Friday, November 19, 2010

Stocks jump as worries over Ireland ease; GM pops Stocks post big gains as hopes build for a resolution of Ireland's debt woes; GM bounds higher

Stocks jump as worries over Ireland ease; GM pops

Stocks post big gains as hopes build for a resolution of Ireland's debt woes; GM bounds higher


NEW YORK (AP) -- Stocks bounded higher Thursday thanks to a jump in manufacturing activity and growing confidence that Ireland will resolve its debt crisis.

Most eyes were glued on General Motors, an American icon which re-emerged from bankruptcy in the largest initial public offering in U.S. history. Its shares, trading under the symbol GM, rose 3.6 percent to $34.19. GM's stock amounted to 9.7 percent of all shares traded on the New York Stock Exchange.

Stocks got an early boost from a surprisingly strong reading on manufacturing from the Federal Reserve Bank of Philadelphia. The report said factory orders in the mid-Atlantic region expanded at the fastest rate since December.

"The Philly Fed data shows that the economy had been getting better on its own without the Fed's help," said Michael Strauss, the chief economist for Commonfund, referring to a stimulus plan by the Federal Reserve announced Nov. 3. The Fed is buying up to $600 billion worth of bonds through the spring. The tactic is intended to spur spending by pushing interest rates down.

The manufacturing report helped industrials and materials companies. Aloca Inc. jumped 3.4 percent, making it the biggest gainer among the 30 stocks that make up the Dow Jones industrial average. General Electric Co. rose 1.5 percent and Caterpillar Inc. rose 2.4 percent. Intel Corp. was the only stock in the Dow to fall.

The Dow Jones industrial average rose 173.35, or 1.6 percent, to close at 11,181.23. It was the Dow's first gain in three days. Thanks to a 178-point plunge on Tuesday on worries about Ireland's debt crisis and a slowdown in China, the Dow is still down 0.1 percent for the week.

The broader Standard and Poor's 500 index rose 18.10, or 1.5 percent, to 1,196.69. The technology-focused Nasdaq composite index rose 38.39, or 1.6 percent, to close at 2,514.40.

All ten industry groups within the S&P index rose, with industrial and materials stocks posting the largest gains. Sears Holdings Corp. sank 3.8 percent after reporting that its loss nearly doubled in the third quarter on weak sales. Shares of Delta Air Lines jumped 4.2 percent the same day that its baggage handlers voted to reject forming a union.

Shares jumped in Europe after Ireland moved closer to accepting financial assistance from the European Union. Ireland has nationalized three of its six local banks following a collapse of the country's real estate market.

If it accepts outside help, Ireland will become the second European country to need a bailout this year. Greece came close to fiscal collapse in May and had to be rescued by other European countries and the International Monetary Fund. Fears that Greece's fiscal morass would undermine the euro and lead to bailouts of other European countries brought stock prices down around the world in May and early June.

Ireland is also expected to accept a loan worth tens of billions of euros from Great Britain. While Britain isn't one of the 16 nations that uses the euro, its banks have large holdings of Irish government debt and would face major losses if the country defaulted.

The Euro Stoxx 50 index, which tracks blue chip companies in the euro zone, gained 1.4 percent.

Bond prices fell, pushing their yields higher. The yield on the 10-year Treasury note rose to 2.90 percent from 2.87 percent late Wednesday. The yield on the note, which is a widely used benchmark for consumer and business loans, traded as low at 2.49 percent on Nov. 4.

The dollar fell 0.6 percent against an index of six currencies.

Five shares rose for every one that fell on the New York Stock Exchange. Consolidated volume was 4.7 billion shares.

How GM's return played in 3 cities with a stake

How GM's return played in 3 cities with a stake

GM stock offering is welcomed on Wall Street, but elsewhere feelings are nuanced


NEW YORK (AP) -- General Motors returned to Wall Street with the satisfying roar of a muscle car's engine, embraced by traders at the New York Stock Exchange who stood in a crowd eight deep for the chance to buy a piece of a resurrected American icon.

Elsewhere, the moment was more complex.

The White House walked a fine line, stressing that the government was eager to get out of the automotive business while also taking credit for a taxpayer bailout that helped save the industry, not to mention tens of thousands of jobs.

And while the day allowed Detroit a moment of pride -- one man spoke of the new GM as if it were a sturdy, righted ship -- many of its residents were quick to point out that the damage caused by the auto industry's collapse had long since been done.

Here is how the day played out in the three American cities most closely tied to the fortunes of General Motors.

NEW YORK

At the New York Stock Exchange, it was clear before the sun even rose that this was no ordinary day. The famous facade, so often covered since the Sept. 11, 2001, attacks by an enormous American flag, was decked out in a chrome-colored GM logo.

The stock exchange opens at 9:30 a.m., and by 9:15 the floor post for General Motors -- back under its old symbol, "GM" -- was packed with a crowd almost unseen in these days of electronic trading.

Densely packed traders surrounded a man known as the market-maker whose job is to match buyers and sellers.

At 9:30, the opening bell was followed by the sound effect of the roar of a Chevrolet Camaro. Executives crowded around CEO Dan Akerson and applauded, and cheers normally reserved for a big stock rally went up from the floor.

And then a big stock rally happened. Almost immediately, GM stock shot from $33 per share, the price set by the company ahead of the offering, to nearly $36. The broader stock market joined in the fun, with the Dow Jones industrials soaring nearly 200 points.

As the stock rose, so did spirits on the floor of the exchange.

"What's the last sale?," DME Securities trader Alan Valdez shouted to his assistant staring at a screen a few feet away. "$35.50," came the reply -- apparently not high enough for Valdez.

"I think it's a buy," he said. "Just a year ago the company was in bankruptcy. People thought they'd never sell cars again. So this is huge. What is great for GM is great for the country. It's great for Main Street."

WASHINGTON

For the White House, which has faced relentless attacks from tea party Republicans upset that it owns part of General Motors, the stock offering was a chance to point out to voters that the majority control of the company was only temporary.

At the same time, the Obama administration took credit for rescuing a company "at the heart of America's manufacturing sector" and saving American jobs. GM employs 209,000 people globally, about 115,000 fewer than it did in 2004.

The night before the stock offering, Treasury Secretary Timothy Geithner called Akerson to thank him and other GM executives for the work they had done putting it together.

And Thursday afternoon President Barack Obama took to the White House briefing room to declare that "an industry that helped to build our middle class is once again on the rise."

"These last two years haven't been easy on anybody," the president said. "They haven't been without pain or sacrifice, as the tough restructuring of GM reminds us."

"We are finally beginning to see some of these tough decisions that we made in the midst of crisis pay off," he said, apparently speaking not just of the GM bailout but of other bailout and stimulus measures adopted during the worst of the economic meltdown.

Obama pointed out that the stock offering had cut the government stake by nearly half, to 33 percent from 61 percent. For the taxpayers to break even on the $50 billion federal bailout of GM, the government needs to sell the rest of its shares at an average of about $53.

DETROIT

In downtown Detroit's main square, within sight of GM's 73-story headquarters, workers were putting the finishing touches on the city's Christmas tree and ice rink. Passers-by expressed indifference about the stock offering.

It may be a moment of pride for Detroit, but the city was hammered by the downfall of the U.S. auto industry in the late 2000s. Michigan's unemployment rate only recently fell beneath 13 percent, compared with a national rate under 10 percent.

"They've already been affected by the plant closings, the layoffs. It's been devastating," said Tim Jenkins, a mortgage banker who lives in the suburb of Grosse Pointe. He said he was too close to retirement to invest in GM stock, which he worried would be volatile for a while.

A half-dozen people watched the trading begin on a small TV in an upstairs, cafeteria-style dining room at Local 652 of the United Auto Workers union in Lansing, which represents workers at a factory for Cadillac, a GM brand.

"That's great news -- the biggest IPO ever," said Mike Green, the local union president, whose family includes four generations of GM workers. "It's good to see her on the ticker tape again, isn't it?"

He said he already had an order in to buy GM stock.

And at GM headquarters in Detroit, several hundred workers cheered and welcomed Akerson at a catered party with a jazz band. It got going about the time the stock market closed -- with GM finishing the day at $34.19, up $1.19 from the offering price.

"Sixteen months ago, we were pretty much flat on our backs," the CEO said, "but we picked ourselves back up and got back in the game. We need to work hard to repay that confidence and trust that has been placed in us."

Krisher reported from Detroit. Also contributing were Associated Press writers Martin Crutsinger, Dee-Ann Durbin, Mike Householder, Tim Martin, Darlene Superville and Corey Williams.

Wall to Wall Street Coverage: Upgrades and Downgrades

Markets meandered, trading in a tight range on anemic volume and ending mixed as ongoing European sovereign debt concerns offset another encouraging report on core inflation here at home. Consumer discretionary stocks provided pockets of strength but financials were the worst performing sector and Canadian Solar Inc (CSIQ), off 3.77%, was indicative of a industry which slumped after an analyst downgrade. (That a Vancouver native was just named People‘s Sexiest Man Alive was consolation of sorts for the country.) In other analyst action, a broker's boost sent shares of Discovery Communications (DISCA) surging 3.45%; it's a safe bet Sarah Palin is thrilled with the strong showing of her employer, though she will be less enamored with a 2.34% tumble in Alaska Air (ALK). Still, she won't have to read about irate individuals taking a shotgun to the TV due to her daughter, at least not in the National Enquirer, which filed for Chapter 11. As did Michael Jordan's Steakhouse, doubtless dismaying the current basketball loving occupant of the house Sarah so covets.

Obama in fact announced he will bestow the Presidential Medal of Freedom on Warren Buffett. Berkshire's (BRK-A) billionaire doesn't owe many debts but only hours earlier he very publicly expressed a big one of gratitude to Uncle Sam. Talk about paying it forward. Ever the investor, Omaha's Oracle will note that the nation's highest civilian honor contains a central disk depicting thirteen gold stars, worth less than it would have been last week with bullion having backed off approximately 6% in as many days. And Warner Music Group (WMG) slid 7.51% after announcing uninspiring earnings, though the record label will surely look to immediately recoup much of the damage from royalties of a certain song they own the rights to. After all, with General Motors pricing its initial offering at an impressive $33 per share, rasing roughly $23.1 billion in history's biggest ever IPO, today is going to be all about Cars. In economics, October leading indicators and November's Philadelphia Fed Index are each expected to increase at 10:00AM Eastern. On the corporate front Autodesk (ADSK), Dell (DELL), Gap (GPS), SABMiller (SAB), Sears (SHLD), and Staples (SPLS) are all anticipated to announce earnings.

Initiations

Motorola (MOT): MOT is begun with a Buy and set an $11 target price at Stifel Nicolaus, which says its improving competitive position in the high-growth smartphone market is not reflected in the valuation.

Green Dot (GDOT): The stock gets initiated at Neutral by Janney Montgomery Scott, which sets a $48 price objective.

SAP AG (SAP): BMO Capital starts SAP AG with Market Perform and establishes a price target of $52. The brokerage believes current valuation is full in light of a potential slowing of growth in 2011.

Chipotle Mexican Grill (CMG): CMG is a new Hold with a $210 target at brokers Miller Tabak. Although long term believers in the stock, the firm feels that current upside is limited given the sharp rally in shares over the past four months.

Biostar Pharmaceuticals (BSPM): Rodman & Renshaw begin Biostar Pharmaceuticals at Outperform at Rodman & Renshaw, which notes they have an established strong historical revenue growth with its flagship product Xin Aoxing targeting the world's largest hepatitis B market in China. For more on the sector, see Has Merck Found the Holy Grail of Cholesterol Drugs?

TiVo Inc (TIVO): Saying their cautious stance reflects fears it will face continued declines in its subscriber base with existing US cable service providers, Stifel Nicolaus starts TiVo Inc at a Hold.

Garmin (GRMN): Navigation stock Garmin is initiated with a Sell at Stifel Nicolaus due to the proliferation of smartphones with GPS functionality, which will cause erosion in Garmin's core Auto/Mobile segment to occur more rapidly than is reflected in current Street estimates.

Kohlberg Kravis Roberts & Co. (KKR): KKR is resumed at Outperform by JMP Securities.

Solar Capital (SLRC): RBC Capital starts Solar Capital is initiated with an Outperform at RBC Capital.

Upgrades

NetApp (NTAP): NTAP is now Buy from Hold at Canaccord Genuity. The stock is also now on the Short term Buy list at Deutsche Bank.

Qualcomm (QCOM): Credit Suisse raises its Qualcomm recommendation to Outperform from Neutral.

Allegheny Technologies (ATI): ATI is moved to Overweight from Neutral at JP Morgan, which establishes a price objective of $58.

CRH Plc. (CRH): ING Group gives a Buy-from-Hold boost to CRH Plc.

Golar LNG (GLNG): The stock gets a Buy-from-Neutral upgrade at Goldman Sachs.

Suntech Power (STP): The stock is upgraded to Hold from Sell at Citigroup. See also The Solar Sector Strikes Again!

Boston Properties (BXP): BXP is now Outperform from Neutral at Cowen & Company.

Estee Lauder (EL): EL gets lifted to Perform from Underperform at Oppenheimer.

Downgrades

General Maritime (GMR): GMR gets moved to Market Perform from Outperform with Wells Fargo.

Abbott Labs (ABT): Sanford Bernstein lowers Abbott Labs to Market Perform from Outperform.

Alcatel-Lucent (ALU): ALU is trading lower in Europe after being downgraded to Underperform from Neutral at Credit Suisse, which is concerned it “will continue to burn significant cash in [the first half of 2011], which increases the risk of a potential capital raise.”

Research In Motion (RIMM): RIMM is reduced to Hold from Buy at Stifel Nicolaus, which takes their target to $45 from $65 on a view that their window of opportunity to create a competitive ecosystem of smartphone content has closed. Also read PlayBook Tablet May Be Sign of Trouble at Research In Motion.

LDK Solar (LDK): LDK is lowered to Sell from Buy at Soleil Securities.

Nothing contained in this article is intended as a solicitation for business of any kind or for investment in the firm.

Four in 10 say marriage is becoming obsolete

Four in 10 say marriage is becoming obsolete


WASHINGTON – Is marriage becoming obsolete?

As families gather for Thanksgiving this year, nearly one in three American children is living with a parent who is divorced, separated or never-married. More people are accepting the view that wedding bells aren't needed to have a family.

A study by the Pew Research Center, in association with Time magazine, highlights rapidly changing notions of the American family. And the Census Bureau, too, is planning to incorporate broader definitions of family when measuring poverty, a shift caused partly by recent jumps in unmarried couples living together.

About 29 percent of children under 18 now live with a parent or parents who are unwed or no longer married, a fivefold increase from 1960, according to the Pew report being released Thursday. Broken down further, about 15 percent have parents who are divorced or separated and 14 percent who were never married. Within those two groups, a sizable chunk — 6 percent — have parents who are live-in couples who opted to raise kids together without getting married.

Indeed, about 39 percent of Americans said marriage was becoming obsolete. And that sentiment follows U.S. census data released in September that showed marriages hit an all-time low of 52 percent for adults 18 and over.

In 1978, just 28 percent believed marriage was becoming obsolete.

[Photos: Secret celebrity weddings]

When asked what constitutes a family, the vast majority of Americans agree that a married couple, with or without children, fits that description. But four of five surveyed pointed also to an unmarried, opposite-sex couple with children or a single parent. Three of 5 people said a same-sex couple with children was a family.

"Marriage is still very important in this country, but it doesn't dominate family life like it used to," said Andrew Cherlin, a professor of sociology and public policy at Johns Hopkins University. "Now there are several ways to have a successful family life, and more people accept them."

The broadening views of family are expected to have an impact at Thanksgiving. About nine in 10 Americans say they will share a Thanksgiving meal next week with family, sitting at a table with 12 people on average. About one-fourth of respondents said there will be 20 or more family members.

"More Americans are living in these new families, so it seems safe to assume that there will be more of them around the Thanksgiving dinner table," said Paul Taylor, executive vice president of the Pew Research Center.

The changing views of family are being driven largely by young adults 18-29, who are more likely than older generations to have an unmarried or divorced parent or have friends who do. Young adults also tend to have more liberal attitudes when it comes to spousal roles and living together before marriage, the survey found.

[Related: Sudden celebrity splits]

But economic factors, too, are playing a role. The Census Bureau recently reported that opposite-sex unmarried couples living together jumped 13 percent this year to 7.5 million. It was a sharp one-year increase that analysts largely attributed to people unwilling to make long-term marriage commitments in the face of persistent unemployment.

Beginning next year, the Census Bureau will publish new, supplemental poverty figures that move away from the traditional concept of family as a husband and wife with two children. It will broaden the definition to include unmarried couples, such as same-sex partners, as well as foster children who are not related by blood or adoption.

Officials say such a move will reduce the number of families and children who are considered poor based on the new supplemental measure, which will be used as a guide for federal and state agencies to set anti-poverty policies. That's because two unmarried partners who live together with children and work are currently not counted by census as a single "family" with higher pooled incomes, but are officially defined as two separate units — one being a single parent and child, the other a single person — who aren't sharing household resources.

"People are rethinking what family means," Cherlin said. "Given the growth, I think we need to accept cohabitation relationships as a basis for some of the fringe benefits offered to families, such as health insurance."

Still, the study indicates that marriage isn't going to disappear anytime soon. Despite a growing view that marriage may not be necessary, 67 percent of Americans were upbeat about the future of marriage and family. That's higher than their optimism for the nation's educational system (50 percent), economy (46 percent) or its morals and ethics (41 percent).

And about half of all currently unmarried adults, 46 percent, say they want to get married. Among those unmarried who are living with a partner, the share rises to 64 percent.

Other findings:

_About 34 percent of Americans called the growing variety of family living arrangements good for society, while 32 percent said it didn't make a difference and 29 percent said it was troubling.

_About 44 percent of people say they have lived with a partner without being married; for 30-to-49-year-olds, that share rose to 57 percent. In most cases, those couples said they considered cohabitation as a step toward marriage.

_About 62 percent say that the best marriage is one where the husband and wife both work and both take care of the household and children. That's up from 48 percent who held that view in 1977.

The Pew study was based on interviews with 2,691 adults by cell phone or landline from Oct. 1-21. The survey has a total margin of error of plus or minus 2.6 percentage points, larger for subgroups. Pew also analyzed 2008 census data, and used surveys conducted by Time magazine to identify trends from earlier decades.

Leonardo DiCaprio Gives 'Red Riding Hood' the 'Twilight' Treatment

Amanda Seyfried in 'Red Riding Hood' Warner Bros. Pictures The trailer for "Red Riding Hood" makes it seem the classic fairy tale has received the "Twilight" treatment.

This isn't surprising. The director of "Red Riding Hood" -- Catherine Hardwicke -- also shot the first installment of the world's most profitable sparkly vampire franchise. What might be surprising, though, it is that the idea for an amped-up fairy tale bursting with adolescent angst didn't come from her.

Instead, it came from Leonardo DiCaprio.

According to Hardwicke, who was recently interviewed for the Los Angeles Times, DiCaprio thought, "Wouldn’t it be cool to do a Gothic twist on Red Riding Hood, with the wolf being a werewolf, and just have a cool, sexy romantic thriller?" Soon his company, Appian Way, began to develop the idea.

Star Amanda Seyfried's rumored beau >>

Judging from the trailer, which you can see below, Leo got exactly what he asked for. By the looks of it, "Twilight" fans are going to be very pleased with the results.

It opens with Amanda Seyfried gamboling in an autumnal glade with a handsome young suitor, Peter (Shiloh Fernandez), who sports an anachronistic faux-hawk. As they embrace, we hear Seyfried say, "I’ll do anything to be with you." And then, suddenly, the trailer makes a left turn into Gothic! There’s talk of killer wolves, there’s foreboding music, there’s Gary Oldman.

From what I can piece together, Amanda is in love with Peter though she's betrothed to Henri (Max Irons), another handsome young suitor in a faux-hawk. Someone in the village is a lupine supernatural killer, but, in spite of Oldman's glowering looks, no one is 'fessing up. Somewhere along the lines, Seyfried dons her red cloak and goes to grandmother's house.

The 'Twilight' story that never was >>

So -- Is this flick like "Twilight?" Or has this trailer been edited to remind everyone of "Twilight?" On the one hand, the set-up does seem remarkably familiar, with one or both of Seyfried's paramours most likely werewolves. That sounds a lot like that other lycanthrope love triangle Hardwicke is associated with. On the other hand, there's a claustrophobic paranoia here that feels much more akin to horror movies like "The Thing."

So which is it? To find that out, you'll have to wait until the movie comes out in March 2011.

First glimpse of a planet from another galaxy

WASHINGTON (AFP) – A hot, gaseous and fast-spinning planet has been found orbiting a dying star on the edge of the Milky Way, in the first such discovery of a planet from outside our galaxy, scientists said Thursday.

Slightly larger than the size of Jupiter, the largest in our solar system, the newly discovered exoplanet is orbiting a star 2,000 light years from Earth that has found its way into the Milky Way.

The pair are believed to be part of the Helmi stream, a group of stars that remains after its mini-galaxy was devoured by the Milky Way some six to nine billion years ago, said the study in Science Express.

"This discovery is very exciting," said Rainer Klement of the Max Planck Institute for Astronomy.

"Because of the great distances involved, there are no confirmed detections of planets in other galaxies. But this cosmic merger has brought an extragalactic planet within our reach."

Astronomers were able to locate the planet, coined HIP 13044 b, by focusing on the "tiny telltale wobbles of the star caused by the gravitational tug of an orbiting companion," the study said.

They used a powerful telescope owned by the European Southern Laboratory at La Silla Observatory in Chile, located at an altitude of 2,400 meters (7,800 feet) some 600 kilometers (375 miles) north of the capital, Santiago.

The planet is quite close to the star it is orbiting, and survived a phase in which its host star went through a massive growth after it depleted its core hydrogen fuel supply, a phase known as the "red giant" stage of stellar evolution.

"This discovery is particularly intriguing when we consider the distant future of our own planetary system, as the Sun is also expected to become a red giant in about five billion years," said lead researcher Johny Setiawan of the Max Planck Institute for Astronomy.

The exoplanet is likely to be quite hot because it is orbiting so close to its star, completing each orbit in just over 16 days, and is probably near the end of its life, astronomers said.

The star may have already swallowed other planets in its orbit, making the star spin more quickly and meaning that time is running out for the surviving exoplanet.

Astronomers were mystified as to how the planet might have formed, since the star contained few elements heavier than hydrogen and helium and planets typically form out of a complex cloud of spinning space rubble.

"It is a puzzle for the widely accepted model of planet formation to explain how such a star, which contains hardly any heavy elements at all, could have formed a planet," said Setiawan.

"Planets around stars like this must probably form in a different way."

Tuesday, November 16, 2010

call strut method through javascript

function showProjectDetails(projectId) {
var url = '';
url += 'exec=' + 'openProjectDetailView';
url += '&projectId=' + projectId;
location.href = url;
}

Thursday, November 11, 2010

China's monitoring of activists surges post-Nobel

China's monitoring of activists surges post-Nobel


BEIJING – Dissident writer Yu Jie and his wife are prisoners in their apartment. Blocked by security agents outside their building, the couple have been living on deliveries of takeout food and groceries for nearly a month and voraciously reading books to stave off boredom.

The Yu family and scores of other activists are targets of one of the most extensive campaigns of surveillance, house arrest and other harassment by Chinese police against dissidents in years. The clampdown was brought on by the government's fury over the Nobel Peace Prize awarded to democracy campaigner Liu Xiaobo.

"We can't even take one step out of the apartment," Yu said in an e-mail Thursday from his home, where he and wife Liu Min have been held since Oct. 18. "Today we called the vegetable market for a delivery of food, and the guards actually came to our door to check every single item that was delivered."

"And no one is allowed to come to my place," Yu said. "Even a neighbor who tried to share some birthday cake was stopped by them."

In the sweep, police picked up democracy advocate Liu Shasha from her home before dawn Oct. 15 and drove her to her hometown 600 miles (965 kilometers) away. Constitutional scholar Zhang Zuhua, also under house arrest, said he was let out for lunch but had to dine with security agents. Human rights lawyers such as Pu Zhiqiang reported being followed by plainclothes officers.

The breadth of the police action underscores the authoritarian government's anxieties that the Nobel prize could unleash demands for political change.

Since the award was announced Oct. 8, state media have published scathing attacks on the Nobel committee and Liu, who is serving an 11-year prison sentence for co-authoring an appeal for democratic reform. The Chinese Foreign Ministry has leaned on European and Asian diplomats not to attend the Dec. 10 prize ceremony in Oslo.

The attention on dissidents, many of whom are among the thousands of signatories of Liu's Charter 08 appeal, appears aimed at ensuring they take no encouragement from the prize, while preventing them from traveling to Norway.

"The scale and the intensity of the monitoring and restrictions is definitely at an all-time high," said Nicholas Bequelin, Asia researcher for Human Rights Watch. "It's sort of an across the board, minute surveillance of all people who are deemed to be critics of the government."

In enforcing the clampdown, police actions have verged on the bizarre.

Police have barricaded the door to Yu's apartment building with a long table that is moved aside to allow other residents to come and go. Agents in a security office watch video footage of the couple's main door and windows, he wrote. Yu believes they are under house arrest because his wife helped Liu Xiaobo's wife buy thermal underwear for the jailed dissident.

The pair have had to cancel a trip overseas and apply for extended leave from work. Their mobile phone service has been cut, and their landline goes dead when reporters call or a politically sensitive topic arises. Police rejected their request to visit their 2-year-old son staying with his grandparents in western China.

Surprisingly, Yu noted, a book of Nobel Peace Prize winners' speeches that Yu ordered from Amazon China was not confiscated by the guards who checked the delivery.

Lawyer Teng Biao, whose passport was confiscated and who has been prevented from attending talks or gathering with friends, said activists are being watched more closely than in the weeks and months ahead of the 2008 Beijing Olympics — when police also launched an extensive dragnet to pre-empt any trouble.

The Nobel prize winner's wife, Liu Xia, also remains under house arrest and has lost contact with the outside world since late October when she was last in touch with friends, said Yang Jianli, an exiled Chinese democracy activist and close friend of the couple.

The activist network, Chinese Human Rights Defenders, said it has received about 100 reports of people being harassed, surveilled, interrogated, detained or placed under "soft detention" — virtual house arrest — across the country.

Outside the scholar Zhang's apartment, guards are posted at all hours and sleep in the hallway at night.

Liu Shasha, a rights activist who protested in front of three Beijing police stations in support of Liu, said four men and a woman in plainclothes stormed into her apartment in Beijing at 4 a.m. on Oct. 15, seized her mobile phone and laptop and ordered her to follow them.

"I was dragged out of the door and didn't even get time to dress properly. I was still wearing slippers on my feet. They threatened to seal my mouth with a towel and a roll of adhesive tape if I kept shouting," Liu Shasha said by phone from her home in Henan province, where she was driven by security agents.

Bequelin said the clampdown has put on display China's wide array, and growing use, of tactics for controlling dissent.

Rights lawyer Gao Zhisheng, for example, has repeatedly disappeared and was last seen in April shortly after announcing he was abandoning his role as a government critic. Blind activist lawyer Chen Guangcheng was released from prison after four years in September, only to find himself immediately under house arrest.

"You effectively silence activists without attracting the attention and opprobrium that accompanies arrests and imprisonment," Bequelin said. "Over the past two or three years we really have seen an increase in the array of unlawful measures taken against dissidents."

The Beijing public security bureau did not immediately respond to a faxed list of questions.

Bomb rocks Pakistan's largest city killing 10

Bomb rocks Pakistan's largest city killing 10


KARACHI, Pakistan – Suspected militants detonated a car bomb in the heart of Pakistan's largest city on Thursday, destroying a police investigation bureau and killing at least 10 people, police and witnesses said.

The explosion rocked a high-security area of Karachi that is home to the U.S Consulate, two luxury hotels and the offices of government leaders, showing the reach of Islamist militants in the city despite efforts to crack down on them.

Gunman first opened fired on the office of the Crime Investigation Department before detonating a massive car bomb, said Sindh home minister Zulfiqar Mirza. The building has a detention facility that was believed to be holding criminals, and possibly militants.

The CID takes the lead in hunting down terrorists in Karachi. Earlier this week, the agency arrested six members of the militant Lashkar-e-Jhangvi group. The suspects were presented before a court earlier Thursday.

The blast was heard several kilometers away in this city of 14 million people. It destroyed much of the several-story police building, damaged nearby houses and left a 10-feet (three meter) wide crater in the road. The U.S. Consulate was around a mile (1.5 kilometers) from the blast and was undamaged.

"We heard different kinds of firing for several minutes and then a deafening explosion," said Ali Hussain, who was covered in dust. "The roof of our house collapsed."

TV footage showed bloodied victims leaving the scene and security officers searching through the debris of the police building.

Dr. Seemi Jamai said 10 bodies had been brought to a nearby hospital, along with 90 injured.

Pakistan is battling Islamist militants with links to al-Qaida that are trying to overthrow the U.S.-allied government. The insurgents have repeatedly bombed government, police and Western targets over the last three years, including in Karachi.

Economy recovering, but recession's shadow is long

Economy recovering, but recession's shadow is long

The economy may be recovering, but Americans are still guarding their wallets


NEW YORK (AP) -- Layaway, once the province of the poor, has gone mainstream. At the Mall of America in Minnesota, shoppers dart in for just one or two things. In New York, socialites do the unthinkable: They wear the same ball gown twice.

During the Great Recession, people made drastic changes in how they spent their money. They stopped treating credit cards as cash. They learned to save and learned to wait.

Now the recession is over, at least technically, and the economy is growing again, at least a little. But many changes in spending habits that most Americans first saw as temporary have taken hold, perhaps for good, some economists say.

This is the reality of the new American consumer -- focused, cautious and tactical.

EDITOR'S NOTE -- The Great Recession has been over for nearly a year and a half, and the economy is slowly growing again. But many of the drastic changes that Americans made in how they spend money have endured -- and may be here to stay, some economists think. In a three-part series, The Associated Press examines the state of the American consumer.

In Jacksonville, Fla., Bernie Decelles and his wife both have jobs and own their home. They recognize that the economy is still fragile, though, and that they work in industries still struggling. They scrutinize every purchase they make.

"It used to be if we saw something, and liked it, we bought it," says Decelles, a salesman for a company that makes storage equipment. "Nowadays, no way."

In dozens of interviews nationwide with shoppers, retailers, manufacturers, economists and analysts, The Associated Press identified key changes in consumer behavior that have endured after the recession. They include:

-- Americans are buying brands and shopping at stores that they shunned before. They are trying more store-brand products for things like detergent and beer. Goodwill and consignment shops are attracting customers across the income spectrum. And people are putting big-ticket items on layaway rather than whipping out charge cards.

-- Consumers are taking a surgical approach to shopping, buying only what they need, when they need it. Pantries are no longer filled with weeks' worth of food, nor closets with clothes bought seasons in advance. Shoppers are visiting fewer stores, both traditional and online, and getting only what's on their shopping list.

-- The wealthy are spending again, but their behavior is much like everyone else. They are buying more timeless and classic goods: watches and handbags that won't go out of style quickly. They are even -- gasp! -- recycling some of their most expensive clothes and wearing them twice.

These behavioral shifts aren't at the extremes of the Great Depression, which produced changes so drastic that many who lived through it adopted frugality as a lifelong habit.

Still, some experts say the changes from the recession of 2007, 2008 and 2009 could last.

"This was a massive cultural event for our society," says John Gerzema, a branding executive at marketing and advertising firm Young & Rubicam and co-author of a new book about the changing ways we spend money. "Eighty percent of Americans were born after World War II, so essentially this is our Depression."

The impact is hard to overstate. Consumer spending represents 70 percent of economic activity. Every business feels the pullback in some way, and it's more pronounced for those that sell things directly to people.

The new patterns of spending represent a radical turn from the boom years of the last decade. Americans up and down the income ladder piled on credit-card debt and used their homes as ATMs by taking out home-equity loans to pay for third cars, clothes and far-flung vacations.

During that time, the savings rate plunged to nearly zero. Americans accumulated debts that far exceeded their incomes. Household debt, including obligations for mortgages and credit cards, rose to about 140 percent of disposable income, double what it was before the boom years.

Credit was easy, and money seemed readily available. Until it wasn't.

"We saw a period of consumption that was unusual and unstable," says Jarrett Paschel, vice president of strategy and innovation at The Hartman Group, a consumer research firm in Bellevue, Wash.

A plunge in housing prices set off the economy's slump. Most Americans were left financially stressed in some way. Millions of people abandoned all but the necessities; for some, the necessities became luxuries.

The worst recession since the Depression ended in June 2009, according to the National Bureau of Economic Research, a group of academic economists that officially declares the starts and ends of recessions.

Americans' psyche hasn't recovered. An index of consumer confidence from The Conference Board has been in a tight range from the high 40s to high 50s. A reading of 90 indicates a healthy economy, and that level has not been seen since December 2007, the month the recession began.

U.S. households lost 17 percent of their wealth over in the past three years, more than $10 trillion, according to the Federal Reserve. The labor market remains in shambles, with nearly one in 10 Americans unemployed. One in six Americans now receives some form of government assistance, including food stamps and extended jobless benefits.

You may not see soup lines, but only because "the soup lines are in the mail," says David Rosenberg, chief economist and investment strategist at the Toronto-based money management firm Gluskin Sheff.

This stressful economic climate isn't just affecting Americans who are struggling to get by. Those who are more fortunate also have a new approach to spending.

Before the financial meltdown, philanthropist and socialite Allison Weiss Brady didn't think twice about dropping $20,000 each season on posh accessories. One prized possession she bought at the height of the boom? A $4,950 Fendi lizard handbag.

Brady still springs for luxury labels like Chanel, but she's snubbing the "it" handbags in favor of clothes and accessories that have staying power beyond a season.

She won't buy a new dress for every occasion, and will be wearing a Lanvin gown bought for a charity event last year to a few parties this year. And for the first time, she bought a peach-colored Chanel bag at a second-hand store, saving $2,000.

"I do think my mentality is more need-based now," says Brady, who lives in Florida and is a vice president of marketing for Florida Dental Benefits, a dental insurance company. "Am I going to show up with a new pair of diamond earrings every times I go to a ball? That's not happening." Brady is also buying more items at charity auctions -- not only to save but to give to others.

Tempered spending by Americans of most income levels means the economic recovery is having a harder time gaining steam. Rosenberg says that at this point of the economic cycle -- two years and 11 months since the recession began -- things should be much better.

Retail sales are off by 2.6 percent since the recession began in December 2007. That's a stark contrast to the last 60 years. At this stage in an economic recovery, retail sales on average were up 25 percent, according to Gluskin Sheff. Retail sales include food, autos, clothing, furniture and electronics.

Decelles, of Jacksonville, acknowledges his spending was more careless a few years back. Saving was barely on the radar. Now he eats out far less, doesn't entertain much and spends little time shopping.

"Things certainly feel a lot different now," he says, "than they did back then."

PARAMUS, N.J. (AP) -- The Goodwill store in this middle-class New York suburb is buzzing on a recent weekend afternoon. A steady flow of shoppers comb

Asian stock markets mixed despite jump in US jobs

Asian stock markets mixed after US musters only tiny gains despite strong jobs report


TOKYO (AP) -- Asian stock markets were mixed Monday as investors took a pause after last week's big gains with losses tempered by a surprise jump in U.S. employment.

Japan's Nikkei 225 stock average was up 96.67 points, or 1 percent, at 9,722.66 while South Korea's Kospi was off 0.4 percent at 1,931.34.

Hong Kong's Hang Seng shed less than 0.1 percent to 24,870.30 and China's Shanghai Composite Index added 0.4 percent to 3,141.38. Australia's S&P/ASX 200 slipped 0.3 percent to 4,786.10.

Elsewhere, markets in Singapore and Indonesia rose while Taiwan's benchmark fell.

Global stocks and commodities rallied last week after the U.S. Federal Reserve on Wednesday announced it would sink $600 billion into buying Treasurys over the next eight months to stimulate the sluggish economy by lowering long-term interest rates.

But the rally ran out steam by Friday in the U.S. with shares in New York squeezing out only narrow gains despite a surprisingly positive jobs report.

The Labor Department said employers added 151,000 jobs in October, the first gain since May and far more than analysts had anticipated.

Even with the surge, the U.S. national employment rate remained at 9.6 percent for the third straight month, and shares ended barely higher.

The Dow closed up 9.24, or 0.1 percent, at 11,444.08. The broader Standard & Poor's 500 index edged up 4.79, or 0.4 percent, to 1,225.85, and the Nasdaq composite index edged up 1.64, or 0.1 percent, to 2,578.98.

In currencies, the dollar fell to 81.16 yen Monday from 81.25 yen in New York late Friday. The euro fell to $1.3961 from $1.4031.

Benchmark oil for December delivery was up 3 cents at $86.88 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 36 cents to settle at $86.85 on Friday.

(This version CORRECTS Corrects oil settle price in last paragraph to $86.85.)

Investors looking for safer places to stow their assets pushed gold to a record price above $1,400 an ounce Monday as they become more worried about t

In a tough economy, old stigmas fall away

In a bad economy, old stigmas no longer apply; Americans less shy about layaway and off-brands


PARAMUS, N.J. (AP) -- The Goodwill store in this middle-class New York suburb is buzzing on a recent weekend afternoon. A steady flow of shoppers comb through racks filled with second-hand clothes, shoes, blankets and dishes.

A few years ago, opening a Goodwill store here wouldn't have made sense. Paramus is one of the biggest ZIP codes in the country for retail sales. Shoppers have their pick of hundreds of respected names like Macy's and Lord &Taylor along this busy highway strip.

But in the wake of the Great Recession, the stigma attached to certain consumer behavior has fallen away. What some people once thought of as lowbrow, they now accept -- even consider a frugal badge of honor.

EDITOR'S NOTE -- The Great Recession has been over for nearly a year and a half, and the economy is slowly growing again. But many of the drastic changes that Americans made in how they spend money have endured -- and may be here to stay, some economists think. In a three-part series, The Associated Press examines the state of the American consumer.

And it's not just about Goodwill. Americans, even those with jobs, are shopping for brands, buying at stores and eating at restaurants that they shunned before because they are trying to get more for their money.

At the supermarket, shoppers are buying more store-labeled products, like no-name detergents and cereal, and not returning to national brands.

And in a telling trend, Americans are turning to layaway more often when they buy expensive items such as engagement rings and iPads. The wealthy are also using layaway more often, a drastic change from the past.

"The old stigmas are the new realities," says Emanuel Weintraub, a New York-based retail consultant. "Now, people don't have a problem saying, 'I can't afford it.' It's a sign of strength."

At the Goodwill in Paramus, even financially secure shoppers are showing up. One is Heather Dzielinski, from nearby Ramsey, N.J., who had donated things to Goodwill but never shopped at one of its stores until the Paramus location opened in July.

A pair of L.L. Bean fur-lined slippers for $8, far below the $50 retail price, got her hooked. She thought a Goodwill store would be dark and dingy, but it wasn't.

"This store is a lot different than what I thought it would be, and that impressed me," Dzielinski said during a recent visit. She picked up two shirts for her son costing about $4 each.

Thrift and consignment stores are thriving, so much so that some high-end retail stores are carving out space for second-hand goods as a way to offset weak sales of their full-price merchandise.

This behavioral shift is pronounced at the nation's supermarkets. Store-branded groceries now make up 22 percent of total sales, up from 20 percent before the recession, according to The Nielsen Co. The private-label business is worth $500 billion a year, so even a 2 percentage point change means $10 billion.

Improved quality has helped drive the growth, but price also plays a big role. Supermarkets that stock almost all store-brands are thriving. One is Aldi, a chain of more than 1,000 stores in the Midwest and on the East Coast.

At an Aldi location in Chicago on a recent evening, shoppers didn't care that the only recognizable brands were the Splenda sweetener, a Butterball turkey and a few kinds of candy.

Six no-name grocery items -- macaroni and cheese, potato chips, cream cheese, sour cream, olive oil and guacamole -- cost about $10. The same six brand-name items cost $22 at the nearby Dominick's.

"I started realizing that I could save $20 shopping here for my groceries, and I liked the products," says Aline Silberg, a mother of two who works as a massage therapist and started coming to Aldi during the recession. "I stopped caring that they weren't brands I knew."

People are learning to live with trading down on clothes, too. Jaime Palmer of Dallas used to go to Neiman Marcus and spend as much as $300 on dress shirts by such high-end designers as Hugo Boss and Thomas Pink.

Now, Palmer, a 36-year-old a managing partner at an investment boutique, buys from a new label called J. Hilburn, which customizes dress shirts for a much lower price -- $120. As for his suits, he's turning to outlets.

"You don't get the service. They don't bring you coffee," he concedes. "It did have a bit of a stigma for me." But living through the Great Recession has made him reassess how he shops, he says.

"All of a sudden you feel mortal," he says. And even though business has stabilized and Palmer's own personal portfolio has rebounded, "my spending patterns will probably be a lot more conservative for the rest of my life."

The search for value is also helping sales at fast-food restaurants like McDonald's. Driving some of the sales gains are wealthy Americans who are eating at such establishments more often than before the recession.

New research from American Express found that the super-affluent, which it defines as those who put at least $7,000 a month on their credit cards, spent 24 percent more on fast-food last spring than the year before. They spent 12 percent more on fine dining.

Back in Paramus, the packed racks at Goodwill are sorted by style and color, much like a department store. Black pants all hang together. Sets of dishes are displayed on a large rack. The merchandise contains some recognizable names -- Ann Taylor, Gap, Ralph Lauren, Lilly Pulitzer. Women's shirts sell for $5.29, half that if they're the color of the week.

The Paramus store is one of 100 new locations for the nonprofit Goodwill. Many are in middle-class suburbs. The strategy: Attract not only people in need, but also the many Americans who are looking for more value when they shop. Revenue this year is up 11 percent.

"We're increasingly seeing our shoppers and donors can be the same people," says Jim Gibbons, who is CEO of Goodwill Industries International, based in Rockville, Md.

A similar scenario plays out on Manhattan's Upper East Side, where wealthy women who tend to frequent high-end boutiques are increasingly showing up at consignment shops looking for designer brands like Chanel and Gucci for less.

To fight back, some retailers are adding consignment to their stores. In the tony Boston suburb of Winchester, Mass., upscale clothing merchant T. Michaels began offering consignment a few months ago as a way to make up for weak sales. Locals drop off high-end clothes in pristine shape -- some even have the tags still attached. When the shop sells them, the two split the profit.

Two years ago, having second-hand clothes in the same store that sells regular-priced goods might have driven well-heeled shoppers away. Today, the concept works. The new consignment area, called My Secret Closet, has brought in new customers. Shoppers browse both the retail and consignment areas without hesitation.

"We are seeing a permanent change in how people shop, and we have to respond to that," says Tom Patrolia, who has owned the store for 24 years.

The growth in layaway also reflects Americans' new willingness to set aside old shopping stigmas. Layaway, which lets shoppers pay over time while the store holds the item, had its roots in the Great Depression. It became passe in the past two decades with the rise of credit cards.

Toys R Us expanded its layaway program this year after seeing strong demand last holiday season. Two years ago, it didn't exist. Now customers are using it to pay for outdoor gym sets, bicycles and baby-related goods such as cribs and changing tables.

At online site eLayaway.com, the average price of goods on layaway now runs around $460. Expensive items like the latest gadgets and expensive tickets to sporting events are becoming more common, as the website attracts higher-income consumers. More than 40 percent of its customers have income above $60,000. Before the recession, it was just 8 percent, says founder and chief marketing officer Sergio Pinon.

Shoppers at Davis Jewelers in Louisville, Ky., used to be embarrassed when the sales help would suggest layaway for engagement rings, which start at $3,000, says saleswoman Erica Samelson. Now more shoppers are asking to pay through layaway because they can't rack up big balances on their credit cards or get bank loans.

"For the first time, I am hearing lots of people bringing it up," she says.

D'Innocenzio reported from New York.

Gold sets record high amid economic fears

Gold sets record high amid economic fears

Gold sets record above $1,400 an ounce; investors seek safety net amid global economic worries


Investors looking for safer places to stow their assets pushed gold to a record price above $1,400 an ounce Monday as they become more worried about the global economy.

A combination of issues have created fresh worry among investors: Ireland's debt difficulties and two key global summits where leaders of major industrial and developing nations are discussing currencies, free trade and ways to help the world economy.

Also in the back of investors' minds is the prospect of inflation stemming the Federal Reserve's multi-billion bond-buying program.

"People are really concerned again and so I think we're seeing safe-haven buying," IG Markets Inc. CEO Dan Cook said.

"Whether you're holding dollars or euros or whatever you're holding, gold is that one kind of go-to product, a commodity as well as a currency type of trade," he said. "Nobody seems to be that willing to sell out of it."

Gold for December delivery added $5.50 to settle at a record high of $1,403.20 an ounce. Some analysts believe gold could go climb as high as $1,500 an ounce by year end.

In other metals contracts for December, silver added 68.4 cents to settle at $27.432 an ounce; copper gained 0.8 cent to $3.9565 pound and palladium rose $25.50 to $710.90 an ounce. January platinum rose $2.20 to settle at $1,771.10 an ounce.

Oil prices settled at a high for the year while most of the other energy contracts also rose.

Benchmark oil for December delivery settled up 21 cents at $87.06 a barrel on the New York Mercantile Exchange. Analysts think oil prices could climb to $90 a barrel by the end of the year.

In other December energy contracts on the Nymex, heating oil added 1.29 cents to settle at $2.3977 a gallon, gasoline slipped 0.15 cent to $2.1785 per gallon while natural gas gained 15.1 cents to $4.088 per 1,000 cubic feet.

Grains and beans were mixed ahead of Tuesday's U.S. Agriculture Department report updating global supply and demand estimates of major crops.

December wheat added 7.5 cents to settle $7.3625 a bushel, December corn gained 11.5 cents to $5.9925 a bushel and January soybeans lost 9.25 cents to $12.7475 a bushel.

US issues new security rules for air cargo

US issues new security rules for air cargo

US issues new security rules for air cargo, curbs shipments of large toner and ink cartridges


WASHINGTON (AP) -- New U.S. security rules are in place banning all cargo from Yemen and Somalia and prohibiting toner and ink cartridges weighing more than one pound from passenger flights, Homeland Security Secretary Janet Napolitano said Monday.

The new rules are a direct response to the thwarted terror plot that could have taken down two cargo planes over the U.S. last month. Terrorists in Yemen had hidden two powerful bombs inside printers and shipped them to addresses in Chicago.

As the packages made their way to the U.S., Saudi Arabia tipped off intelligence officials to the plot, providing the FedEx and UPS tracking numbers that allowed officials to pinpoint where the packages were en route.

"The threats of terrorism we face are serious and evolving, and these security measures reflect our commitment to using current intelligence to stay ahead of adversaries," Napolitano said in a statement.

The U.S. immediately banned cargo from Yemen after the bombs were intercepted. Other countries including England and Germany -- which the bombs traveled through -- followed suit.

Somalia was added to the U.S. ban, despite a lack of intelligence pointing to a similar plot to detonate bombs on cargo planes, said a senior administration official who spoke on condition of anonymity because he was not authorized to speak publicly. The official said the terrorist group in Somalia, al-Shabaab, has said it intends to attack the U.S., just as al-Qaida in the Arabian Peninsula has stated and tried to do.

Britain is also banning all cargo from Somalia as well as large printer cartridges transported by air.

Besides the bans, high risk cargo will no longer be allowed to fly on passenger planes, Napolitano said, without elaborating what constitutes high risk. Until now, the U.S. has required that high risk cargo be screened before it's loaded onto U.S.-bound passenger planes. Some printer ink and toner cartridges weighing more than a pound shipped internationally will also be banned from flying to the U.S., but Napolitano and the senior administration official did not say which toner and ink shipments would be banned. The senior administration official instead pointed to the ban on all cargo from Somalia and Yemen. The new rules also include extra screening for all high risk cargo, which could include physically opening a package and inspecting it, explosive detection and X-rays, the official said. How a high risk package is screened will be left up to the company or the country, he said.

About 30 percent of air cargo shipped to the U.S. is shipped on passenger planes, according to the Bureau of Transportation Statistics.

Analysts warn that the cost of screening every piece of air cargo in a bid to prevent terrorists from downing airliners might bankrupt international shipping companies, hobble already weakened airlines and still not provide full protection.

On Monday, European Union interior ministers established a panel to review a proposed plan to tighten air cargo security that would include blacklisting high-risk airports that are deemed to have inadequate security measures.

Fed official raises doubts over bond-purchase plan

Fed official raises doubts over bond-purchase plan

Fed official with ties to Bernanke raises doubts over $600 billion bond-purchase plan


WASHINGTON (AP) -- A Federal Reserve official with close ties to Chairman Ben Bernanke expressed doubts Monday about whether the Fed's new $600 billion bond-purchase program would succeed in boosting the economy.

Kevin Warsh, a Fed governor, also warned of "significant risks" associated with the program, including the potential for triggering excessive inflation later on.

The Fed's program, announced last week, is intended to push interest rates on loans even lower than they are now. The Fed hopes cheaper loans will spur Americans to borrow and spend more. A stronger economy could, in turn, prompt companies to hire more and invigorate the economy.

But Warsh said he doubted the program will have "significant" or "durable benefits" for the economy. He made the comments in a speech to the annual meeting of the Securities Industry and Financial Markets Association in New York.

Despite his reservations, Warsh was among 10 Fed officials who voted for the $600 billion program. The sole dissent came from Thomas Hoenig, president of the Federal Reserve Bank of Kanas City.

Warsh's comments point to the uneasiness about the risks the central bank is taking with the new program -- even among some Fed officials who supported it. Warsh, a Bernanke lieutenant, has never dissented from a Fed vote.

Warsh warned that the Fed might have to reconsider its program if the dollar continues to fall or if commodity prices continue to rise, raising inflation across the economy.

The Fed last week said it will monitor the effect of the bond-buying program on the economy. It left the door open to scaling back the purchases if the economy grows more than expected or if high inflation becomes too much of a threat. On the other hand, the Fed indicated it would boost its purchases if economic conditions weakened.

"The Federal Reserve is not a repair shop for broken fiscal, trade or regulatory policies," Warsh said. "Given what ails us, additional monetary policy measures are, at best, poor substitutes for more powerful pro-growth policies."

Warsh suggested that Congress reform the tax code to provide more incentives for businesses to step up investment. He indicated that such an approach is a more effective way to strengthen the economy.

Taking a different stance, James Bullard, president of the Federal Reserve Bank of St. Louis, argued in a speech Monday in New York that the "benefits outweigh the risks." He also voted for the $600 billion program last week.

Bullard said he worries that the weak economy might lead to deflation -- a destructive drop in the prices of goods and services, wages and in the values of homes and stocks. The Fed's bond-buying program should help prevent any deflationary forces from taking hold, he said. Bullard did acknowledge that the program risks spurring too-high inflation.

With the Fed's efforts to stimulate growth, its balance sheet now stands at $2.3 trillion. That's nearly triple its amount before the recession. Adding the new bond holdings will push it to nearly $3 trillion.

Hoenig and Warsh say they worry that the vast sums the Fed is pumping into the economy could unleash inflation. Bernanke, though, has argued that such fears are overblown. He says he's confident the Fed can soak up all the money once the economy is on firmer footing -- before inflation gets out of control.

During the 2008 financial crisis, Warsh worked with Bernanke to craft programs to get credit -- the economy's oxygen -- to flow again. Banks had essentially stopped lending to each other and to their customers, helping plunge the economy deeper into recession.

Richard Fisher, president of the Federal Reserve Bank of Dallas, who took part in the Fed's discussions last week but isn't a voting member, called the $600 billion program "wrong medicine" for what ails the economy. Fisher, who made his comments in a speech in San Antonio, said he worries that the Fed looks as though it's printing money to pay for the federal government's debt.

And he frets that the plan could lead to new bubbles in the prices of commodities, stocks and other assets.

"Financial speculation and excess ... is beginning to raise its hoary head," he said.

Ambac files for bankruptcy under Chapter 11

Ambac files for bankruptcy under Chapter 11

Ambac fails to get structured agreement or raise capital, files for bankruptcy


DES MOINES, Iowa (AP) -- Bond insurer Ambac Financial Group Inc. said Monday that it has filed for Chapter 11 bankruptcy protection after it failed to raise additional capital.

The embattled company also failed to arrange a structured bankruptcy agreement with senior debt holders.

It has tried for two years to regain its footing after getting pummeled by the collapse of the housing market.

The company continues to operate under the jurisdiction of the bankruptcy court.

As of June 30, it had $1.62 billion in debt. Assets were listed in bankruptcy court documents as $394.5 million.

The bankruptcy filing halts any debt claims. The company also is seeking a court declaration that would wipe out its tax liability for tax years 2003 through 2008 and that would allow it to keep the tax refunds it received for those years.

Documents were filed in the U.S. Bankruptcy Court for the Southern District of New York.

The Vanguard Group Inc. was listed as holding 5.46 percent of the company's stock, or 16.5 million shares.

The shares are spread across seven funds and no single fund owns more than 5 percent, documents said.

Creditors holding the largest 20 unsecured claims include BNY Mellon, which held about $1.6 billion in unsecured notes.

The city of New York claimed a $42.3 million disputed tax assessment.

Several businesses claimed trade debt including Algorithmics Inc., which claims $81,656; RR Donnelly, $14,000; and Bloomberg LP at $6,602.

Ambac, which is based in New York, had said just a week ago that it planned to file for bankruptcy protection either through a prepackaged plan arranged with senior debt holders or through Chapter 11 proceedings.

A statement released late Monday indicated that an agreement with debt holders could not be reached.

However, Ambac has agreed to a nonbinding term sheet that will serve as a basis for further negotiations with the debt holders and that may allow the company to emerge from bankruptcy more quickly.

The company's stock traded above $95 a share in the spring of 2007, before the housing bust.

Shares closed at 52 cents Monday then fell 32 cents in aftermarket trading.

In March, Wisconsin regulators took over some of the most troubled assets of Ambac's main operating subsidiary, Ambac Assurance Corp., which is based in that state. Regulators feared the company would run out of money paying claims on policies related to risky structured finance transactions. Those include the credit default swaps and residential mortgage-backed securities held by major Wall Street banks that helped to accelerate the national financial crisis.

Bond insurers traditionally offered insurance mainly to government entities for debt that covered infrastructure construction and other municipal projects, but that changed as investors began betting on complex structured finance products like mortgage-backed securities in the late 1990s. The collapse of that market as foreclosures skyrocketed left Ambac and several competitors teetering when they were left on the hook for more coverage than they could financially handle.

Ellison: Oracle has $4 billion case against SAP

Ellison: Oracle has $4 billion case against SAP

Oracle CEO Larry Ellison testifies that SAP should have paid $4 billion for software licenses


OAKLAND, Calif. (AP) -- Oracle Corp. CEO Larry Ellison turned up the pressure in an industrial espionage trial Monday by testifying that archenemy SAP AG should have paid $4 billion for licenses to Oracle software.

SAP and Oracle, two of the world's biggest business-software makers, are fighting over how much SAP should pay to atone for the shady tactics of a now-shuttered software support subsidiary called TomorrowNow.

SAP has already admitted to bad behavior. It acknowledged that TomorrowNow stole customer support documents from Oracle password-protected websites and used them to steal business from Oracle by offering similar services at a cheaper price.

Oracle has said that it is owed billions for the value of the intellectual property that was taken from it. Ellison's $4 billion estimate concerned the amount of money SAP would have paid for the appropriate licenses to Oracle's software, under certain conditions.

SAP claims TomorrowNow wasn't that effective at stealing customers, and it should only have to pay $40 million for Oracle accounts it did manage to lure away.

The trial, in its second week in federal court, offers a rare look at the corners big companies might be tempted to cut in the battle for new business.

It is also as much a public relations bonanza for Oracle as it is an attempt to recover damages, since Oracle gets to pillory two rivals at once: SAP and Hewlett-Packard Co.

The conflict with SAP has grown as Oracle has moved beyond its core business of selling database software and into SAP's stronghold of applications that help companies manage payroll, human resources and other tasks.

The beef with HP stems from Oracle's decision to start selling computer servers, an HP mainstay. Also, Ellison has taken HP to task for hiring Leo Apotheker, SAP's former CEO, as HP's new CEO. Apotheker is replacing Ellison's friend and tennis buddy Mark Hurd, who was ousted as HP's CEO over expense-report lapses. Ellison has since hired Hurd to serve as an Oracle co-president.

Apotheker may not wind up testifying live about his role in the TomorrowNow espionage.

Oracle has tried to force him to appear in court but says HP has refused the subpoena. Apotheker has proven so elusive that Oracle has hired investigators to try and track him down and serve him with the subpoena if he appears within 100 miles of the federal courthouse in Oakland, which includes HP's headquarters in Palo Alto.

If Apotheker stays out of range, Oracle can't force him to testify.

HP accuses Oracle of harassing its new executive and says Oracle had ample time to question Apotheker during an earlier sworn deposition. If Apotheker doesn't appear, Oracle could play the videotaped testimony.

Ellison's testimony injected some celebrity drama into the trial. Although he is known for trash-talking against rivals, his courtroom appearance was devoid of theatrics, and he didn't give any public comments afterward.

Ellison testified that he was deeply worried that his company would bleed customers because of what seemed like SAP's masterstroke of an acquisition of TomorrowNow in 2005. Ellison called the TomorrowNow deal a "brilliant idea" that posed a "grave risk" to Oracle because of its ability to let SAP steal business, even without the theft of Oracle's documents.

The extent of those fears, and how they squared with the amount of business SAP actually poached, consumed most of his hourlong testimony.

Lawyers from Oracle and SAP questioned Ellison on his initial fears that Oracle could lose as much as 30 percent of the customer contracts it got as part of its $10.3 billion acquisition of PeopleSoft in 2005.

That deal sparked SAP's interest in TomorrowNow, since TomorrowNow supported PeopleSoft software.

SAP insists that it owes far less than Oracle is demanding because TomorrowNow stole far fewer customers than Oracle thought it would. SAP's lawyers have repeatedly cited SAP's claim that TomorrowNow stole only 358 Oracle customers, out of the thousands that came to Oracle through the acquisition.

A “Secret” Subway Stop

Hidden deep under New York City, a "secret" subway stop is drawing visitors. The Big Apple's City Hall station, a beautiful structure that opened in 1904, but has been out of use for decades, can be seen by riders ... if they know how to make the journey. Check out these photos below, courtesy of John-Paul Palescandolo.

Click image to see New York's City Hall subway station.


John-Paul Palescandolo & Eric Kazmirek

Jalopnik writes that if you want to check out this long-forgotten station, one of the "most gorgeous gems in the world of mass transit," you'll have to take the 6 train and then stay on board. Jalopnik elaborates, "The 6 train used to make all passengers leave the train at the Brooklyn Bridge stop, but no longer. If you have a little extra time, you can stay on the train and view the City Hall station as the train makes its turnaround."

Video: Secret tunnel connects U.S. and Mexico

So why was the station closed so many years ago? Motobullet explains that the station's curved tracks played a part in its closure. When subway cars moved their doors to the center, it "created an dangerous gap between the exit point on the train and the platform." There were plans to make the stop into a transit museum, but security concerns, especially following the events of 9/11/01, put the plan in limbo.

Now, though, folks who take a little extra time amid New York's hustle and bustle can spy the station with their own eyes.

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Monday, November 8, 2010

Stronger dollar sends stocks falling

Stronger dollar sends stocks falling

Stocks fall in morning trading after ending at more than 2-year highs last week, dollar gains


NEW YORK (AP) -- Stocks pulled back Monday as the dollar rose and traders retreated from a rally that brought indexes to their highest levels since the peak of the financial crisis in September 2008.

The Dow Jones industrial average fell 40.80, or 0.4 percent, to 11,403.28 in mid-day trading. It had surged 2.9 percent last week after the Federal Reserved announced a $600 billion stimulus package for the U.S. economy.

The Standard and Poor's 500 index fell 3.98, or 0.3 percent, to 1,221.87. The Nasdaq composite index slid 0.21, or 0.1 percent, to 2,578.84.

Technology companies were the only group among the 10 industry areas of the S&P 500 index to post gains. Financial companies were down the most, at 1.3 percent.

"Today is shaping up to be a modest sell-off and that's to be expected," said Barnaby Levin, a managing director at HighTower Advisors.

Stocks have risen in recent weeks on better-than-expected corporate earnings reports and the introduction of a bond-buying program by the Federal Reserve that is intended to stimulate the economy by driving interest rates lower and encouraging spending.

The dollar rose 0.7 percent against a broad basket of currencies. That's a negative for big U.S. companies like Caterpillar Inc. that do a lot of business overseas, since a higher dollar makes their products more expensive in other countries. Caterpillar was off 1.1 percent, and Boeing Co., another big exporter, was off 1.9 percent, making it the biggest loser among the 30 companies that make up the Dow.

Hewlett-Packard's 1.4 percent gain made it the best performing company among the 30 stocks that make up the Dow, followed by Bank of America Corp. and Cisco Systems Inc. The Travelers Co. fell 1.5 percent as the index's laggard.

The euro fell 1.1 percent from recent highs, in part on renewed concerns about the debt burdens of the weaker economies among countries that use the Euro. Ireland announced Thursday that it would raise taxes and seek additional cuts in government services to rein in its deficit. Yields on 10-year Irish bonds rose sharply in response. U.S. markets had swooned this spring over concerns that a fiscal crisis in Greece would spread to Portugal, Spain and other weak economies in the euro zone.

Prices for Treasury bonds rose. The yield on the 10-year Treasury bond fell slightly to 2.52 percent, from 2.53 percent late Friday.

Traders will get a better indication of consumer spending later in the week as several major retailers announce earnings. Kohl's Corp., Macy's Inc. and J.C. Penny Co. Inc. will release their third-quarter earnings starting Wednesday. Retailers such as The Gap Inc. and Macy's rose more than 8 percent last week on better-than-expected October sales that suggest that consumers will increase their spending this holiday season.

Leaders from the Group of 20 industrialized and developing nations will meet Thursday and Friday in Seoul. Tensions have risen between the group regarding trade imbalances and the respective strength of the Chinese yuan and the dollar.

Officials from several countries have criticized the Fed's bond-buying program amid concerns that it will spark asset bubbles in emerging economies. Representatives in Germany, Brazil, South Africa and China have voiced objections to the plan and argued that it could lead to a surge in commodity prices.

Precious metals rose, with gold posting a 0.2 percent gain and silver jumping 2.3 percent.

US trade deals recast India as job growth engine

US trade deals recast India as job growth engine

Trade deals announced around Obama trip recast India as engine for US job growth


MUMBAI, India (AP) -- Indian and U.S. companies have discussed or signed over $14.9 billion in deals around President Barack Obama's trip that will support 53,670 U.S. jobs, the White House said.

The U.S. export content of the deals, estimated at $9.5 billion, won't go far to settle America's trade deficit, which was $46.3 billion in August alone, but the numbers are testament to India's growing importance as a global market and have provoked a swell of pride here.

"I want to be able to say to the American people when they ask me, well, why are you spending time with India, aren't they taking our jobs?" Obama told reporters in New Delhi Monday. "I want to be able to say, actually, you know what, they just created 50,000 jobs. And that's why we shouldn't be resorting to protectionist measures. We shouldn't be thinking that it's just a one-way street."

KPMG India executive director Pradeep Udhas, who is also president of the Indo-U.S. Chamber of Commerce, said the deals are significant less for their absolute value than their message.

"A two-way street between the U.S. and India has started," he said. "It's important in terms of sending out a message to U.S. constituencies that India is not just some Third World country. It's actually a huge market."

India is also a growing investor in the U.S. From 2004-2009, Indian companies invested over $26 billion in the U.S., creating more than 55,000 jobs, according to KMPG.

"For five decades after Independence, Indians looked up to the rest of the world for aid, technology and capital. Now, the world looks upon India as a dynamic creator of jobs and income opportunities," India's Economic Times editorialized Monday.

"It would, at this point of time, be safe to say that the U.S. needs India more," Anil Padmanabhan wrote in the Indian business daily, Mint, on Monday.

Boeing Co. and General Electric Co. walked away with the richest deals, worth $6.8 billion and $1.6 billion, respectively.

The biggest single deal is Boeing's long-discussed sale of 10 C-17 transport aircraft, which will give the Indian Air Force the largest fleet of C-17s outside the U.S., according to the White House. The preliminary agreement values the sale at $4.1 billion, less than the anticipated $5.8 billion. Boeing says the sale will support 22,160 U.S. jobs.

Indian airline SpiceJet also agreed to buy 30 B737-800 planes from Boeing, in a $2.7 billion transaction that will support 12,970 jobs.

GE was selected last month to provide the Indian Aeronautical Development Agency with 107 F414 engines for Tejas light combat aircraft, in a deal tentatively valued at $822 million, which will support 4,440 jobs in the U.S.

India's Ministry of Railways also selected GE Transportation and LaGrange, Illinois-based Electro-Motive Diesel as the two sole bidders to make 1,000 diesel locomotives over the next decade, in a deal that could be worth over $1 billion.

On Saturday, Reliance Power signed a $750 million turbine deal with General Electric, and on Sunday finalized an agreement with the U.S. Export-Import Bank to provide up to $5 billion in financing for U.S. exports.

Reliance Power said it is negotiating an additional $1.25 billion worth of equipment deals with U.S. companies which it declined to name.

Those deals pale in comparison with Reliance Power's recent China purchases. Less than two weeks ago, Reliance Power announced a $10 billion order for power generation equipment for its coal-based power plants from China's Shanghai Electric Group Co. Ltd., and secured a $12 billion financing package for Chinese exports from a consortium of Chinese banks.

Still, the flurry of activity may help ease the dismay GE and other private companies have felt at India's strict nuclear liability law, which extends liability to suppliers of nuclear plants, stymieing their efforts to participate in India's multibillion nuclear reactor build-out. America led the diplomatic push to restart nuclear trade with India, despite its weapons program.