. Through Jan. 3, 2010, at Studio 54, 254 W. 54th St. Information: +1-212-719-1300; http://www.roundabouttheatre.org . Rating: ** ( John Simon is the New York drama critic for Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: John Simon in New York at jis1925@aol.com .

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Mom Goes Blind So Her Daughters Can See (VIDEO)

September 28, 2009

As part of the Huffington Post’s efforts to bear witness to the effects of the current economic environment on ordinary Americans, we’re rounding up some of the most compelling stories reported by local news organizations around the country. Monique Zimmerman-Stein has been nearly blind for the last two years from Stickler syndrome, a rare genetic disorder. She recently decided to forego her own treatment to save funds to treat her two daughters , who also suffer from the condition, reports Lane DeGregory of the St. Petersburg Times. The family is covered under husband Gary’s Blue Cross/Blue Shield plan, but that coverage only pays for 80 percent of medical expenses. She will no longer get treatment to preserve that last slice of light. The injections that might help cost $380 after insurance, and she needs one every six weeks. She could be spending that money on her daughters’ care. If forgoing treatment might help them see, she said, “That’s a choice any mom would make.” The expensive care has already forced the family out of their home, which was foreclosed, and forced them to sell their furniture and to cash in their life insurance. Tampabay.com put together an excellent video to accompany the story: ****** A family fallen on hard times after their 12-year-old daughter was diagnosed with a brainstem tumor has been served foreclosure papers , reports Elizabeth Prann of local NBC affiliate WJHG. Amber Howard underwent surgery that could only remove part of the tumor. Her father, Neil, is the only member of the family who is able to work. Amber’s weak immune system requires home-schooling. But the Howards don’t let the situation keep them down. The Howard family is fascinatingly optimistic, each one picking up the other when he or she is down. “When she has a good day, that’s when we charge our batteries!” And if it’s one thing none of them is lost is hope. Amber is living proof. “She said to me, God came to me mom. He told me, it’s not my time. But I said, you can’t remember Amber, you were asleep. She said no Mom, I remember! He came over, God came over and he talked to me, he said everything would be OK, it’s just not my time,” Shawn said. ****** Kenneth Hoagland, of Nashville, Tenn., was put in jail for getting a cold , reports Janell Ross of the Tennessean. Hoagland, previously bankrupted by a week-long stay in a hospital for his diabetes, was on a health insurance waiting period for a new job when what started as a cold landed him in a hospital for two days with a $1,200 tab. He could not pay, was afraid to miss work to show up in court, and was arrested on what’s known as a “body attachment.” “They fingerprinted me, took my picture and asked some questions about my medical history,” he said. “When the guy who tested (my blood sugar) asked me why I was there and I told him … he said, ‘I didn’t know we did that in this country.’ I told him, ‘Until now, I didn’t either.’ ” The Tennessean reports that “Hoagland, 36, is one of the hundreds of thousands of Americans — insured and uninsured — facing collection suits, wage garnishments and, more rarely, trips to jail because of medical debt.” HuffPost readers: Seen a good local story? Heard about a heroic judge, neighbor, or doctor helping people stay in their homes? Tell us about it! Email jmhattem@gmail.com .

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Peter Diamandis: Launching Commercial Space Flight: Part Two — Dumitru Popescu Builds His Dream Rocket

September 11, 2009

To commemorate the 5th anniversary of the winning of the Ansari X PRIZE, every week through October 2, read the inspirational stories of the visionaries and heroes who turned their “crazy ideas” into a reality. Guest Blogger Dumitru Popescu: In 2000, I recruited a highly educated and skilled Aerospace team; started a small commercial space organization in a country where that is unprecedented; and dedicated all of my spare time and money to a contest I was sure we would not win. THAT is the power of incentivized competition. I first heard about the X PRIZE Foundation by pure coincidence. My wife and I were surfing the web in an internet cafe when my search for rocket engines unearthed the Ansari X PRIZE website, which would change my life forever. I learned about the competition to privately launch a rocket into sub-orbit. As someone with a lifelong passion for Aviation and Astronautics, as well as a degree from the Aerospace University in Bucharest, I have always wanted to build civilian rockets, but in Romania this sort of activity is limited to the military. I knew competing in this contest would require a lot of technical expertise. I also knew that securing the funding would be difficult as there are very limited opportunities in the EU for entrepreneurs interested in starting small, commercial space businesses. If we went forward, we would do so with our own wallets. Despite these hurdles, my wife and I teamed up with University students to create ARCA, a private organization that would eventually build a rocket to compete for the Ansari X PRIZE. From the beginning, my colleagues were skeptical about whether or not we could make ARCA a serious organization, let alone be a serious contender in the X PRIZE competition. Regardless, it was a great opportunity to gain experience and learn about space, so we decided to move forward. My dream to build rockets became a reality. Early on we did not talk publicly about what we intended to do. We waited until we could leverage the product of our work to increase our credibility. After completing a small pressurized tank, we showed it to various potential sponsors and succeeded in convincing them to donate money and to sponsor our team for a few years. The donations and sponsorship amounts weren’t very big, but they enabled us to keep going. After we completed our first rocket, we were ready to share our achievements publicly. The press and our community became excited when they witnessed our engine tests. It was that moment when others began to realize what was possible. With a half a year remaining in the competition, I attended a meeting with the other teams competing for the Ansari X PRIZE. On that day, I told Burt Rutan, designer of Scaled Composites’ SpaceShipOne, in the presence of all the competitors, that he would win the competition. This was hard for a lot of people to accept, but I was right. One of my colleagues was in attendance for the first flight of SpaceShipOne, and he carried with him the support of our whole team. We wanted very much for Burt and his team to succeed (my team and I were very concerned when their vehicle began to spin out of control). In the end, Burt and his team claimed the $10 Million Ansari X PRIZE. A lot of teams were disappointed as they found themselves suddenly left without a main objective. We at ARCA decided to keep moving forward. In 2006, I had the opportunity to speak with Peter Diamandis at the X PRIZE Cup. I expressed my hope to him that the X PRIZE would initiate another space-based competition in which ARCA could compete. By the end of 2007, this hope was realized when I learned about the $30 Million Google Lunar X PRIZE. Once again, I said, “Let’s go forward with this competition.” I had listened, learned and taken the best from the teams in the Ansari X PRIZE and five years later, I am armed with that knowledge and ready for a new competition…a competition with larger ambitions. This time our sights are set on the Moon. And when the time comes for us to launch our space probe to the Moon, I will decorate that probe with a picture that was taken in Los Angeles of myself and the other Ansari space pioneers back in 2004. And after the probe lands on the Moon, I plan to call each one of them to say that, “Your picture is on the Moon and it’s looking at you!” Then we will laugh together just as in the days of the Ansari X PRIZE Competition.

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Ari Herzog: 12 Ways to Use LinkedIn Today

August 16, 2009

In the wake of numerous individuals and organizations realizing they either don’t have a LinkedIn profile or need to update their existing one, here are 12 ways to use LinkedIn today. 1. If you have a LinkedIn profile, please keep it updated. If you want to know why, ask your friend to open his or her web browser and search your name. Chances are, unless you are omnipresent everywhere online or your name is very common like John Smith (not that I’ve ever met anyone with that name), your LinkedIn profile will appear in the top 5 search engine results. That’s why it should be updated. 2. Fill your profile with colorful language, not drab resume-speak. There is a reason why the site is called LinkedIn, not ResumePlace. Verify the headline either is a mirror of your job title or a description of what you do. Change your headline as often as you’d like; mine currently states, Online media strategist and community manager for business and government, and Newburyport City Council candidate . Flesh out the summary and don’t be afraid it’s too long. Most summaries I see are too short. Which leads me to… 3. Write in first person, not third. Unless you introduce yourself in third person at job interviews, cocktail hours, and networking mixers, keep your page about you in your words. Be transparent to who you are, not a third-person essay of what you’d like people to think you are. 4. Upload the same photo you use elsewhere online. Ensure the picture is what you look like today, or within the past few months. Don’t use a picture that’s more than a year old. Again, think of the cocktail hour; unless you wear a mask to the event, show me who you are and what you look like. 5. Join a group. Prove to me that you can connect to random people who share your beliefs. The more groups you join, the better. But don’t overdo it. You can also choose, when joining groups, whether they appear on your public page or not. If you look at my page, I am displaying a fraction of the groups in which I belong. Don’t display irrelevant groups to the rest of your profile. 6. Ask and answer questions. Social media is about a dialogue; and the more questions you ask, the more frequently your connections will see the questions you ask in their streams. The more questions you answer, the more likely your answer will be marked “the best” and appear next to your name for future questions and answers. There are dozens of topics you can participate in, so go crazy. I was selected for having the best answers in selected questions on blogging, organizational development, and using LinkedIn. 7. Don’t accept every connection request. This is a controversial topic, as some people prefer to use LinkedIn like a typical job recruiter and be connected to anyone and everyone; I am in the other camp. If we’ve met in person or communicated enough times online–if you’re someone I trust and respect and wouldn’t hesitate to recommend to someone who asks for a referral, then I’ll connect with you. But if I don’t know who you are, I’ll archive your request, nicely reply no thanks, and ask you to connect with me elsewhere as a precursor. The caveat is if you’re seeking to hire me and indicate that in your introductory message, I’ll say yes. 8. Don’t mirror your LinkedIn network with other social networks. Just because we’re friends on Facebook or mutually connected on Twitter doesn’t necessarily imply I will connect with you on LinkedIn. Point is, you can always decline. (Try not to click the “I Don’t Know” button which has negative consequences; just archive the request.) 9. Recommend your connections. Whether someone is a friend, a colleague, a co-worker, a teacher or student, or any other connection to you, recommend the person. Some suggest you should recommend a new person every day, a strategy I sometimes commit for a few days and then forget to continue. You don’t have to work with someone to recommend him or her. I’ve recommended (and been recommended by) people whose blogs I respect, for instance. Just don’t add two sentences; make your recommendation prolific. 10. Ask your connections to recommend you. Sometimes, people will recommend you if you recommend them first. Other times, they won’t. Either way, if you don’t ask, you’ll never know. 11. Add applications to your profile. If you have a blog, there are applications to add recent posts. If you travel a lot and like to share where you go, or attend networking events, there are applications you may want to add to your profile. If like me , you have a Slideshare account for your presentations, link that. 12. Most importantly, be a person, not a robot. If you’re not connected to someone on LinkedIn and would like to be connected, don’t accept the default invitation text that would arrive in my inbox like this: Dear Ari, I’d like to add you to my professional network on LinkedIn. -John Tell me why you want to connect with me, for your assumption may be different than mine. Again, think of the cocktail party. If you give the same business card to every person with the same line, “Call me,” then please send the default invitation. But if you give the business card to people and personalize the action, why not echo that on LinkedIn? More people are visiting LinkedIn every day. Maybe these tips will enrich your online experience. If you get confused, add a comment below or send me a message on LinkedIn . Link to original post

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Khatami Denounces Trial of Iranian Election Protestors as Unconstitutional

August 2, 2009

By Ladane Nasseri Aug. 2 (Bloomberg) — Iran’s former president Mohammad Ali Khatami , a backer of the opposition movement, denounced as a sham the trial of protestors detained after the country’s disputed re-election of Mahmoud Ahmadinejad , as the hearings continued for a second day

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Michael Shapiro: (Un) Happy Anniversary: 45 Years Since Baseball Debuted on Pay-TV

July 29, 2009

The Los Angeles Dodgers will be in St. Louis tonight to play the Cardinals, and it is only fitting that the game will be available only to those who pay to watch

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Michael Shapiro: (Un) Happy Anniversary: 45 Years Since Baseball Debuted on Pay-TV

July 29, 2009

The Los Angeles Dodgers will be in St. Louis tonight to play the Cardinals, and it is only fitting that the game will be available only to those who pay to watch. For this month marks the 45th anniversary of baseball’s first pay-to-view major league baseball game, and with whom better to celebrate than the team that hosted that first telecast from the House that Walter O’Malley built?

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Alzheimer’s Angst Builds for Elan, Wyeth, Pfizer as Rival Drugs Fail Tests

July 20, 2009

By Michelle Fay Cortez July 20 (Bloomberg) — The leading Alzheimer’s drug discovery strategy being pursued by companies including Wyeth and Elan Corp. appears increasingly risky as new studies emerge. More than a dozen drugs now in human testing were designed to slow progression of the illness by blocking the proteins that form clumps in the brain

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White Men Can’t Trump Sotomayor on Life Story: Albert R. Hunt

July 19, 2009

Commentary by Albert R. Hunt July 20 (Bloomberg) — Senator Lindsey Graham , the engaging South Carolina Republican, lectured Supreme Court nominee Sonia Sotomayor last week that if he had made a comment like hers that a “wise Latina woman” often reaches better conclusions, it would have a been a career-ender.

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