race

Republican Leads Race in Illinois for Obama’s U.S. Senate Seat, Poll Finds

February 4, 2010

By Jonathan D. Salant Feb. 4 (Bloomberg) — Republican Mark Kirk leads Democrat Alexi Giannoulias in the race for the Illinois U.S. Senate seat formerly held by President Barack Obama , a new poll finds. Kirk, a U.S. representative, led Giannoulias, the state treasurer by 46 percent to 42 percent in the Feb. 3 survey of 500 likely voters by Rasmussen Reports. The poll, taken one day after the Illinois primary in which both men won their parties’ nominations, had a margin of error of 4.5 percentage points. A Public Policy Polling survey of 1,062 likely voters taken Jan. 22-25 gave Giannoulias an 8 point lead, 42 percent to 34 percent, with a margin of error of 3 percentage points. A Dec. 9 Rasmussen poll of 500 likely voters showed Giannoulias leading Kirk by 42 percent to 39 percent. Both parties wasted little time in attacking the opposition candidate yesterday. Republicans posted an online video called “Making Tony Soprano Proud,” which cites loans that the Giannoulias family’s bank made to a bookmaker as well as to convicted Illinois influence peddler Antoin “Tony” Rezko. Democrats called Kirk, who supported President George W. Bush’s tax cuts that contributed to record federal deficits, “a Washington insider who wants to return to the failed policies that created the economic mess we now face.” The incumbent, Roland Burris , appointed to succeed Obama, is not seeking re-election. The race is considered one of the most competitive U.S. Senate contests this year by the three Washington-based publications that rate congressional races: Congressional Quarterly, the Cook Political Report and the Rothenberg Political Report. To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net .

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Fred Redmond: Taking a Stand Against Hate: Hotels Bar American Renaissance

February 2, 2010

A Washington, D.C. area hotel last week closed its doors to a racist convention that had booked rooms under the benign-sounding name “American Renaissance” conference. Now all American hotels and conference centers should follow that lead, because in the U.S. renaissance means overcoming bigotry. American Renaissance conducts a biannual conference that promotes racial and religious hatred. This year one of its guest speakers at the February conference is to be Nick Griffin , a convicted criminal who heads the British National Party, a white separatist group that contends immigrants are causing the “genocide” of “indigenous” white Britons. The hotel canceled the booking after several groups asked it not to serve as host to a hate hoedown. Those groups will monitor the organization’s attempts to secure another meeting place. They include the United Steelworkers; One People’s Project , which describes itself as a resource for those fighting fascism; and the Mormon Worker , a newspaper based in Provo, Utah. As a union that promotes diversity and inclusion, the United Steelworkers finds the doctrine and language of Griffin and American Renaissance reprehensible. The American Renaissance Web site contends, for example: “Virtually no whites anywhere are willing to break taboos about racial differences in IQ, the costs of ‘diversity,’ or the challenges of non-white immigration.” It specifies: “Gentlemen will wear jackets and ties to all conference events.” Apparently women are not invited. It also tacitly acknowledges the offensiveness of its message by offering attendees tags bearing false names, which it describes as “war names”: “We will prepare name tags in advance; please call us if you would like to use a nom de guerre. ” That link to violence is not accidental. By inviting Nick Griffin, the group embraced a criminal whose organization is connected to numerous violent — even deadly — acts. In 1998, Griffin was convicted of inciting racial hatred with articles that denied the Holocaust. He received a suspended nine-month prison term. At the trial he said, “I am well aware that the orthodox opinion is that six million Jews were gassed and cremated and turned into lampshades. Orthodox opinion also once held that the world is flat.” Griffin has cited neo-fascist Robert Fiore as a major BNP influence. Fiore is a convicted criminal and member of the Italian terrorist organization implicated in the 1980 Bologna bombing that killed 85 people. Among the criminals associated with the BNP are David Copeland, a former member sentenced to 50 years for setting off explosives that killed three people and injured 139; former BNP candidate Roderick Rowley, who was sentenced to prison on 14 charges of making and distributing obscene images of children, and BNP election agent Kevin Hughes who was sentenced to two years in prison for assaulting an Iraqi asylum seeker. Griffin and the BNP were admired by U.S. Holocaust Memorial Museum shooter James W. von Brunn, who killed a security guard when he opened fire in the Washington museum lobby last year. Brunn, a white supremacist who was convicted and imprisoned earlier for an armed attempt to kidnap Federal Reserve Board members, went to see Griffin speak when the BNP leader lectured in the U.S. previously. Brunn wrote on his blog that although he had misgivings about Griffin allowing Jews to join the BNP: “My hat is off to this fighting white man, Nick Griffin, for the incredible victories for White Britain which his hard work, rhino-thick skin against [Jewish media] criticism, and inspired leadership have made possible. . . . Hail the white leader, Nick Griffin!” Brunn died in prison in January awaiting his murder trial. Griffin himself is again facing the potential of imprisonment, this time over the BNP’s racist constitution. A British court ordered him to change the document so that it no longer bars admission of Asians, blacks and members of other ethnic minorities. The BNP constitution also says: “The British National Party stands for the preservation of the national and ethnic character of the British people and is wholly opposed to any form of racial integration between British and non-European peoples. It is therefore committed to stemming and reversing the tide of non-white immigration and to restoring, by legal changes, negotiation and consent, the overwhelmingly white make-up of the British population that existed in Britain prior to 1948.” Griffin suggests non-whites be paid to leave Britain and return to their countries of origin. It’s not clear how that would work for minorities who’ve lived in Britain for generations. The court initially set the end of January as a deadline for the constitutional change, but has given Griffin two more weeks to comply. This convict connected to so many other criminals apparently received a visa to enter the U.S. How likely is it that he would he have gotten one if he were a Muslim endorsing the “cleansing” of Christians? Hotels and conference centers have every right to shun the likes of Griffin and American Renaissance. Refusing to provide a forum for hate is not a denial of First Amendment free speech rights. Griffin and the American Renaissance are free to spew their race- and religion-based venom in any public park or on any private property owned by a like-minded bigot.

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Republican Leaders to Watch Obama’s State of the Union Speech From Waikiki

January 27, 2010

By John McCormick Jan. 27 (Bloomberg) — The Republican Party’s leadership plans to watch President Barack Obama’s State of the Union speech tonight from a Hawaiian resort’s South Pacific Ballroom. The picture-perfect weather along Honolulu’s Waikiki Beach matches the mood of Republican National Committee members gathered for their winter meeting starting today. They convene following Scott Brown’s Jan. 19 win in Massachusetts to claim the U.S. Senate seat formerly held by the late Democratic Senator Edward M. Kennedy , a victory that invigorated the party. “We feel very positive about Republican success in 2010,” said Sean Mahoney, an RNC member from Portsmouth, New Hampshire. “Independent voters are coming back to Republican principles.” The Republicans say this can be a year of opportunity as they seek to capture congressional seats and governors’ offices held by Democrats. More than 100 RNC members are at the conference at the oceanfront Hilton Hawaiian Village amid swimming pools and lagoons in the city where Obama was born. Brown’s victory, in a state Obama won by 26 percentage points in 2008, was the third recent high-profile Democratic loss. In November, the president’s party lost the governor’s mansions in New Jersey and Virginia. Mahoney, 43, said his party is poised to take advantage of an angry electorate amid a national unemployment rate of 10 percent and gridlock in Congress. “People are now questioning whether more government spending is the right remedy for long-term prosperity,” he said. Senate and House After Brown is seated, Democrats will control 59 Senate votes compared with 41 for the Republicans. In the House, Democrats outnumber Republicans 256 to 178. Bob Bennett, 70, an RNC member from Cleveland, Ohio, said there is no shame in meeting in a palm-tree-lined locale, though he also said, “If you took a poll of members, they probably would have held it a little closer to home.” Hawaii Governor Linda Lingle , the state’s first Republican governor since 1962, is a former state party chairman who has long lobbied for a gathering in her state, Bennett said. “She has a lot of friends on the committee,” said Bennett, wearing a Hawaiian shirt. “It’s a show of support.” Michael Steele , the RNC chairman, told the Associated Press he isn’t concerned about gathering in a lush place and wants to recognize the efforts of Republicans from Hawaii and U.S. territories in the Pacific Ocean who usually must travel to the mainland for such events. “Hawaii’s going through a recession, too,” Steele told AP. “So we’re going to help the economy a little bit.” Luau After Obama Speech After the State of the Union, RNC members plan a luau with a speech by Hawaii Lieutenant Governor James “Duke” Aiona, a Republican candidate for governor in the state. Before adjourning Jan. 30, the committee is considering a resolution that would bar party contributions to Republicans who fail to meet a test of conservative principles. As drafted, the resolution would require Republican candidates to agree to at least eight of 10 positions on issues including abortion, gay marriage and gun control. “There is no final text on the purity resolution,” said Gail Gitcho, a committee spokeswoman. “I don’t know what it will say, or if it will be in fact voted on.” The idea was proposed by James Bopp Jr ., an Indiana lawyer, after discontent over the party’s handling of a special election last fall in upstate New York. Democrat Bill Owens won the open seat in November after some Republicans rebelled against the party’s pro-choice nominee, who withdrew from the race, leaving a Conservative Party candidate to oppose Owens. Mahoney said he is undecided on the resolution, which is named after former President Ronald Reagan . “It is important that we have Republicans that both campaign as Reagan Republicans and govern as Reagan would, not as Jimmy Carter would,” he said. Mahoney said Republicans will also look at how to work with the anti-establishment “Tea Party” movement. “Our candidates would be wise to engage anti-tax advocates of all stripes,” he said. To contact the reporter on this story: John McCormick in Honolulu at jmccormick16@bloomberg.net .

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Massachusetts Vote, Message of Change Brings Threat to President’s Agenda

January 20, 2010

By James Rowley and Julianna Goldman Jan. 20 (Bloomberg) — The calls for change that rallied independents to Barack Obama in 2008 and propelled him to the White House reverberated again in Massachusetts last night, now threatening the president’s agenda. With Republican Scott Brown ’s victory in a special election to fill the Senate seat that had been long held by the late Edward M. Kennedy , a Democrat, the president may have to scale back his second-year agenda, which includes overhauling immigration laws and financial regulations, analysts said. Brown’s defeat of Democrat Martha Coakley is “a body blow to Obama and other Democrats,” said Larry Jacobs , director of the Hubert Humphrey Institute of Public Affairs at the University of Minnesota in Minneapolis. “It’s a resounding message of rejection, disappointment and the loss of hope.” The White House is likely to focus now on salvaging health-care legislation and reclaiming populist ground on the economy and jobs. Obama’s advisers said the president is already moving to focus on those issues, along with deficit reduction, in his State of the Union address on Jan. 27 and the budget he submits to Congress Feb. 1. He’ll also keep up criticism of Wall Street and executive bonuses as he presses for new regulations. “What you will really see the Democratic leadership do is to pivot to job creation and deficit control,” Arizona’s Jon Kyl , the second-ranking Republican in the Senate, said yesterday. “They can read the polls, too.” Bigger Struggle Even with 60 seats in the Senate and 256 seats in the House, Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi struggled to steer the president’s agenda through Congress. That will become even more difficult with one less Senate vote and with lawmakers facing close re-election fights in November hearing echoes from the Massachusetts race. Some of Obama’s most ambitious initiatives, from climate- change legislation to closing the U.S. prison camp at Guantanamo Bay, Cuba, — already imperiled because of lukewarm support from Democrats — may have to be shelved, analysts and lawmakers said. “Normally, a junior senator winning doesn’t have a great effect,” said Robert Blendon , a professor of health policy and director of the Harvard Opinion Research Program. Brown’s victory will “dramatically alter President Obama’s domestic agenda for the rest of his term, or at least through 2010.” Connecticut Democratic Representative Joe Courtney said his party’s defeat in Massachusetts is reminiscent of Republican congressional gains during Bill Clinton ’s first term as president. Curtailed Agenda “We’ve sort of seen this movie before in the 1990s,” Courtney said. “It seems inevitable” that Obama’s “agenda will be curtailed or reduced.” Brown’s win in a state that gave Obama 62 percent of the vote in 2008 follows Democratic losses of governorships in Virginia and New Jersey last year. Obama won both those states as well. Before the Massachusetts results were in, White House press secretary Robert Gibbs described Obama as “surprised and frustrated” that Brown was able to overcome the lead Coakley had at the start of the campaign to replace Kennedy, who died of brain cancer in August. Gibbs yesterday declined to address questions about how the Massachusetts election would affect Obama’s agenda. He previewed how the administration would frame the results, saying the race reflected the “tremendous amount of upset and anger in this country about where we are economically.” Anger and Frustration That sentiment predates Obama taking office and “in many ways, we’re here because of that upset and anger,” Gibbs said. “The president understands there’s a lot of economic frustration out there,” he said. That means work on bringing down the unemployment rate , which stood at 10 percent last month, and boosting the economy, which is still pulling out from a recession that began in December 2007. “If we are not successful in establishing job growth and economic growth soundly we will not achieve any of our other objectives,” National Economic Council Director Lawrence Summers told reporters last week. “Priority number one has to be assuring rapid job growth.” The debate over financial regulation and Obama’s proposal to tax banks such as Citigroup Inc . and Bank of America Corp . that received government assistance after last year’s financial crisis, will give Obama a chance to focus public anger. Banks a Target Obama can “go down a very, very aggressive populist route,” said Ross Baker , a political scientist at Rutgers University in New Brunswick, New Jersey. “There is a preexisting attitude toward banking which he can tap into for sure.” David Plouffe , who was Obama’s campaign manager in the 2008 election and still serves as an outside adviser, said Obama will remain focused on moving his agenda forward. “That’s not going to be easy,” Plouffe said. Democrats still retain “big majorities” in both chambers, and advancing health-care legislation will be pivotal for the party’s efforts to keep control of Congress after the November election, he said. If Democrats step away, Plouffe said, “We’re going to have the worst of both worlds, which is you supported a bunch of stuff that has been demonized, you don’t have the opportunity to pass it and not just sell it but have voters experience the reality of it.” That may not be an easy task. Some Democrats last night already began backing away from Obama’s top legislative priority New York Democratic Representative Anthony Weiner said his party should suspend its push to pass health-care legislation and come back to it later. “We’ve got to recognize we’ve got a completely different situation.” To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net ; Julianna Goldman in Washington at jgoldman6@bloomberg.net

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Republican Brown Wins Democrat Kennedy’s Former Massachusetts Senate Seat

January 19, 2010

By Heidi Przybyla and John McCormick Jan. 19 (Bloomberg) — Republican Scott Brown won the Massachusetts Senate seat of the late Democrat Edward Kennedy, a political upset that imperils health-care legislation in Congress and sends a warning shot to Democrats ahead of November’s elections. Brown was leading Democratic state Attorney General Martha Coakley 52-47 percent with 92 percent of the state’s precincts reporting, according to the Associated Press, which projected Brown as the winner. Independent candidate Joseph Kennedy, no relation to the late senator, had about 1 percent of the vote. Brown, 50, a previously little-known state senator, cast himself as an independent voice who would help thwart President Barack Obama’s health-care plan and keep a check on Democrats in Congress, particularly on tax-increase proposals. Brown’s victory increases his party’s Senate numbers to 41, which would give Republicans enough members in the 100-person Senate to block votes on an overhaul of the U.S. health-care system, Obama’s top legislative goal. His victory, in a state Obama won by 26 percentage points in the 2008 election, is the third recent high-profile Democratic loss. In November, the president’s party lost the governor’s mansions in New Jersey and Virginia. It follows decisions by five House Democrats since November to retire instead of face potentially tough races later this year. Political ‘Tsunami’ The Massachusetts vote represents “a tsunami in American politics,” said Robert Blendon , a Harvard University pollster. The last Republican senator from Massachusetts was Edward Brooke , who was elected to the last of his two terms in 1972. Once Brown is sworn in, Democrats will lose the 60-vote super-majority that has allowed them to overcome often-unanimous Republican opposition to Obama’s legislative initiatives. Brown’s election comes just as Democratic congressional leaders are negotiating a final version of a health-care bill that many Democrats view as a tribute to Kennedy’s decades of work on the issue. Brown’s presence in the Senate will force Obama to “dramatically alter” his domestic agenda, Blendon said. Former Massachusetts Governor Paul Cellucci , a Republican, warned his party’s national leaders against interpreting the results as a wholesale movement toward Republicans. Brown described himself as independent-minded, and campaigned without deploying Republican heavyweights such as former vice presidential candidate Sarah Palin or Minnesota Governor Tim Pawlenty to stump for him. Pickup Truck Instead, he crisscrossed the state in a pickup truck and appeared days before the election with Boston Red Sox pitching legend Curt Schilling and John Ratzenberger , an actor who played a mail carrier on the “Cheers” television comedy. “The message for the national Republican Party should be, even though people aren’t happy with the Democrats right now, if we get back to power we can find ways to be independent and be bipartisan,” Cellucci said. “People are sick of this partisanship.” Brown will serve the rest of Kennedy’s term, ending in January 2013. He will replace Paul Kirk , a Kennedy friend and former head of the Democratic National Committee who was appointed by Governor Deval Patrick on Sept. 24 to temporarily fill the seat. Brown told CNN before the results were known that he would expect to take office quickly and already has made plans to travel to Washington on Jan. 22. As House and Senate Democrats seek to combine each chamber’s version of health-care legislation, Republicans want to avoid delays. Certification Process Massachusetts has up to 10 days after the election to send results to the governor and the governor’s council, which must certify the results. Brian McNiff , spokesman for the Massachusetts secretary of the commonwealth, said that gives cities and towns the chance to count ballots from the military and overseas. Brown’s election, in a state long considered a Democratic stronghold, could have an impact on Democrats and potential Republican competitors in closely divided districts across the country. “You’re going to see not only an infusion of real money, but also a lot of good-quality candidates come out and want to run — because they smell blood in the water,” said Republican strategist Scott Reed, who managed Bob Dole ’s 1996 presidential campaign. Once that happens, “the damage is already done,” even if economic conditions across the nation improve, said Ross Baker , a political science professor at Rutgers University in New Brunswick, New Jersey. The House and Senate are trying to reach a compromise on the U.S. health-care system’s largest revamp since the Medicare program for the elderly was created more than four decades ago. 60 Votes Coakley, 56, had said she would vote for health-care legislation while Brown vowed to block it. Democrats have controlled 60 of the Senate’s 100 votes, and needed all 60 to thwart Republican efforts to prevent a final vote of the chamber’s version of the bill in December. Senate Minority Leader Mitch McConnell of Kentucky has said the race shows the extent of popular opposition to Obama’s health plan. Thomas Mann , a congressional expert at the nonpartisan Brookings Institution in Washington, calls “a stretch.” “Residents of Massachusetts approve of their state plan, which is the model for the Obama plan,” said Mann. Democrats are likely to reject Republican calls to scrap the plan and start over. “Obama and the Democrat’s policy and political future depend upon banking health reform now and pivoting to aggressively engage Republicans on economic policy.” Massachusetts Bill In 2006, Brown voted as a state senator for a Massachusetts universal health-care bill that has been used as a model by the president’s administration. Massachusetts, in part due to Kennedy and his brother, former President John Kennedy , has long been regarded as among the most Democratic-leaning states. While Democrats outnumber Republicans by a margin of 3-to-1 on the state’s voter registration rolls, 51 percent of Massachusetts voters aren’t registered with either party. The state has a history of electing Republican governors, who held that post from 1991 to 2007. Still, all 10 of the Massachusetts House seats are held by Democrats. The last time Kennedy faced a competitive Senate race was 1994, when Republican Mitt Romney closed the gap in the polls before losing by 17 percentage points. That was the same year Democrats lost their congressional majorities as part of the so- called Republican Revolution. Unemployment Figures Coakley ran against political headwinds such as lingering high unemployment. The Massachusetts unemployment rate was 8.8 percent in November, down from a peak of 9.3 percent in September. Nationally, “until those numbers improve the outlook for the Democrats is very bleak,” said Baker. Local issues also influenced the Massachusetts race, including a recent state tax increase and abuse-of-power scandals surrounding the state’s Democratic Party. “It’s much more local,” said Jennifer Duffy , the Senate analyst at the nonpartisan Cook Political Report in Washington. Perhaps most importantly, the Coakley campaign failed to take the threat from Brown seriously. Coakley opened two district offices to Brown’s five and she kept a far lighter schedule of campaign events. “She thought the election was won,” said Edwin Betancourt, 39, a Boston Democrat who voted for Brown. Duffy said Coakley “wasn’t out there while Brown was running a sprint.” Kennedy, 77, died Aug. 25 after a 15-month battle with brain cancer. A Democrat, he had served in the Senate since 1962, when he won the seat once held by his brother John. To contact the reporters on this story: Heidi Przybyla in Washington at hprzybyla@blooomberg.net ; Brian K. Sullivan in Boston at bsullivan10@bloomberg.net

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For Obama, Message of Change in Massachusetts Vote Brings Threat to Agenda

January 19, 2010

By James Rowley and Julianna Goldman Jan. 20 (Bloomberg) — The calls for change that rallied independents to Barack Obama in 2008 and propelled him to the White House reverberated again in Massachusetts last night, now threatening the president’s agenda. With Republican Scott Brown ’s victory in a special election to fill the Senate seat that had been long held by the late Edward M. Kennedy , a Democrat, the president may have to scale back his second-year agenda, which includes overhauling immigration laws and financial regulations, analysts said. Brown’s defeat of Democrat Martha Coakley is “a body blow to Obama and other Democrats,” said Larry Jacobs , director of the Hubert Humphrey Institute of Public Affairs at the University of Minnesota in Minneapolis. “It’s a resounding message of rejection, disappointment and the loss of hope.” The White House is likely to focus now on salvaging health-care legislation and reclaiming populist ground on the economy and jobs. Obama’s advisers said the president is already moving to focus on those issues, along with deficit reduction, in his State of the Union address on Jan. 27 and the budget he submits to Congress Feb. 1. He’ll also keep up criticism of Wall Street and executive bonuses as he presses for new regulations. “What you will really see the Democratic leadership do is to pivot to job creation and deficit control,” Arizona’s Jon Kyl , the second-ranking Republican in the Senate, said yesterday. “They can read the polls, too.” Bigger Struggle Even with 60 seats in the Senate and 256 seats in the House, Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi struggled to steer the president’s agenda through Congress. That will become even more difficult with one less Senate vote and with lawmakers facing close re-election fights in November hearing echoes from the Massachusetts race. Some of Obama’s most ambitious initiatives, from climate- change legislation to closing the U.S. prison camp at Guantanamo Bay, Cuba, — already imperiled because of lukewarm support from Democrats — may have to be shelved, analysts and lawmakers said. “Normally, a junior senator winning doesn’t have a great effect,” said Robert Blendon , a professor of health policy and director of the Harvard Opinion Research Program. Brown’s victory will “dramatically alter President Obama’s domestic agenda for the rest of his term, or at least through 2010.” Connecticut Democratic Representative Joe Courtney said his party’s defeat in Massachusetts is reminiscent of Republican congressional gains during Bill Clinton ’s first term as president. Curtailed Agenda “We’ve sort of seen this movie before in the 1990s,” Courtney said. “It seems inevitable” that Obama’s “agenda will be curtailed or reduced.” Brown’s win in a state that gave Obama 62 percent of the vote in 2008 follows Democratic losses of governorships in Virginia and New Jersey last year. Obama won both those states as well. Before the Massachusetts results were in, White House press secretary Robert Gibbs described Obama as “surprised and frustrated” that Brown was able to overcome the lead Coakley had at the start of the campaign to replace Kennedy, who died of brain cancer in August. Gibbs yesterday declined to address questions about how the Massachusetts election would affect Obama’s agenda. He previewed how the administration would frame the results, saying the race reflected the “tremendous amount of upset and anger in this country about where we are economically.” Anger and Frustration That sentiment predates Obama taking office and “in many ways, we’re here because of that upset and anger,” Gibbs said. “The president understands there’s a lot of economic frustration out there,” he said. That means work on bringing down the unemployment rate , which stood at 10 percent last month, and boosting the economy, which is still pulling out from a recession that began in December 2007. “If we are not successful in establishing job growth and economic growth soundly we will not achieve any of our other objectives,” National Economic Council Director Lawrence Summers told reporters last week. “Priority number one has to be assuring rapid job growth.” The debate over financial regulation and Obama’s proposal to tax banks such as Citigroup Inc . and Bank of America Corp . that received government assistance after last year’s financial crisis, will give Obama a chance to focus public anger. Banks a Target Obama can “go down a very, very aggressive populist route,” said Ross Baker , a political scientist at Rutgers University in New Brunswick, New Jersey. “There is a preexisting attitude toward banking which he can tap into for sure.” David Plouffe , who was Obama’s campaign manager in the 2008 election and still serves as an outside adviser, said Obama will remain focused on moving his agenda forward. “That’s not going to be easy,” Plouffe said. Democrats still retain “big majorities” in both chambers, and advancing health-care legislation will be pivotal for the party’s efforts to keep control of Congress after the November election, he said. If Democrats step away, Plouffe said, “We’re going to have the worst of both worlds, which is you supported a bunch of stuff that has been demonized, you don’t have the opportunity to pass it and not just sell it but have voters experience the reality of it.” That may not be an easy task. Some Democrats last night already began backing away from Obama’s top legislative priority New York Democratic Representative Anthony Weiner said his party should suspend its push to pass health-care legislation and come back to it later. “We’ve got to recognize we’ve got a completely different situation.” To contact the reporters on this story: James Rowley in Washington at jarowley@bloomberg.net ; Julianna Goldman in Washington at jgoldman6@bloomberg.net

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Democrats Face Loss of Kennedy’s Senate Seat as Health Measure in Jeopardy

January 19, 2010

By Heidi Przybyla Jan. 19 (Bloomberg) — Democrats face the possibility of losing their most iconic U.S. Senate seat, held for almost 47 years by the late Edward Kennedy , in a Massachusetts election today that could also cost them their 60-vote Senate supermajority needed to help pass a health-care overhaul. In just over a week, Democrat Martha Coakley , the state attorney general once considered a sure bet for the Senate, has watched her lead evaporate. Some polls show her trailing state Senator Scott Brown , who was more than 30 points behind last November. Democrats are mobilized by the prospect of conceding a Senate seat in a state where they control all 10 House seats. President Barack Obama stumped for Coakley in a trip to Boston Sunday. He also cut a new television ad, while his grassroots organizing group says it placed 93,000 calls across the state on Jan. 16 alone. “In some ways, Republicans have already won,” said Jennifer Duffy , the Senate analyst for the nonpartisan Cook Political Report in Washington. “Nobody ever imagined a special election in Massachusetts for Ted Kennedy’s seat would ever get remotely competitive.” Research “strongly suggests” that Brown, 50, will defeat Coakley, 56, the Washington-based nonpartisan Rothenberg Political Report said. That outcome or even a narrow Coakley win could discourage House or Senate Democrats in competitive districts and states from running in this November’s elections amid a sagging economy and declining poll numbers for Obama. Supermajority at Stake At stake is the presidential party’s 60-vote majority that helps Democrats avoid Republican attempts to kill legislation, including Obama’s signature issue, a health-care bill before Congress that many Democrats also consider a tribute to Kennedy’s decades of work to expand medical coverage. Still, “the key is what’s the turnout of independents,” who aren’t as likely as Democrats or Republicans to vote, said Jeffrey Berry , a political science professor at Tufts University in Medford, Massachusetts. “A big turnout of independents probably favors Brown.” While Democrats outnumber Republicans 3-to-1 in the state, 51 percent of voters aren’t registered with a party. Obama warned that much of his agenda in Congress, specifically his health-care overhaul and proposed fee on big banks, hinges on retaining Kennedy’s former seat. “We’ve begun to deliver on the change you voted for,” Obama told a crowd of about 1,500 people Jan. 17 at Northeastern University in Boston. Race Tightening Polls show the race tightening in the closing days of the campaign. One poll by Boston’s Suffolk University gave Brown a 4-percentage-point lead. Another poll by Survey USA, conducted Jan. 15-17, gave Brown a 7-point advantage. Coakley had led by 31 points in a Suffolk poll last November. The polls all have a margin of error of less than 5 percentage points. Brown has cast himself as a populist and political outsider in a state with abuse-of-power scandals involving Democratic lawmakers including a former speaker of the House, Salvatore DiMasi , who was indicted on federal corruption charges . The last Republican senator from Massachusetts was Edward Brooke , who served two terms before being defeated in 1978. While Coakley campaigned with Obama and former President Bill Clinton , Brown crisscrossed the state in a pickup truck and recruited celebrities with blue-collar appeal. Joining him yesterday were Red Sox pitching legend Curt Schilling and John Ratzenberger , an actor who played the mail carrier on the “Cheers” television comedy. ‘Political Machine’ “I’m running in the name of every independent-thinking voter to take on the political machine and their candidate,” Brown says in a recent Web advertisement. Senate Republican leader Mitch McConnell of Kentucky said Jan. 17 that the Massachusetts race shows the extent of popular opposition to Obama’s health-care proposal. Some analysts say local issues such as taxes loom larger. “People are just really angry” about the economy, tax increases and corruption, said Fred Bayles , director of Boston University’s Statehouse Program. “Coakley should have been aware of what the situation was.” Democrats took aim at Brown’s opposition to Obama’s plan to tax the largest financial firms, including Charlotte, North Carolina-based Bank of America Corp. , to recoup losses from companies that got federal aid from the $700 billion Troubled Asset Relief Program. Focus on Banks “Bankers don’t need another vote in the United States Senate — they’ve got plenty,” Obama said in Boston, signaling a broader political strategy to tie Republicans in this year’s races to Wall Street greed. Brown has said banks will pass on the cost of Obama’s proposed tax to consumers in the form of higher fees. Outside groups poured money into the race. The Tea Party Express, which opposes Obama’s health-care plan, said it has spent more than $300,000 supporting Brown. The National Rifle Association put almost $20,000 behind Brown. Service Employees International Union groups reported on Jan. 13 spending almost $740,000 to back Coakley. “The whole nation’s watching what’s happening in Massachusetts,” Coakley told supporters in Boston on Jan. 15. The Massachusetts winner will replace Paul Kirk , a former Democratic National Committee chairman appointed to the Senate after Kennedy died last August at age 77. Kirk didn’t run to serve the remaining three years of Kennedy’s term. To contact the reporters on this story: Heidi Przybyla in Washington at hhprzybyla@bloomberg.net ;

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Obama Will Stump for Coakley Ahead of Vote to Fill Kennedy’s Senate Seat

January 15, 2010

By Hans Nichols and Heidi Przybyla Jan. 15 (Bloomberg) — President Barack Obama will campaign Sunday in Massachusetts for the Democratic candidate in a close race to fill the seat held by the late Senator Edward Kennedy . State Attorney General Martha Coakley is trying to hold off a surge by Republican state Senator Scott Brown in recent opinion polls before the Jan. 19 vote. The campaign, in a state dominated by Democrats, will affect Obama’s ability to move legislation through the Senate and is becoming an early test of his party’s prospects in November’s congressional elections. “The president sees a pretty clear distinction” between the candidates, White House press secretary Robert Gibbs said. The Republican, Gibbs said, is “fighting for the insurance industry and big banks.” If Brown wins, Democrats would lose the 60-vote Senate majority they’ve needed to prevent Republicans from blocking votes on measures such as a health-care overhaul. A Jan. 11-13 poll by Boston’s Suffolk University showed Brown leading Coakley 50 percent to 46 percent. Brown’s lead is within the poll’s error margin of plus-or-minus 4.4 percentage points. Coakley had led by 31 points in a Suffolk poll last November . “It’s an important Senate seat,” Gibbs said during the daily White House briefing. “That’s why the president’s going.” Shift in Plans In Washington, Democrats expressed concern that the race could have an impact on pending health-care legislation. “We felt there was not enough energy,” said Democratic Representative Barney Frank , who plans to campaign with Coakley in his congressional district outside Boston. “People are going to try to help energize people in ways the campaign didn’t.” For many voters, the election’s “public-policy significance has been lost in a personality contest between two people,” Frank said. “That’s now being changed.” Obama’s decision to step into the fray changes the White House stance from as recently as Jan. 11, when Gibbs told reporters that Obama “doesn’t have any travel plans to campaign in Massachusetts.” Asked what changed, Gibbs today said, “He got invited. I think he thinks it’ll be productive.” In the Suffolk poll of 500 Massachusetts registered voters, 48 percent of respondents approved of Obama’s job performance as president, against 43 percent who disapproved. Asked about broader views of Obama, 55 percent said they had a generally favorable opinion of the president and 35 percent had an unfavorable opinion. Campaign Money Money also is pouring into the race. The Democratic Senatorial Campaign Committee has bought $567,000 worth of advertising to help Coakley. The Tea Party Express, a group that’s opposing the health-care legislation, said it has spent more than $200,000 supporting Brown. The American Federation of State, County & Municipal Employees today reported buying $100,000 of radio advertising time in support of Coakley. Next week’s winner will replace Paul Kirk , a former Democratic National Committee chairman appointed to the Senate after Kennedy died last August at age 77. Kirk didn’t run to serve the remaining three years of Kennedy’s term. Massachusetts politics recently have been dominated by Democrats. The last Republican senator from Massachusetts was Edward Brooke , who served two terms before being defeated in 1978. Democrats hold all 10 of the state’s U.S. House seats. Republicans didn’t field candidates for six 2008 House races and, in four contested districts, their nominees lost by at least 40 points. Rated a Toss-Up The Rothenberg Political Report and Cook Political Report, Washington-based publications that handicap elections, yesterday labeled the Massachusetts contest as a toss-up. In the race’s closing days, both candidates sought to cast the election as a proxy battle over health care. Coakley, 56, says she would vote for Democratic proposals. Brown, 50, says electing him as the 41st Senate Republican would be the best way to halt the legislation. House and Senate negotiators are in talks to draft final legislation implementing the biggest changes in U.S. health care in 45 years and extending insurance to tens of millions of Americans. When he died, Kennedy and his brother, former President John Kennedy , had held the Senate seat for 55 of the previous 57 years. November Elections In part because of that history, even coming close would help Republicans make the case that Democrats are in danger of losing congressional majorities in November. “Anything in the single digits and Republicans get to crow a little bit,” said Jeffrey Berry , a political science professor at Tufts University in Medford, Massachusetts. Coakley’s challenge stems in part from a “drowsy” campaign approach, said Fred Bayles , director of the Boston University Statehouse Program . She set up two district offices to Brown’s five and kept a light schedule. Coakley also is fighting voter anger over the economy and indirect damage from local scandals involving state House Democrats, Bayles said. “She’s just on the wrong end of the historic stick right now,” he said. The state’s unemployment rate was 8.8 percent in November, down from a peak of 9.3 percent in September. To contact the reporters on this story: Hans Nichols in Washington at hnichols2@bloomberg.net ; Heidi Przybyla in Washington at hhprzybyla@bloomberg.net

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Fund Manager Ambrosio Seeks Risks in Desert in Deadly Dakar Motorbike Race

January 15, 2010

By Matt Craze and Alex Duff Jan. 15 (Bloomberg) — Claritas Investimentos fund manager Carlos Ambrosio is poised to grab his best finish in the Dakar Rally, one of motor sport’s most treacherous events that claimed more than 20 competitors’ lives since 1978. The Brazilian, who manages 2.5 billion reais ($1.42 billion) as a partner at the Sao Paulo hedge fund, is 40th of 93 remaining motorcycle riders on the 5,600-mile (9,000 kilometers) course through Argentina and Chile. Organizers of the race, which ends tomorrow in Buenos Aires, say 58 riders have quit since the Jan. 2 start. Bankers are increasingly drawn to the race and costs of competing are as much as $80,000, according to Ambrosio. He was backed by his company, whose Multimercado Longo Prazo fund has beaten 90 percent of its peers this year, according to Bloomberg data . He is used to weighing risks, and does the same during the event. “We are managing risk all the time: the risk of getting lost or falling,” said Ambrosio, 43, as he made adjustments to his bike at the rally’s bivouac near Santiago Jan. 12. “It’s the same thing in the market.” The longer the race goes on the more likely that riders withdraw, according to Simon Pavey, who runs the BMW off-road bike skills school near Swansea, Wales. He has finished five of seven Dakar rallies since 1998. “You slowly get run down day by day,” Pavey, a 42-year- old Sydney native, said in a Jan. 12 interview. “That’s when you make mistakes.” Hot Sands Brazil’s Bernardo Bonjean , a stock trader at XP Investimentos CCTVM SA , stopped Jan. 4 after gasoline in his bike evaporated before reaching the engine in 45 degree Centigrade (113 degrees Fahrenheit) heat when crossing the white sands of Fiambala, Argentina. Bonjean was backed by his company and billionaire mining magnate Eike Batista . “I thought my boots would melt,” said Ambrosio, who is riding a Honda CRV motorbike. The race started in 1978 after rally driver Thierry Sabine got lost in the Libyan Desert during a sandstorm, giving him the inspiration to invent a race beginning in Europe and finishing in Dakar, Senegal. The event has separate prizes for participants on motorbikes, quad-bikes, cars and trucks. South America Move The rally was moved to South America from Africa in 2008 after four French tourists were killed in Mauritania in 2007, where the traditional Paris-to-Dakar route passes. Ambrosio, who finished 70th in the 2007 Dakar Rally after enduring sandstorms in the Sahara, said he was discouraged from competing this year by Claritas founding partners Marcelo Karvelis and Renato Abucham . “They said ‘Hey, the Dakar is dangerous,’” Ambrosio said. “But I said to myself: if my wife lets me do it, why wouldn’t my partners?” To contact the reporters on this story: Matthew Craze in Santiago at mcraze@bloomberg.net ; Alex Duff in Madrid at aduff4@bloomberg.net .

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Equity funds struggle to beat Sensex in 2009

December 26, 2009

Aarati Krishnan BL Research Bureau After easily outpacing it in earlier years, equity funds seem to be losing the race to the bellwether Sensex in 2009. In 2009, only half of the equity funds managed to deliver a better return to their investors

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49ers Beat Cardinals 24-9 to Keep Alive Hopes of Making NFL Playoffs

December 15, 2009

By Erik Matuszewski Dec. 15 (Bloomberg) — The San Francisco 49ers prevented the Arizona Cardinals from clinching a second straight division title, forcing seven turnovers in a 24-9 victory that keeps the 49ers in contention for a playoff berth. Frank Gore rushed for 167 yards and a touchdown last night at Candlestick Park in San Francisco and Alex Smith threw two touchdown passes as the 49ers improved to 6-7. Kurt Warner threw two interceptions and also had one of the Cardinals’ five fumbles. Arizona fell to 8-5 and now holds a two-game lead over the 49ers in the National Football Conference West Division with three games left in the National Football League regular season. The 49ers trail the Dallas Cowboys (8-5) by two games in the race for the NFC’s final wild card playoff spot. They’re also one game behind the New York Giants (7-6) and tied with the Atlanta Falcons (6-7). To contact the reporter on this story: Erik Matuszewski in New York at matuszewski@bloomberg.net

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Gulf States to Compete More for Money as Banks Balk After Dubai Debt Delay

December 13, 2009

By Camilla Hall Dec. 13 (Bloomberg) — The emirs, presidents and sheikhs of the six members of the Gulf Cooperation Council meet in Kuwait this week with the days of easy credit over following a year of debt defaults and deferred payments. Dubai World said Dec. 1 it was seeking to restructure $26 billion of borrowing, and the race to build financial centers and skyscrapers is now turning into a competition to convince banks simply to keep lending to the region, investors and economists said. The GCC annual summit starts today. “Financing will be harder to attract for all companies in and related to the Gulf in the next few quarters as international banks will be loath to have any association with regional corporates and governments, regardless of their stability,” said Emad Mostaque , who helps manage $100 billion at Pictet Asset Management Ltd. in London. While the global financial crisis forced bank bailouts across the western world, in the Gulf it has jeopardized plans to develop markets and forge closer economic ties. At the GCC’s meeting in Muscat on Dec. 30 last year, leaders approved a monetary union agreement, a step toward forming a Gulf single currency. Kuwait said last week that the project may take 10 more years to come to fruition. ‘Moral Hazard’ When the two Saudi family holding companies, Ahmad Hamad Algosaibi & Brothers Co. and Saad Group, defaulted on their Bahrain-based banking units earlier this year, the U.A.E. complained that there was no communication within the GCC. The perception that “the money was there and it would just be splashed around regardless of moral hazard or business viability has not been the case,” said Jane Kinninmont , an economist at the Economist Intelligence Unit in London. “If there’s less money to go around, there will be more competition between the Gulf states.” Qatar is building a $14 billion luxury residential project called the Pearl similar to Dubai’s palm-shaped islands. Saudi Arabia is trying to develop its own financial center in Riyadh that will challenge Dubai’s complex of banks including Deutsche Bank AG and Goldman Sachs Group Inc. “It’s healthy to develop competition,” Sheikh Hamad Bin Jabor Bin Jassim al-Thani , director general of Qatar’s General Secretariat for Development Planning said last week in Dubai. “We need to embrace where our strengths are and ensure that we focus around them at the initial stage.” Tallest Tower Saudi Arabia’s Kingdom Holding Co., whose chairman is Prince Alwaleed Bin Talal , started a $26.6 billion real estate project that will include the world’s highest tower, overtaking the U.A.E.’s Burj Dubai set to open Jan. 4. “Everyone’s been trying to build the biggest airport, the best tourist infrastructure,” said Kinninmont. “Everyone is trying to compete for the same territory.” Investor confidence has deteriorated as Kuwaiti investment firms Global Investment House KSCC and Investment Dar along with the two Saudi family holding companies defaulted. Global said Dec. 10 it signed an accord to restructure $1.73 billion. Dubai World, whose property unit is building the landmark palm-shaped islands, sought a “standstill” agreement with creditors. Dubai’s benchmark share index is down 22 percent since Nov. 25, while bond prices tumbled and the credit ratings for several Dubai companies were cut. ‘Top Pick’ Saudi Arabia, the Arab world’s biggest economy, is Mostaque’s “top pick” to emerge strongest. The kingdom’s central bank governor, Muhammad al-Jasser , has said that the economy is in recovery and it may avoid a contraction this year as oil prices rebound to what the world’s largest oil exporter deems a “fair price” of $75. Then there’s Qatar. The world’s largest exporter of liquefied natural gas “is a strong story,” according to Marios Maratheftis , a Dubai-based economist at Standard Chartered Plc. The Gulf state is forecasting economic growth of 9 percent this year and 16 percent next year. “The economies that have better balance sheet structures will recover a lot quicker,” said Ahmet Akarli , a London-based economist at Goldman Sachs. “Saudi Arabia has a healthier balance sheet, so does Qatar, even Abu Dhabi is in a good position but Dubai will drag the U.A.E. down.” To contact the reporter on this story: Camilla Hall in Dubai at chall24@bloomberg.net

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Brevan Howard Founder Blochet Will Leave Europe’s Biggest Hedge-Fund Firm

November 13, 2009

By Tom Cahill Nov. 13 (Bloomberg) — Jean-Philippe Blochet , a founding partner in Brevan Howard Asset Management LLP and the source of the “B” in its name, is leaving Europe’s largest hedge-fund firm. Blochet, 46, a French native, worked with co-founder Alan Howard on Credit Suisse First Boston’s proprietary fixed-income trading desk before starting the London-based money manager in 2002. The first part of the firm’s name comes from the initials of founding partners Blochet, Christopher Rokos , James Vernon and Trifon Natsis . Blochet, who was a currency trader at Credit Suisse, had taken a sabbatical in 2008. The Brevan Howard Master Fund, its largest, returned 20.4 percent in 2008 when the average fund lost 19 percent, according to Hedge Fund Research Inc. The fund is up 18 percent this year through Nov. 6, Bloomberg data show. “Over the last few years they’ve built up a very extensive infrastructure and business,” said Clayton Heijman , founder and chief executive officer of Darwin Platform, an Amsterdam-based provider of hedge-fund services. “It’s only natural that at a certain point of time people move on.” Blochet declined to comment. Brevan Howard, which managed $25.7 billion at the end of September, confirmed his departure in an e-mail today. Blochet completed the Marathon des Sables, a six-day, 151- mile (243 kilometer) foot race across the Sahara desert, in 2006. Competitors cover the equivalent of five and half marathons over six days in temperatures reaching 120 degrees Farenheit (49 celsius), with packs for food and sleeping gear on their backs. The race, which raises money for charities, was described as “The Toughest Footrace on Earth” in the 2007 book “Seven Days in the Sahara” by event competitor. Blochet finished the race 157th out of 800 competitors, according to Marathon des Sables’ Web site . “Following his return from sabbatical last year, Jean- Philippe Blochet has decided to cease to be an active member of Brevan Howard Asset Management LLP,” the company said in the e- mail. To contact the reporter on this story: Tom Cahill in London at tcahill@bloomberg.net

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Eric O’Keefe: American Thoroughbred Racing Needs a Lifeline, and the Answer Can Be Found in Australia

November 9, 2009

It’s the sort of headline that demands a second look: “Zenyatta Joins the Immortals with Sensational Breeders’ Cup Win” At more than 1,500 words, the accompanying article not only singled out the gallant charge of the 5-year-old mare down the stretch to beat her male rivals in North America’s richest race yesterday — “arguably the finest racemare in American racing history” — but it highlighted other key contests on the second day of most important event in U.S. Thoroughbred racing, the Breeders’ Cup World Championships. Too bad it ran in Britain’s Guardian. What’s wrong with that? Because it sure would be nice if the American press gave a damn about horseracing. Friday morning I stepped off a 14-hour flight from Melbourne to Los Angeles and got ready to make my way to Santa Anita for the Breeders’ Cup. Naturally I picked up a copy of the Los Angeles Times . As I leafed through it, it was clear that jet lag had already set in. The only article I could find in sports about the races was about synthetic surfaces. It was one of those absurd moments when you know you just put your keys in your pocket only you can’t find them anymore. There had to be something somewhere, only I was too frazzled from my flight to pick it out. It didn’t take long for me to come to my senses. There was no article. Think about that. If Tiger Woods and Phil Mickelson were about to tee off in the U.S. Open and you had a look at the local paper where the tournament was taking place, wouldn’t you expect the event to be all over the place? Now what would you do if the Open were about to begin and the only story you could find was one about a group of groundskeepers arguing over the merits of one type of seeded Bermuda fairway green over another? You’d probably join the rest of America and stop reading newspapers. With press like that is it any surprise that the racing industry in the U.S. is on life support? At Seabiscuit’s final race in 1940, 78,000 watched him win the Santa Anita Handicap. On Friday, 37,651 showed up at the same California landmark for the biggest, richest race meet in North America. No wonder Santa Anita’s parent company is in bankruptcy court. The New York Times ? I opened that paper this morning to find a whopping 200+ words devoted to the most memorable Thoroughbred race of the last decade. That’s half the coverage the Times gave the Harvard-Columbia game and a fraction of what it devoted to an 18-year-old NBA hopeful dribbling his life away in obscurity in Israel. Sure, the Daily Racing Form and the Thoroughbred Times went the distance on Zenyatta’s epic performance, but those are industry rags. Racing is their beat. America’s great dailies? They just don’t get it. Zenyatta was anything but a narrow niche story. Minutes prior to the Classic, her sassy moves were critiqued by Len Goodman from Dancing With the Stars. How did the Brit score the long-legged mare? “10!” During the post parade, it was impossible to overlook the thousands of pink signs with “Girl Power” and “Maneater” dedicated to their heroine. You can imagine the endless ovation after she returned unbeaten. I bring all this up because I just flew back from Australia, a country with one-tenth the population of the U.S. Yet the Australian racing industry is the envy of every racetrack operator in the States. There are not only more racetracks in Australia, there are more racetracks in Australia than in the U.S., Canada, Ireland, and Great Britain combined. The country’s greatest racing event is a four-day meet called the Melbourne Cup Carnival, and like the Breeders’ Cup it too ended on Saturday. Attendance on the first day of the Melbourne Cup Carnival was a tad over 107,000. That’s right. More people packed into Flemington Racecourse for the first day of the Melbourne Cup Carnival than showed up at Santa Anita Park for two days of Breeders’ Cup. And things were just getting going. Over the remaining three race days, the Victoria Racing Club hosted an additional 250,000, which is why it is Australia’s largest single event. The reason I’m so familiar with Australian racing is because I just wrote a book called The Cup . It’s about one of the most emotion charged episodes in the history of the Australia’s greatest race. I won’t give away the storyline, but it goes without saying that Damien Oliver’s journey to the winner’s circle in the 2002 Melbourne Cup has been chosen as one of the greatest moments in the history of Australian sport. Over the past six years, I’ve been to Australia four times, researching the book and writing the script for the companion movie with the Australian director Simon Wincer (Lonesome Dove, Free Willy). So why is Thoroughbred racing alive and kicking Down Under? The obstacles they face are no different — casino gambling, online competitors, and of course rising costs for everything under the sun. But I’ll tell you what they do have going for them: the sort of press that champions a great story. (Not that synthetic surfaces isn’t gripping material.) Go to Google and punch in the words “Jake Stephens Alcopop.” I just did this and links to 666 stories popped up. Was the 5-year-old gelding hailed as the next Secretariat? No. Was his owner a Whitney or a Mellon or, to use an Australian version of more money than God, a Murdoch? No. You know what Alcopop was? A story people wanted to read. For the last two weeks, Melbournians read about him in their three daily papers, and they watched his South Australian trainer on TV brushing off questions about the fact that he had taken out his license just a year ago. And Alcopop wasn’t even this year’s big news. Center stage belonged to 81-year-old Bart Cummings, a 12-time winner of the Melbourne Cup who had three runners in the race. Guess what? Neither Alcopop nor any of Bart’s runners won the Cup. So did the Australian media get this year’s Melbourne Cup wrong? Not at all. The moment the Race That Stops the Nation concluded, the tabloids and the newspapers had a brand new story about a hard-luck trainer and a never-say-die jockey who believed in a great horse. That’s a lesson their American counterparts should take to heart … before another track goes bankrupt.

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Palin Ponders Iowa Visit as Republican Hopefuls Plant Seeds for 2012 Race

November 6, 2009

By John McCormick Nov. 6 (Bloomberg) — It is harvest season in Iowa. For Republicans who want to challenge President Barack Obama in 2012, though, it is time to start planting seeds. Minnesota Governor Tim Pawlenty will make his first Iowa trip as a potential presidential candidate tomorrow to deliver a speech, fueling speculation he is preparing to run. Former Arkansas Governor Mike Huckabee is in the state that holds the nation’s first presidential caucus a day later, while former New York Governor George Pataki is scheduled to stop there on Nov. 10. Sarah Palin , the former Alaska governor and 2008 vice presidential nominee, also is considering an Iowa visit. If it all seems early — the next presidential election is three years away — consider that Huckabee, who won his party’s 2008 Iowa caucuses, had been to the state five times by this point in 2005, according to the Des Moines Register . “It is the natural course of events here in Iowa,” said Matt Strawn, chairman of the state’s Republican Party . “Iowa Republicans will certainly look favorably on those national Republican figures who come in and help us win back the legislature, help us win back the governor’s office” in the 2010 election. Republicans are trying to build on victories in gubernatorial races in Virginia and New Jersey in this week’s off-year elections. Fresh Face While Pawlenty lacks the star power of Palin, who earlier this year received a $1.25 million book advance, he presents himself as a fresh face who has won elections in a state historically dominated by Democrats. His Iowa visit follows a summer crisscrossing the nation to speak to Republicans, introducing himself as the hockey- playing son of a truck driver who grew up in Minnesota near South St. Paul meat-packing plants. Pawlenty, 48, says his upbringing helped spur his push for Republicans to be the “party of Sam’s Club, not the country club.” His reference is to the Sam’s Club chain of warehouse stores that operate throughout the U.S. He recently gained attention by endorsing a Conservative Party candidate over a Republican in a closely watched congressional election on Nov. 3 in Upstate New York. The Conservative Party candidate, Doug Hoffman , 59, lost to Democrat Bill Owens , 60, after Republican nominee Dede Scozzafava , 49, dropped out of the race the weekend before the election. Definition Effort “What he is clearly trying to do is define himself as one of the conservatives,” John Feehery , a Republican political strategist in Washington, said of Pawlenty. “His consultants are telling him that he has to go where the votes are in the Republican primary, which is the conservatives.” Pawlenty has formed his own political action committee, Freedom First PAC , to boost his image. He appeared Nov. 4 in Minneapolis at an inaugural fundraising dinner for the PAC, an event that featured remarks by actors Jon Voight , John Ratzenberger and Kelsey Grammer . One of the PAC’s co-chairs is former Minnesota congressman Vin Weber , an early supporter of former Massachusetts Governor Mitt Romney in the 2008 Republican presidential race. Another is Morgan Stanley Vice Chairman William Strong , a top fundraiser for former President George W. Bush and Senator John McCain of Arizona, the Republican White House nominee last year. Pawlenty, considered by McCain as a possible running mate, joins other possible 2012 candidates with PACs. Huckabee, 54, has the Huck PAC , Palin, 45, created SarahPAC and Romney, 62, opened the Free and Strong America PAC . Audition Season Pawlenty’s keynote speech at the Iowa State Fairgrounds in Des Moines is the first high-profile event of the early audition season. The dinner event offers the governor, who is not seeking re-election in 2010, a chance to introduce himself to Republican activists. Obama’s re-election campaign will have an Iowa presence this month as well, when Vice President Joe Biden speaks Nov. 21 at a Jefferson-Jackson Day dinner in Des Moines. “I haven’t made any decisions about what I’m going to do after being governor,” Pawlenty said on a Nov. 4 conference call with Iowa reporters. Pawlenty spent time in Iowa in 2008 as a McCain surrogate. Strawn said Pawlenty is best known in northern Iowa, which shares media markets with Minnesota. A USA Today/Gallup Poll conducted Oct. 31-Nov. 1 showed 32 percent of Republicans nationwide would seriously consider voting for Pawlenty for president. Huckabee, Romney, Palin and former House Speaker Newt Gingrich , 66, of Georgia, all scored higher than him in the survey of 301 Republicans that had a margin of error of plus-or-minus 7 percentage points. Sex Joke Elected to Minnesota’s House of Representatives in 1992, Pawlenty won the governorship in 2002. He was re-elected in 2006. One gaffe likely to be reprised should he run for president occurred during Minnesota’s traditional Governor’s Fishing Opener in May 2008. In an effort to be humorous during an interview with a Minneapolis radio station, he praised his wife, Mary, for her willingness to fish with him and watch hockey games. He also told the program’s host: “I jokingly say, ‘Now, if I could only get her to have sex with me.’” Mary Pawlenty later said her husband was being a prankster. To contact the reporter on this story: John McCormick in Chicago at Jmccormick16@bloomberg.net .

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Schumer Urges Obama to Block Stimulus Funds for Chinese-Backed Wind Farm

November 5, 2009

By Kim Chipman Nov. 6 (Bloomberg) — The Obama administration should bar a $1.5 billion wind-farm project in Texas from receiving U.S. government stimulus funds because most of the power turbines would be made in China, Senator Charles Schumer said. “The idea that stimulus funds would be used to create jobs overseas is quite troubling,” Schumer, a New York Democrat, wrote in a draft of a letter he said yesterday he would send to U.S. Energy Secretary Steven Chu . “I urge you to reject any request for stimulus money unless the high-value components, including the wind turbines, are manufactured in the United States.” U.S. Renewable Energy Group , a private-equity firm based in Washington, and Cielo Wind Power LP, a closely held company in Austin, Texas, said last week they formed a joint venture with China’s Shenyang Power Group to build the 600-megawatt wind farm. The 36,000 acre-project marks the largest Chinese-American investment in U.S. renewable energy, the companies said. A-Power Energy Generation Systems Ltd. of China, Shenyang’s largest shareholder, is set to supply turbines for the farm, the companies said. The Democratic senator said he was “furious” when he learned that $450 million in U.S. economic recovery aid may be used to help build the wind farm and create as many as 3,000 jobs, mostly in China. “I don’t care if the Chinese invest here and create jobs here: It’s where the jobs are that I care about,” Schumer told reporters yesterday in Washington. “I think if you told the other 99 senators about this the vast majority would agree with me.” Climate Challenges “China and the U.S. enhancing cooperation on clean energy serves the common interests of the two countries and welfare of their peoples, which is also significant for commonly tackling the challenges posed by climate change,” said Wang Baodong , a spokesman for the Chinese Embassy in Washington. “We hope that people in question will do more to help facilitate the joint effort instead of complicating the situation.” Cielo President Walt Hornaday said the project will boost hiring in the energy industry and benefit people in Texas. He also said international joint ventures are “essential to the development of low-cost renewable energy” in the U.S. and that the project can’t happen without help from the U.S. economic stimulus package. “Without this incentive, wind projects will wait in the sidelines for energy prices to come back to the levels we saw a few years ago,” Hornaday said in a statement. “This could be next year or this could be next decade.” Economic Stimulus The Texas venture will be funded by Chinese banks as well as take advantage of financing through the U.S.’s $787 billion economic stimulus law, Cappy McGarr , managing partner of U.S. Renewable Energy Group, said at a news conference in Washington last week. Spokesmen for U.S. Renewable Energy Group, Shenyang Power Group and A-Power Energy Generation Systems weren’t available to comment. An Energy Department spokeswoman, Stephanie Mueller , said any application for the Texas project to benefit from a tax credit program under the stimulus would have to be “evaluated by the Energy and Treasury departments to determine eligibility.” “But no application has been received to date,” she said in a statement. Leaders to Meet President Barack Obama is preparing to meet later this month with Chinese President Hu Jintao . Energy will be a top issue as both countries say they want to bolster cooperation on clean-energy technology and help clear the way for a new global treaty to fight climate change. The countries remain at odds over how far developed and developing nations should go in attempts to curb greenhouse-gas emissions blamed for global warming. Legislation to curb carbon emissions has passed the U.S. House and is being debated in the Senate. Democratic senators including Sherrod Brown of Ohio sent a letter to Obama in August saying it would be “extremely difficult” to support a climate bill that doesn’t include a tariff on products from countries such as China that don’t impose limits on global warming pollution. Legislation Possible Schumer said he would pursue legislation if necessary to prevent stimulus funds from being used for the Texas project, though he said he’s “hopeful” the Obama administration will “change the policy.” He said it was “counterproductive” for the U.S. to invest federal funds in Chinese companies. Energy Secretary Chu and other administration officials have said the U.S. is in danger of falling behind China in a competition to dominate the global market for clean-energy technology. “China is fast emerging as one of our main rivals in the race to build the technology that can help us achieve energy independence,” Schumer said yesterday in a statement. “We should not be giving China a head start in this race at our own country’s expense.” The Obama administration has not been tough enough in negotiations with China on a wide range of issues, including trade, according to Schumer. “They don’t play fair,” he said yesterday, referring to China. “One of the many reasons we had the financial collapse that we had is because China manipulated its currency,” Schumer said. He said the U.S. should be “a lot tougher” on China. The Alliance for American Manufacturing, a Washington-based coalition of steel companies and the United Steelworkers union, also have criticized the wind energy project. “Why aren’t American firms building this clean-energy project?” the group asked in a Nov. 2 statement. To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net .

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Complete Genomics Gets Cost of Gene Sequencing Under $5,000 in New Method

November 5, 2009

By Rob Waters Nov. 5 (Bloomberg) — Complete Genomics , a closely held company in Silicon Valley, produced complete sequences of three people’s DNA at an average cost of $4,500, accelerating the race to develop faster, cheaper gene-mapping systems. That’s about one-tenth as cheap as the $48,000 effort reported in August by Helicos Biosciences Corp. of Cambridge, Massachusetts. The first human genome map was completed by researchers in 2001 at an estimated cost of more than $100 million, according to a report published today in the journal Science. Complete Genomics funded the research. Helicos, Illumina Inc. of San Diego, Pacific Biosciences Inc. of Menlo Park, California, and Roche Holding AG of Basel, Switzerland, are competitors trying to develop technology that would map the DNA of individuals for less than $1,000 and to sell systems to government and academic researchers. Complete Genomics is pursuing a different strategy, contracting with research institutions to perform genomic scans under contract, said Chief Executive Officer Clifford Reid. “Our mission is to sequence a million genomes over the next five years,” Reid said in a telephone interview on Nov. 3. “That’s one thousand people in each of 100 disease studies. By the time we’ve done that, we will have a deep understanding of the genetic basis of all the major human diseases.” Code for Life DNA is four-chemical code for making all the proteins in an organism. Reshufflings of the chemicals, called bases, instruct cells’ DNA as to which proteins to make, when to make them and in what amounts. Virtually every human cell has two strands of DNA, each 3 billion bases long. For today’s Science report, led by Radoje Drmanac , the company mapped the genomes of two Caucasian males and a Yoruban female. Since the genes of all three had been analyzed before, the scientists could compare the results of their analysis to previous reports. The company, based in Mountain View, California, read each pair of chemical bases an average of 45 to 87 times, with an accuracy rate of 99.9 percent, Dramanac said in a telephone interview. The $4,500 average cost for the three sequences reflected the cost of the chemicals and other materials, he said. To contact the reporter on this story: Rob Waters in San Francisco at rwaters5@bloomberg.net .

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Bloomberg Wins Third NYC Mayor Term, Beats Comptroller Thompson

November 4, 2009

By Henry Goldman Nov. 4 (Bloomberg) — New York Mayor Michael Bloomberg won re-election yesterday in a tighter race than public opinion polls had projected, becoming the first three-term chief executive of the largest U.S. city by population since 1989. Bloomberg, running on the Republican and Independence Party lines, beat Democratic city Comptroller William Thompson , 51 percent to 46 percent, with all of the city’s 6,110 election districts counted, according to unofficial results tabulated by the Associated Press. Polls in the campaign’s final week found Bloomberg ahead by at least 10 percentage points. Bloomberg’s victory gave him another four years to begin balancing a city budget with a projected $5 billion deficit in the fiscal year beginning July 1, while making good on promises to improve schools and municipal services. New York’s unemployment rate rose to 10.3 percent in September from 6 percent a year earlier. “While we can’t fix the national recession, we can and we will get our city through these tough times and we’ll come out stronger than ever,” Bloomberg said. “We’re going to show we can keep outperforming the rest of the country.” Thompson conceded shortly after 11 p.m., thanking his campaign staff and volunteers and offering Bloomberg his congratulations. “Your support, your enthusiasm and desire for change is what carried me to this point,” he told the crowd. “This campaign was about standing strong, standing tall, and never backing down in the face of a formidable challenge.” Prior Polls Bloomberg’s 4.6 point victory margin was inconsistent with public opinion polls released in the closing week of the campaign. His lead was 12 percentage points in a Nov. 2 Quinnipiac University survey and 15 points in an Oct. 30 Marist College poll. “The polls didn’t measure intensity,” said Kenneth Sherrill , a political science professor at Hunter College in Manhattan. “Bloomberg’s problem was that the people who liked him didn’t feel as strongly as the people who were unhappy. In low turn-out elections, the people who feel most intensely dominate.” In New Jersey, Republican Chris Christie denied incumbent Jon Corzine a second term as governor, 49 percent to 45 percent, in a contest that polls released Nov. 2 showed as a statistical tie. Republican Robert McDonnell won the Virginia governor’s race, defeating R. Creigh Deeds , 59 percent to 41 percent. Incumbent Timothy Kaine was barred by term-limit law from seeking re-election. About 1.1 million voters turned out for the New York City election, 200,000 less than in 2005 when Bloomberg won his second term, beating former Bronx Borough President Fernando Ferrer by 250,000 votes, 57 percent to 38 percent. Power of Incumbency “A spread between the two of less than 5 points is not typical for an incumbent election,” said Joseph Mercurio , a political consultant who has worked for Democrats and Republicans. “It indicates that Bloomberg really did have to spend all that money.” Aside from the advantages of incumbency, Bloomberg, 67, benefited from a treasury that totaled more than $85 million 10 days before election, breaking a national record for a personally financed campaign. Bloomberg spent his tens of millions of dollars campaigning as a political independent and assailing Thompson, 56, by characterizing his past service as a Board of Education president as a failure, as well as his acceptance of campaign contributions from managers of pension funds that Thompson supervised, as “politics as usual.” Term Limits The mayor, whose wealth Forbes magazine estimated last month at $17.5 billion, is founder and majority owner of Bloomberg LP, parent of Bloomberg News. He gained the ability to run for re-election last year after persuading the City Council to change the law and remove a restriction that limited officials to two, four-year terms. Bloomberg vowed to continue to reduce crime after eight years in which it fell 35 percent, improve the city’s environment by planting 1 million trees, build affordable housing and pursue an ambitious public health agenda that during his first two terms included bans on smoking in the workplace and use of trans fats in processed food. The tight vote might prove problematic for Bloomberg in governing the city during the next four years, Sherrill said. Several council members that supported Bloomberg’s effort to abolish term limits lost bids for re-election in the September primary election, he noted. Mayoral Opposition Newly elected Public Advocate Bill de Blasio and city Comptroller John Liu , the first Asian to win citywide office, both Democrats who opposed Bloomberg on term limits, have mayoral ambitions, Sherrill said. “The lesson is that there’s peril in supporting the mayor and less risk in challenging him, so the close vote will embolden people to be independent of the mayor and question his agenda,” Sherrill said. At the Sheraton New York hotel in Manhattan campaign workers enjoyed miniature hamburgers and watched five television monitors displaying reports declaring the race closer than expected. Democratic U.S. Representative Anthony Weiner, who decided against running against Bloomberg in May, said Thompson benefited from voter resentment of tax increases and the mayor’s overturning of term limits. “Thompson has a better sense of the notion of helping to lift up the middle class,” Weiner said. Newspaper Endorsements Bloomberg received endorsements from each of the city’s four major daily newspapers — the New York Times, the Daily News, the New York Post and the Staten Island Advance — and from dozens of neighborhood and ethnic newspapers. Former Mayor Ed Koch , a Democrat who has a radio show on Bloomberg Radio, supported him, as did several Democratic city council members. Thompson won backing from about 30 labor organizations including the city’s largest municipal labor union, District Council 37 of the American Federation of State, County and Municipal Employees, which represents 125,000 city workers and 50,000 retirees; the Uniform Firefighters Association, and the Transportation Workers Union. The United Federation of Teachers remained neutral. Bloomberg’s re-election makes him the fourth three-term mayor for the city in the past 100 years. Ed Koch was mayor from 1978 to 1989; Fiorello LaGuardia served from 1934 to 1945 and Robert Wagner Jr., from 1954 to 1965. To contact the reporter on this story: Henry Goldman in New York City Hall at hgoldman@bloomberg.net .

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Online Bettors Mirror Polls, Make Corzine-Christie Race Too Close to Call

November 3, 2009

By Jonathan D. Salant Nov. 3 (Bloomberg) — The latest polls show the New Jersey gubernatorial race between incumbent Democrat Jon Corzine and Republican nominee Christopher Christie too close to call. Online bettors agree. Bets that Christie, a former U.S. attorney, would win traded at 50 yesterday on Dublin-based Intrade , meaning that the online exchange puts his chances of emerging the victor in today’s election at 50 percent. Bets on the chances of Corzine getting a new four-year term traded at 48. Independent Christopher Daggett was given a 1 percent chance of winning. The trades followed three polls showing a statistical tie between Christie, 47, and Corzine, 62. A Hamden, Connecticut- based Quinnipiac University poll showed Christie ahead 42 percent to 40 percent with 12 percent for Daggett. The survey’s margin of error was plus or minus 2.5 percentage points. Polls by Madison, New Jersey-based Fairleigh Dickinson University and Monmouth University both put Corzine in the lead, 43 percent to 41 percent, over Christie, with Daggett at 8 percent. The Fairleigh Dickinson poll had a margin of error of 3 percentage points, the figure for the Monmouth survey was 3.7 percentage points. “Corzine seems to be a very unpopular governor but Christie hasn’t been convincing in his campaign,” said Carl Wolfenden, Intrade’s exchange operations manager. Virginia’s Race In Virginia’s gubernatorial election today, Intrade bettors gave Republican Bob McDonnell, 54, a 99 percent chance of winning and ending the Democrats’ eight-year hold on the state’s executive office. McDonnell, the former state attorney general, is running against state Senator Creigh Deeds , 51. An Oct. 22-25 Washington Post poll gave McDonnell an 11 percentage point lead over Deeds, 55 percent to 44 percent. In a U.S. House race in upstate New York, Intrade bettors gave Conservative Party nominee Doug Hoffman a 70 percent chance of winning today’s special election for a successor to Republican John McHugh , who became secretary of the Army. Over the weekend, the Republican nominee in the race, Assemblywoman Dede Scozzafava , dropped out and endorsed Democratic nominee Bill Owens . A Loudonville, New York-based Siena College survey released yesterday gave Hoffman a 5 percentage point lead over Owens, 41 percent to 36 percent. The survey’s margin of error was plus or minus 4 percentage points. Outside Spending Outside groups have outspent the candidates in the race, pumping $3 million into the district. As an example of those efforts, Federal Election Commission reports released yesterday showed that 1199SEIU, a New York health care affiliate of the Service Employees International Union, spent $33,350 on radio and television ads on behalf of Owens. The anti-abortion Life and Liberty PAC spent $84,107 on mail and phone calls in support of Hoffman, according to the FEC. New York City Mayor Michael Bloomberg , 67, had a 95 percent chance of winning a third term in today’s election, according to Intrade. Bloomberg, running as the Republican nominee, led New York City Comptroller William Thompson , 56, the Democratic challenger, by 50 percent to 38 percent in a Quinnipiac poll out yesterday. Bloomberg is the founder and majority owner of Bloomberg News parent Bloomberg LP. To contact the reporter on this story: Jonathan D. Salant in Washington at jsalant@bloomberg.net .

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New York Marathon Keeps Working as Unemployed Have More Time to Prepare

October 31, 2009

By Tony C. Dreibus and Mary Childs Oct. 31 (Bloomberg) — Ben Lloyd will run the New York City Marathon tomorrow after a good night’s sleep and a relaxing week. After losing his job as a Barclays Plc loan salesman in August, he says he’s had plenty of time to train properly. “Actually getting to train and sleep is a pretty novel concept,” said Lloyd, 38, who lives on the Upper East Side of Manhattan. “After being laid off in August it gave me the perfect opportunity to really focus my training.” About 40,000 people are registered to start the race, the 40th running of the event that makes its way through all five boroughs of a city that’s lost 173,000 jobs since July 2008, including 37,400 at financial companies. The slumping economy hasn’t kept away unemployed people like Lloyd or those who had to travel thousands of miles to attend the event. Only 25 percent of the 26.2-mile (42.2-kilometer) race’s participants are from the New York area, about 10,000 are from other parts of the country and approximately 20,000 are from outside the United States, said Richard Finn, a spokesperson for New York Road Runners , which organizes the annual event. Seven-time Tour de France winner Lance Armstrong , who overcame cancer and now runs the Lance Armstrong Foundation that raises money to help people with the illness, will run the New York City Marathon after finishing in just under three hours a year ago. After the 2008 race, he said it was “the hardest physical thing” he’d accomplished. A Status Race Lloyd, who sold high-yield loans for Barclays and lost his job as a result of the company’s acquisition of Lehman Brothers Holdings Inc. 10 months earlier, said the race is appealing because of its status. “The location attracts more than the race itself,” he said. “New York City is a cool place to come, and if you want to do a marathon then why not make it NYC? If you are someone who is going to end up running a lot of marathons then ultimately the New York City Marathon is one of the ones you need to do.” Marathon running has grown in the past two decades as a record 425,000 people finished the distance in 2008, up 3.2 percent from a year earlier, according to data from Running USA , a group that tracks running trends. This year’s marathon is the city’s biggest on record, with about 103,000 applicants, Finn said. “Running serves as something of an anchor in rocky waters,” said Mary Wittenberg , chief executive officer of New York Road Runners and race director of the marathon. “It’s something you can control, something you can go out and spend some time and feel better for it.” Running Shoe Sales The National Sporting Goods Association reported that in 2008 about $2.31 billion was spent on running shoes, up 5.5 percent from a year earlier, according to the Running USA site. The New York race starts in Staten Island, crosses the Verrazano-Narrows Bridge into Brooklyn before entering Queens. Runners will cross the Queensboro Bridge into Midtown and take First Avenue into the Bronx before heading back into Manhattan, along Fifth Avenue and finishing in Central Park South. The men’s and women’s winners will each receive $130,000, according to the marathon Web site. Second place nets $65,000 and third place will earn $40,000, the site said. If a former winner takes first place, he or she will receive an additional $70,000, Finn said. Last Year’s Record Brazilian Marilson Gomes dos Santos won the men’s race last year in a time of 2:08:43. Paula Radcliffe from the U.K. won the women’s race in 2:23:56. This year’s field will include Kenya’s Robert Kipkoech Cheruiyot , winner of the Boston Marathon in 2007 and 2008, and Gomes dos Santos. Among the women vying for this year’s title are Radcliffe and Ludmila Petrova from Russia, last year’s runner-up. Along with the pros, Wall Streeters who are accustomed to setting and achieving goals in high-pressure situations have turned their focus to running as an outlet, according to Wittenberg. “It’s the Mount Everest of running,” she said. “It’s a major goal at a time when high-achieving people who are used to being able to set major goals in their business life might either be living with greatly reduced budgets at work or they might be out of work or stressed about their own job.” Lloyd, who plans to finish the race a few minutes slower than his personal record of 2 hours and 54 minutes because he participated in the Ironman World Championships on Oct. 10, said he’ll enjoy relaxing after the race and not having the pressure of returning to the office on Monday morning. “My triathlon club always has a big gathering post-race at a bar on the Upper East Side,” he said. “So I can enjoy a few beers without the worry of work.” To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net ; Mary Childs in New York at mchilds4@bloomberg.net

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Afghan Presidential Runoff Vote Is `a Likely Scenario,’ Karzai Envoy Says

October 16, 2009

By Indira A.R. Lakshmanan and Viola Gienger Oct. 16 (Bloomberg) — A runoff election between Afghan President Hamid Karzai and his main challenger is “a likely scenario,” Afghanistan’s ambassador to the U.S., Said Jawad , said as an announcement of ballot-recount results draws near. A probe by Afghan and United Nations officials into allegations of fraud in the Aug. 20 presidential election has trimmed Karzai’s share of the vote to 47 percent, the Washington Post reported today citing unnamed officials. A preliminary count last month put Karzai’s vote at almost 55 percent, higher than the more than 50 percent needed to avoid a runoff. Early November would be the latest the new vote could be held between Karzai and former Foreign Minister Abdullah Abdullah because the extreme winter cold would make turnout difficult, Jawad told the U.S. Institute of Peace in Washington. “If it’s delayed until spring, that’s a recipe for disaster,” Jawad said yesterday. The Afghan government and its projects would be “in limbo,” he said, putting pressure on both the U.S. and Afghanistan to deliver results without a new president and cabinet. The commission investigating fraud will announce its findings in the next day or two, State Department spokesman Ian Kelly said today. Secretary of State Hillary Clinton said in a CNN interview that Afghans should follow “whatever their recommendation is” and predicted that if a second round is held, the likelihood of Karzai winning “is pretty high.” Obama Reconsiders President Barack Obama’s advisers have said Afghanistan needs a legitimate, stable government to harness the support of the country’s people and security forces to marginalize extremists. The uncertainty surrounding the election was among the elements that prompted Obama to reconsider U.S. strategy and troop levels in the country. “We don’t have any favorites in this race,” White House spokesman Bill Burton told reporters aboard Air Force One with the president today. “The legitimacy of this election and its outcome is in the hands of the Afghan people,” Burton said. “We’re looking for them to get through this process just like everyone else is.” Bruce Riedel , a senior fellow at the Brookings Institution in Washington, said the “most immediate requirement we need is to fix the Afghan election fiasco.” “If there is a second round,” as looks increasingly likely, “we need to make sure it is not marred” by fraud and corruption, said Riedel, who led Obama’s interagency Afghan- Pakistan strategy review earlier this year after advising the National Security Council under the last three presidents. Coalition Government Karzai probably will try to organize a “national participation government,” Jawad said in an interview yesterday, without giving details. A coalition government would create problems such as the requirement to dole out appointments based on loyalty rather than merit, Jawad said. For now, the Obama administration can help cool tensions after the recount by making “tough decisions” to press both sides toward an agreement, said Ashraf Ghani , a former finance minister in Afghanistan who ran fourth in the election. “One party or the other is going to contest the decision and is going to declare it illegitimate,” Ghani said yesterday at the Atlantic Council of the United States, a policy group in Washington. “The key is to get all parties on board to accept a road map, reach an understanding and move on.” Alternatives Ghani said a coalition government is a possible solution to an impasse. Another alternative, he said, would be an interim administration similar to the one established in 2002 after the U.S. ousted the Taliban for harboring al-Qaeda, the group responsible for the Sept. 11 terrorist attacks on the U.S. Still another would be a national government with specific goals and timelines for delivering public services, Ghani said. Or, the U.S. could bypass the central government and concentrate on working with local leaders, he said. Obama’s presidency “in part rests on getting Afghanistan right, as does the future of my people,” Ghani said. Karzai is indisputably a force in Afghanistan even after the fraud allegations, Ghani said. Still, the president “understands the depth of the crisis of his legitimacy,” Ghani said. “Without international support, Mr. Karzai’s government could not last 10 days.” Clinton said earlier this week that the U.S. will expect the next Afghan president to increase stability in the country. Karzai Helpful When asked about a potential Karzai victory, Clinton told British Broadcasting Corp. radio that he “had been very helpful on many fronts.” “If this election results in him being re-elected, there must be a new relationship between him and the people of Afghanistan, between his government and governments which are supporting the efforts in Afghanistan to stabilize and secure the country,” Clinton said. Afghanistan’s Independent Election Commission said on Sept. 16 that Karzai held a nominal lead of almost 55 percent, compared with 28 percent for Abdullah. The commission joined with a separate Electoral Complaints Commission composed of two Afghans and three foreign officials to announce on Sept. 24 an audit of suspect ballots by sampling. Kai Eide , the top UN envoy to Afghanistan, said at an Oct. 11 news conference in Kabul there was “significant fraud” at some voting stations. To contact the reporters on this story: Indira Lakshmanan in Washington at ilakshmanan@bloomberg.net ; Viola Gienger in Washington at vgienger@bloomberg.net .

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Sinopec Facing `Intense’ Competition for Overseas Energy Assets, Su Says

October 15, 2009

By Bloomberg News Oct. 16 (Bloomberg) — China Petrochemical Corp. , Asia’s biggest oil refiner, said the race for overseas energy assets is getting tough as companies vie to acquire resources. “The competition is intense,” Su Shulin , president of the state-owned company known as Sinopec Group, said in an interview in Beijing yesterday. “There are opportunities in overseas acquisitions, but there are also many people looking at them,” he said, without identifying where it is seeking assets. China, the world’s second-largest oil consumer, joins South Korea, Japan and India in their quest to secure overseas resources to drive their economies. Sinopec Group’s domestic rivals, including state-owned China National Petroleum Corp. and China National Offshore Oil Corp., are also seeking stakes in oil and gas fields in Africa and Latin America, backed by the government’s $2.1 trillion in currency reserves. “China is a relatively new kid on the block in terms of going out and securing oil resources abroad and it’s trying to fight itself into the centre of the arena,” said Albert Kwong , the chief operating officer of Hong Kong-listed explorer PetroAsian Energy Holdings Ltd. “It’s not that easy as everybody around the world wants oil.” China Petroleum & Chemical Corp., Sinopec Group’s Hong Kong-listed unit, climbed 0.6 percent to HK$7.09 at 10:46 a.m. today. The stock has gained 56 percent this year while the Hang Seng index rose 54 percent. India, South Korea Chinese energy companies have spent at least $13 billion on assets overseas since December, including purchases in Singapore, Syria and Kazakhstan. South Korea’s government said on Oct. 6 domestic energy developers may team up with private companies including SK Energy Co. and the country’s sovereign wealth fund to compete with China and India. Sinopec Group acquired Swiss-based Addax Petroleum Corp. for C$8.3 billion ($8.1 billion) this year, beating state-run Korea National Oil Corp. to add oil reserves in countries including Nigeria. Africa is one of the areas targeted by Sinopec Group, which will pursue at least a 12 percent rate of return on investments in overseas acquisitions, an official familiar with operations at the refiner said on Oct. 13. “The group will be cautious on takeovers because we need an appropriate rate of return,” Su said, without specifying any targets. Chinese Rivals China National Petroleum, the country’s biggest oil company, is considering offering $13 billion to $14.5 billion for a controlling stake in Repsol YPF SA’s Argentine unit, three people familiar with the matter said in July. China is also vying for stakes in Africa’s emerging oil nations as part of a broader push for natural resources. The Wall Street Journal, citing unidentified people, said Oct. 12 China National Offshore Oil was in talks with Ghana National Petroleum Corp. on a bid for Kosmos Energy LLC’s stake in Jubilee oilfield off the continent’s west coast. Sinopec Group isn’t involved in talks to buy Repsol’s unit in Argentina, Su said. He also said he isn’t aware of talks to acquire Kosmos’s assets in Ghana. China National Offshore Oil has also shown interest in investing in the development of Tullow Oil Plc’s oil discoveries in Uganda, the U.K explorer said this month. In Angola, Chinese officials agreed with President Jose Eduardo dos Santos on Oct. 2 to discuss “strengthening cooperation” in areas including energy and infrastructure, according to an Oct. 5 Agencia AngolaPress report. That’s after Angola blocked the sale of Marathon Oil Corp. ’s 20 percent stake in an oilfield off the country’s coast to China, Reuters reported on Sept. 10. China consumes more than a third of the world’s aluminum output, a quarter of its copper production, almost a tenth of its oil and accounts for more than half of trading in iron ore. Last year, China bought $211 billion worth of iron ore, refined copper, crude oil and alumina, according to government data. To contact the reporter on this story: Ying Wang in Beijing at ywang30@bloomberg.net

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GM, Toyota’s Fuel-Cell Car Plans Clash With U.S. Infrastructure Priorities

October 8, 2009

By Alan Ohnsman Oct. 9 (Bloomberg) — General Motors Co. , Toyota Motor Corp. and other automakers want to sell consumers electric cars powered by hydrogen within six years. Their plans clash with the U.S. government’s infrastructure priorities. GM, Toyota, Honda Motor Co. and Daimler AG say durability improvements and cost reductions may enable them to sell the zero-emission vehicles by 2015. Costs to make the fuel-cell cars have fallen from $1 million each a few years ago, and automakers are working to meet a proposed goal of slashing the premium for the cars to $3,600 more than a midsized gasoline model. As the federal government, utilities, cities and states plan charging infrastructure for battery cars, hydrogen fueling stations are also needed, automakers say. While Germany and Japan are moving to build large-scale fueling networks, the U.S. lacks a national infrastructure program and the Energy Department has sought to cut hydrogen-related project funding. “The advances that have been made by the automobile manufacturers are remarkable,” said Scott Samuelsen , director of the National Fuel Cell Research Center at the University of California, Irvine. “Infrastructure is the Achilles’ heel.” The fuel cell center opened in 1998 and is funded mainly by the U.S. government and California Energy Commission. It has also received grants from Toyota and Royal Dutch Shell Plc’s hydrogen unit, said Kathy Haq, a spokeswoman for the center. Funding Cut The U.S. has provided more than $10 billion in low-cost loans and grants this year for production of electric cars, batteries and charging infrastructure, as the Obama administration pushes automakers to improve fuel economy and cut oil imports. By contrast, hydrogen funding was initially gutted. Energy Secretary Steven Chu in May recommended a 60 percent budget cut for hydrogen projects to $68.2 million, saying batteries and bio-fuels are a better near-term option. Congress restored funding to $190 million. “Secretary Chu will continue to work with Congress to shape a budget that will help us achieve the most efficient vehicles and will help save money for consumers,” said Stephanie Mueller , an Energy Department spokeswoman. Hydrogen “is taking longer because fuel cells themselves are still very expensive and getting ‘green’ hydrogen — made from wind or solar, rather than natural gas — is still not so easy,” said Daniel Kammen , director of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley. “It might look right now that EVs and plug-ins are winning the race, certainly in terms of federal funding, but that’s because they’re a bit more near term,” Kammen said. ‘Million-Dollar Car’ Hydrogen cars, touted for a decade as an eventual replacement for gasoline models, offer better range and faster fueling than battery models. Fuel cells, made up of layers of plastic film coated with platinum sandwiched between metal plates, make electricity in a chemical process combining hydrogen and oxygen, with water vapor as the only exhaust. “The fuel-cell vehicle has been called the ‘million-dollar car,’ and when they first came out, they were a million bucks,” Irv Miller , a group vice president for Toyota’s U.S. sales unit, said Oct. 2 in Los Angeles. Toyota, Honda, Daimler and Hyundai Motor Co. said at a Sept. 21 briefing in Sacramento, California, they were working to meet a proposed target of a $3,600 cost premium for the cars. To do that will require mass-production and continued cuts in fuel- cell stack and hydrogen tank costs, the companies said. Platinum Costs GM has spent $1.5 billion on fuel-cell research, Charles Freese , executive director of GM’s fuel-cell program, said in an interview. The company is discussing partnerships to commercialize the technology, he said, without providing details. Detroit-based GM showed a fuel-cell system on Sept. 24 that is 220 pounds lighter than one it replaces, uses less than half as much platinum and may be durable enough for a decade of use. “We’ve gone from 80 grams of platinum per stack to less than 30 grams,” Freese said. The reduction, smaller size and other refinements mean “substantial” cost reductions, he said, without elaborating. Platinum cost $1,334 an ounce as of Oct. 8. GM, Toyota, Honda, Daimler, Hyundai , Kia Motors Corp., Renault SA and Nissan Motor Co. released a statement Sept. 9 saying they shared a goal to create a fuel-cell vehicle market within six years. Government support for the goal is stronger in Germany and Japan than in the U.S., according to GM’s Freese and Samuelsen of the fuel cell center. Germany plans 1,000 hydrogen stations by 2015, and Japan has a similar goal. The German government is working with utilities and Linde AG, the world’s second-biggest maker of industrial gases, to set up a station network, Bharat Balasubramanian , Daimler’s vice president for product innovations, said in Los Angeles. “We have a road map to address these challenges of infrastructure by 2015,” Balasubramanian said. California In California, where most fuel-cell vehicles in the U.S. are tested and even owned by some customers, compressed hydrogen gas is dispensed at pumps similar to those for gasoline . The fuel comes either from a process that breaks down natural gas using steam, or from solar power and water. While the state requires large automakers to sell “zero- emission” vehicles, it’s added hydrogen stations at a slower pace than planned, said Catherine Dunwoody , executive director of the California Fuel Cell Partnership . California currently lists 23 stations in operation. “Germany has come out with a very strong program to develop infrastructure; we don’t have anything like on the federal level,” Dunwoody said. Hydrogen Pumps Just 32 public hydrogen pumps, installed mainly at existing gasoline stations in Southern California, would be sufficient to support an initial consumer market and cost as little as $32 million, Samuelsen said. Shell , among the few oil companies adding U.S. hydrogen stations, will open two more in Southern California by next year, Phil Baxley , president of Shell Hydrogen, said in Los Angeles. Shell is also participating in Germany’s program. The cost of installing a hydrogen pump at a Shell station ranges from $1 million to $5 million, depending on how much capacity is required, Baxley said. “Daimler, Toyota, Honda, they have the advantage of partnerships with national governments that are forcing the creation of a fueling infrastructure,” GM’s Freese said. “If we don’t do the same thing in the U.S., we’re going to fall behind.” To contact the reporter on this story: Alan Ohnsman in Los Angeles at aohnsman@bloomberg.net

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Quest to Solve Model of Life Leads Two Americans, Israeli to Nobel Prize

October 8, 2009

By John Lauerman and Andrea Gerlin Oct. 8 (Bloomberg) — A quest to create a three- dimensional image of one of life’s most complex molecules led scientists Ada Yonath , Venkatraman Ramakrishnan and Thomas Steitz on a decades-long race, culminating in a shared Nobel Prize in chemistry announced yesterday. Their work, conducted over more than 30 years in separate laboratories thousands of miles apart, helped solve the puzzle of the ribosome , the protein-making factory for all living organisms. Yonath, 70, an Israeli at the Weizmann Institute of Science in Rehovot, Israel; Ramakrishnan, 57, an American at the MRC Laboratory of Molecular Biology in Cambridge, England; and Steitz, 69, an American at Yale University, created 3-D models of the ribosome that have allowed researchers to unlock its secrets in translating genetic material into protein chains. That ribosome’s “crystal structure” has become the basis for research on new antibiotics as well as artificial life forms that may one day make new fuels. “I depend heavily on that crystal structure and admire it frequently,” said George M. Church , a Harvard Medical School geneticist who is experimenting with artificial ribosomes. “This is one of the most fundamental structures in all of biology, and one of the few seen in all organisms. It’s a much deserved award.” For Steitz, the road to discovery began as a first-year graduate student at Harvard University in Cambridge, Massachusetts, in 1963 when he went to a lecture by Max Perutz , a Vienna-born scientist who had won the chemistry Nobel a year earlier. Perutz’s three-dimensional pictures of the blood molecule hemoglobin inspired him to pursue similar work. Audible ‘Wow’ “No one had seen anything like it before,” Steitz said yesterday in an interview at Yale’s campus in New Haven, Connecticut. “An audible ‘Wow!’ went through the room.” Steitz says his work focuses on what scientists call the “central dogma” of genetics: cells make copies of their DNA, which is then transcribed like a photographic negative into RNA. That RNA is then used as the template for cells to make protein, which takes place in the ribosome. The process of describing the ribosome was more of an evolution than a single moment of discovery, Steitz said in the interview. He began looking closely at the structure in the 1990s, when X-ray crystallography techniques, the process used to produce the molecule’s 3-D image, were a primitive version of what they’ve become today. “We were at the edge of what computers could do at the time, much of it had to be done with supercomputers,” he said. “Today, you can do a lot of this work on your laptop.” ‘Dreamer’ Ada Yonath was called a “dreamer” for trying to generate X-ray crystallographic images of the ribosome structure as early as the 1970s, a task the Nobel committee said was then considered “impossible.” She earned a doctorate in X-ray crystallography at the Weizmann Institute in 1968, followed by postdoctoral studies at the Carnegie Mellon University in Pittsburgh and the Massachusetts Institute of Technology in Cambridge, Massachusetts. Yonath returned to Weizmann in 1970 to start Israel’s first laboratory for protein crystallography. By 1980, she had managed to generate the first rudimentary, three-dimensional crystals of the larger piece of the ribosome, which is divided into two so- called sub-units. Steitz and Ramakrishnan joined the race and over the next 20 years, the three scientists worked separately to determine the atomic structure of the ribosome. Yonath generated three- dimensional crystals of ribosomes in bacteria living in harsh conditions such as the Dead Sea. In X-ray crystallography, scientists shoot X-rays toward a crystal of a protein, scattering its atoms and tracking their path on the other side. Race to the Line Yonath also introduced cryo-crystallography, a technique that minimizes damage to crystals by freezing them in liquid nitrogen at very cold temperatures. Refining their techniques until they were able to see individual atoms in the ribosome’s structure, the Nobel Committee said the three scientists “reached the finishing line almost simultaneously” in August and September 2000 when they published crystal structures showing the exact location of each atom, allowing them to map the precise three-dimensional structure of ribosomes. “We have faced years of persistence in carrying out this research,” Yonath, the first woman to win the chemistry accolade in 45 years, said yesterday at a press conference. Fundamental Biology Ramakrishnan, reached yesterday at his office five minutes after being told of his achievement, said advances in crystallography methods, computer technology and synchrotrons, or sub-atomic particle accelerators, helped propel the scientists’ work. He said he was happy and surprised to be chosen. The three winners know each other well, though they work separately, he said. “It must have been a difficult decision; it’s been the subject of study by many groups over 40 years,” he said in a phone interview. “It’s fundamental biology.” Ramakrishnan was born in India. His parents were also scientists. He holds a doctorate in physics from Ohio University. Steitz’s laboratory began making crystals out of the ribosome’s 53 proteins, alone and in combinations. Protein crystals, while extremely difficult to make, present a repeating atomic pattern that scientists can analyze. Researchers bombard the crystals with X-rays to find the densest portions and deduce what size atoms may lie there. They also see how large proteins interact with the crystal, yielding a signal that gives more clues about the nature of the protein inside. Getting Close In 1999, Steitz knew that he was getting close to a solution. He and his wife, Joan Steitz , also a Yale professor, had planned a sabbatical. She went to Melbourne while her husband remained in New Haven. “There was too much going on, and I didn’t want to miss anything,” he said. He published the first atomic picture of the ribosome’s structure in 2000. While the effort to describe the ribosome came from scientific interest that was born early in his career at Perutz’s lecture, it wasn’t until later that he realized the implications for studying antibiotic resistance, Steitz said. Germs such as methicillin-resistant Staphylococcus aureus, or MRSA, overcome conventional antibiotics by making proteins that deactivate or flush out drugs. Changes in the ribosome itself play an important role in manufacturing these drug- resistant proteins, Steitz said. Steitz’s work provided the technological basis for a closely held company called Rib-X Pharmaceuticals in New Haven. Rib-X is developing new antibiotics that target infectious cells’ ribosomes. The company has two drugs that are being tried in patients, according to its Web site. “We’re using this three-dimensional structure of the ribosome as a road map to design new drugs, rather than relying solely on Mother Nature, which has been the source of most antibiotics,” said Susan Froshauer , president and chief executive officer of Rib-X, in a telephone interview. To contact the reporters on this story: John Lauerman in Boston at jlauerman@bloomberg.net Andrea Gerlin in London at agerlin@bloomberg.net

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Detroit Tigers Lose Again, Tied With Minnesota Twins in AL Central Race

October 4, 2009

By Nancy Kercheval Oct. 4 (Bloomberg) — The Detroit Tigers and Minnesota Twins are taking their race for the American League Central Division championship and a spot in Major League Baseball’s playoffs down to the last day of the regular season. The Tigers lost their advantage over the Twins last night when they fell 5-1 to the Chicago White Sox after Minnesota beat Kansas City 5-4. Detroit held a seven-game lead on Sept. 6 before going 10-15 to allow the Twins to catch up. The Tigers have had the lead since May 10 and been alone in first place every day since July 23. No team has led a division or league since May 10 and lost it in the final week, and no team has led a division or league by three games with four games to play and not won, according to MLB.com. If the two teams remain tied after today’s games, they will have a one-game playoff Oct. 6 at the Metrodome in Minneapolis. It will be a repeat of last season for the Twins, who were eliminated from postseason action after losing the playoff to Chicago. The division leader will play the New York Yankees in the first round of the AL playoffs. In Minneapolis, Michael Cuddyer hit a home run in the eighth inning to lift the Twins to its win over the Royals. The Twins have won 15 of 19 games to come from seven games behind the Tigers. “What we’ve done and the run we’ve had up to this point has been pretty special,” manager Ron Gardenhire said. “These guys really have just huge hearts out there.” To contact the reporter on this story: Nancy Kercheval in Washington at nkercheval@bloomberg.net .

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Senate’s Warner Urges Goldman Sachs to Watch `Optics’ on Executives’ Pay

October 2, 2009

By Alison Vekshin Oct. 2 (Bloomberg) — Goldman Sachs Group Inc. must be cautious about handing out record bonuses while the banking industry is still under distress or risk spurring an outcry from Congress, U.S. Senator Mark Warner said. “I do hope that Goldman Sachs will be a little more sensitive to the optics of their actions,” Warner, a member of the Senate Banking Committee , said today in an interview on Bloomberg Television’s “Political Capital with Al Hunt ,” to be broadcast today. “They ought to be sensitive to the fact that the whole industry is still under a great deal of scrutiny,” said Warner, a Virginia Democrat. “You can end up seeing a reaction on the Hill if there’s not some of that sensitivity.” Goldman Sachs, the biggest U.S. securities firm before converting to a bank holding company in September 2008, set aside $11.4 billion to pay compensation in the first six months of this year after reporting record earnings. Goldman Sachs spokesman Lucas Van Praag didn’t immediately return messages seeking comment. Warner said the banking committee will finish drafting legislation based on President Barack Obama’s proposal to overhaul U.S. financial regulations this month and will meet in November to consider amendments. The legislation can be finished next month, he said. “If we did not learn the lessons of the worst financial meltdown in all our lifetimes and try to put new rules of the road in place, I think it would be a disaster,” Warner said. Council of Regulators Warner said he supports creating a council of regulators to monitor systemic risk that would include the Federal Reserve and the Treasury Department, adding that there is a sense on the committee that setting up a council is the “right way” to go. The banking panel will consider creating a single bank regulator by merging the oversight powers of the Federal Reserve and the Federal Deposit Insurance Corp., with the Office of the Comptroller of the Currency and the Office of Thrift Supervision, Warner said. The committee plans to take into account the concerns of community bankers, who say merging the four bank regulators would make them “a stepchild” to larger banks, Warner said. Warner said the government shouldn’t have a say in who replaces Kenneth Lewis as chief executive officer of Bank of America Corp. “I actually think that the board ought to be making that decision,” Warner said. “The government micromanaging these companies — that is a very dangerous place to be.” ‘Arbitrary Cap’ Warner dismissed discussion about setting limits on Wall Street compensation, saying it’s “really hard to set an arbitrary cap.” “The private sector will always find a way around that,” he said. “If too much risk was taken and we end up seeing the institution go down, some notion of a clawback makes a lot of sense.” While Goldman Sachs has repaid the funds it owed the government under the $700 billion Troubled Asset Relief Program, the financial sector is “still not out of the woods,” Warner said. Warner said the Senate will pass a health-care bill this year with 60 votes, adding that he hoped to see Republican support for the legislation. Republicans haven’t supported the legislation even after Democrats on the Senate Finance Committee agreed to such compromises as excluding a government-run insurance program from its legislation, Warner said. Warner said Virginia voters’ concern about what is happening in Washington is causing Creigh Deeds , the Democratic party’s gubernatorial candidate in Virginia, to fall behind. “He’s got a month to close this race,” Warner said. “We can turn out the more moderate voters if we can make this a choice not about what is going on in Washington, but about the record of the last eight years in Virginia.” To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net .

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Yankees Poised to Claim AL East; Cardinals, Dodgers Clinch Playoff Berths

September 27, 2009

By Nancy Kercheval Sept. 27 (Bloomberg) — The New York Yankees can claim their division, the American League’s best record and home-field advantage through the Major League Baseball playoffs today with a win over the Boston Red Sox. In the National League, the St. Louis Cardinals won the Central division title with a 6-3 win over the Colorado Rockies at Coors Field in Denver. The Los Angeles Dodgers clinched a playoff berth by beating the Pittsburgh Pirates, sending manager Joe Torre to his record-tying 14th straight postseason series. The Yankees beat the Red Sox 3-0 to raise their season record to 99-56 yesterday as CC Sabathia became the first pitcher to claim 19 victories. No other AL team can win 100 games this season, and the league has home-field advantage in the World Series. “We need one win basically in the next seven games,” manager Joe Girardi said. “You’d like to clinch as soon as possible so you could maybe give the guys a couple days and make sure that you keep them well-rested and strong.” Sabathia (19-7) went seven innings, allowing one hit and striking out eight for the Yankees. Mariano Rivera got his 43rd save after pitching one inning. Sabathia could reach 20 wins with a victory against Tampa Bay on Oct. 2. “He’s been everything that we have asked for and more,” Girardi said. “He is an ace.” Robinson Cano hit his 24th home run of the season in the sixth inning to give the Yankees their first run of the game at Yankee Stadium. Johnny Damon singled in the eighth to drive in two runs. ‘Doesn’t Matter’ Daisuke Matsuzaka (3-6) gave up six hits and one run in seven innings for the Red Sox, who dropped to 91-63. “I don’t think it matters,” Red Sox first baseman Kevin Youkilis said. “Both of us are probably going to the playoffs unless we don’t do something right.” Boston leads the Texas Rangers by 6 1/2 games in the race to claim the wild card playoff spot. The Red Sox have a “magic number” of three — Boston wins plus Texas losses — to eliminate the Rangers and get into the playoffs. Jim Thome hit a two-run single that followed two runs scored on walks in the eighth inning as the Dodgers (93-62) sealed the 8-4 win at PNC Park in Pittsburgh. George Sherrill (1-0) allowed one run in 1/3 inning to get the win. Denny Bautista (1-1) gave up one hit and two runs in 1/3 inning for the loss. The Pirates fell to 57-96. Los Angeles has a magic number of three to clinch the National League West for their first back-to-back division titles since 1977-78. To contact the reporter on this story: Nancy Kercheval in Washington at nkercheval@bloomberg.net .

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Germany Votes as Merkel-Steinmeier Race Tightens in Final Days

September 27, 2009

By Tony Czuczka and Brian Parkin Sept. 27 (Bloomberg) — Germany votes today to decide who steers the European Union’s biggest country, with polls showing Angela Merkel set to remain chancellor and her bid to forge a coalition with the pro-business Free Democrats in doubt. Merkel’s challenger, Social Democratic Foreign Minister Frank-Walter Steinmeier , has narrowed the gap in the past two weeks and about a quarter of the electorate was undecided in the last days of the campaign. The candidates used their final appeals yesterday urging supporters to turn out. “It’s going to be a thriller,” said Peter Loesche , a political scientist at Goettingen University in central Germany. While he expects Merkel to win, he said the race for her coalition partner is “50-50.” After four years of compromise in a grand coalition of their two parties, Merkel, 55, and Steinmeier, 53, used the campaign to set out competing visions on how to spur growth as the economy emerges from the worst post-World War II slump. Merkel backs tax cuts that Steinmeier says are unaffordable as debt soars. He wants a national minimum wage and an increase in the top income-tax rate to 47 percent from 45 percent. The vote, which decides the balance of power in the 598- seat lower house of parliament, “is a crossroads,” Merkel told a rally in Berlin yesterday after returning from the Group of 20 summit in Pittsburgh. Only a coalition of her Christian Democrats with the Free Democrats can “secure economic growth and jobs.” Voting is from 8 a.m. until 6 p.m., when television stations ARD and ZDF release the first exit polls. ‘Cold Place’ Steinmeier, addressing supporters in Dresden , said a Merkel-FDP alliance would benefit only the rich and turn Germany into a “cold place.” Merkel’s Christian Democrats and their Bavarian sister party, the Christian Social Union, slipped 2 points to 33 percent in a Forsa poll released on Sept. 25, their lowest score since March. The Social Democrats lost a point to 25 percent, while the Left rose two points to 12 percent and the Greens declined 1 point to 10 percent. The Free Democratic Party, led by Guido Westerwelle , gained a point to 14 percent, giving a CDU-FDP alliance combined support of 47 percent, the lowest since October last year. A score as low as 46 percent may still be enough to form a government, analysts say. Forsa polled 2,001 voters on Sept. 21- 24 with a margin of error of as many as 2.5 percentage points. Al Qaeda Threat The vote comes amid heightened security after video threats by al-Qaeda and the Taliban. The Interior Ministry banned flights over the Munich Oktoberfest and raised security at train stations and airports after videos surfaced warning Germany to withdraw its 4,200 troops from Afghanistan. While Afghanistan featured only briefly in the election campaign, the parties have clashed on energy policy. Merkel wants to extend the lifespan of nuclear-power plants by as many as 15 years, while Steinmeier backs a law he helped negotiate as Schroeder’s chief of staff that will shut them by about 2021. Nuclear power is “yesterday’s energy,” he said. At stake are stations run by Dusseldorf-based E.ON AG, RWE AG of Essen, Sweden’s Vattenfall AB and Karlsruhe-based EnBW Energie Baden-Wuerttemberg AG that generated 23 percent of Germany’s electricity last year. ‘Old Greed’ Steinmeier, who pledges to promote green technology to create as many as 4 million new jobs, says a CDU-FDP coalition would make it easier to fire workers and promote “the old greed.” He wants to lower the bottom tax rate to 10 percent from 14 percent and use the top rate increase to improve the education system. “The voters want a government that offers social justice for everyone in this country,” Steinmeier said in Dresden. “They won’t get that with Merkel’s CDU and certainly not with Westerwelle’s party.” Merkel wants to push deregulation, overhaul labor-market rules to make it easier to hire and fire and cut taxes by 15 billion euros ($22 billion) over four years. She aims to lower the bottom tax rate to 12 percent and raise the threshold for the 45 percent rate to 60,000 euros from 52,000 euros. Merkel wants to avoid a repeat of the 2005 election, when then-Chancellor Gerhard Schroeder hauled the Social Democrats back into contention after trailing by as many as 20 percentage points. Merkel’s victory by a single point forced her into coalition with her traditional rivals. Coalition Stimulus Policies enacted by the coalition helped Germany, the world’s biggest exporter, emerge from recession in the second quarter, sooner than economists forecast. The government pushed through stimulus spending of 85 billion euros and a 102 billion- euro government-backed rescue of Munich-based lender Hypo Real Estate Holding AG, helping keep unemployment below the U.S. level and the euro-area average. “The election is too close to call,” Gary Smith , director of the American Academy in Berlin, a trans-Atlantic research institute, said in an interview. “We might end up with another not-so-grand coalition.” To contact the reporters on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net ; Brian Parkin in Berlin at bparkin@bloomberg.net

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Bobby Cox to Retire After One More Season as Manager of Atlanta Braves

September 23, 2009

By Larry Siddons Sept. 23 (Bloomberg) — Bobby Cox will manage the Atlanta Braves for one more season and then retire, ending a 20-year run in which he helped turn one of baseball’s doormats into a World Series champion and perennial contender. Cox, 68, signed a one-year contract extension through 2010, the Braves said in a news release. He then will become an adviser to the Major League Baseball club under a five-year agreement. The manager of mediocre teams in Atlanta and Toronto for seven seasons, Cox got hot with the Blue Jays in 1985, winning the American League East Division and capturing the AL Manager of the Year award. He retired from managing after that season to become the Braves’ general manager, then returned to the dugout midway through 1990 to manage the club. That team finished last in the National League West with a major-league-worst 65-97 record, but went 40-57 under its new manager. The next season, the Braves became the first team to reach the World Series a year after posting baseball’s worst mark, falling in seven games to the Minnesota Twins. That started a run of 14 straight postseason appearances for Atlanta and Cox, including the World Series title in 1995. The postseason run stopped in 2006 and the Braves haven’t returned to the playoffs. They are in second place in the NL East this season with an 81-70 record, 7½ games behind Philadelphia in the division and 4½ behind Colorado in the race for the league’s wild-card playoff spot. Cox has won four Manager of the Year awards and is fourth in baseball history with 2,408 regular-season victories. To contact the reporter on this story: Larry Siddons in New York at lsiddons@bloomberg.net .

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David Segal: The Commerce Secretary From Boeing

September 22, 2009

A recent decision by the World Trade Organization, and an upcoming one, could have major implications for the budgets and economies of our 50 states — effects which should be welcomed by progressives who are typically critical of that secretive regulatory body. United States trade officials and politicians are praising last week’s ruling that certain European subsidies to Airbus violate international trade law. It is seen as a boon to US-based Boeing, but the celebration may be premature — a forthcoming decision will determine whether billions of dollars in government aid to Boeing is also illegal. We should hope the WTO sides with Airbus and the E.U. this time: These grants and tax breaks are busting state budgets, at a time when every last penny is precious. There’s a war among the states to lure in businesses; our federal government should mediate it, but it could be the WTO that forces a cease-fire. Washington State was the long-time home of Boeing, and the state’s elected officials have paid due deference to that behemoth of airplanes and military machinery for generations. Senator Henry “Scoop” Jackson earned his nickname as “The Senator From Boeing” — and worse ones — for doing Boeing’s bidding in the halls of Congress. More recently it was Gary Locke, Washington’s governor from 1997 to 2005, who worked hard to minister to the needs of the hometown corporation. Since being appointed by President Obama as secretary of commerce, he has an even higher perch from which he can do so. Locke made a telling comment about corporate subsidies at this summer’s National Conference of State Legislatures. Asked by a reporter if legislators had complained to him about the vicious competition between states for businesses, and the billions of dollars localities have conceded in tax revenue to entice their presence, he answered, “I really think that’s a states-rights issue … I understand companies wanting to move, looking for a better business climate.” Large corporations have become adept at pitting state and city governments against each other to secure ever bigger budget-busting tax concessions and subsidies, ever threatening to locate their facilities in some more ‘business-friendly’ state. In fact, many fellow state legislators and I were lamenting these wasteful tax breaks, the race to the bottom they have precipitated, and the harm they have done in this era of budgetary crises. More than ever, we need those squandered dollars for schools and public works and social services. It is unfortunate that our concerns did not reach the Secretary’s ear. While disappointing, Locke’s reply to the reporter’s query was not surprising: As governor, he oversaw perhaps the greatest boondoggle (so far) in the history of tax giveaways to corporations. It damaged local pride when Boeing moved its corporate headquarters from Seattle in 2001, holding Washington State hostage while securing $60 million in tax breaks and subsidies from Illinois and Chicago to relocate. Increasingly sophisticated at extracting tax breaks from its easy prey, in 2003 Boeing spread word that it would manufacture its new 787 mega-jetliner in whichever state offered it the deepest subsidy. Stricken with Stockholm Syndrome, Washington State, under Governor Locke’s leadership, ponied up a projected $3 billion to secure the few-thousand jobs promised with the factory, out-bidding about 20 other states. (In practice, it appears that the subsidy package will cost perhaps two-thirds of what was anticipated — while creating an even smaller fraction of the promised jobs.) The 787 has yet to leave the ground. The Washington State tax break plan is now a key plank in the E.U.’s complaint against the U.S. and Boeing. It is one thing to support such tax breaks as the executive of a single state, recently spurned by a major employer, desperate for new jobs, and wanting to save face. States are trapped in a paradigm wherein it seems to make sense to lure in new corporations, or hold onto old ones, by dangling goodies in front of them — there’s nothing more likely to win a potential vote than securing or saving the job of he or she who shall cast it. A solitary governor ought to lament that corporations regularly hold him or her over the barrel, pitted against governors of neighboring states; it is tragic, but understandable, when he or she succumbs to such pressures by forking over precious public funds. But a Democratic commerce secretary with a birds-eye view of these United States, and a responsibility to act in the interest of all of its citizens, should take a very different stance. As states swipe employers from each other with tax breaks, businesses are moved around and countless tax dollars are lost, but on the net, few new jobs are created. The Boeing plant would be built somewhere, no matter what. If we care about all Americans equally — as should any cabinet secretary — it’s clear that it would have been better for the public if it had been built without a mammoth subsidy, even if not in Washington State. The same phenomenon, on a somewhat smaller scale, manifests countless of times over, as states and cities compete for factories, stadiums and their sports teams, and corporate headquarters. Public coffers throughout the nation are poorer for it. Locke suggested such interstate competition is a matter of “states’ rights.” One could argue, however, that it’s really a matter of interstate commerce, and hence under the purview of the federal government; the Constitution’s commerce clause empowers Congress to regulate commerce “among the several states.” Unfortunately, the courts have made it unclear who, if anybody, has standing to force a ruling on the matter. Regardless of its constitutionality, the phenomenon is a destructive one. Rather than encourage the practice, the secretary of commerce should facilitate cooperation among the states — via federal legislation or an interstate compact — to reduce corporations’ abilities to extract subsidies by playing states and their residents off of each other, as states sprint past one another, into ever deeper deficits. We ought to celebrate the WTO’s recent decision not because it hurts Airbus and Europe, but because it reduces pressure to cede public money to corporate giants like Boeing. A ruling against Boeing in coming months could circumvent a complacent administration and commerce secretary and force a reorientation of tax policy that will leave cities and states across our country better off.

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Sheehan’s Cold War History Links Golf, Nuclear Annihilation: Book Review

September 21, 2009

Review by Rich Jaroslovsky Sept. 21 (Bloomberg) — No weapon in history has done more to threaten humanity’s survival, and paradoxically to maintain it, than the intercontinental ballistic missile. Starting in the mid-1950s, with the Soviet Union embarked on the same path, the U.S. launched a crash program to develop the ultimate weapon: rockets capable of delivering nuclear annihilation in a matter of minutes. Leading the effort was Bernard Schriever, an Air Force officer who fought for and organized the missile’s development and deployment. His life’s work forms the engrossing core of “ A Fiery Peace in a Cold War ,” the first major book in 20 years from Neil Sheehan, who as a New York Times reporter revealed the existence of the Pentagon Papers and whose “ A Bright Shining Lie ” won the 1989 Pulitzer Prize for nonfiction. Schriever, born in Germany four years before the outbreak of World War I, arrived in the U.S. with his family at age 6, settling in San Antonio. A year later, his engineer father was killed in an industrial accident. His formidable mother raised him to a young adulthood that included becoming a championship golfer. Bennie Schriever’s skill on the links wasn’t incidental to his rise through the U.S. Army Air Corps, which eventually became the Air Force. At several important junctures, the desire of older men to play with the accomplished young golfer helped his upward trajectory. So too did his keen interest in aeronautical engineering, his unflappability and ability to marshal other men — whether scientific experts or political allies — to prove the ICBM would work and get it built. Military-Industrial Complex “A Fiery Peace in a Cold War” offers an unparalleled look at the workings of what President Dwight D. Eisenhower memorably labeled the “military-industrial complex.” Schriever proved a skilled bureaucratic maneuverer, keeping his program from the clutches of the World War II-era aircraft manufacturers with their well-heeled lobbyists and friends in Congress, and promoting a new generation of technicians and engineers that gave birth to the modern aerospace industry. Out of the race Schriever led came the Cuban Missile Crisis, when the world teetered on the brink of destruction. But also came the doctrine of Mutual Assured Destruction — MAD for short — the balance of terror that held both sides’ nuclear weapons in check through the eventual collapse of the Soviet Union, and holds them in check today. Vacuum at the Center If Sheehan’s book suffers anything, it is a bit of a vacuum at its center. For all the pages expended on Schriever’s thoughts and actions, he never fully comes alive: He’s more a vehicle than a character. The contrast is particularly stark with “A Bright Shining Lie,” Sheehan’s book about the former military officer John Paul Vann, whose personal shortcomings deepened his story and served as a metaphor for America’s motives in Vietnam. If Schriever is a less than a completely compelling central figure, Sheehan compensates with sharply drawn depictions of many others. The German rocket scientist Wernher von Braun , who cast his lot with the U.S. after World War II, emerges as so amoral and enamored by the possible use of rockets for space travel that he looked the other way while his Nazi overseers put his technological advances to unspeakable uses. Ed Hall becomes the Air Force’s chief rocketry guru after, unbeknownst to all, his physicist brother, Ted, had been the Soviets’ second-most-important spy at Los Alamos. Hating Russians Then there’s the Hungarian-born nuclear pioneer John von Neumann, whose brilliance as a mathematician was matched only by his fascination with explosions and his hatred of Russians. “If you say why not bomb them tomorrow, I say why not today?” he said. “If you say today at five o’clock, I say why not one o’clock?” Schriever, who became a four-star general, died in 2005 at 94, having lived long enough to see a de-escalation of the arms race that had so dominated his life. He was laid to rest at Arlington National Cemetery amid honors normally reserved for a military chief of staff. Perhaps there should have been one more medal: a combat ribbon for the war that never had to be fought. “A Fiery Peace in a Cold War: Bernard Schriever and the Ultimate Weapon” is from Random House (534 pages, $32). To order this book in North America, click here . ( Rich Jaroslovsky is the technology columnist for Bloomberg News. The opinions expressed are his own.) To contact the writer of this column: Rich Jaroslovsky in New York at rjaroslovsky@bloomberg.net .

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N.Y. Governor Paterson Refuses to End Election Bid as Polls Unsettle Obama

September 21, 2009

By Michael Quint and Nicholas Johnston Sept. 21 (Bloomberg) — New York Governor David Paterson said he still wants to be the Democratic candidate for governor next year, even after President Barack Obama conveyed unease amid sinking poll results. “My plans for 2010 are to run for governor of the state of New York,” Paterson, 55, said after marching in the annual African-American Day Parade in New York City. Paterson said he wouldn’t discuss “confidential conversations” when asked about a New York Times report that Obama administration officials asked him to withdraw. No one at the White House has ordered Paterson not to run, said a White House official, speaking on condition of anonymity. The administration shares the concerns of party leaders in New York about Paterson’s political strength going into the 2010 election, the official said. Obama “has not spoken to me,” Paterson said yesterday. Developing a plan to close a $2.1 billion budget gap in the state’s $131.8 billion spending plan is “the most important issue I’m going to focus on in the next few months,” he said. The Times reported that the administration and New York Democratic Party officials are pushing Paterson, one of only two black state governors in the U.S., because they fear weakness at the top of the ticket might influence other races. Massachusetts Governor Deval Patrick is the other officeholder. Obama’s message was delivered by Democratic Representative Gregory W. Meeks of Queens, according to the Times. Telephone messages left for Meeks at his offices in New York City and Washington were not returned. Polling Data Paterson’s political future has been discussed as public opinion polls show him trailing other Democrats and losing a hypothetical election contest to former New York City Mayor Rudolph Giuliani , a Republican, who has said he is considering seeking the office. “Presidents are party leaders and part of the job, particularly in first term, is to recruit and make tough decisions,” said independent analyst Charles Cook , Washington- based publisher of the nonpartisan Cook Political Report . “The only thing unusual about this is that you have a governor who has no chance of being re-elected who doesn’t seem to take a hint that it’s time to bail out,” Cook said. Traditionally, Democrats running for Congress and the Legislature most directly may feel the effects of a Republican gubernatorial victory. In the New York Senate, Democrats hold a 32-30 majority, after winning control of the chamber in 2008 for the first time in 43 years. 2010 Redistricting Maintaining that edge in next year’s elections is critical to Democrats, because it would give them an advantage drawing new district boundaries based on 2010 Census results. Democrats hold a wide majority in the Assembly. There are 5.87 million registered Democrats and 2.96 million Republicans in New York, according to the Board of Elections . New York’s 29-member U.S. House delegation has 26 Democrats and three Republicans, according to the House Clerk’s office. The Republican count includes Representative John McHugh , who has been confirmed as Army secretary in Obama’s administration. An Aug. 16 Quinnipiac University poll of registered voters showed 59 percent disapproved of the way Paterson is handling the governor’s office. The survey from the Hamden, Connecticut, based school found that voters favor Giuliani over Paterson 53 percent to 33 percent in a potential gubernatorial race. If state Attorney General Andrew Cuomo were the Democratic candidate, he would beat Giuliani 48 percent to 39 percent, according to the poll, which had a 2.4 percentage-point error margin. Giuliani Bid Giuliani’s possible candidacy “frightened a lot of people” and his entry to the race may force party leaders to jettison Paterson, said George Arzt , a Democratic political consultant. The message from the White House is “only three-quarters of a death knell,” and Paterson still may rebound, Arzt said. After the November elections “there will be caucuses around the state, and that is when you could get people going to the governor and saying, ‘You can’t do this,’” Arzt said. Michael Steele , chairman of the Republican National Committee, said he was ‘stunned” the Obama administration would send such a message to Paterson and not to New Jersey Governor Jon Corzine , who has similar approval ratings and trails Republican Christopher Christie in polls before the Nov. 3 election. Steele spoke on CBS Television’s “Face the Nation.” Cuomo Profile In New York, Cuomo is the son of former Democratic Governor Mario Cuomo and has kept his name before the public with investigations of companies making student loans, prices charged by health insurance companies and money managers hired by the state pension fund. For months he has deflected questions about running for governor. “I’ve been doing my job” and want “to stay away from the politics,” Cuomo said during a radio interview Sept. 18 on radio station WGDJ in Albany. Asked about Paterson’s low standing in polls, Cuomo said, “These are very difficult times.” Paterson has confronted growing budget deficits since he became governor in March 2008. He called for a public meeting with lawmakers Sept. 25 to discuss a multiyear solution. The budget approved in April included unpopular fee increases for drivers licenses and vehicle registrations, and ended state rebate checks for local property taxes registration. Spitzer Resignation Paterson, a former state senator from Harlem, was elected lieutenant governor in 2006. He moved to the governor’s office in March 2008 when Eliot Spitzer resigned after being identified as “Client 9” in a federal prostitution investigation. Spitzer wasn’t charged with wrongdoing. Paterson enjoyed early popularity before his ratings slid with his handling of the vacancy created when U.S. Senator Hillary Clinton became Secretary of State. He chose first-term U.S. Representative Kirsten Gillibrand of Hudson, disappointing more experienced congressional Democrats and supporters of Caroline Kennedy , daughter of the slain president, who also sought the job. To contact the reporter on this story: Michael Quint in Albany, New York, at mquint@bloomberg.net ; Nicholas Johnston in Washington at Njohnston2@bloomberg.net .

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Steve Parker: This weekend’s auto radio shows

September 18, 2009

Join us LIVE Saturday and Sunday at 5pm Pacific time on www.TalkRadioOne.com for our exclusive LIVE motoring and motorsports talk shows! Steve Parker’s The Car Nut Show Saturday starting at 5pm Pacific GM is offering an unprecedented deal for new car buyers — a money-back, 60-day guarantee on whatever GM car or truck you buy. The corporation’s new CEO, Ed Whiteacre, is doing the TV ads ala Lee Iacocca, but the reviews so far have not been too kind. Plus Steve gives his “Sixty-Second Road Tests” of some of the many 2009 and 2010 cars he’s driven recently. Plus all your calls! Be sure to join-in the conversation: The call-in number is: 213-341-4353. Not even Barack Obama got a 60-day, money-back guarantee on his new GM car! Steve Parker’s World Racing Roundup Sunday starting at 5pm The big news in motor racing is the scandal involving Formula 1 and the Renault team. People are being fired, charged, indicted and have quit the team because the Renault apparently ordered their driver, Nelson Piquet, Jr., to crash at the 2008 Singapore GP, in order for their other driver, Fernando Alonso, to win the race. We’ll cover it from every angle. NASCAR starts their 10-race Chase for the Championship this weekend; we’ll have the full report. Also an interview with Dave Rockwell, one of the engineers who created and ran the legendary Ramchargers NHRA drag racing team for Dodge in the ’60s. The call-in number is: 213-341-4353. Podcasts of the shows are available one hour after the live shows’ conclusions. That’s this Saturday and Sunday at 5pm USA Pacific time on www.TalkRadioOne.com! Was “the fix in” when Fernando Alonso won the 2008 Singapore Grand Prix for Renault?

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House’s Lynch Is Second Democrat to Enter Race for Kennedy’s Senate Seat

September 4, 2009

By Tom Moroney Sept. 4 (Bloomberg) — A second Democratic officeholder in Massachusetts is moving to enter the race to succeed Edward Kennedy in the U.S. Senate, not waiting for the late senatorâ€™s nephew, Joseph Kennedy II , to say whether he will run. A representative for Representative Stephen Lynch , a Boston Democrat, took out nomination papers this morning for the Jan. 19 special election, according to Brian McNiff , spokesman for Massachusetts Secretary of State William Galvin . Calls to Lynchâ€™s office werenâ€™t immediately returned. Attorney General Martha Coakley , 56, announced her candidacy yesterday, saying in an interview that â€œthis decision is so important it should be decided by the voters on the merits, not on the last name.â€ Joseph Kennedy , a former congressman also 56, hasnâ€™t spoken publicly since an Aug. 28 memorial ceremony for his uncle at the John F. Kennedy Presidential Library & Museum , where he asked the audience to rededicate themselves to public service. He would bring to the contest his famous name, as well as a $2 million funding head start for the five-month campaign, according to John Sasso, a Democratic consultant for the presidential campaigns of Massachusetts Senator John Kerry in 2004 and former Governor Michael Dukakis in 1988. High Favorability Kennedy, the founder of Citizens Energy Corp., a Boston- based non-profit group that assists low-income residents, also topped the field in a March survey of favorability ratings, scoring 67 percent compared with 56 percent for Coakley. Kennedyâ€™s mark was â€œunbelievable,â€ especially since it was taken in a down economy when people lean toward a dim view of politicians, pollster David Paleologos of Bostonâ€™s Suffolk University said in an interview today. In the survey of 400 Massachusetts voters, Kennedy did well with older voters and union members, Paleologos said. The influence of these two groups is magnified in this cycle because the primary is Dec. 8, at a time of year when other voter groups may show a drop in participation, he said. Only three of the 400 surveyed said they would like to see Kennedyâ€™s widow, Victoria Reggie Kennedy , run. Lynch, 54, a former ironworker who earned a degree from Boston College Law School , is positioned as the more conservative of other Democrats who may be running, according to Tufts University political scientist Jeffrey Berry . Split Vote? The more liberals who get into the race and split the vote, the more Lynchâ€™s chances improve, although he starts with relatively low name recognition, Berry said. While Berry says Coakley has high name recognition and the ability to raise funds, the candidate said yesterday she starts â€œwith zeroâ€ because her state campaign money canâ€™t be used in a federal race. Martin Meehan , a former Democratic congressman now chancellor of the University Massachusetts in Lowell, said in an interview heâ€™ll decide by the end of this week whether to run. Other possible contenders are Democratic Representatives Michael Capuano , Edward Markey , James McGovern and William Delahunt . On the Republican side, there is former Lieutenant Governor Kerry Healey . Former Red Sox pitcher Curt Schilling , a registered independent who supported Republican John McCain â€™s presidential bid last year, said he is considering a run. Massachusetts Governor Deval Patrick is working with lawmakers to change a state law and allow him to appoint an interim senator to serve before the election decides who will serve out Kennedyâ€™s term which runs through 2012. To contact the reporter on this story: Tom Moroney in Boston at tmorrone@bloomberg.net

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Massachusetts Attorney General Coakley Announces She Plans Run for Senate

September 3, 2009

By Tom Moroney Sept. 3 (Bloomberg) — Massachusetts Attorney General Martha Coakley said she will run for the U.S. Senate seat that opened up following the death of Senator Edward Kennedy last week. Coakley, a Democrat, became the stateâ€™s first female attorney general in January, 2007. The 56-year-old lawyer becomes the first official candidate to enter the race for the seat, which will be determined by a special election Jan. 19. To contact the reporter on this story: Tom Moroney in Boston at tmorrone@bloomberg.net

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Florida Pension Lost $250 Million on New York’s Stuyvesant Town Apartments

September 1, 2009

By Jerry Hart Sept. 1 (Bloomberg) — Floridaâ€™s pension lost $250 million it invested in Stuyvesant Town and Peter Cooper Village, Manhattanâ€™s largest rental-apartment complex, the fundâ€™s trustees were told. â€œWe are carrying that investment at zero because the market softened dramatically,â€ Ash Williams , executive director of the State Board of Administration, which oversees $121.9 billion of pension and other assets, told a meeting in Tallahassee today. The SBA bought in 2007 its share of a limited partnership run by Tishman Speyer Properties LP and Blackrock Inc. , owners of the property, said Williams, who was hired in October 2008. Tishman and Blackrock acquired the 80-acre, 11,200-unit Stuyvesant Town and Peter Cooper complex for $5.4 billion in 2006 at what Williams called â€œthe top of the market.â€ Their plan to convert 1,600 rent-stabilized units to market rates as residents vacated was stymied by rising unemployment during the worst economic recession since the Great Depression. â€œRents are not going up like they normally would, landlords are making concessions like free rent and people have not moved out at the rate anticipated,â€ said Williams, who came to the SBA after nine years as a managing director at Fir Tree Partners, a New York hedge fund. Manhattan apartment rents fell as much as 10 percent in August from a year earlier, the Real Estate Group of New York said on Aug. 25. Vacancies are growing and tenants arenâ€™t moving as the cityâ€™s unemployment rate climbed to a 12-year high of 9.6 percent in July. Ratings Reduction Fitch Ratings on Aug. 28 cut its ratings on $3 billion of mortgage-backed securities used by Tishman and Blackrock for the Cooper-Stuyvesant purchase because the partnership will deplete a $400 million reserve fund for debt service by the end of the year. The reductions, involving 16 separate ratings, ranged from BBB-, the lowest investment grade, for $107.4 million in debt, to B-, the sixth-lowest non-investment grade, covering $115.4 million in obligations. â€œCash flow generated from the property remains significantly below what is needed to service the current outstanding debt,â€ Fitch said in a report. â€œWhatâ€™s going to happen to the investment?â€ Florida Attorney General Bill McCollum , a Republican running for governor in the November 2010 election, asked Williams. â€œIs there potential for recovery? Yes,â€ Williams said. â€œIs it a strong possibility? No.â€ Florida is a junior partner in the Tishman/Blackrock venture, Williams said, with an equity-only investment and none of the mezzanine debt held by senior partners. He said the equity stake â€œcould be wiped out.â€ â€œWeâ€™ve had an unfortunate experience, we regret it and weâ€™re taking steps so it doesnâ€™t happen again,â€ Williams said. Pension Meeting The SBAâ€™s three trustees — McCollum; Alex Sink , the chief financial officer who is seeking the Democratic nomination in the race for governor; and Charlie Crist , the Republican governor who will run for the U.S. Senate next year — met for the first time outside their monthly cabinet meeting to hear reports from the pension system. Pension fund assets rose 12.5 percent, or $10 billion, $96.6 billion during the second quarter, the trustees were told by Stephen Cummings , chief executive of Ennis Knupp & Associates, a Chicago-based outside adviser. The fund was worth $126.9 billion at the end of second quarter 2008, according to its annual report last year. The fundâ€™s gain is less than the 15.2 percent advance, not including dividend reinvestment, in the Standard & Poorâ€™s 500 Index during the second quarter. The fund is overly concentrated in foreign equities, high- yield securities and real estate, Cummings said. Itâ€™s below its target allocations on all other assets, including domestic stocks and fixed-income securities, he said. â€œLack of liquidity made it difficult to rebalance into equities,â€ he said. â€œWeâ€™ve temporarily suspended rebalancing to avoid selling the least liquid holdings.â€ To contact the reporter on this story: Jerry Hart in Miami at jhart@bloomberg.net .

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Honda Redeploys Formula One `Warriors’ to Win Race for Fuel-Efficient Cars

August 28, 2009

By Makiko Kitamura and Kae Inoue Aug. 28 (Bloomberg) — Honda Motor Co. â€™s withdrawal from Formula One racing in December to save money may give it an advantage over rivals: fresh blood from an elite cadre of engineers to improve its Civic compacts and Odyssey minivans. The automaker reassigned the racing teamâ€™s 400 engineers to speed up development of new technologies to improve fuel efficiency and emission levels for mass-produced cars. â€œF-1 was all about pursuing the best energy efficiency to achieve speed,â€ Kazuo Sakurahara, who led Hondaâ€™s team of F-1 engineers, said in an interview at the companyâ€™s research center in Tochigi prefecture, north of Tokyo. â€œIn that sense, the approach to our new job is exactly the same as it was then.â€ Honda is boosting the brainpower of its research and development team as automakers hasten to meet stricter pollution regulations by moving away from cars powered solely by gasoline. Unlike Toyota Motor Corp. and Nissan Motor Co., Honda hasnâ€™t announced plans for a plug-in hybrid or battery-powered car, even as emission regulations in California may force the Tokyo- based carmaker to do so in two years. â€œThe pace of change in environmental technologies is getting faster and faster,â€ Honda President Takanobu Ito said in an interview. Sakurahara has moved from working on engines with more than 700 horsepower to those in hybrid systems that may take Honda past Toyota in overall efficiency. Fuel Economy U.S. fuel-economy rules set by the Obama administration will force carmakers to produce vehicles that get an average of 35.5 miles per gallon by 2016, four years sooner than previously planned. The Honda fleetâ€™s average fuel economy ranked second at 29.6 mpg in 2008, behind Toyota at 29.7 mpg, according to the U.S. Environmental Protection Agency. The auto industry â€œisnâ€™t going to shift immediately to battery-only electric vehicles, so the internal combustion engine will remain a coreâ€ technology, Sakurahara said. Honda , which employs about 13,000 engineers in Japan, is expanding its lineup of gasoline-electric hybrid models, bringing out a hybrid version of the CR-Z sports coupe in February and a hybrid Fit compact next year. Toyota plans to lease plug-in hybrid cars next year and plans to sell battery-powered electric car in 2012. Nissan unveiled its Leaf electric car on Aug. 2 and plans to sell it next year in Japan and the U.S. Honda gained 0.2 percent to 2,990 yen at the close of trading in Tokyo today. The shares have risen 57 percent this year compared with a 39 percent gain for Toyota. BMW Exits â€œAutomakers that are able to spare their resources for advanced and environmental technologies will eventually become the winners at a time when one breakthrough technology will make a huge difference,â€ said Masayuki Kubota , a senior fund manager in Tokyo who helps manage about $37 million at Daiwa SB Investments Ltd. Honda quit Formula One racing late last year to cut costs as auto sales plunged amid the global recession. The company, which expects to post a profit of 55 billion yen ($588 million) in the year ending in March, spent about 20 billion yen a year operating the team, excluding engine and car development costs, then-President Takeo Fukui said. Last month, Bayerische Motoren Werke AG also said it would pull out of the race at the end of this season. Toyota, which forecasts a net loss of 450 billion yen for a second straight year, continues racing in Formula One. Toyota unit Fuji International Speedway Co. said in July it would stop hosting Japanâ€™s Formula One Grand Prix race, citing the recession. It will be held this year at Hondaâ€™s Suzuka circuit starting October 2. Toyota President Akio Toyoda is a racer himself, supporting the sport as a way to â€œhelp groom talent by forcing them to solve all sorts of problems within the 24-hour time limit,â€ he told reporters in June. Flaming Engine Sakurahara was responsible for the engine of the car driven by Jenson Button that won the 2006 Hungarian Grand Prix, he said. The win, one of only three in the Honda teamâ€™s Formula One history, came a day after the engine spewed flames during a test run. â€œAfter we changed the engine, we knew we were in really good shape,â€ Sakurahara said, calling the win his proudest moment. Honda owned a Formula One team as early as 1964, even before it began making cars in 1967. It dropped out of Formula One in 1969 and returned in the 1980s as an engine supplier. In 2004, Honda purchased a stake in the BAR team from British American Tobacco Plc. It bought out the team a year later to form the Honda team for the 2006 season. â€˜Warriorâ€™ Engineers Teams using Hondaâ€™s engines won 69 races out of 151. Toyota, which started Formula One racing in 2002, has never won. When Honda announced it would pull out of Formula One on Dec. 5, Sakuraharaâ€™s team was working on a car for the current season that now is being used by Brawn GP. Instead, the former Formula One engineers will apply their experiences to bettering fuel efficiency, including improving aerodynamics and making components smaller or lighter. The engineers also developed an advanced regenerative brake system that stores energy. The system was tested on a pilot basis for possible use in Hondaâ€™s hybrid cars, Sakurahara said. Racing trained the engineers to objectively acknowledge what works and what doesnâ€™t, he said. Those competitive instincts now are redirected toward building cars that outsell rivals. â€œThese 400 are warriors, in a sense,â€ Sakurahara said. â€œIf you donâ€™t win, that means your technology lost.â€ To contact the reporters on this story: Makiko Kitamura in Tokyo at mkitamura1@bloomberg.net ; Kae Inoue in Tokyo at kinoue@bloomberg.net

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Natalie Holder-Winfield: When Comedy Meets Workplace Diversity

August 18, 2009

Last week, as I was piecing together a diversity training presentation, I came across my “Two Wongs Don’t Make a White” slide. This corny play on words was used as a t-shirt graphic by the clothing company Abercrombie & Fitch in the earlier part of this decade. Thank goodness those t-shirts didn’t get much play and were dragged off of the market, along with Abercrombie’s image as an equal opportunity employer. (The retailer has also faced failure to hire and promote discrimination lawsuits.) Although the retailer, today, is making an effort to redeem itself, I couldn’t help but wonder what they were thinking when they exposed the market to those t-shirts. Have the lines of culturally insensitive jokes been so drastically moved that even a large retailer doesn’t know the difference between wrong and right? With the advent of diversity and multi-culturalism, many of the invisible racial barriers in society are slowly fading away thanks, in part, to entertainment. With Justin Timberlake and Amy Winehouse producing some of the best R&B music, it’s hard to have white radio stations and black radio stations. Reality television shows openly parade mixed race-couples, making them less of a taboo or head turner. Comedians, especially, have been the greatest catalysts for making other cultures less mysterious by lifting the lid off of what were once private inside jokes. You have Rex Navarrette openly joking about Filipino time (that is, being 20 minutes late to everything). George Lopez pokes fun at his Latino brothers and sisters on HBO specials and his network television show. Larry the Cable Guy gives Northern urbanites comedic insight to redneck life. What happens when people at work decide to re-tell a joke they heard from Navarrette, Lopez, or Larry? Is it ok to laugh at or make a joke about another race, culture, or religion? These were the questions underlying my reasons for not watching the Dave Chappelle show. Now, I never started a mass boycott against the show, but I was vocal about why I didn’t tune in. While I never judged anyone for watching the show, I just couldn’t support a show that profusely overuses the “N” word on national television. I felt that his show, which was written by a multi-racial staff, could be used to defend the use of the “N” word. I knew that some would argue that the word had evolved to the point where it was no longer an offensive racial epithet to denigrate black people and could be used by any and everyone. I was not ready for that level of evolution. Comedy is tricky. The same slurs, epithets, and offensive language that comics use to get laughs, can create disrespect in the workplace, school and in other social settings. I’m sure that some snarky designer at Abercrombie & Fitch probably thought he or she was appealing to the public’s sense of humor about Asians with the hideous “Wong” t-shirts. As Abercrombie reminds us, context matters. Material that works in a nightclub often falls flat in the office.

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Schwab Vows Court Fight Against Cuomo in Auction Rate Securities Suit

August 18, 2009

By Bob Van Voris and Andrew M. Harris Aug. 18 (Bloomberg) — Charles Schwab Corp. , accused by New York Attorney General Andrew Cuomo of deceiving customers about auction-rate securities, said Cuomo was letting the real culprits go and vowed the company will defend itself in court. Cuomo sued the San Francisco-based discount brokerage yesterday in state court in Manhattan, claiming it falsely described the securities as liquid investments without disclosing their risks. Schwab countered by accusing the attorney general of going too soft on the banks that underwrote the products. In a July 24 letter released yesterday, the firm said the state let underwriters including Citigroup Inc. , UBS AG and Goldman Sachs Group Inc. off the hook by settling claims related to the securities. â€œI do view it as a legitimate point by Schwab and other brokerage firms,â€ said Jay Ritter , a University of Florida finance professor. â€œFor many years the auction-rate market had operated very smoothly. I donâ€™t think many people envisioned that there was a scenario where the market would freeze up the way it did in the last two years.â€ Itâ€™s unfair for Cuomoâ€™s office to try to force the brokerage to repurchase remaining securities held by its customers after dropping claims against the banks when they agreed to buy back more than $50 billion in debt from their retail customers, the companyâ€™s attorney, Faith Gay , wrote to David A. Markowitz , chief of Cuomoâ€™s investor-protection bureau. â€œSchwab submits that, having released the real culprits from responsibility for their acts,â€ Cuomo is seeking to â€œshift that responsibility to Schwab,â€ the lawyer wrote. Cuomoâ€™s Actions â€œThe attorney general permitted the major Wall Street securities firms that controlled the ARS market to buy back ARS only from investors who held the securities at those firms rather than from all investors who owned ARS that those firms underwrote,â€ Gay wrote, referring to auction-rate securities. Gay, a New York partner of Los Angeles-based Quinn Emanuel Urquhart Oliver & Hedges LLP, also said Cuomo lacks jurisdiction over its customers outside New York state. The demand that Schwab â€œact as an insurer for an unprecedented market collapseâ€ is legally unsound and unjust and â€œthe company will vigorously defend itself in court,â€ Gay wrote. Alex Detrick , Cuomoâ€™s press secretary, declined to comment on the Schwab letter. â€œWe look forward to a fair hearing in court, and weâ€™re confident that we will prevail when we have the chance to expose the workings of the Auction Rate Securities market completely rather than just through selective sound bites in the press,â€ Sarah Bulgatz , a spokeswoman for Schwab, said in an e-mail. Auction-rate securities are long-term debt, primarily issued by municipalities, with interest rates reset periodically through auctions. The $330 billion market collapsed last year as dealers stopped bidding to keep auctions from failing, leaving clients unable to sell their supposedly liquid investments. What Schwab Knew Schwab knew or should have known of â€œa steep decline in demand for auction rate securities in the last months of 2007,â€ the state said in its lawsuit. It asked that a court order it to repurchase the securities from investors and pay penalties and costs. â€œSchwab brokers repeatedly and persistently misrepresented the liquidity risks in auction-rate securities, comparing them to money market funds or certificates of deposit, selling auction-rates as suitable for cash management purposes, or otherwise telling customers they would always be able to retrieve their cash,â€ Cuomoâ€™s office said in a statement. Cuomo, a Democrat and possible candidate for New York governor in next yearâ€™s election, has raised more campaign money than the current governor, David Paterson . The attorney general would lead Paterson among Democrats 61 percent to 15 percent in a primary as of June 24, a Quinnipiac University poll found. Customersâ€™ Plight In February 2008, Schwab customers were left holding $789 million worth of the securities. That amount â€œhas come down considerablyâ€ since then, Schwab spokesman Greg Gable said last month. Schwabâ€™s efforts to avoid a settlement and charges related to the securities come after retail brokers Fidelity Investments and TD Ameritrade Inc. settled probes, agreeing to buy back $756 million in the securities from clients. Schwab blamed the Wall Street firms for creating, marketing and then abandoning the market. Cuomo said July 17 in a letter to the online brokerage New York might sue Schwab unless it provided investors â€œthe liquidity they were promisedâ€ when they bought the securities. Schwab brokers â€œrepeatedly misled investors about the risks of investing in auction-rate securities,â€ Markowitz said in the letter, citing recorded conversations between brokers and customers. Executives didnâ€™t tell clients of reports they received in late 2007 that the auction-rate securities market was declining, Cuomoâ€™s office said. Schwabâ€™s Arguments Schwab argued that Cuomoâ€™s â€œfailure to acknowledge that Schwab and its customers were misled by the ARS underwritersâ€ is one of the flaws of his investigation. One underwriter â€œcontinued to deceive Schwab and conceal critical information right up to its complete withdrawal from the auction market,â€ the brokerage said. Schwab said Cuomoâ€™s office contacted its clients to urge them to complain, and took â€œone-sided testimonyâ€ at sessions where Schwabâ€™s lawyers werenâ€™t allowed to ask questions or get a transcript. Political strategist Hank Sheinkopf rejected the notion that Cuomoâ€™s settlements with the investment firms that underwrote the auction rate securities had political motivation. â€˜Nonsensical Garbageâ€™ â€œIt is nonsensical garbage. The public wonâ€™t believe it,â€ he said yesterday in a phone interview. The attorney general has done â€œeverything possibleâ€ to not engage in political activity while holding that office, he said. â€œHeâ€™s just done his job,â€ the strategist said. â€œTo accuse him of engaging in politics is just not fair not true.â€ The principal of New York-based Sheinkopf Communications, the strategist has worked on campaigns for former President Bill Clinton and former New York Attorney General Eliot Spitzer . He is also a consultant to New York City Mayor Michael R. Bloomberg , the founder and owner of Bloomberg LP, parent company of Bloomberg News. In the campaign for the 2002 Democratic Party gubernatorial primary, Sheinkopf worked for then-New York Comptroller H. Carl McCall , whose opponent was Cuomo. Cuomo dropped out of the race prior to the primary election. Schwab yesterday fell 87 cents to $17.39 at 4 p.m. in Nasdaq Stock Market trading. To contact the reporters on this story: Bob Van Voris in New York at rvanvoris@bloomberg.net ; Andrew M. Harris in Chicago at aharris16@bloomberg.net .

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China Embarks on Energy, Mining Acquisition Spree After Valuations Slump

August 13, 2009

By John Duce Aug. 14 (Bloomberg) — China, unfazed by failures to invest in Rio Tinto Group and Unocal Corp., will boost spending on oil and mining acquisitions by at least half this year to take advantage of lower valuations after commodity prices slumped. State-owned Yanzhou Coal Mining Co. yesterday agreed to buy Australiaâ€™s Felix Resources Ltd. for about A$3.5 billion ($2.9 billion), a day after Sinochem Corp., Chinaâ€™s biggest chemicals trader, offered to buy Emerald Energy Plc for 532 million pounds ($881 million) to gain oil fields in Syria and Colombia. China National Petroleum Corp.â€™s plan to buy Repsol YPF SAâ€™s Argentine unit may push Chinese purchases of overseas commodity assets to $43 billion this year, a 48 percent increase on 2008, according to data compiled by Bloomberg. â€œThe Chinese donâ€™t have enough nickel, donâ€™t have enough oil, and they donâ€™t have enough copper,â€ Jim Rogers , chairman of Rogers Holdings and the author of books including â€œInvestment Bikerâ€ and â€œAdventure Capitalistâ€, said in a telephone interview yesterday. â€œThereâ€™s a crisis coming. They are going around the world buying up what they can. Theyâ€™re preparing for a rainy day.â€ Bids for resources by China, whose $2.1 trillion in currency reserves are the worldâ€™s largest, have been met with opposition in the U.S. and Australia. Neither concern over its growing influence nor the arrest of four Rio executives in Shanghai have stopped Chinese companies from buying assets abroad as the nationâ€™s 4 trillion yuan ($585 billion) economic stimulus spurs demand. â€˜Bolder Dealsâ€™ â€œChina will see larger and bolder deals,â€ said Brian Gu, the Hong Kong-based head of mergers and acquisitions for greater China at JPMorgan Chase & Co., the third-ranked adviser by transaction value this year. â€œThe growing outbound mergers and acquisitions activity is going to be a long-term trend and the volume and activity are here to stay.â€ The Reuters/Jefferies CRB Index , which tracks 19 raw materials, dropped 36 percent last year, the biggest annual decline since at least 1957. The measure has gained 15 percent this year on signs that the recession may be ending. Chinese energy companies have spent at least $13 billion on overseas assets since December as they take advantage of lower valuations caused by the slowdown. Yanzhou, Chinaâ€™s fourth-biggest coal miner, is offering A$18 a share for Felix, including a dividend and stock in a spin off of a unit of the Australian company. â€˜Inferiorâ€™ Offer The offer, recommended by Felixâ€™s board, is â€œinferiorâ€ and shareholders should reject it, Sophie Spartalis , an analyst with Macquarie Group Ltd., said in a report today. A bid of between A$23 to A$25 a share would be â€œmore reasonable,â€ she wrote. Felix rose 4.4 percent to A$17.64 at 1:30 p.m. Sydney time. Yanzhou climbed as much as 7.3 percent in Hong Kong trading to HK$13 and was at HK$12.23, while its Shanghai shares rose 4 percent to 20.79 yuan. The state-owned parents of PetroChina Co. , China Petroleum & Chemical Corp. and Cnooc Ltd. are studying investments in companies in Africa, Latin America, the Middle East and Central Asia, according to JPMorganâ€™s Gu and Mike Arruda, a lawyer at Jones Day in Hong Kong who advises on mergers and acquisitions in the oil and gas industry. Both declined to disclose details of deals they are advising on. Controlling Stake China National Petroleum, the parent of PetroChina and the nationâ€™s biggest oil company, is considering offering $13 billion to $14.5 billion for a controlling stake in Repsolâ€™s unit, three people familiar with the matter said last month. China Petrochemical Corp. , the countryâ€™s second-biggest oil company, in June agreed to buy Geneva-based Addax Petroleum Corp. for C$8.3 billion ($7.6 billion) in Chinaâ€™s biggest overseas takeover to date. Purchasing Addax, which has oil reserves in Iraqâ€™s Kurdish territory, shows Chinese oil companies are â€œgoing for bigger transactions,â€ said Arruda, who is advising on what he described as â€œsignificantâ€ acquisitions. â€œThese deals seem to reflect an appetite we have not seen before.â€ China bought record volumes of oil and iron ore in July, according to customs figures released Aug. 11. The worldâ€™s fastest-growing major economy consumes more than a third of the worldâ€™s aluminum output, a quarter of its copper production, almost a tenth of its oil and accounts for more than half of trading in iron ore. Last year, China bought $211 billion worth of iron ore, refined copper, crude oil and alumina, according to government data. Demand, Imports Chinaâ€™s oil consumption doubled in the last decade, rising to 8 million barrels a day last year from 4.2 million barrels in 1998, according to BP Plcâ€™s Statistical Review. The worldâ€™s third-largest economy imported 3.6 million barrels of oil a day last year, meeting about 45 percent of its needs. Chinaâ€™s increasing reliance on imported crude means the scale of acquisition deals has to increase, said Paul Ting, president of New Jersey-based Paul Ting Energy Vision LLC, a consulting company specializing in Chinese oil and gas markets. The countryâ€™s crude needs may rise to more than 11 million barrels a day in five years with Chinaâ€™s ageing oilfields unable to produce the extra capacity needed, Ting said. China National Petroleum said on May 13 it wants overseas crude production to match domestic output by 2020. Chairman Jiang Jiemin said CNPC produces less than 8 percent of its oil overseas and foreign acquisitions and ventures must be increased. â€œWe want overseas production to contribute half,â€ he said at the time. Australian Opposition Bids for resources by China have been met with opposition from lawmakers in Australia. Melbourne-based Rio, the worldâ€™s third-largest mining company, abandoned a tie-up with Aluminum Corp. of China, or Chinalco, in June. The arrest of four Rio executives in July has strained relations between the countries. They were formally arrested on charges of trade secrets infringement and bribery, Chinaâ€™s Supreme Peopleâ€™s Procuratorate said Aug. 11, according to a Xinhua report. Some 57 percent of Australians said Chinese mining investments should be resisted because the nationâ€™s interests would be â€œbetter servedâ€ with local ownership, according to a poll of 890 people conducted by Essential Research in April. Opposition to Chinese investment helped block Cnoocâ€™s $18.5 billion bid for Unocal in 2005 while Haier Group Corp. lost out in the race to acquire U.S. appliance maker Maytag Corp. in the same year. Unocal, Repsol Cnooc, 66 percent-controlled by state-owned China National Offshore Oil Corp., abandoned its cash offer for Unocal after being outmaneuvered by Chevron Corp, the second-largest U.S. oil company. Chevron purchased the El Segundo, California-based oil and gas producer for $17.8 billion amid political opposition to the Chinese approach in Washington. CNPCâ€™s approach for Repsolâ€™s Argentine unit is unlikely to face such obstacles from Spain, according to Nitin Sharma , an analyst at JPMorgan Cazenove Ltd. in London. â€œWe do not believe that the Spanish government will veto Repsol YPF plans to divest a controlling stake in YPF,â€ Sharma wrote in a report last month. To contact the reporter on this story: John Duce in Hong Kongt . Jduce1@bloomberg.net

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Gershon Hepner: In Fed We Trust

July 24, 2009

In Fed we trust, not expecting hanky-panky, but may go bust despite the efforts of Bernanke. When there’s a panic in Wall Street we expect the Fed to fight Satanic forces.

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Armstrong Finds Mountain Legs to Help Contador’s Tour de France Chances

July 21, 2009

By Alex Duff July 21 (Bloomberg) — Alberto Contador maintained his Tour de France lead in the Alps with help from his new support rider: Lance Armstrong .

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Invesco May Pay 2B For Van Kampen

February 10, 2009

Invesco is leading the race for Morgan Stanleys Van Kampen fund business

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