After Wasting $5 Billion, the Army Is Eyeing These New Camouflage Patterns

Earlier this summer we wrote: "The U.S. Marine Corps has long been known for doing more with less; smaller, more agile, and quick to react, it actually employed that ability when hunting for new uniforms in 2002.

Erik German at The Daily tells the story of the Marines and the Army's uniform selections, mentioning a conversation he had with a textile technologist that shows the Marines flexibility and the Army's cumbersome bureaucracy.

The Marines went to their sniper school at Quantico, Va., and told a couple of their guys to find a good camouflage color for the new uniform pattern. A group of snipers went to the local Home Depot and found the main base color in the Ralph Lauren section of the paint department. The color now called Coyote Brown went into the pattern of their very successful and well-loved MARPAT uniform pattern.

This was also around the time the Army was sending its troops to Iraq with uniforms and body armor in a variety of mismatched patterns that, in effect, left U.S. soldiers wearing a target for the enemy to fire upon.

Bedder explains that in response to this and the Marines new uniforms, the general in charge of Army uniform procurement told his staff to pick a color before trials were finished. 

Five billion dollars, eight years later, and the Army is now doing the whole thing again. Over the next 12 months 1.1 million soldiers will be replacing their uniforms for something called Multicam.

Hopefully this will work out better for troops, and won't have to be replaced again in a handful of years."

Now see what direction that new camo may take.

You just see the big picture and camo helps to confuse the eye

Kryptek demonstrates its concealment capability (Kryptek/Jim Kinsey)Except there's someone with a weapon.

Color schemes are chosen to mimic natural surroundings. 

It's best that colors are contrasted with dark and light shades so that the wearer blends into the natural reflections and shadows we're used to seeing.






Pixels disrupt what you see and break up straight lines that did not occur in nature

ADS woodland pattern simulated (ADS, Inc./Guy Cramer)Digital patterns re-create shapes found in nature, known as fractals, which we see as mere background noise.

Pixels break up the fabric into a macropattern and a micropattern, so the design doesn't appear as a solid block. Even when picked up by infrared technology, the human form is broken up and its movements are masked.






3-D Layering tricks your brain by creating depth and shadows where there may be none and refusing to allow an image to form

ADS entry for desert camouflage. Pattern simulated. (ADS, Inc./Guy Cramer)We interpret gradients and layers of color as a textured surface with depth. In this case, the desert.

ADS explains that the brain is deceived into regarding the fabric as part of the natural environment, rather than a solid flat surface. 









Science and shadows do their part by bleeding out camo light to dark into backgrounds and help personnel blend better through patterns of light

A Kryptek pattern called Nomad selected by the Army for testing (Kryptek)Kryptek's example of 3-D layering features two levels: shading in the background and sharp random shapes in the foreground.

A light-reflecting gradient helps creates a three-dimensional illusion that blends into natural terrain.









There is no better designer than someone who stood out wearing bad camo — good hard R&D thinking goes on in the field

(Kryptek/Jim Kinsey)And active-duty soldiers will be field testing the Phase IV entries. The Army will then weigh the benefits and costs of adopting new camouflage.

Kryptek says their designs are made for the battlefield and the backcountry alike, so troops and civilians can both take note. 

Lessons Learned - The 1929 Stock Market Crash

Once the First World War was over, the U.S. entered into a new era. It was a time of great enthusiasm, and optimism. This was a time when great inventions, like the airplane and radio, made pretty much anything seem possible in the 1920's.

By around 1925, more and more people were getting involved in the stock market. Then in 1927, there was a very strong upward price trend. This enticed even more people to get into the stock market. By 1928, the stock market boom had taken off.

At this point, the stock market seemed like a place where virtually everyone thought they could become rich. The stock market had reached a fever pitch. Everyone thought they were an expert, and stocks were talked about everywhere. Tips were given by almost everyone. Lesson number one: Beware when the fever pitch is high, and everyone thinks they are a master of the stock market, getting richer by the day. Beware when everything seems too good to be true, and tips are given out by almost everyone.

About this time, the Federal Reserve began to raise interest rates. Then in March of 1929, the stock market suffered a mini crash. In the spring of 1929, there were more signs that the economy could be headed for trouble. Steel production went down, house construction slowed down, and car sales tailed off.
Lesson number two: Rising interest rates is a negative for the stock market. Also, when economic conditions begin to deteriorate, this is another negative.

In the Summer of 1929, the market surged ahead again, and all early warning signs were forgotten. From June through August, the stock market reached its highest price level ever. Nearly everyone thought it was a stock market heaven, which would never end.
Lesson number three: When the market seems too good to be true, it probably is, and at the very least, a correction is coming soon.

It is important to remember that markets do not go straight up forever. What we are seeing here is a classic example of mob psychology in full force. This is human nature at work, with the emotion of greed taking over many people. A real get-rich-quick attitude.

By August of 1929, many leading stocks were rising in price in dramatic fashion. This is called a climax run, and another warning sign of trouble up ahead for the market.
Lesson number four: When leading stocks, after a big run up in price, make huge price gains in a relatively short period of time, this is a warning sign of the market topping.

The stock market peaked in September of 1929. At this point, heavy selling in big volume began to happen, and became somewhat common place. This is a major sign that smart money was leaving the market. There were five declines on heavy volume throughout September. All this selling was happening a full month before all hell broke loose in the stock market.
Lesson number five: When general market declines on heavy volume begin to mount, it is definitely time to start selling your stocks. This is a major warning sign.

The Dow declined nearly 90% from its peak in September, 1929, to its July, 1932 bottom. Many people lost their entire savings, and more. Savvy traders saw many signs of trouble, and had plenty of time to exit the market, before it really started to crash.
Lesson number six: Those who knew the market warning signs, and acted, had plenty of time to exit the market, before it crashed, late in 1929. These stock market warning signs are just as valid today, as they were back then. Always keep an eye out for these warning signs, and act appropriately.

By Gary E Kerkow
Article Source: http://EzineArticles.com

An Introduction to Bottom Fishing

Whenever there is a sustained down period in the market, one of the first things you are likely to hear investors talk about is bottom fishing. In bear markets or in general, when the market has gone down for a period of time, certain stocks will be taken down to a lower level than they deserve to go.
A lot of investors enjoy the challenge of bottom fishing. A lot of them also wrongly assume bottom fishing and picking market bottoms are the same thing. The main reason they are not the same thing has to do with the fact that you are not trying to call the end of a market down turn.
Bottom fishing is, in essence, buying stocks that are on sale. On the other hand, picking market tops or bottoms deals with prediction, and that is a complicated and impossible feat to achieve successfully on a regular basis.
An investor can employ many strategies when it comes to bottom fishing. The following paragraphs describe some of the most popular that many investors and professionals use to identify the right stocks. Keep in mind that there is not going to be any one solution to picking the right bottomed-out stock. A blend of strategies can make the selection process easier.

Technical Analysis and Bottom Fishing

Technical analysis is the use of charts, as well as stock price, to help determine the correct stock to buy. Technical tools make it easier to spot an oversold stock. This oversold stock may indeed be the perfect candidate.
Using technical analysis means that you don't have to worry about the fundamentals of the company. Your concern is price action.
Technicians have many tools and different charts they can use to help identify a stock ready to make a rebound. But, although technical analysis is a very powerful tool, it is also time consuming to learn.
Learning to identify chart patterns can be a difficult endeavor. You must also become fluent in the use of indicators that help you gauge market activity. Learning all of this takes time and patience.

Fundamental Analysis and Bottom Fishing

If being a technician is not your thing, maybe you would prefer looking at the stock a little more deeply than just its price alone.
Fundamental analysis, also known as value investing, is the philosophy of studying a company's balance sheet, as well as understanding its business, to pick a stock that is undervalued. The biggest advantage to fundamental analysis comes in the form of identifying stocks that have been ignored by other traders. Remember: You are searching for value.
In this case, value comes in the form of price per share -- the current price per share versus what you think the price per share should be. Because you are a fundamentalist, this price per share has you buying stocks that are on discount with the hope that the market will move the stock to your target price.
Learning to read a company's balance sheet is a difficult and slow process. And, finding an undervalued stock is still no guarantee that the stock price will move to meet what the perceived price should be.

The 52-Week Low and Bottom Fishing

You have all heard about the 52-week low. Well, one of the ways to find potentially bottomed-out stocks is by searching for stocks that have dropped over a certain period or dropped by a certain percentage. You could easily do a search for a stock that has fallen 70 percent or more in value within the last 18 months or so. You could look for stocks that have made new one-year lows, for example.

Buying the Beaten Big Caps

This strategy is simple. You are buying the biggest market-cap stocks that have taken a down turn -- the best of the big-name stocks. Every market has them. The ideology holds that these bigger-capped stocks will still have viable businesses that are just out of favor. Or, they may have missed a couple of quarters in their earning revenues.
Sometimes, there can be an internal management issue that has little or nothing to do with the business. Any one of these factors can lower a stock's price quickly. No matter the market or how big the company, at one time or another, that stock can be on sale. Once the sale has occurred, the bottom fisher needs to decide if the downward move is justified or an overreaction to something else.
Another benefit to buying these beaten-down big-cap stocks is their yield. Many times, these companies pay a dividend. If the dividend has not been cut, you are now able to buy a higher-yielding stock for a lower price. These are rare, and when they are a worthy investment opportunity, you need to act quickly.

A Word of Caution about Bottomed-Out Stocks

Technical and fundamental analysis, as well as looking for 52-week lows and buying beaten big caps, can all be excellent ways to look for potentially bottomed-out stocks. These discounted prices mean you can purchase a bigger stake. So, any upward move in the price is quickly rewarded. Usually, this will mean that you are buying companies in sectors that are essential or that you believe will make a comeback in the near future.
Keep in mind that there is often a reason why certain companies have lost 70 percent or more of their value in a short time. Those same factors do not change overnight. You need to invest cautiously.
You should keep in mind that a lower stock price can be an indication of future trouble. So, be cautious and decide to purchase only after you have done your research. You should also realize that there is no guarantee that a company will be able to rebound this time. If there are underlying problems, this could only be the beginning, and the price may head lower in the future.
The most important factor in successful bottom fishing is market timing. I said at the beginning of this article that market timing was impossible to do consistently, and that is what makes bottom fishing so difficult. You do not know if the price you are paying is at the lowest it can go or if it will go lower.
Investors looking to bottom fish need to be prepared for the potential of buying the stock of a company that may not exist in the near future. So, although the up side is high and, with time and patience, you will be rewarded for the good picks, you want to limit your bad picks because those can be quite costly.
There is no exact way to know which of the stocks you bought will be winners in the future. Keep in mind that bottom fishing can be rewarding as long as you are prepared for the potential pitfalls.

http://www.esignallearning.com/education/marketmaster/archive/2011/archive_index.aspx?date=072211
 

Secret U.S. effort aims to help dissidents: report

WASHINGTON (Reuters) – The Obama administration is leading a global effort to establish "shadow" Internet and cellphone systems to help dissidents undermine authoritarian governments, the New York Times reported on Sunday.

The effort has quickened since former Egyptian President Hosni Mubarak's government shut down the country's Internet in the last days of his rule, said the Times report, which cited planning documents, classified diplomatic cables and sources.

The Internet has been used in recent months by anti-government protesters in North Africa and the Middle East to help coordinate demonstrations. Some governments have responded by disabling Internet access.

In one project, the U.S. State Department and Pentagon have spent at least $50 million to create an independent cellphone network in Afghanistan using towers on military bases in the country, the Times said, citing unnamed U.S. officials.

The operation is aimed at counteracting the Taliban insurgency's ability to shut down official Afghan services, the Times said.

The State Department is also financing creation of stealth wireless networks to enable activists to communicate beyond the reach of governments in countries like Iran, Syria and Libya, the Times said, citing participants in the projects.

Another project focuses on development of an "Internet in a suitcase" that could be smuggled across a border and deployed to allow wireless communication with a link to the global Internet, the Times reported.

Secretary of State Hillary Clinton is backing the U.S. effort, according to the report.

"We see more and more people around the globe using the Internet, mobile phones and other technologies to make their voices heard as they protest against injustice and seek to realize their aspirations," the Times quoted Clinton as saying in an email response to a query on the subject.

U.S. diplomats also are meeting with operatives who have been burying Chinese cellphones near the border with North Korea, where they can be dug up and used to make furtive calls, the Times reported.

(Writing by Paul Simao; Editing by Eric Beech)

Prince Philip marks 90th birthday with new title(Colonial Masters)

Prince Philip marks 90th birthday with new title

LONDON (AFP) – Britain's Prince Philip received a new royal title from his wife Queen Elizabeth II as a gift on his 90th birthday Friday, as the outspoken consort said he would finally scale back his workload.

The queen made him Lord High Admiral -- the titular head of the British Royal Navy and an office until now held by her -- partly in recognition of the promising seafaring career Philip gave up to spend a lifetime at her side.

The gruff patriarch, the longest-serving consort in British history, opted to spend his birthday with a typical lack of fuss, as he hosted a charity reception and chaired a conference for military colonels.

Despite remaining sprightly for his age, if not the dashing blond naval officer of more than five decades ago, Philip admitted he would now take a step back from official duties.

"I reckon I've done my bit. I want to enjoy myself a bit now, with less responsibility, less frantic rushing about, less preparation, less trying to think of something to say," he told the BBC.

"On top of that my memory's going, I can't remember names. I'm just sort of winding down."

There has been speculation he could hand over some of his duties to his grandson Prince William's new wife, Catherine.

Since marrying the then princess Elizabeth in 1947, Philip has carved out his own role supporting the monarch, accompanying her on visits around the world and jollying people up with his off-the-cuff remarks.

Some have been near the knuckle.

On a visit to China in 1986, he warned a group of British students: "If you stay here much longer, you'll all be slitty-eyed." And he told a British student who had trekked in Papua New Guinea in 1998: "You managed not to get eaten, then?".

But in a sign of the public affection for him, the palace revealed that almost 2,000 birthday cards had been sent to the duke from across the globe, including New Zealand and Australia, Italy, Poland, France and Germany.

Known officially as the Duke of Edinburgh, he is patron of some 800 organisations, covering fields including conservation, design and developing life skills among youngsters.

Prince Philippos of Greece and Denmark, a nephew of Greek king Constantine I, was born on a kitchen table on Corfu on June 10, 1921.

After a turbulent childhood, Lieutenant Mountbatten, as he became, married Elizabeth but his stellar progress in the Royal Navy, including service in World War II, was halted when his wife became queen in 1952.

He told ITV it was "disappointing", but "being married to the queen, it seemed to me that my first duty was to serve her in the best way I could".

Buckingham Palace said in a statement that the award of the title of Lord High Admiral was a "gift to The Duke of Edinburgh on the occasion of his 90th birthday", and that an official ceremony would take place at a later date.

The queen has held the title, which dates back to the 14th century, since 1964.

Canada also named Prince Philip an admiral and general in the Canadian Armed Forces for his birthday, Prime Minister Stephen Harper said, praising his "significant contribution to our national life".

The queen is Canada's head of state.

On Friday Philip was also honoured with a 62-gun salute and the striking of a Royal Mint coin with his image on one side and the queen's on the other.

At the event he attended for the Royal National Institute for Deaf People he was given a pair of ear defenders.

But the official celebration of his birthday will be on Sunday when there will be a service at Saint George's Chapel in Windsor Castle, attended by the royal family, with a reception to follow.

"There is no ceremony or anything today. The main event will be on Sunday," a Buckingham Palace spokesman told AFP.

The duke showed the accolades were unlikely to go to his head, as he showed when he was asked by the BBC if he thought he had been successful.

"I couldn't care less. Who cares what I think about it? I mean it's ridiculous," he said, adding that he had figured out how to perform his role by "trial and error".

Paying tribute this week, Prime Minister David Cameron said Philip had been "a constant companion and a source of rock-solid strength" to the queen, adding that Britons found the duke's down-to-earth style "endearing".

5 New Rules of Real Estate

In the 20-odd years that I have been writing about real estate, I don't believe there has ever been a better time to buy a home.

Why? For starters, 30-year fixed-rate mortgages can be had for less than 5 percent. Recently, the 30-year rate hit 4.6 percent. If you want a 15-year mortgage, you can (for now) still get it for less than 4 percent. These are astounding rates. As Robert Fogel, a Nobel prize-winning economist from the University of Chicago, recently told me, it's like borrowing for free. That's how it feels to me, too: When my husband and I bought our first home in 1989, our interest rate was 11.75 percent.

At this point, it seems everyone wants the real estate market to get better:

• Realtors are selling a fraction of the homes they once were, taking a huge hit in income.

• Builders (at least, those that are still in business) are selling about one-eighth as many homes as they were selling in 2005.

• Appraisers continue to take some of the blame for the housing crisis, for over-appraising property in the boom years and under-appraising it now. Realtors say that more than 75 percent of the homes sales that fall apart do so because the appraisal comes in so far below the contract price that a deal can't be worked out.

• And homeowners are desperate for the housing market to rebound -- especially the more than 25 percent who are underwater with their homes -- so they can refinance or sell their homes and move on with their lives.

[Click here to check home equity rates in your area.]

There's no reason you shouldn't buy a home now and take advantage of super-low prices, historically low mortgage interest rates, and a significant supply of homes on the market. But to be successful in today's real estate market, you need to understand that the game has changed.

Here's my list of the biggest shifts:

1. R.I.P., Big Housing Price Jumps

If you want to buy a house, you have to have enough income to support the mortgage. Now, take it the next step: If everyone in a particular neighborhood earns around the same money, then all the houses in the neighborhood will be priced about the same and home values will only rise 3 percent per year.

That's about the typical raise most Americans used to get, but the decidedly old-fashioned expectation went out in the 2000s because banks told borrowers that exotic mortgages (like the infamous pay-option adjustable-rate mortgage, or ARM) would allow them to "leverage up" to a much more expensive house payment. It was a payment most clearly couldn't afford; the bulk of those loans started going delinquent within three months of closing. Now that every borrower has to have a job and some sort of down payment, and the only basic loan types available are 30-year and 15-year fixed-rate mortgages, you won't be able to leverage up with your mortgage, and housing prices will remain far more steady.

In short -- buy now, but don't expect a huge pop in home prices. It ain't going to happen.

2. Mortgage Lenders: Just Not That into You

Most home buyers don't have enough cash in their pocket to purchase a home without a mortgage. But, lenders are extremely risk-averse at the moment -- so they don't want to approve a mortgage application unless you have an extremely good FICO score (preferably 700 or higher, and at least 760 to get the best rates); you have plenty of cash in the bank (for your down payment, closing costs and a healthy cash reserve); you don't have anything weird or amiss in your financial data. And it helps if you have another loan application approved from a competing institution. Which is to say: They only want you if you don't really need them.

You'll also need to make sure the property appraises at or above the contracted price and the neighborhood is steady (without too many foreclosures).

3. The Best Deals Are in New Places

Sure, there are amazing short sales and foreclosures out there. To find them, you'll have to hire a great agent who really knows what he or she is doing, has connections with the foreclosure-sale (also known as real estate owned, or REO) departments of big lenders, and can help you navigate a tricky and frustrating negotiation cycle.

For example, if you want to buy a HUD home (an FHA foreclosure), you'll need a HUD-certified real estate agent who can help you make an offer at HUDHomeStore.com. But the agent may not tell you that short sales and foreclosures are often damaged properties that will require tens of thousands of dollars (or more) in deferred maintenance, rebuilding or renovating.

Instead, look for a property where the seller has plenty of equity and has to sell, but is confronted with a neighborhood full of foreclosures. The seller will have to price the home to compete with foreclosures, and you'll scoop up a property that is in much better shape and will, in all likelihood, require a lot less maintenance, renovation and upkeep.

4. Investing? Focus on Income

Somewhere along the way, ordinary civilians got the idea that there were massive profits to be made in real estate, if only they could flip the properties fast enough. The problem with that strategy became apparent when the real estate market crashed, and investors (who were leveraged to the hilt) couldn't get out of their properties in time. When you're paying thousands of dollars for a mortgage but don't have any income -- nor hopes of a sale -- it's a fast track to bankruptcy.

But now is an amazing time to buy investment property. Purchase a foreclosure or two (or up to 10, if you can find the financing), and focus on how much income you can get each month. If you buy a foreclosure in the Atlanta area for $75,000 and can get $800 to $1,000 per month in rent, that's a terrific return on investment.

5. Time to Think Medium Term ... at Minimum

I'm not sure where home buyers got the idea that they could buy and flip houses every 24 months and collect a king's ransom's worth of tax-free profits. But those days are over. Whether you're buying as an investor or plan to live in the property, you'll need a 7- to 10-year plan in order to make sure you won't lose money after factoring in the costs of sale.

Even those investors who are buying bottom-feeder foreclosures and fixing them up might not be able to resell them so quickly. And if they do, they might find that lenders won't finance their buyers. So come up with a long-term plan that will let you rake in money ... while the rest of the real estate market catches up.

The Bitcoin Triples Again

The online currency has minted off-line millionaires. But for how long?

The world's fastest-gaining currency has tripled in price again. Last week, SmartMoney reported that the Bitcoin had exploded from an exchange rate near zero to more than $10 in about a year, making it one of the top-returning assets of any kind. On Wednesday the currency topped $30.

More from SmartMoney.com: • Groupon and Pals: Worth More Than Google? • The Most Expensive Stock in America • The Invisible Stock Bubble

If returns like those seem otherworldly, perhaps its because Bitcoin is a world unto itself. To recap, it's is a purely online currency with no intrinsic value; its worth is based solely on the willingness of holders and merchants to accept it in trade. In that respect, it's not so different from fiat currencies like the dollar or Euro, but whereas governments back such money, Bitcoins lack central control.

In another way, the appeal of the Bitcoin echoes the appeal of gold. Instead of a central bank, a computer algorithm dictates their supply. Today there are six million Bitcoins, a number that will grow at a steadily slowing rate until it approaches 21 million, but no more. As with gold, some see such limited supply as built-in protection against inflation that could result from runaway government budget deficits. Gold, of course, has been a store of value for thousands of years and has at least some industrial use, whereas Bitcoins are brand new and exist only on the Internet.

For some early adopters, Bitcoins have turned from a hobby into a windfall. MtGox.com, the main exchange for users swapping Bitcoins for dollars and other currencies, charges buyers and sellers a fee of 0.65% for its brokerage service. (The name stands for Magic the Gathering Online Exchange, but the Bitcoin dabbler who bought the domain didn't bother to change it.) As recently as a few months ago, the site generated just pennies a day in income. By Wednesday it was making more than $40,000 a day.

Mt. Gox, needless to say, is not a regulated exchange, so its pricing and liquidity data aren't subject to any review or verification. Mt. Gox didn't respond to an email request for comment. The site offers no customer service phone number.

Click here for the Currency Center.

The largest Bitcoin account holder -- who is, of course, anonymous -- has 297,000 units of the start-up currency, according to Donald Norman, a spokesman for the The Bitcoin Consultancy, which offers advisory services for institutions interested in Bitcoin transactions. At $31 per Bitcoin, that's equivalent to $9.2 million.

Bitcoins are accepted by a limited number of merchants for services, such as website design, and some goods, such as music and clothes. The anonymous nature of the currency has also led to brazen use by drug dealers, including ones who hawk their merchandise on Silk Road, a website than can only be reached through a network that cloaks the identity of its owner. Lawmakers are not amused. "The only method of payment for these illegal purchases is an untraceable peer-to-peer currency known as Bitcoins," wrote Sens. Charles Schumer of New York and Joe Manchin of West Virginia this week in a letter to the U.S. Attorney General and the Drug Enforcement Agency.

Cash, Bitcoin advocates are quick to point out, is also an anonymous payment system used to buy drugs, and Norman says the focus on drugs is sensationalistic and misguided. "It would be sad if the growth of Bitcoin was stunted because of this criminal byproduct," he says. "Bitcoin is going to change the world in the same way the Internet did and make societies freer."

It's not clear that U.S. law enforcement agencies could regulate Bitcoins if they wanted to. The currency runs on software similar to the file-sharing software used to download music and movies, technology the entertainment industry has been trying unsuccessfully to quash for years. There's no headquarters, main server or central bank to visit, just a network of thousands of users. It's also not clear whether U.S. regulators would have jurisdiction over a global, virtual currency. Last week, a spokesman for the F.B.I. said he was unaware of Bitcoins and would check into the Bureau's position on them. Subsequent calls for comment have not been returned.

Readers tempted to bet on the Bitcoin should resist, not least because it's unclear whether it will have any enduring worth. Beyond what fans say are the currency's design advantages, its chief appeal at the moment is surely that it's soaring in value. As of now, today is the first day in more than a week that the currency didn't hit a new high. And when the gains stall, the fall that follows may be as breathtaking as the rise.

Florida bank fails, 40th shuttered in 2011

Regulators shut down small Florida bank; makes 40 US bank failures in 2011

LOS ANGELES (AP) -- Regulators on Friday shut down a small Florida bank, bringing the number of U.S. bank failures this year to 40.

The pace of closures has slowed, however, as the economy improves and banks work their way through piles of bad debt. By this time last year, regulators had closed 68 banks.

The Federal Deposit Insurance Corp. seized Coastal Bank of Cocoa Beach, with about $129.4 million in assets and $123.9 million in deposits as of March 31.

Premier American Bank N.A., based in Miami, agreed to assume the deposits and buy the assets of the failed bank. It also agreed to share losses on $108.2 million of Coastal Bank's assets with the FDIC.

The failure of Coastal Bank is expected to cost the deposit insurance fund $13.4 million.

Coastal Bank's two branches will reopen on Monday as branches of Florida Community Bank, a division of Premier American, the FDIC said.

Florida has been among the hardest-hit states for bank failures.

Regulators shuttered 29 banks in the state last year. Coastal Bank is the fifth Florida lender shut down by the FDIC this year.

In 2010, authorities seized 157 banks that succumbed to mounting soured loans and the hobbled economy. It was the most in a year since the savings-and-loan crisis two decades ago.

The FDIC has said that 2010 likely would mark the peak for bank failures.

There were 140 bank failures in 2009, costing the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.

From 2008, the year the financial crisis struck, through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009, and its deficit stood at $7.4 billion as of Dec. 31.

The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.

Depositors' money -- insured up to $250,000 per account -- is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted last July.

The number of banks on the FDIC's confidential "problem" list rose to 884 in the final quarter of last year from 860 three months earlier. The 884 troubled banks is the highest number since 1993, during the savings-and-loan crisis

Obama tries to reassure public on economy, jobs

Obama says jobs, economy remain priority despite week's focus on bin Laden

WASHINGTON (AP) -- President Barack Obama is reassuring the public that jobs and the economy are his top priority.

At the end of a historic and emotionally charged week that began with his nationally televised announcement that Osama bin Laden had been killed in Pakistan during a raid by U.S. special forces, Obama on Saturday returned to promoting his energy agenda.

U.S. forces raided a compound in Abbottabad, Pakistan, where bin Laden had lived for several years, killing the al-Qaida leader.

The news of bin Laden's demise dominated the week's headlines.

"So although our economy hasn't been the focus of the news this week, not a day goes by that I'm not focused on your jobs, your hopes and your dreams," Obama said in his weekly radio and Internet address.

He recorded the address Friday while visiting an Indianapolis transmissions plant that makes systems for hybrid vehicles.

Obama has been traveling around the country to talk up his plan to reduce U.S. consumption of foreign oil -- and the price Americans pay for it -- by increasing domestic oil production, encouraging a shift to alternative energy sources and building vehicles that use less fuel.

He says shifting to jobs like those at the Indianapolis factory will create more jobs and help the economy grow.

"The clean energy jobs at this plant are the jobs of the future, jobs that pay well right here in America," Obama said. "It's clean energy companies like this one that will keep our economy growing, create new jobs and make sure America remains the most prosperous nation in the world."

Republicans devoted their weekly message to bin Laden.

Massachusetts Sen. Scott Brown praised years of diligent work by the military and by intelligence professionals to pinpoint bin Laden's location. The al-Qaida leader's death, Brown said, sends a clear message to others like bin Laden.

"The example will not be lost on other terrorists," Brown said. "Any escape they make will be temporary. Any sanctuary they find will be uncovered. Those who harm or threaten the American people will be dealt with, on our terms, however long it takes."

Stocks rally as hiring spree surprises Wall Street

Stocks reverse weeklong slump after report shows job growth well above expectations

NEW YORK (AP) -- The biggest corporate hiring spree in five years ended a weeklong slide in the stock market.

The Labor Department reported Friday that private employers hired 268,000 people last month, the most since February 2006. Taking into account job cuts of government workers, the economy added a total of 244,000 jobs overall last month, well above the 185,000 jobs that analysts had predicted.

It was the third straight month with an increase of more than 200,000 jobs.

The unemployment rate rose, however, to 9.0 percent from 8.8 percent in part because more people who resumed looking for work.

The news on job growth helped lift the dollar, nudged up oil prices and reversed a four-day slump for stocks.

"Everyone was a bit surprised by the jobs number," said Frank Fantozzi, the chief executive of Planned Financial Services, a Cleveland, Ohio-based firm. "It's a good indication for the markets that we are still in the growth stage."

The Dow Jones industrial average gained 54.57 points, or 0.4 percent, to close at 12,638.74. The Standard & Poor's 500 index rose 5.10, or 0.4 percent, to 1,340.20. The Nasdaq composite rose 12.84, or 0.5 percent, to 2,827.56.

Industrials companies that benefit from global building and expansion projects led the market following the jobs report. Caterpillar Inc. rose nearly 1 percent. Boeing Co. rose 1.1 percent.

But Friday's bounce failed to make up for losses earlier this week, when fears of an economic slowdown and weaker-than-expected earnings dragged down the major stock indexes. All three ended the week down more than 1 percent. The Russell 2000, an index of small companies that reached record highs just a week earlier, ended the week down 3.7%.

The higher jobs number helped stem a sell-off in commodities brought on by fears that the economy was sputtering. Regular investors and speculators had begun to flee commodities in an effort to lock in profits in case the economy slowed even further.

"The jobs report put an end to the idea that growth appeared to be weakening, which is what really fueled most of the declines in commodities this week," said Jeffery Kleintop, the chief strategist at LPL Financial.

The dollar also got a lift. An index that measures the dollar against six major currencies gained 1 percent.

Financial markets are markedly different from this time last year. Friday marks the one-year anniversary of the "Flash Crash." Stocks tumbled that day when one large trade overwhelmed the market's computer servers and sent prices into a tailspin. Though stock prices made up most of their losses that day, the sudden drop fueled skepticism that stocks were a safe investment. That led many investors to pull money out of the stock market.

Two shares rose for every one that fell on the New York Stock Exchange. Trading volume was 4.4 billion shares.

Why some people can run on little sleep and get so much done

For a small group of people -- perhaps just 1% to 3% of the population -- sleep is a waste of time.

Natural "short sleepers," as they're officially known, are night owls and early birds simultaneously. They typically turn in well after midnight, then get up just a few hours later and barrel through the day without needing to take naps or load up on caffeine.

They are also energetic, outgoing, optimistic and ambitious, according to the few researchers who have studied them. The pattern sometimes starts in childhood and often runs in families.

While it's unclear if all short sleepers are high achievers, they do have more time in the day to do things, and keep finding more interesting things to do than sleep, often doing several things at once.

Nobody knows how many natural short sleepers are out there. "There aren't nearly as many as there are people who think they're short sleepers," says Daniel J. Buysse, a psychiatrist at the University of Pittsburgh Medical Center and a past president of the American Academy of Sleep Medicine, a professional group.

Out of every 100 people who believe they only need five or six hours of sleep a night, only about five people really do, Dr. Buysse says. The rest end up chronically sleep deprived, part of the one-third of U.S. adults who get less than the recommended seven hours of sleep per night, according to a report last month by the Centers for Disease Control and Prevention.

[More from WSJ.com: How Much Sleep Do You Need?]

To date, only a handful of small studies have looked at short sleepers -- in part because they're hard to find. They rarely go to sleep clinics and don't think they have a disorder.

Normal Sleeper Most adults have normal sleep needs, functioning best with 7 to 9 hours of sleep, and about two-thirds of Americans regularly get it. Children fare better with 8 to 12 hours, and elderly people may need only 6 to 7. Wannabe Short Sleeper One-third of Americans are sleep-deprived, regularly getting less than 7 hours a night, which puts them at higher risk of diabetes, obesity, high blood pressure and other health problems. Short Sleeper Short sleepers, about 1% to 3% of the population, function well on less than 6 hours of sleep without being tired during the day. They tend to be unusually energetic and outgoing. Geneticists who spotted a gene variation in short sleepers were able to replicate it in mice -- which needed less sleep than usual, too.

A few studies have suggested that some short sleepers may have hypomania, a mild form of mania with racing thoughts and few inhibitions. "These people talk fast. They never stop. They're always on the up side of life," says Dr. Buysse. He was one of the authors of a 2001 study that had 12 confirmed short sleepers and 12 control subjects keep diaries and complete numerous questionnaires about their work, sleep and living habits.One survey dubbed "Attitude for Life" that was actually a test for hypomania. The natural short sleepers scored twice as high as the controls.

There is currently no way people can teach themselves to be short sleepers. Still, scientists hope that by studying short sleepers, they can better understand how the body regulates sleep and why sleep needs vary so much in humans.

"My long-term goal is to someday learn enough so we can manipulate the sleep pathways without damaging our health," says human geneticist Ying-Hui Fu at the University of California-San Francisco. "Everybody can use more waking hours, even if you just watch movies."

Dr. Fu was part of a research team that discovered a gene variation, hDEC2, in a pair of short sleepers in 2009. They were studying extreme early birds when they noticed that two of their subjects, a mother and daughter, got up naturally about 4 a.m. but also went to bed past midnight.

Genetic analyses spotted one gene variation common to them both. The scientists were able to replicate the gene variation in a strain of mice and found that the mice needed less sleep than usual, too.

[More from WSJ.com: What's a Good Night's Sleep Worth to You?]

News of their finding spurred other people to write the team, saying they were natural short sleepers and volunteering to be studied. The researchers are recruiting more candidates and hope to find more gene variations they have in common.

That All-Nighter Feels Good -- Temporarily Sleep deprivation makes most people grumpy. It's sometimes used as a form of torture. Oddly enough, it can also bring on temporary euphoria, according to a study in the journal Neuroscience last month. Researchers had 14 healthy young adults stay up all night and all the next day and then compared their reactions with 13 subjects who had slept normally. In one test, sleepless subjects asked to rate a series of images uniformly saw them as more pleasant or positive. "We saw this strange lopsided shift," says lead author Matthew Walker, an associate professor of psychology and neuroscience at the University of California-Berkeley. Brain scans also showed that the subjects who had pulled all-nighters had heightened activity in the mesolimbic pathway, a brain circuit driven by dopamine, a neurotransmitter that typically regulates feelings of pleasure, addiction and cravings. The boost of dopamine after an all-nighter may help explain why sleep deprivation can alleviate major depression in about 60% of patients, although the effect is only temporary. "As soon as they get recovery sleep, all that mood elevation is lost," says Dr. Walker. Could the sleep-deprived brain be somehow compensating for the lack of downtime with a surge of dopamine to keep on going? Scientists don't yet know. Earlier studies have also shown that sleep deprivation amplifies activity in the amygdala, the primitive emotional center of the brain, and reduces it the prefrontal cortex, where higher, more rational thought occurs. It may be that the brain reverts to a more basic mode of operating when it is sleep deprived, Dr. Walker speculates. Alternatively, he says, "we know that different parts of the brain are more sensitive than others to sleep deprivation. It may be that the prefrontal cortex just goes down first." Although the feelings of euphoria sound great, Dr. Walker warns that operating more on emotion than reason can be very risky. "You are all gas pedal and no brake," he says. That can be dangerous, indeed, if you are in a job that requires both long hours and difficult decision making.

Potential candidates for the gene study are sent multiple questionnaires and undergo a long structured phone interview. Those who make the initial screening wear monitors to track their sleep patterns at home. Christopher Jones, a University of Utah neurologist and sleep scientist who oversees the recruiting, says there is one question that is more revealing than anything else: When people do have a chance to sleep longer, on weekends or vacation, do they still sleep only five or six hours a night? People who sleep more when they can are not true short sleepers, he says.

To date, Dr. Jones says he has identified only about 20 true short sleepers, and he says they share some fascinating characteristics. Not only are their circadian rhythms different from most people, so are their moods (very upbeat) and their metabolism (they're thinner than average, even though sleep deprivation usually raises the risk of obesity). They also seem to have a high tolerance for physical pain and psychological setbacks.

"They encounter obstacles, they just pick themselves up and try again," Dr. Jones says.

Some short sleepers say their sleep patterns go back to childhood and some see the same patterns starting in their own kids, such as giving up naps by age 2. As adults, they gravitate to different fields, but whatever they do, they do full bore, Dr. Jones says.

[More from WSJ.com: Using a Sleep Monitor to Track Healthy Sleep]

"Typically, at the end of a long, structured phone interview, they will admit that they've been texting and surfing the Internet and doing the crossword puzzle at the same time, all on less than six hours of sleep," says Dr. Jones. "There is some sort of psychological and physiological energy to them that we don't understand."

Drs. Jones and Fu stress that there is no genetic test for short sleeping. Ultimately, they expect to find that many different genes play a role, which may in turn reveal more about the complex systems that regulate sleep in humans.

Benjamin Franklin, Thomas Jefferson and Leonardo da Vinci were too busy to sleep much, according to historical accounts. Winston Churchill and Thomas Edison came close but they were also fond of taking naps, which may disqualify them as true short sleepers.

Nowadays, some short sleepers gravitate to fields like blogging, videogame design and social media, where their sleep habits come in handy. "If I could find a way to do it, I'd never sleep," says Dave Hatter, a software developer in Fort Wright, Ky. He typically sleeps just four to five hours a night, up from two to three hours a few years ago.

"It's crazy, but it works for me," says Eleanor Hoffman, an overnight administrator at Bellevue Hospital Center in New York who would rather spend afternoons playing mahjong with friends than sleep anymore than four hours. Sometimes she calls her cousin, Linda Cohen, in Pittsburgh about 4 a.m., since she knows she'll be wide awake as well -- just like they were as kids.

"I come to life about 11 at night," says Mrs. Cohen, who owns a chain of toy stores with her husband and gets up early in the morning with ease. "If I went to bed earlier, I'd feel like half my life was missing."

Are you a short sleeper? For more information on the genetic study, contact Dr. Jones at chris.jones@hsc.utah.edu

Managing your wealth in uncertain times

Managing personal savings and investments is a quandary for many people. Finding your way through the hurly-burley of financial markets can be unnerving. But letting your money just sit there isn’t an option either. Low savings rates increase pressure for higher returns elsewhere.

But will interest rates remain low for much longer? Is the dizzying high of the stock market for real? Is it foolhardy to invest bank savings in the market? As people get richer the task of managing and retaining wealth becomes more complex. So how do you approach this?

Investors should take a long term perspective. Over time, various types of investments of asset classes will earn different rates of returns and risk, or losses. A well-diversified portfolio of investments matched to a person’s requirements and risk tolerance can lay the foundation for long term financial security.

This is wealth management. Stock picking and market timing are not consistent sources of returns. Avoid the temptation to chase markets and seek professional investment advice if you want to build wealth.

With recent changes announced in the Budget proposals, it is likely that Sri Lankans will be able to gain global investment exposure from early 2011. This will pave the way for truly diversified portfolios. This is an exciting period for Sri Lankan investors. However, investing globally also takes expertise, to understand the risks and rewards of various asset classes. Seek professional advice to make sure you and your investments match.

Prudent wealth management

Wealth management is about matching an investor to a portfolio. It is not stock picking or investing wisely in real estate. A concentrated portfolio faces greater risk of loss than a well-diversified one.

Wealth management begins by understanding yourself, understanding markets and finding a balance between capital preservation and future growth in your investment portfolio. It is important to do this in the context of your ability to tolerate losses and other constraints. The most important aspect of investing is to match the investor with a portfolio that is well diversified through asset allocation and suits individual needs and wants.

Know your weaknesses

Humans are emotional and operate on rules of thumb. When it comes to investing, this can be a risk. There is a large body of literature called behavioural finance which focuses on exactly this. Some of the key findings are that our behavioural biases figure prominently in our investment decisions and can lead to poorly diversified portfolios, because we are over-confident of our ability to pick winning stocks, or we don’t sell falling stocks, because we don’t want to realise the loss. There are many other examples. The message is to be precise and rational when making investment decisions.

Investors are often motivated by fear or hope. Fearful investors desire capital preservation. Hopeful investors aim for high returns even if it means more risk. In reality, there needs to be an optimal balance between the two.

Investors will often hold very concentrated holdings in one ‘winning’ stock. While this may be a great way to riches, there is also a risk the company may fail. One off events can have serious impacts on a company. For example, the global financial crisis has eroded returns on many financial service companies, which seemed bullet-proof only a few years earlier.

Wealth management means managing risks to your wealth and maximising returns.

Know who you are first

Know your goals and constraints before you start investing. In professional wealth management, the starting point is an Investment Policy Statement (IPS). The IPS is a detailed document that lays out an investor’s financial goals, appetite for risk, ability to take risk and constraints.

Financial goals can be short or long term and are sometimes conflicting. They can range from retirement, sending children to a university abroad or an Alaska cruise. It is important to prioritise your goals and ensure that the investments match them. For example, make less risky investments for goals you cannot do without, but take more risk with the Alaska cruise.

Risk is often difficult to identify and is prone to misunderstanding. Risk is the probability of loss. With fixed deposits, the risk of losing your capital is low, but erosion of your purchasing power is high due to inflation as the upside is also limited. With equities, there is a risk that you could lose money, but there is also a good chance of higher returns than fixed deposits. Different assets and investments exhibit varying degrees of risk. Cash and bonds are typically low risk, while equities and private equity are higher risk.

The ability to take risk and appetite for risk can be different for different investors. An investor close to retirement may have a large enough nest-egg that he or she may wish to take more risk. However, there is little time before retirement to recover from a market fall, so their ability to take risk is low. Conversely, a young person should invest in higher risk assets, because they can easily recover from market falls. However, some young people may not want to take too much risk, because they are saving for a first home or a car.

It is important to also know your other constraints. For example, some may wish to bequeath to their children or donate to charities. This may mean a larger than otherwise retirement fund.

Match yourself to a portfolio

After a thorough self-examination in an IPS, the next step is to make investments. The investments should be such that they meet your return requirements and also your risk profile. The key driver for sustainable returns over the long term is asset allocation and diversification.

There is a large body of literature that shows the benefits of diversification and asset allocation. In fact asset allocation is the most important driver of long term returns. Fund manager selection or stock picking are much smaller contributors. There is some scope for tactical changes in the portfolio to match market conditions. For example, a professional wealth manager will reduce exposure to equities when markets are hot and increase exposure after markets have fallen sharply.

In constructing a portfolio, particularly for high net worth individuals, it is important to have a well-diversified portfolio. There is a dizzying array of investment products out there. The typical breakdown is between traditional and alternative assets. Traditional assets include equities and bonds, both local and global. But there is also a large range of investment options, including commodity Exchange traded Funds (ETFs) such as oil and gold, real estate investment trusts (REITs), currency ETFs and private equity.

Many assets move in opposite directions. Building a portfolio with a number of assets that respond to different economic and policy signals can reduce risk and smooth returns. This is why literature focuses so profoundly on diversification and asset allocation. A professional wealth manager will find a selection of assets that together maximise long term expected returns depending on the investor’s risk tolerance level.

Understand your portfolio

Once your portfolio is all set up, it is important to review it regularly. Make sure you understand your portfolio, whether it is aggressive or conservative and whether the asset allocation is really providing the diversification you need. Compare your returns against benchmarks, like bank deposit rates but not returns on a single stock. Once a year, reassess yourself and your portfolio – make sure you still belong together. If not, reflect the changes in your personal circumstances in your portfolio.

Managing wealth

Managing wealth is about making an informed and long term investment decision that matches your needs and risk profile with an investment portfolio. The key to long term returns is diversification through appropriate asset allocation.

The universe of investments is large and risks vary. Investors have conflicting goals and risk profiles. Aligning everything can be a complex task. Seek advice from a qualified investment professional if you can’t do it yourself.

Managing wealth is not about getting rich quick, or speculating on the stock market. Wealth management is a well considered journey to prosperity.

Ravi Abeysuriya is Chief Executive Officer at Heraymila Securities Ltd., a subsidiary of Heraymila Investments Ltd. (HIL) UAE. HIL directly manages over 260 million dollars of private and public investments on behalf of Abdulaziz Al Mashal’s family office.

SEC weighs new rules for private companies' stock

Market regulators consider easing rules for private companies that issue stock

DALLAS (AP) -- The Securities and Exchange Commission is considering whether to ease rules on private companies that issue shares.

Chairman Mary Schapiro said in a speech Friday that she has asked the SEC staff to review the rules. The changes might make it easier for companies such as Facebook and Twitter to raise money by issuing stock, without facing costly reporting requirements imposed on public companies.

Private companies can keep their finances secret if they have fewer than 500 shareholders. If they have more, they must provide details on their companies and finances.

The new rules might replace the process by which technology companies and other startups offer shares publicly through initial public offerings. Companies that have IPOs must disclose financial details about themselves.

Earlier this week, Schapiro sent a letter to Rep. Darrell Issa, R-Calif., notifying him of the review. Issa, who is chairman of the House Oversight and Government Reform Committee, had previously raised concerns with Schapiro that the current rules discourage investment and limit economic growth

The current rules are designed to stop insiders from trading shares using information that is not available publicly. In her letter to Issa, Schapiro said the agency must walk a fine line, protecting investors from insider trading while making it easier for private companies to raise money.

Companies "should not be overburdened by unnecessary or superfluous regulations," Schapiro said in the letter. "At the same time, all offerings must, of course, provide the necessary information and protections to give investors the confidence they need to invest in our markets," she said.

The staff review aims to develop ideas to reduce companies' cost of compliance without sacrificing investor protection, she said.

In addition to Facebook and Twitter, the rules would affect the daily discount site Groupon and Zynga, the maker the online game "FarmVille."

Many of these companies are startups in name only. They have thousands of employees and estimated billions of dollars in yearly revenue. But they have put off going public. That's partly because they already have access to capital from deep-pocketed investors and venture capitalists.

Going public also requires a time commitment from top executives. Facebook's 26-year-old CEO, Mark Zuckerberg, seems to prefer keeping his focus on the company's product development, rather than cashing out through an IPO or answering analysts' questions about earnings and revenue in quarterly conference calls.

Facebook has been trying to put off reaching the 500-shareholder threshold. For example, it has barred current employees from selling their shares. Nonetheless, it has indicated that it is likely to file its IPO plans by the end of April 2012.

Before the companies' IPOs, shares of privately held companies can be traded on private stock exchanges, such as SecondMarket, based in New York, and SharesPost, based in San Bruno, Calif. The shares are generally sold by former employees or early investors in these companies, and often there are more buyers than sellers. Only institutional investors or high net-worth individuals -- those worth more than $1 million -- can buy the shares.

Wagner reported from Washington. AP Technology Writer Barbara Ortutay in New York contributed to this report.

Stocks waver as government shutdown looms

Stocks waver as oil jumps above $112; government shutdown hangs over the market

NEW YORK (AP) -- A surge in oil and the threat of a government shutdown weighed on stocks Friday.

Investors kept one eye on Washington, where Republicans and Democrats were in the final day of talks to reach a budget agreement. Without a deal, the federal government is expected to stop all services that aren't considered essential. That means most economic reports would be suspended. Sales of debt would continue.

Benchmark crude oil jumped $2.49 to settle at $112.79 per barrel on the New York Mercantile Exchange. That's the highest price since Sept. 22, 2008.

Over the past two months, most stocks have fallen following large jumps in oil prices as investors worried that higher transportation costs would cut into company margins and consumer spending.

The Dow Jones industrial average lost 29.44 points, or 0.2 percent, to close at 12,380.05. The Standard & Poor's 500 index slipped 5.34, or 0.4 percent, to 1,328.17. The Nasdaq composite lost 15.72, or 0.6 percent, to 2,780.42.

The Dow ended the week flat, while the S&P and Nasdaq lost 0.3 percent. All three indexes made gains in the previous two weeks.

Transportation companies fell. Delta Air Lines Inc. dropped 3.9 percent, and United Parcel Service Inc. lost 1 percent. Energy companies rose, leading the 10 industry groups within the S&P 500. Occidental Petroleum Corp. rose 2.6 percent, and Anadarko Petroleum Corp. rose 1.6 percent.

Todd Salamone, director of research at Schaeffer's Investment Research, said most stocks tend to rise along with oil prices over the long term. "The recent breakdown in the pattern has largely been due to fears of supply shocks," he said. "But the oil rally could also be attributed to a stronger world economy."

World markets rose broadly. The Euro Stoxx 50, an index of European blue chips, gained 0.7 percent. Japan's benchmark Nikkei index rose 1.9 percent.

Expedia Inc. rose 13 percent, the most in the S&P 500 index, after it said it would split off its TripAdvisor.com division.

More than two stocks fell for every one that rose on the New York Stock Exchange. Trading volume was 3.7 billion shares.

Government lets Google buy travel software company

Approval of travel software deal underscores broader antitrust concerns about Google

WASHINGTON (AP) -- Google Inc. won government clearance with restrictions Friday for its $700 million purchase of airline fare tracker ITA Software in a deal that will give the Internet search giant a key role in online travel.

Google promises to give consumers more choices and better ways to search for plane tickets as it incorporates ITA technology, which powers the reservation systems of most major U.S. airlines and many popular online fare-comparison services, including Kayak, TripAdvisor and Hotwire.

The company had to accept significant conditions, though, in a sign that federal antitrust officials are becoming more concerned about whether Google's enormous clout as a major gateway to the Internet has the potential to stifle competition broadly online.

As Google expands far beyond its core search business into specialized markets such as travel, companies operating in all corners of the Web -- and government regulators as far away as Europe -- are taking notice.

Rivals and regulators alike are worried that Google could use its control over the Internet's dominant search engine to extend its monopoly into travel and other markets by steering users to its own sites and services and burying links to rivals far down in its search results. Indeed, Google's search results already highlight some of its own specialized services, including mapping, video and finance.

Although Justice Department officials did not tackle that danger outright Friday, they laid the groundwork for a potential government investigation into manipulation of Internet search results. Google agreed to ongoing federal monitoring of its behavior to win government approval.

"They clearly decided that they want to keep an eye on Google," said Thomas Barnett, an attorney who represents Expedia Inc., which opposed the ITA deal in a coalition with other online travel services including Microsoft Corp.'s Bing, Travelocity, Kayak Software Corp. and Farelogix Inc. Expedia owns TripAdvisor and Hotwire services.

"The ability to use search dominance to exclude competitors is not unique to travel," added Barnett, who was head of the Justice Department's antitrust division when it threatened a lawsuit to block Google from entering into a search partnership with Yahoo Inc. in 2008.

The agreement with the Justice Department comes at a time of mounting government scrutiny of Google's behavior in Washington and beyond.

The European Commission and the Texas attorney general are looking into whether Google manipulates search results to extend its monopoly into other online businesses. The European investigation started after competitors -- U.K.-based price comparison site Foundem, French legal search engine ejustice.fr and Microsoft-owned shopping site Ciao -- complained that their services were being buried in Google searches. The Senate Judiciary Committee's antitrust subcommittee also is investigating whether Google gives its services favorable treatment in search results.

In addition, a federal judge last month rejected a proposed legal settlement that would have given Google the digital rights to millions of out-of-print books after determining that the agreement would have violated U.S. copyright laws and given Google's already-dominant search engine an unfair advantage over its rivals.

And just last week, the Federal Trade Commission announced a landmark agreement with Google to settle charges that it deceived users and violated its own privacy policy when it launched a social networking service called Buzz last year. The settlement requires Google to adopt a comprehensive privacy program and submit to independent audits of that program every other year for the next 20 years.

Eric Goldman, academic director of the High Tech Law Institute at the Santa Clara University School of Law in Silicon Valley, said the agreements with Justice and the FTC "collectively indicate that the U.S. government has more and more hooks into Google and is subjecting Google to greater oversight and reduced operational freedom."

Nonetheless, Friday's approval by the Justice Department makes ITA the latest major deal that Google has managed to clear with Washington. Other big purchases include the 2007 acquisition of Internet advertising network DoubleClick and last year's purchase of mobile ad service AdMob, both of which were approved by the FTC without any conditions.

Google has said it wants to use ITA to improve its search results for travel and doesn't plan to sell airline tickets or book other travel arrangements on its own site. Rather, ITA would enable the company to command higher ad rates from airlines, hotels, rental car agencies and other leisure services trying to reach travelers.

Google offered a hint about what could be coming in a blog post Friday. It suggested that by simply typing in "flights to somewhere sunny for under $500 in May" into Google, a user would get not just a set of links but also flight times, fares and a link to sites for buying the trip.

To win Justice Department clearance, Google agreed to license ITA's software to other companies on fair terms through 2016. And it would continue to invest in research and development of new products, which it would also have to license. Google had previously promised only to honor all of ITA's current contracts, which expire over the next few years, leaving ITA customers to worry that Google would keep its innovations for itself. Under the terms of the approval, any disputes would be subject to binding arbitration.

Google also agreed to establish a separation between ITA and other Google operations to ensure that it cannot misuse proprietary customer data or technology that resides on or runs through ITA servers.

But most significant, the government will monitor Google to ensure it does not engage in anticompetitive behavior, which could include manipulation of search results. The company will be subject to broad requirements to report to government officials on its online travel operations, including travel search and advertising. In addition, the government will establish a forum for complaints about Google's behavior. This could eventually pave the way for a broader investigation of Google by either Justice or the FTC.

The coalition of online travel services that had expressed concerns about the ITA acquisition praised the government conditions, calling them a "significant step in the right direction." Still, the group added in a statement that although "consumers won this round, but we must remain vigilant" to ensure that Google does not abuse its search monopoly.

Google says it understands that it will face more government scrutiny as it grows bigger. But the company argues that most of the accusations of anticompetitive behavior come not from users, who like its services, but from competitors that are not pleased with their search rankings. And that, the company, is not necessarily an antitrust problem.

"We built Google for users, not websites," the company said in a statement.

AP Airlines Writer Samantha Bomkamp in New York and Technology Writer Jordan Robertson in San Francisco contributed to this story.

NYSE gets a facelift, its future unknown

Landmark stock exchange building undergoing major renovation as bidding war escalates

NEW YORK (AP) -- What do you do when a cathedral of capitalism becomes antiquated? You turn it into New York's best party space.

The New York Stock Exchange has lost most of its famous shoulder-to-shoulder bustle in the age of computerized trading. So it's hoping its status as an icon of American finance will be a popular draw for cocktail receptions, analyst presentations and other festivities.

The exchange, where traders have nervously watched tickers and shouted orders for more than 100 years, is already available for some events. It wants to expand to 1,000 a year, double the number from three years ago.

Think black tie, not Black Monday.

"Planners are always looking for something that's different and unique, and there's only one stock exchange," said Ken Edwards, an executive at SmartSource Rentals who serves as the president of the New York chapter of a national meeting planners organization. "From an experience standpoint, that it's getting a facelift now is an absolute sign that they think that there's a recovery going on."

In addition to the trading floor, the exchange rents out updated meeting spaces to companies and charities. They include vaulted-ceiling dining rooms and a lounge with gilt-edged walls that used to be a club for stock traders. Company officials wouldn't say what they were spending on the renovations, which are expected to be finished by the end of next year.

It's a renovation borne out of necessity. Hosting meetings is a small part of the company's overall profits, but shows how far the building has come from its days as the center of the daily churn global capitalism. Since the last renovation of the building in 1995, the business model of the stock exchange has changed drastically.

Fewer traders than ever actually work on the floor. Steven Grasso, the director of institutional sales at Stuart Frankel & Co., compared stepping onto the floor of the New York Stock Exchange for the first time in 1994 to walking out of the dugout at Yankees Stadium. Traders stood shoulder to shoulder on the trading floor, screaming at each other and into telephones, their feet littered with discarded orders.

"Now, I can do more with my hand-held device than I ever could back then," he says, swinging his arms wide on the trading floor.

No other trader was within 10 feet of him.

There are a couple of strategic reasons for the renovation, which comes while the company's future is uncertain. NYSE Euronext Inc. agreed in February to be acquired by a German exchange operator. Last week, however, its longtime domestic rival Nasdaq OMX Group Inc. announced that it had teamed up with derivatives operator IntercontinentalExchange Inc. to offer a 19 percent higher bid. Both proposals are still pending.

NYSE Euronext gets more and more of its profits from companies that list their shares on the exchange or rent out its rooms. The company brought in $3.1 billion in revenue from trading last year, down from $3.5 billion two years ago and the second year of decline. That figure includes both the conventional trading of stocks but also the far more lucrative business of trading more exotic financial instruments like options and futures contracts. At the same time its stock listings business has grown from $395 million to $422 million.

The company now brings in nearly 25 percent less money for each 100 shares handled compared with two years ago. At the same time, the number of shares it handles are dwindling. A decade ago, the trading floor of the New York Stock Exchange accounted for roughly 80 percent of the volume of the blue chip stocks listed on it like General Electric Co. and Procter & Gamble Co. Now, thanks to regulatory changes and the rise of electronic exchanges such as the Kansas City-based BATS, the figure is closer to 25 percent.

The exchange building is seen as an asset that gives the company a premium brand. The prestige and media attention devoted to its trading floor have long allowed NYSE Euronext to charge companies more for listing their shares than its competitors. "The building itself is a part of our legacy and a big part of our (value)," said Joseph Mecane, an executive vice president at NYSE Euronext Inc. who oversees the listings of U.S. companies.

The building and trading floor are attractive for suitors like electronic-only exchange Nasdaq. "The trading floor is fantastic for marketing," said Michael Wong, an analyst at Morningstar. "Every company would like to ring the opening bell at the New York Stock Exchange, and that's an intangible that BATS or another competitor can't duplicate."

The last physical upgrades to the exchange building were completed in 1995. Since then, NYSE Euronext has devoted more of its resources to upgrading its technology. The company opened a 400,000 square feet data center 30 miles outside of Manhattan in suburban Mahwah, New Jersey last year. Its servers are now at the heart of the exchange, routing trade orders coming from humans and computer programs.

Lou Pastina, the executive vice president of operations, said that the renovations to the building are the next logical upgrade. Each of the 11 brown trading posts in the center of the trading floor will be replaced. New, wider versions will have blue countertops, additional screens, and brighter lighting. The wall of dark glass at the front of the building will be replaced with windows that bring natural light onto the trading floor. And in the middle of it all, a small television set will allow CNBC anchors to conduct interviews from the floor itself.

Traders say the upgrades are part of the evolution of the stock market. Better data screens will make day-to-day orders run more smoothly, while the wider trading booths will make it easier to communicate with other human traders during large market swings, said Richard Rosenblatt, the head of Rosenblatt Securities who has worked in the building for decades.

"When I started here, the telephone was considered technology," he said. "The market is always moving forward."

Kremlin rejects FSB proposal to ban Skype, Gmail

Kremlin rejects Russian security service proposal to ban Skype, Gmail, Hotmail

MOSCOW (AP) -- The Kremlin has rejected a proposal by a senior official of Russia's main domestic security agency who said authorities should ban Skype, Gmail and Hotmail because they are a major threat to national security.

The proposal made Friday by a senior official of the Federal Security Service, or FSB, followed cyber attacks on Russia's most popular blogging site and the website of a popular independent newspaper this week.

Commentators saw them as an attempt by authorities to tighten controls on communications before parliamentary elections in December and a presidential vote in March. The Internet has become the main source of independent news and commentary in Russia, where all nationwide television stations and most print media are under state control.

Alexander Andreyechkin, chief of the FSB's information security and special communications department, told a government meeting that encrypted communications providers such as Gmail, Hotmail and Skype "pose a large-scale threat to Russia's security" and proposed to ban them, Russian news agencies reported.

The Kremlin quickly responded that Andreyechkin had expressed his personal opinion and abused his authority by making the statement.

The FSB backtracked Saturday, saying it was not planning any measures to limit Skype and Gmail in Russia.

Communications Minister Igor Shchegolev also said in a statement Friday that his ministry has no plans to ban any Internet services.

But shortly after that, Dmitry Peskov, a spokesman for Prime Minister Vladimir Putin, came to Andreyechkin's defense, saying that what he said wasn't a private viewpoint, but a "well-reasoned position of his agency," according to Russian news agencies.

Putin, who has been accused by critics of rolling back Russia's democratic freedoms during two terms as president in 2000-08, has remained Russia's most powerful politician even after shifting into the premier's job.

Putin and President Dmitry Medvedev have said they would decide later which of them should run for president in the March 2012 election and wouldn't compete against each other, but Putin is widely expected to reclaim the presidency.

Putin, a former KGB lieutenant colonel and an one-time FSB chief, has surrounded himself with veterans of Soviet and Russian security structures. While FSB and other security agencies formally answer to the president, most commentators agree that Medvedev has little control over their activities.

Putin and Medvedev have recently disagreed over a number of domestic and foreign policy issues, but many observers see the differences as a stage-managed attempt to reach different constituencies. Putin's tough posture appeals to average Russians, while Medvedev's statements are intended to please the West and Russia's liberal circles.