Greg's Stack-of-Stuff

[Greg]

imported post

Delphi pensions underfunded: fed agency

Tuesday October 11, 5:36 PM EDT

WASHINGTON (Reuters) - Pensions at bankrupt auto parts supplier Delphi Corp. (DPHIQ) are under funded by an estimated $10.8 billion, the federal agency that insures corporate retirement accounts said on Tuesday.

Should Delphi decide to terminate its pension obligations during Chapter 11, the Pension Benefit Guaranty Corp. said it would cover less than half of the shortfall, $4.1 billion.

Underfunding is the difference between plan assets and what a company has promised in benefits. Delphi pension assets are roughly $9 billion, the agency said.

The deficit cited by the PBGC is sharply higher than the Delphi's latest figure of $4.3 billion at the end of 2004 because the government calculates what it would cost the company to cover the difference with private insurance.

The pension agency insures defined benefit plans, a dying feature of old-economy companies that usually promises a generous, fixed monthly payment. More than 40 million people participate in these plans.

Delphi, the largest domestic parts supplier, filed the biggest bankruptcy petition in U.S. automotive history on Saturday in New York. The company has been hurt by high wage and benefit costs and market share losses at GM that lowered demand for its parts.

It was the latest blockbuster insolvency in the transportation sector this fall, following bankruptcy filings by Delta Air Lines Inc. (DAL) and Northwest Airlines Corp. (NWACQ) in September. Both of those companies have multibillion-dollar pension shortfalls as well.

Analysts believe that Delphi, based in Troy, Michigan, will push its pension deficit on to the deficit-ridden federal insurance programs like big steel companies and major airlines -- including bankrupt United Airlines, a unit of UAL Corp. (UALAQ) -- have done in recent years.

Delphi's pension picture is complicated by its close relationship with its biggest customer, General Motors Corp. (GM). GM spun off Delphi in 1999 and may be called to back some benefits. GM says its range of exposure under guarantees it made to Delphi extends from "no material impact" to $11 billion.

A spokeswoman for Delphi, Claudia Baucus, said the future of its pensions is unresolved. The company considers the matter on the table in bankruptcy and could negotiate an agreement with labor. Delphi could also choose to default to the PBGC.

"It still needs to be addressed with unions and GM," Baucus said. "We're going to be discussing this issue in the coming months."

Baucus said Delphi is current on its contribution schedule, having invested $625 million in its pensions last June. The payment deadline for 2006 is next June. While many companies with pension plan troubles continue to make contributions, retirement accounts lost billions of dollars when stocks and other market-based returns weakened earlier this decade.

What remains unclear is whether legislation working its way through both houses of Congress to overhaul pension funding rules and hold companies more accountable for keeping their promises would impact Delphi.

One proposal would help Delta and Northwest put off contributions but so far there is nothing in either House or Senate bills to help any other industry.

©2005 Reuters Limited.

 

[Greg]

imported post

Nasdaq slips, Dow gains limited

Tuesday October 11, 7:46 PM EDT

NEW YORK (Reuters) - The tech-laden Nasdaq fell on Tuesday to a 3-month low on weakness in semiconductor stocks, while the Dow's gains were limited by concerns about corporate profits and rising crude prices.

The Dow's biggest boost came from International Business Machines Corp., which rose 2.4 percent, or $1.94, to $83.19 on the New York Stock Exchange. Credit Suisse First Boston raised its investment rating on IBM. Citigroup upgraded IBM on Monday.

After the closing bell, shares of Apple Computer Inc. slid more than 10 percent to $46.20 in after-hours trading on the Inet electronic brokerage system after the computer maker reported quarterly revenue that fell short of Wall Street expectations. It closed on Nasdaq at $51.59, up 2.4 percent.

"Expectations for Apple's results were pretty high, and they needed to beat estimates for us to see a boost in the stock this afternoon. Revenue came a bit lower than expected and that's why we are seeing Apple dip a bit," Jim Fisher, a fund manager at Univest Wealth Management who owns Apple shares, said.

During the regular session, a drop in Xilinx Inc., a maker of programmable microchips, and other semiconductor stocks cast a shadow over the Nasdaq for the second straight day. Xilinx, down 3.1 percent at $22.07, extended Monday's slide after it cut its sales estimate for the September quarter.

The Dow Jones industrial average was up 14.41 points, or 0.14 percent, to end at 10,253.17. The Standard & Poor's 500 Index was down 2.46 points, or 0.21 percent, at 1,184.87. The technology-laced Nasdaq Composite Index was down 17.83 points, or 0.86 percent, at 2,061.09.

"We need to see a decent number of earnings coming through with good numbers before we see the market able to hold a rally," said Larry Peruzzi, senior equity trader at The Boston Co. Asset Management, a Mellon subsidiary.

The Dow climbed as high as 10,312.88 earlier in the day.

SigmaTel Inc., which supplies memory chips for Apple iPod Shuffles, sank 20.5 percent, or $3.52, to $13.69 on Nasdaq after a profit warning on Monday.

Shares of General Motors Corp. gained after U.S. antitrust authorities said they would not oppose a plan by billionaire investor Kirk Kerkorian to increase his stake in GM. Shares of GM rose 3.7 percent, or 94 cents, to $26.42 on the NYSE and helped the Dow finish higher.

Alcoa launched the quarterly earnings reporting period on Monday, with the aluminum maker posting better-than-expected results. Its shares rose less than 1 percent, or 19 cents, to $22.85 on the NYSE.

Rising oil prices also may have discouraged some investors from loading up on stocks. U.S. crude oil for November delivery surged $1.73 to settle at $63.53 a barrel.

But the jump in oil prices buoyed the shares of oil company Exxon Mobil Corp., which gained 1.5 percent, or 90 cents, to $59.40 on the NYSE. Exxon was the Dow's third-biggest positive influence.

The Nasdaq's biggest percentage gainer was RealNetworks Inc., up 34.2 percent, or $1.96, at $7.70 after Microsoft Corp. said it would pay $761 million to settle an antitrust dispute with the Internet media software company. Microsoft shares dipped 0.2 percent, or 5 cents, to $24.41.

Minutes from the last Federal Reserve meeting, released Tuesday afternoon, eased some investor concerns about more aggressive interest-rate hikes. Investors were relieved that the Fed will keep to its pledge of raising interest rates at a "measured pace."

The policy-setting Federal Open Market Committee raised the fed funds rate by a quarter-percentage point on September 20.

"I think people are perceiving that the worst is baked in. But it's inevitable that we're going to have more rate hikes," said Mike O'Hare, head of listed trading at Lehman Brothers.

Trading was heavy on the New York Stock Exchange where decliners beat gainers by a little less than 2 to 1. About 1.73 billion shares were traded, above the 1.46 billion daily average for last year.

On Nasdaq, decliners outnumbered gainers by a ratio of 2.5 to 1, with about 1.88 billion shares changing hands, almost matching the 1.81 billion daily average last year.

©2005 Reuters Limited.

 

[Greg]

imported post

Northwest seeks to void labor contracts

Wednesday October 12, 3:00 PM EDT

CHICAGO (Reuters) - Northwest Airlines Corp. (NWACQ) on Wednesday said it has asked a bankruptcy judge for permission to void its labor contracts if its employee unions do not agree to concessions worth $1.4 billion a year.

The annual labor reductions would be part of $2.5 billion in overall savings the No. 4 U.S. airline would seek through steps including the return of passenger jets with leases that are too expensive, Northwest said in a statement.

"We must quickly reduce our labor costs by $1.4 billion annually," Northwest's Chief Executive Doug Steenland said in a statement. "Our court motion gives union leaders and Northwest management time to reach the necessary agreements, before the court would be compelled to intervene and impose new contracts."

Most of the U.S airline industry has been battered by weak revenue and soaring fuel costs. Northwest and No. 3 U.S. carrier Delta Air Lines Inc. (DAL) filed for bankruptcy protection in September.

"Northwest has been losing a fair amount of money for a while now," said Standard & Poor's analyst Philip Baggaley. "I expect they feel they need to move forward quickly on these cost savings given where fuel prices are and going into the weak winter season."

Companies in bankruptcy can use court protection as leverage to extract savings from their labor forces that otherwise might be unattainable. Unions at UAL Corp's (UALAQ) bankrupt United Airlines, for example, agreed to wage and benefit concessions this year after the carrier asked for court permission to void its labor contracts.

Northwest also said it plans to freeze its defined benefit plan and implement a cheaper defined contribution plan that would take effect when the airline exits bankruptcy. Northwest now faces unfunded pension liabilities of about $3.8 billion, of which almost $3 billion is due between 2005 and 2007.

Will Holman, spokesman for the Air Line Pilots Association, said Northwest's action was expected and the union is hopeful of reaching a consensual deal with Northwest.

"We viewed it as a matter of when, not if," Holman said. Northwest has asked the pilots for $358 million in savings in addition to earlier concessions.

In a court filing, Northwest complained that its labor costs are the highest in the industry, putting the carrier at a distinct competitive disadvantage.

The company said such expenses have contributed to losses that will exceed $1 billion for the first nine months of 2005.

"Time has run out. Northwest must achieve competitive labor costs quickly or it too faces the prospect of failure," the carrier said in the filing.

Northwest has already managed to achieve some of its labor cost savings by replacing its 4,400 striking mechanics and related staff with cheaper workers and outside vendors.

The mechanics represented by the Aircraft Mechanics Fraternal Association have been on strike since August after failing to agree on a contract with Northwest. AMFA said its negotiating committee would meet with Northwest's management on Thursday to discuss the status of their dispute and to see if open issues could be resolved.

The carrier said its salaried and management employees also would take a second round of pay and benefits reductions in the near future.

Another cost-savings measure would be cutting the late fall schedule. Along with previously announced reductions, Northwest anticipates that its fourth-quarter system mainline capacity would be down 7 percent to 8 percent from a year earlier.

Northwest said it would cut domestic mainline capacity by 9 percent to 10 percent and international mainline capacity by 4 percent to 5 percent.

The company is planning additional schedule reductions beginning in January. The airline said it expects its first-quarter 2006 system mainline capacity to be down 11 percent to 13 percent. Eventually, the Northwest mainline flight schedule could be reduced by as much as 15 percent or more, the carrier said.

©2005 Reuters Limited.

 

[Greg]

imported post

Harriet Miers's nomination resulted from a failed vetting process.

Thursday, October 13, 2005 12:01 a.m.

"There's a standard vetting process that we go through with all nominees."--White House spokesman Scott McClellan

"The president is very, very confident in his judgments about people, and he likes to reward loyalty."--Brad Berenson, an associate White House counsel in the first Bush term

President Bush has told friends that he learned how to manage from three places: Harvard Business School, his experiences working in the Texas oilfields and with baseball teams, and from watching his father. In all three places he learned valuable skills: flexibility, the importance of team effort, discretion, how to delegate. The one thing he apparently didn't learn was that you never short-circuit the standard vetting process when filling an important job, even when doing so has worked out in the past.

The vetting of Harriet Miers leaves questions that demand answers, not more spin or allegations that critics are "sexist" or "elitist." It was so botched and riddled with conflicts of interest that it demands at a minimum an internal White House investigation to ensure it won't happen again.

Not only did the vetting fail to anticipate skepticism about her lack of experience in constitutional law or the firestorm of criticism from conservatives, but it left the White House scrambling to provide reporters with even the most basic information about the closed-mouthed nominee. Almost every news story seemed to catch the White House off guard and unprepared.

The skepticism is not abating. Back home, the Liberty Legal Institute, the only conservative legal foundation in Texas, has declined to endorse her. Several large GOP donors in Texas have met to discuss spending large sums to run ads calling on Ms. Miers to withdraw. "They include both male and female friends of hers who don't think the confirmation process will be good for her or the country," one told me. "They're not sexists, they're realists." This even though the White House has ominously put out the word in Texas: "If you oppose this nomination, you oppose the president." Everyone knows what the political ramifications of that can mean in the world of George W. Bush and Karl Rove.

How could this have happened? In his Harvard Business School courses, Mr. Bush was taught the importance of fully vetting job candidates. In 2000, when he was preparing to name his running mate, he conducted a months-long vetting process that had a couple of dozen top political players copying tax records, speeches and medical files and filling out an exhaustive questionnaire. In the end, Dick Cheney, the man in charge of the vetting, got the job. To preserve the secrecy Mr. Bush loves, he wasn't replaced when he was asked to consider joining the ticket. So Mr. Bush relied upon his friend to evaluate his own shortcomings.

A real vetting process involves sitting down with potential nominees and grilling them with hard-charging and probing questions that go beyond the existing paper trail--or, in the case of Harriet Miers, the lack of a paper trail. In picking his No. 2, Mr. Bush personally handled the questioning of Mr. Cheney. But the strong "comfort level" he had with him would have predisposed him to avoid no-holds-barred questions. "I expect Cheney tried to be candid, but no one can truly scrutinize their own past--there is too much room for judgment, interpretation, wishful thinking, self-deception," says Steven Lubet, a professor of legal ethics at Northwestern University.

In Mr. Cheney's case, Mr. Bush was lucky. He picked someone who had previously been vetted for secretary of defense, someone who had a 30-year public record and a nationwide reservoir of respect. But mistakes were made. No one anticipated all the questions about Halliburton, the construction company he led as CEO. Columnist Robert Novak reported that no one had even checked Mr. Cheney's House voting record, which included votes against South African sanctions and funding for Head Start. "But in the end, Bush thought the Cheney pick worked out so well the seeds for the Miers decision were sown in that impulsive process," Mr. Novak told me.

The Miers pick had its origin in the selection of John Roberts last July. Ms. Miers was praised for her role in selecting him and the wildly positive reaction. At that point, a senior White House official told the Washington Post that William K. Kelley, the deputy White House counsel who had been appointed to his post only the month before, stepped in. The Post reported that Mr. Kelley "suggested to [White House Chief of Staff] Andy Card that Miers ought to be considered for the next seat that opened."

To most people's surprise, that happened with stunning swiftness when Chief Justice William Rehnquist died Sept. 3. Judge Roberts's nomination was shifted to fill the vacancy for chief justice, thus opening up the seat of Justice Sandra Day O'Connor. A quick political consensus developed around the White House that the nominee should be a woman.

Even though several highly regarded female lawyers were on Mr. Bush's short list, President Bush and Mr. Card discussed the idea of adding Ms. Miers. Mr. Card was enthusiastic about the idea. The New York Times reported that he "then directed Ms. Miers' deputy . . . to vet her behind her back."

For about two weeks, Mr. Kelley conducted a vetting he has described to friends as thorough. It wasn't. A former Justice Department official calls it "barely adequate for a nominee to a federal appeals court." One Texas lawyer called by the White House was struck by the fact "that the people who were calling about someone from Texas and serving a Texas president knew so little about Texas." (Mr. Kelley didn't return my telephone calls.)

It is unlikely that the vetting fully explored issues surrounding Ms. Miers that are sure to figure in her confirmation hearings, such as her work as Mr. Bush's personal lawyer. Another issue will involve Ms. Miers's tenure as head of the Texas Lottery Commission, where lottery director Nora Linares was fired in a scandal involving influence-peddling and lottery contracts. In a curious move, the White House announced this week that regarding the Linares matter, "Harriet Miers has never commented and will not now on what was a personnel matter." That is unlikely to remain a tenable position.

Regardless of whether or not the vetting process was complete, it presented impossible conflicts of interest. Consider the position that Mr. Bush and Mr. Card put Mr. Kelley in. He would be a leading candidate to become White House counsel if Ms. Miers was promoted. He had an interest in not going against his earlier recommendation of her for the Supreme Court, or in angering President Bush, Ms. Miers's close friend. As journalist Jonathan Larsen has pointed out he also might not have wanted to "bring to light negative information that could torpedo her nomination, keeping her in the very job where she would be best positioned to punish Kelley were she to discover his role in vetting her."

Mr. Lubet, the Northwestern professor, says "all the built-in incentives" of the vetting process were perverse. "In business you make an effort to have disinterested directors who know all the material facts to resolve conflicts of interest," he told me. "In the Miers pick, the White House was sowing its own minefield."

"It was a disaster waiting to happen," says G. Calvin Mackenzie, a professor at Colby College in Maine who specializes in presidential appointments. "You are evaluating a close friend of the president, under pressure to keep it secret even internally and thus limiting the outside advice you get."

Indeed, even internal advice was shunned. Mr. Card is said to have shouted down objections to Ms. Miers at staff meetings. A senator attending the White House swearing-in of John Roberts four days before the Miers selection was announced was struck by how depressed White House staffers were during discussion of the next nominee. He says their reaction to him could have been characterized as, "Oh brother, you have no idea what's coming."

A last minute effort was made to block the choice of Ms. Miers, including the offices of Vice President Cheney and Attorney General Alberto Gonzales. It fell on deaf ears. First Lady Laura Bush, who went to Southern Methodist University at the same time as Ms. Miers, weighed in. On Sunday night, the president dined with Ms. Miers and the first lady to celebrate the nomination of what one presidential aide inartfully praised to me as that of "a female trailblazer who will walk in the footsteps of President Bush."

Although President Bush is ultimately responsible for the increasingly untenable selection, the nominee bears some responsibility. She could have, as blogger Mickey Kaus has suggested, told the president to appoint her to a federal appeals court with the understanding she would be on the short list for the next Supreme Court vacancy. Or she might have said. "That's very flattering, Mr. President. Maybe another time after I'm in another job. But right now I need to keep my wits about me and give you the best possible advice I can about the other candidates. That's my one and only job, and I don't want to blow it."

She did, he did, and the Senate must now deal with a nominee who keeps her thoughts so close to her vest that the number of people outside the White House who have ever discussed judicial philosophy with her appear to be countable on the fingers of one hand. Jim Martin, the man she was engaged to for a year after law school, told the Dallas Morning News they didn't discuss politics and she rarely shared her private thoughts or ambitions. "Harriet was content to be focused on the job at hand," he told the News. "She thought if you do the best job you can, everything will take care of itself."

Things have certainly worked out well for Harriet Miers. But even some of her friends wonder if her Super Glue closeness to the man who appointed her represents the best vehicle or role model to promote the advancement of women in the legal profession. Harriet Miers has taken care of herself. But what about the country?

Copyright © 2005 Dow Jones & Company, Inc.

 

[Greg]

imported post

Harriet Miers's nomination resulted from a failed vetting process.

Thursday, October 13, 2005 12:01 a.m.

"There's a standard vetting process that we go through with all nominees."--White House spokesman Scott McClellan

"The president is very, very confident in his judgments about people, and he likes to reward loyalty."--Brad Berenson, an associate White House counsel in the first Bush term

President Bush has told friends that he learned how to manage from three places: Harvard Business School, his experiences working in the Texas oilfields and with baseball teams, and from watching his father. In all three places he learned valuable skills: flexibility, the importance of team effort, discretion, how to delegate. The one thing he apparently didn't learn was that you never short-circuit the standard vetting process when filling an important job, even when doing so has worked out in the past.

The vetting of Harriet Miers leaves questions that demand answers, not more spin or allegations that critics are "sexist" or "elitist." It was so botched and riddled with conflicts of interest that it demands at a minimum an internal White House investigation to ensure it won't happen again.

Not only did the vetting fail to anticipate skepticism about her lack of experience in constitutional law or the firestorm of criticism from conservatives, but it left the White House scrambling to provide reporters with even the most basic information about the closed-mouthed nominee. Almost every news story seemed to catch the White House off guard and unprepared.

The skepticism is not abating. Back home, the Liberty Legal Institute, the only conservative legal foundation in Texas, has declined to endorse her. Several large GOP donors in Texas have met to discuss spending large sums to run ads calling on Ms. Miers to withdraw. "They include both male and female friends of hers who don't think the confirmation process will be good for her or the country," one told me. "They're not sexists, they're realists." This even though the White House has ominously put out the word in Texas: "If you oppose this nomination, you oppose the president." Everyone knows what the political ramifications of that can mean in the world of George W. Bush and Karl Rove.

How could this have happened? In his Harvard Business School courses, Mr. Bush was taught the importance of fully vetting job candidates. In 2000, when he was preparing to name his running mate, he conducted a months-long vetting process that had a couple of dozen top political players copying tax records, speeches and medical files and filling out an exhaustive questionnaire. In the end, Dick Cheney, the man in charge of the vetting, got the job. To preserve the secrecy Mr. Bush loves, he wasn't replaced when he was asked to consider joining the ticket. So Mr. Bush relied upon his friend to evaluate his own shortcomings.

A real vetting process involves sitting down with potential nominees and grilling them with hard-charging and probing questions that go beyond the existing paper trail--or, in the case of Harriet Miers, the lack of a paper trail. In picking his No. 2, Mr. Bush personally handled the questioning of Mr. Cheney. But the strong "comfort level" he had with him would have predisposed him to avoid no-holds-barred questions. "I expect Cheney tried to be candid, but no one can truly scrutinize their own past--there is too much room for judgment, interpretation, wishful thinking, self-deception," says Steven Lubet, a professor of legal ethics at Northwestern University.

In Mr. Cheney's case, Mr. Bush was lucky. He picked someone who had previously been vetted for secretary of defense, someone who had a 30-year public record and a nationwide reservoir of respect. But mistakes were made. No one anticipated all the questions about Halliburton, the construction company he led as CEO. Columnist Robert Novak reported that no one had even checked Mr. Cheney's House voting record, which included votes against South African sanctions and funding for Head Start. "But in the end, Bush thought the Cheney pick worked out so well the seeds for the Miers decision were sown in that impulsive process," Mr. Novak told me.

The Miers pick had its origin in the selection of John Roberts last July. Ms. Miers was praised for her role in selecting him and the wildly positive reaction. At that point, a senior White House official told the Washington Post that William K. Kelley, the deputy White House counsel who had been appointed to his post only the month before, stepped in. The Post reported that Mr. Kelley "suggested to [White House Chief of Staff] Andy Card that Miers ought to be considered for the next seat that opened."

To most people's surprise, that happened with stunning swiftness when Chief Justice William Rehnquist died Sept. 3. Judge Roberts's nomination was shifted to fill the vacancy for chief justice, thus opening up the seat of Justice Sandra Day O'Connor. A quick political consensus developed around the White House that the nominee should be a woman.

Even though several highly regarded female lawyers were on Mr. Bush's short list, President Bush and Mr. Card discussed the idea of adding Ms. Miers. Mr. Card was enthusiastic about the idea. The New York Times reported that he "then directed Ms. Miers' deputy . . . to vet her behind her back."

For about two weeks, Mr. Kelley conducted a vetting he has described to friends as thorough. It wasn't. A former Justice Department official calls it "barely adequate for a nominee to a federal appeals court." One Texas lawyer called by the White House was struck by the fact "that the people who were calling about someone from Texas and serving a Texas president knew so little about Texas." (Mr. Kelley didn't return my telephone calls.)

It is unlikely that the vetting fully explored issues surrounding Ms. Miers that are sure to figure in her confirmation hearings, such as her work as Mr. Bush's personal lawyer. Another issue will involve Ms. Miers's tenure as head of the Texas Lottery Commission, where lottery director Nora Linares was fired in a scandal involving influence-peddling and lottery contracts. In a curious move, the White House announced this week that regarding the Linares matter, "Harriet Miers has never commented and will not now on what was a personnel matter." That is unlikely to remain a tenable position.

Regardless of whether or not the vetting process was complete, it presented impossible conflicts of interest. Consider the position that Mr. Bush and Mr. Card put Mr. Kelley in. He would be a leading candidate to become White House counsel if Ms. Miers was promoted. He had an interest in not going against his earlier recommendation of her for the Supreme Court, or in angering President Bush, Ms. Miers's close friend. As journalist Jonathan Larsen has pointed out he also might not have wanted to "bring to light negative information that could torpedo her nomination, keeping her in the very job where she would be best positioned to punish Kelley were she to discover his role in vetting her."

Mr. Lubet, the Northwestern professor, says "all the built-in incentives" of the vetting process were perverse. "In business you make an effort to have disinterested directors who know all the material facts to resolve conflicts of interest," he told me. "In the Miers pick, the White House was sowing its own minefield."

"It was a disaster waiting to happen," says G. Calvin Mackenzie, a professor at Colby College in Maine who specializes in presidential appointments. "You are evaluating a close friend of the president, under pressure to keep it secret even internally and thus limiting the outside advice you get."

Indeed, even internal advice was shunned. Mr. Card is said to have shouted down objections to Ms. Miers at staff meetings. A senator attending the White House swearing-in of John Roberts four days before the Miers selection was announced was struck by how depressed White House staffers were during discussion of the next nominee. He says their reaction to him could have been characterized as, "Oh brother, you have no idea what's coming."

A last minute effort was made to block the choice of Ms. Miers, including the offices of Vice President Cheney and Attorney General Alberto Gonzales. It fell on deaf ears. First Lady Laura Bush, who went to Southern Methodist University at the same time as Ms. Miers, weighed in. On Sunday night, the president dined with Ms. Miers and the first lady to celebrate the nomination of what one presidential aide inartfully praised to me as that of "a female trailblazer who will walk in the footsteps of President Bush."

Although President Bush is ultimately responsible for the increasingly untenable selection, the nominee bears some responsibility. She could have, as blogger Mickey Kaus has suggested, told the president to appoint her to a federal appeals court with the understanding she would be on the short list for the next Supreme Court vacancy. Or she might have said. "That's very flattering, Mr. President. Maybe another time after I'm in another job. But right now I need to keep my wits about me and give you the best possible advice I can about the other candidates. That's my one and only job, and I don't want to blow it."

She did, he did, and the Senate must now deal with a nominee who keeps her thoughts so close to her vest that the number of people outside the White House who have ever discussed judicial philosophy with her appear to be countable on the fingers of one hand. Jim Martin, the man she was engaged to for a year after law school, told the Dallas Morning News they didn't discuss politics and she rarely shared her private thoughts or ambitions. "Harriet was content to be focused on the job at hand," he told the News. "She thought if you do the best job you can, everything will take care of itself."

Things have certainly worked out well for Harriet Miers. But even some of her friends wonder if her Super Glue closeness to the man who appointed her represents the best vehicle or role model to promote the advancement of women in the legal profession. Harriet Miers has taken care of herself. But what about the country?

Copyright © 2005 Dow Jones & Company, Inc.

 

[Greg]

imported post

American Dream at stake in Delphi-UAW showdown

Sun Oct 16, 2005 1:21 PM ET

DETROIT (Reuters) - At first glance, the showdown between turnaround specialist Steve Miller and organized labor would seem to be good news for the U.S. auto industry. For auto workers, though, it could mean the end of the American Dream.

The hard-charging Miller, who took over as chief executive at giant auto parts maker Delphi Corp. <DPHIQ.PK> in July, and steered it into Chapter 11 bankruptcy on October 8, wants steep wage and benefit concessions from the United Auto Workers and other unions as part of its reorganization.

If he gets what he wants, it could open the door to dramatic cuts in pay and benefits for UAW-protected hourly workers at General Motors Corp. <GM.N> and Ford Motor Co. <F.N>, giving Detroit's distressed automakers sorely needed labor-cost relief.

At the very least, Delphi could exert strong influence on the UAW's negotiations with GM, Ford and the Chrysler arm of DaimlerChrysler <DCXn.DE> <DCX.N>, when new labor contracts are hammered out in 2007.

"More than anything it tells the UAW that their bargaining power is gone," said David Cole, who heads the Ann Arbor, Michigan-based, Center for Automotive Research. "The market is defining wages and benefits of the future and the best they can hope for is to work collaboratively with the companies to survive."

By indicating that he wants to slash UAW wages of $27.50 to as little as $10 an hour, Miller is asking for a fight, however, and UAW leaders have already warned that he may face a potentially crippling strike. In Detroit, where working-class Americans have long been able to lift themselves into the middle-class through well-paid jobs in the auto industry, he also risks becoming Public Enemy No. 1.

Until now the UAW, which is Delphi's largest union, has enjoyed wages and benefits that are the gold standard of industrial America, even as other unions including the Teamsters and United Steelworkers suffered serious setbacks. But with Miller, who took Bethlehem Steel into bankruptcy in 2001, the good times may finally be over.

"THE GREAT AMERICAN DREAM"

In remarks last week, which angered the UAW's leaders, Miller said globalization had swept over the workers in Delphi's factories, effectively ending their pursuit of "the Great American Dream."

His trump card lies in the fact that he could quickly start selling off Delphi's assets. Apart from job losses, shortages of key components could have an industry wide impact. GM, former parent of the top U.S. parts supplier, is its biggest customer and most vulnerable.

"If we do all this right, Delphi will remain one of the world's leading global automotive suppliers," Miller said. "But if we do it badly, Delphi may be broken up into small pieces. The impact of the collapse could potentially injure most of the world's automakers and perhaps fatally wound General Motors."

Henry Ford was credited with a stroke of genius by creating a whole new group of consumers for his company's products back in 1914. Ford doubled the pay of his workers, saying he wanted them to make enough to buy the Model T's they built. But 91 years later Delphi workers could soon find a new car, built with the parts they produce, totally out of their reach.

"This is a total reversal of Henry Ford's landmark insight," said Alan Tonelson, a research fellow with the U.S. Business and Industry Council, who blames many of the domestic auto industry's problems on bad U.S. trade policy, outsourcing and globalization, not U.S. labor costs.

"You have these U.S. parts companies and the U.S. automakers themselves trapped in this cost-cutting spiral which winds up driving down the wages of many of the customers that they're relying on to buy their products," he said.

"The bottom line that Delphi and companies like it seem to be serving up is that it is not possible to manufacture sophisticated products in the United States while paying First World costs. But that is not an acceptable message for this country," he said.

"Whether it be in the trade union movement or the captains of industry, the vision that we have for America ought to be for a better America," said Richard Shoemaker, the UAW vice president responsible for contract negotiations with both GM and Delphi.

"It ought to be a vision of how we make life better for those people that live here; not a vision for dismantling the manufacturing base and taking the quality of life that we've known and enjoyed down to that of a Third World country," Shoemaker told Reuters.

He did not elaborate, but the UAW's membership has fallen by about half from a peak of 1.5 million in the 1970s as the number of well-paid, unskilled manufacturing jobs declined across America.

© Reuters 2005.

 

[Greg]

imported post

an article from the The Tennessean.
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Temporary workers get hefty share of new jobs

Rutherford County has led the nation in job growth, but companies add positions they can fill with temp workers — lower wages, fewer benefits.

Published: Sunday, 10/16/05
SMYRNA —After a 10-year hiatus as a stay-at-home mom, Teresa Henry re-entered the job market four years ago and discovered things had changed.

Instead of hiring on directly with a warehouse company, she had to go through a temporary employment service to land one of the many warehouse jobs in Rutherford County.

She started working at Goggin Express warehouse about a year and a half ago and hopes to become a permanent employee in about six months.

Henry is part of a growing trend in today's labor force. She's a full-time temporary worker, in search of a permanent job.

Temporary service employment is one of the fastest-growing job sectors in the nation.

Rutherford County is one of the more prominent examples of this trend.

For the past year, the county enjoyed some of the fastest job growth in the nation. It added 6,500 jobs last year, racking up a nation-leading 8.9% job growth rate in the fourth quarter and a 7.9% rate for the whole year.

The county's growth rate in manufacturing jobs, 4.6%, was better than that of 40 states, and average annual wages for all industries topped $35,000, a 2.4% increase.

But lurking beneath those rosy numbers is this statistic: Almost half of the jobs created in the county last year were through temporary help agencies, jobs that aren't known for high wages or generous benefits.

A segment that accounts for about 6% of all jobs in the Rutherford County provided about 45% of the job growth last year.

The trend toward temporary workers has been boosted by manufacturers who have discovered that they can apply the same cost-cutting principles of "just-in-time" inventory control to their work force, said Jared Bernstein, a senior economist with the Economic Policy Institute.

"At a time like this, it signals a type of job growth that's more likely to meet employers' needs versus workers' needs," Bernstein said.

Companies such as Nissan North America in Smyrna and its suppliers across the Midstate use temporary workers for special projects or to supply manpower when production demand is high.

"It's a peaks-and-valleys type situation," Nissan Human Resources Director Mark Stout said. "It's really important to us to have that flexibility in this tough environment."

Flexibility is a key focus, Stout said. There are jobs at Nissan that don't require year-round attention. Right now, the company is using temporary staffing firm Randstad to supply engineers, administrative assistants and other white-collar workers for a project aimed at improving the plant's quality scores. It also is using more temporary workers on its production line.

For Nissan, in many instances it's easier to get Randstad to provide workers for a few days, weeks or months, than to go through the task of advertising, interviewing and screening workers and then having to let them go when the job is done.

The same holds true for other companies that use temporary staffing agencies, said Lisa McMahan, who heads Randstad's Smyrna office.

"This is what we do every day," she said. "They're running a business with other facets besides employment. We're able to do the screening quicker. Over the last few years, there are more screens required, drug screens and background checks. We're able to do the references because that's what the main part of our job is."

Nashvillian Leslie Bell said the temporary agency helped her when she started looking for a job.

"I was having a little bit of trouble trying to find a job," she said. "I looked for a month and called a temporary service. They asked me to come out the next day and go to work."

Bell spent a year on Nissan's assembly line, working the night shift building trucks as a temporary worker. She liked the work but hated the hours, so now she's working with Henry packing boxes at the Goggin warehouse in Smyrna while attending Southeastern Career College.

"I'm going to school to be a medical assistant," she said. "It's just something to pay the bills right now."

A souvenir of recession

Although the trend in the use of temporary employees started several decades ago, the slow recovery from the recession of 2000 made many employers reluctant to bring back permanent workers. This was especially so among manufacturers and logistics companies, which account for 30% of all temporary jobs.

"There was enough demand for the goods and services they were producing to warrant bringing some new people on, but they've been uncertain about whether this recovery really had enough legs to warrant permanent hires," Bernstein said. "To avoid those fixed costs, they've relied on temporary workers."

Temporary jobs aren't bad jobs. They often lead to permanent employment and good wages. But in general, they pay 5% to 10% less than similar permanent positions and lack significant health-care and retirement benefits.

"This is a group that doesn't have much bargaining power," Bernstein said. "Typically, the temp worker isn't the one who can hold out for a pay increase. The employer would just as soon replace them with another temp worker."

"One of the motivations for using temp workers is to hold down labor costs,"he said. "That can be helpful for employers but it can be pretty difficult from the perspective of the temp workers themselves."

A study by the federal Bureau of Labor Statistics found that only 8% of the people who work through a temporary help service have health-care or pension benefits provided by the service. Some are covered by other plans but more than 60% don't have health-care benefits at all.

Companies such as Randstad and Murfreesboro-based Holland Employment Service offer a variety of health-care benefits to employees, but most temporary workers don't use them.

"A college student who's working a temporary assignment for the summer won't," Jim Holland of Holland Employment said. "But for most temporaries who are looking long term and try to go temp to hire, it's really an opportunity for them to have benefits they may not have otherwise."

Randstad offers a major medical policy that costs $20-$30 a month, but there are few takers.

"We don't see a lot of employees who take advantage of that," McMahan said. "We'd like to see it more for their benefit. … It's not going to be as good ... coverage, but if there was a catastrophe or in an emergency, you're going to have some coverage."

Bell and Henry are covered by their husbands' insurance plans. Henry has worked long enough to qualify for a week's paid vacation and paid holidays. She also gets a raise every six months.

An evolution of the niche

Pay could be improving overall for temporary employees because the Rutherford County job market is tightening, McMahan said.

Wages run between $8 an hour and $9 an hour for non-skilled assembly jobs. Forklift drivers, a hot commodity at Rutherford's plethora of warehouses, can bring in between $9 and $10 an hour, depending on the client.

"The companies that are still in the $9 range are having much more of a difficult time retaining employees than the companies that have realized that we need to pay them closer to what we're going to be bringing them on at," McMahan said.

Rising job growth has been positive for Rutherford County and its efforts to attract better-paying jobs, said Holly Sears, who heads economic development efforts for the Rutherford County Chamber of Commerce.

The chamber began a new initiative two years ago called Destination Rutherford, with the goal of bringing more business services and manufacturing operations to the area.

"I think we're doing a good job," Sears said.

She's not concerned that much of the job growth last year was in temporary jobs because many of them will be converted into permanent positions due to the nature of the business these days.

"I think part of it is that a lot of companies are using temporary workers just for screening and training reasons," Sears said. "That's a growing trend among the manufacturing and distribution sector, especially with the way benefits are increasingly a cost issue when hiring new hires."

"But also what I'm hearing from a lot of the local industries is they are keeping a good part of them and then making them permanent employees," she said.

"It's an evolving economy in Rutherford County," Sears said. "I think we're going to have to continue with some of the evolution of diversifying our economy and continue to bring in different types of manufacturing and more professional services."

 

[Greg]

imported post

an article from the The Tennessean.
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Winter heating costs projected to increase


Record prices could result in a 'devastating' winter, TRA chief says

Published: Tuesday, 09/27/05
Gas prices are hitting consumers at the pump, but there's more energy shock to come.

Local natural gas companies yesterday briefed state regulators on record-breaking natural gas prices, expected to be brutal this winter.

"I firmly believe this winter will be devastating,'' said Tennessee Regulatory Authority Chairman Ron Jones, saying the increases will be particularly tough on working families barely able to pay their bills now.

Passing on the cost of rising natural gas prices, Piedmont Natural Gas, the parent company of Nashville Gas, has proposed a 39% increase in Nashville-area consumers' total rates compared to last winter. Piedmont's increase will take effect in November.

Atmos Energy Corp. has proposed an increase this year of about 62%.That doesn't include taxes or customer service charges, which would remain unchanged at $13 for Nashville Gas residential customers and at $6 for Atmos residential customers. This increase is to take effect in October.

Although the TRA must approve the rate increase proposals, approval is expected.

Actual bill increases will vary based on usage, and no one knows how cold it will get this winter.

Natural gas utilities are not the only ones announcing price hikes. Nashville Electric Service already has announced increases of about 8% or 9%, depending on usage, starting in October.

Meanwhile, gasoline prices at the pump in Nashville are more than 50% higher than the same time a year ago.

The American Automobile Association reported regular gasoline averages of $2.81 as of 3 a.m. yesterday in the Nashville area. A spot check yesterday showed a wide variance in prices, from $2.759 per gallon at an Exxon station at West End Avenue and Murphy Road to $2.999 per gallon at Phillips 66 at Wedgwood and 12th Avenue South.

The average wholesale price in Nashville, which distributors pay oil companies, stayed about the same yesterday as over the weekend, according to business information service DTN. Wholesale prices are a good predictor of the next day's retail price.

But some are projecting higher prices at the pump this week as the oil industry continues to assess the damage from the double whammy of two hurricanes back-to-back in the oil-dependent Gulf of Mexico.

"Most areas of the country will see price increases in gasoline this week," said Tom Kloza, analyst at Oil Price Information Service in Wall, N.J.

Further from now, but potentially just as ominous, are this winter's heating bills.

Years of low prices have acted as a disincentive to drilling for natural gas, while demand has soared as many utilities have adopted natural gas for new power plants.

That combination has driven up the price of natural gas, which utilities in Tennessee pass through to customers without a profit, according to the Tennessee Regulatory Authority. At the end of each year, TRA audits the companies to make sure they passed on their actual cost increases to customers.

Both Piedmont and Atmos Energy told state regulators yesterday that they will set up payment plans for customers who can't pay their full bills. Customers also can request a rolling average bill over a 12-month period to mitigate the spikes from winter bills.

"This is of grave concern to us and our customers,'' said June Moore, vice president of customer service for Piedmont Natural Gas. "We request that customers let us know as early as possible if they are having trouble paying their bills."

With historically high prices, the utility executives yesterday couldn't estimate how many customers would be unable to pay.

The TRA is charged with the responsibility of setting the rates and service standards of privately owned telephone, natural gas, electric and water utilities, according to the state's Web site.

 

[Greg]

imported post

an article from the The Tennessean.
--------------------------------------------------------------------------------

Winter heating costs projected to increase


Record prices could result in a 'devastating' winter, TRA chief says

Published: Tuesday, 09/27/05
Gas prices are hitting consumers at the pump, but there's more energy shock to come.

Local natural gas companies yesterday briefed state regulators on record-breaking natural gas prices, expected to be brutal this winter.

"I firmly believe this winter will be devastating,'' said Tennessee Regulatory Authority Chairman Ron Jones, saying the increases will be particularly tough on working families barely able to pay their bills now.

Passing on the cost of rising natural gas prices, Piedmont Natural Gas, the parent company of Nashville Gas, has proposed a 39% increase in Nashville-area consumers' total rates compared to last winter. Piedmont's increase will take effect in November.

Atmos Energy Corp. has proposed an increase this year of about 62%.That doesn't include taxes or customer service charges, which would remain unchanged at $13 for Nashville Gas residential customers and at $6 for Atmos residential customers. This increase is to take effect in October.

Although the TRA must approve the rate increase proposals, approval is expected.

Actual bill increases will vary based on usage, and no one knows how cold it will get this winter.

Natural gas utilities are not the only ones announcing price hikes. Nashville Electric Service already has announced increases of about 8% or 9%, depending on usage, starting in October.

Meanwhile, gasoline prices at the pump in Nashville are more than 50% higher than the same time a year ago.

The American Automobile Association reported regular gasoline averages of $2.81 as of 3 a.m. yesterday in the Nashville area. A spot check yesterday showed a wide variance in prices, from $2.759 per gallon at an Exxon station at West End Avenue and Murphy Road to $2.999 per gallon at Phillips 66 at Wedgwood and 12th Avenue South.

The average wholesale price in Nashville, which distributors pay oil companies, stayed about the same yesterday as over the weekend, according to business information service DTN. Wholesale prices are a good predictor of the next day's retail price.

But some are projecting higher prices at the pump this week as the oil industry continues to assess the damage from the double whammy of two hurricanes back-to-back in the oil-dependent Gulf of Mexico.

"Most areas of the country will see price increases in gasoline this week," said Tom Kloza, analyst at Oil Price Information Service in Wall, N.J.

Further from now, but potentially just as ominous, are this winter's heating bills.

Years of low prices have acted as a disincentive to drilling for natural gas, while demand has soared as many utilities have adopted natural gas for new power plants.

That combination has driven up the price of natural gas, which utilities in Tennessee pass through to customers without a profit, according to the Tennessee Regulatory Authority. At the end of each year, TRA audits the companies to make sure they passed on their actual cost increases to customers.

Both Piedmont and Atmos Energy told state regulators yesterday that they will set up payment plans for customers who can't pay their full bills. Customers also can request a rolling average bill over a 12-month period to mitigate the spikes from winter bills.

"This is of grave concern to us and our customers,'' said June Moore, vice president of customer service for Piedmont Natural Gas. "We request that customers let us know as early as possible if they are having trouble paying their bills."

With historically high prices, the utility executives yesterday couldn't estimate how many customers would be unable to pay.

The TRA is charged with the responsibility of setting the rates and service standards of privately owned telephone, natural gas, electric and water utilities, according to the state's Web site.

 

[Greg]

imported post

Sony Chairman: China Is Key to Growth

By ELAINE KURTENBACH
The Associated Press

Monday, October 17, 2005; 10:49 AM

BEIJING -- Sony expects China's fast-expanding market for both entertainment and electronics to be a main source of growth in years to come _ despite the occasional political tension between Japan and China, chief executive Howard Stringer said Monday.

Stringer sidestepped questions about the potential repercussions from a visit by Japanese Prime Minister Junichiro Koizumi to a war shrine on Monday that drew immediate protests from both China and South Korea.

In the spring, Chinese resentment over Japanese wartime atrocities decades earlier swelled into violent protests and calls for boycotts of Japanese brand products. Those antagonisms died down as diplomats sought to restore calm, but are bound to resurface in the future.

"Sony is a global company with 70 percent of its earnings outside Japan and so local politics like that is less clear and appropriate for me to comment on," Stringer said at a news conference introducing company strategy in China.

"I have never actually met any Japanese politicians and I seem to be doing fine," said the Welsh-born Stringer, the first foreigner to head Sony.

"We look forward to a continuing strong relationship with China in many years to come and growing our businesses," he said.

During anti-Japanese protests earlier in the year, Sony's China Web page was attacked by hackers. But the Tokyo-based electronics maker said its sales and other business in China were unaffected. Six months on, Japanese products appear just as popular among Chinese as ever.

Sony is on a campaign to build up its image here as a brand that is "more energetic, cooler and much more fashionable than it was only a few years ago," said Kei Kodera, president of Sony (China) Ltd.

Sony products now reach only 10 percent to 20 percent of the population, leaving huge room for growth, he said.

"The fact you have GDP growth of almost 10 percent a year means millions of people are coming to a new stage where they can consume more consumer durable products," Kodera said, likening that growth to the addition of a new European country every year.

"At this moment we are quite confident about growth in China in the next four to five years," Kodera said. "We expect quite steady growth."

To develop products best suited for Chinese consumers, the company is boosting use of local software and designers, Kodera said.

Sony announced a revival plan last month aimed mainly at boosting profits at its loss-making electronics unit by slashing 10,000 jobs or about 6 percent of Sony's global work force by the end of March 2008, closing 11 of its 65 plants and shrinking or eliminating 15 unprofitable electronics operations.

Sony has 21,000 employees in China, almost all of whom are local Chinese, turning out US$4 billion (euro3 billion) worth of products every year. Its electronics sales in China in fiscal 2004 totaled US$3 billion (euro2.5 billion).

Although Sony has not said where the layoffs will be, they will not be in China, Kodera said.

"China is one of the few countries where I believe we are free from restructuring," he said.

© 2005 The Associated Press

 

[Greg]

imported post

$1 out of $5 in 9/11 loans in default

By FRANK BASS
Oct 17, 11:15 PM EDT

WASHINGTON (AP) -- Roughly $1 of every $5 in loans the Small Business Administration directly made to companies hurt by the Sept. 11 attacks has fallen into default, leaving the government with an uphill effort to recover millions of dollars in taxpayer money.

The agency is just now learning about the magnitude of businesses that went under or stopped making payments. Its Sept. 11 direct disaster loan program often gave recipients two years before their first payments were due, according to documents reviewed by The Associated Press.

The SBA directly lent $1.2 billion to more than 10,000 companies that made specific arguments about how their businesses were hurt by the suicide hijackings in 2001 that destroyed the World Trade Center in New York and damaged the Pentagon in suburban Washington. A plane bound for Washington crashed in rural Pennsylvania.

Of that amount, $245 million is in default, the records show. The SBA investigators consider a loan in default if it has been charged off or liquidated or is more than 60 days delinquent.

SBA officials say they have written off less than $10 million of the default total and will make strong efforts to recover much of the rest of the money by collecting collateral, negotiating settlements with borrowers, or bringing delinquent loans up to date.

The $245 million "does not represent the actual loss to the government, which, because of settlements and recoveries on collateral, will be less than this amount," SBA spokesman Michael Stamler said.

Among the loans already written off, taxpayers are picking up the tab for a $992,000 loan made to an Atlanta hotel; $986,000 to a Florida boat dealer; $620,000 to a Maine broccoli farm; and $38,900 to a Lubbock, Texas, computer store.

Even some who are making their payments are concerned about their recovery.

"Business just isn't doing as well as it was in the past," said Winnie Mou, owner of Manhattan Travel Inc., located about a mile from the World Trade Center site. Her company began paying back its $11,600 loan last year.

Rep. Nydia Velazquez, who represents New York City and is the top Democrat on the House Small Business Committee, wants the SBA to extend the period of time before companies are required to make loan payments, hoping to ease the burden.

"A lot of these companies are just beginning to have to pay back their loans," said Velazquez. "What is the government going to tell them when they can't?"

A second SBA-backed Sept. 11 program, which guaranteed loans made by banks to businesses across the country more broadly hurt by the economic downturn, has a much smaller default rate, records show.

Of the $3.7 billion lent by the Supplemental Terrorist Activity Relief program, only $191 million has been charged off or liquidated or become 60 days overdue. That's a 5 percent default, compared to 20 percent for the SBA's direct lending program.

Historically, other government disaster lending programs have written off about 5 percent of loans. The largest SBA write-off in the last quarter-century came in the wake of the 1992 Los Angeles riots, when taxpayers absorbed $122 million of $356 million in loans, slightly more than a third.

The SBA loan programs received increased scrutiny from Congress and elsewhere after an AP story in September disclosed that some companies with Sept. 11 relief loans from banks under the STAR program weren't harmed by the attacks and didn't even know their money was being drawn from the program.

AP also reported that some businesses far removed from New York and Washington - like a Utah dog boutique and a Virgin Islands perfume bar - got loans directly from the SBA while businesses closer to the World Trade Center were either turned down or unaware of the aid.

The SBA says that while some loans might have been made in haste, the agency is vigorously prosecuting people who obtained tax dollars or loan guarantees under false pretenses.

In June, for example, a former New York attorney pleaded guilty to one count of wire fraud and one count of money laundering after receiving a $247,000 SBA loan. The attorney claimed his offices at 40 Wall Street were damaged by the Sept. 11 attacks and the firm lost clients as a result.

A joint investigation with the IRS found that the firm's offices had never been located at that address.

 

[Greg]

imported post

Dow may dip below 10,000 by yearend - JPMorgan

Mon Oct 17, 2005 04:18 PM ET
By Vivianne Rodrigues

NEW YORK, Oct 17 (Reuters) - The Dow Jones industrial average may end 2005 below 10,000 as lower margins and higher interest rates are likely to hurt corporate profits, pushing stock prices down, JPMorgan's global equity analyst Abhijit Chakrabortti said.

"The margin squeeze story is beginning to catch up, and many investors who are betting on a fourth-quarter rally in stocks may be bound for disappointment," he said in an interview.

Chakrabortti said companies in sectors including consumer discretionary, industrials, materials and pulp & paper are among the most vulnerable as "they have no pricing power."

The analyst predicts the current quarter, more than most others in the past two years, has the potential to miss consensus expectations for earnings growth.

"Energy costs are still very high and borrowing costs are also rising, and that is not a supportive combination for companies and of course, their stocks," the analyst said. "We are in a situation where the return on cash investments is increasing, and that is appealing for many investors given the volatility and risks traditionally involved in the equity market."

Federal Reserve policy makers raised the benchmark lending rate 11 times since June 2004 to 3.75 percent in attempt to ward off mounting inflationary pressures as crude oil prices reached record highs.

Higher interest rates may also hurt capital spending and pave the way for further declines in benchmark stock indexes at the start of 2006, Chakrabortti added. The three most widely-watched stock indexes in the U.S. are down for the year. The Dow Jones lost 4.2 percent, while the Standard & Poor's 500 index slid 1.9 percent. The technology-laced Nasdaq Composite is down 4.9 percent.

"The start of 2006 is not looking good for the U.S. equity market," said Chakrabortti. "Still, there are some bright spots."

Chakrabortti said investors should favor stocks in the aerospace, defense, consumer staples and food and beverage sectors. Investors should also favor shares in oil equipment and refineries, as well as foreign stocks in countries including Japan, he said.

"The largest companies in those sectors are very well managed and are in good position to absorb higher rates," he said. "As for international stocks, I would simply just buy Japanese stocks and wait a while - it will pay off."

 

[Greg]

imported post

Big spender Bush runs out of credit with conservative allies

By Bronwen Maddox
The Times October 18, 2005

YOU can almost see power sliding from the White House to Republicans on Capitol Hill. Their problem is that they don’t know how to use it.

Many Republicans in Congress are appalled at President Bush’s handling of Iraq, Supreme Court appointments and Hurricane Katrina. They are jittery about the effects on their own electoral chances.

So far, this has liberated them mainly to feud with each other. But it has suddenly put within reach changes in policy which had seemed taboo.

This week, some Republicans in the House of Representatives will draw up a list of up to $50 billion (£28 million) of cuts in next year’s budget. Their target is programmes that have until now been sacrosanct — healthcare for the poor, food stamps and farm support.

With mid-term elections in the House and Senate just over a year from now, that is risky, even though Democrats face a tough battle to regain a majority in either house. Republican leaders have resisted until now. But this week’s moves mark a rebellion by conservatives worried at the President’s expensive interpretation of Republicanism.

For the five years of Bush’s presidency, a large bloc of Republicans in Congress has been uneasy about his high-spending policies. Bush predicted that his huge tax cuts would restrain spending; they didn’t.

The federal budget has gone up by a third to $2.47 trillion since he came to power. This summer’s $286 billion Transportation Bill was an exercise in indulgence, including 6,371 special favours, known as “pork” and worth $24 billion. A surplus has turned into a record deficit.

Fiscal conservatives, who believe that Republicans should pursue small government and balanced budgets, have been appalled. But until now, they have not been in a strong position.

The unpopularity of Newt Gingrich’s “Republican Revolution” in 1994, with its plans to slash the size of government, has made budget-cutting taboo.

So why now? The spark for the budget rebellion came from Hurricane Katrina. Bush offered tens of billions of dollars in aid, without saying how he would pay for it.

At first, the House Majority Leader Tom DeLay backed Bush. He challenged House Republicans to find cuts after so many years of “lean” and “pared-down” government.

Well, they called his bluff, and named them. They saw it as a chance to bounce through cuts in social programmes they had long wanted to make. At the same time, DeLay was removed brutally, if temporarily, from the stage by criminal indictments on charges of misuse of electoral funds. He may yet be back; what matters is that, for now, he is gone.

At present, the budget rebellion is confined to a largeish minority who have always called themselves fiscal conservatives. That is a long way from saying that these cuts will actually be made in the run-up to the mid-terms. Many other Republicans are nervous of earning again the label of the party that cuts social programmes.

But even those who are less exercised about the deficits have been rattled by recent Bush decisions. They can see how support for Iraq is dropping. Many in Congress who supported the war are appalled by the execution of it.

And Harriet Miers? Don’t get them started. The incredulity of the conservative intelligentsia thrusts itself into conversations on any subject.

The question is whether those outside the capital will feel as strongly — or might even warm to her.

Republicans on Capitol Hill are displaying all the panicky incoherence of those used to iron leadership and now suffering its absence. But they do show a common conviction that they now need to save themselves — even if they cannot agree with each other on how that should be done.

Copyright 2005 Times Newspapers Ltd.

 

[Greg]

imported post

Farewell to tax breaks?
Presidential panel presses for simpler income tax paperwork, computations

By Mary Dalrymple
AP Tax Writer

WASHINGTON — Most deductions, credits and other tax breaks would be eliminated along with much of the paperwork and equations that baffle taxpayers under a drastically simplified income tax proposed by a presidential commission on Tuesday.

The President's Advisory Panel on Federal Tax Reform, charged with developing ideas to make taxes fairer, simpler and more economically productive, endorsed two alternatives for inclusion in a report due Nov. 1.

Both would drastically simplify the tax system for individuals and families but also would rewrite or remove some of the most popular deductions and credits. Senate Finance Committee Chairman Charles Grassley, R-Iowa, warned the panel that some of the ideas had been promoted, and soundly rejected, before.

"Some of the things they're recommending were hot issues in the 1990s, and they were dropped after being pushed by predecessors of mine very strongly and just didn't get anywhere," he said.

The White House made no commitment to stick to the panel's recommendation when forwarding its tax-simplification proposal to Congress, a move that White House spokesman Scott McClellan said is not expected before next year.

"We're going to take into account all the work that they have done and the recommendations that they are making," McClellan said. "We share a common goal of reforming our tax code to make it simpler and fairer."

President Bush appointed all of the panel's members.

The two alternatives would make nearly identical changes for individuals and families, laid out in a rough outline that left some details undecided. Individuals' investment income and businesses would be treated differently.

Under both plans, three out of four taxpayers would fall into the lowest, 15 percent, tax bracket. Under one plan, individuals would pay no tax on dividends paid by U.S. companies and exclude 75 percent of their capital gains from taxation. Under the second plan, all investment income would be taxed at 15 percent.

Both proposals would abolish the alternative minimum tax, a levy originally drafted to prevent wealthy individuals from escaping taxation but increasingly reaching into the middle class. They also would eliminate federal deductions and credits for mortgage interest, state and local taxes and education, among others.

The nine tax advisers would replace those withdrawn tax breaks with new, simpler benefits, including three savings plans that supplant dozens currently available for retirement, medical expenses and education.

Retirement savings

Individuals could continue to save for retirement by setting aside part of their untaxed salary in a work account. Taxpayers also could stash up to $10,000 each, for a total of $20,000, into a retirement savings account and a family savings account, used for health expenses, education or buying a home.

Two of the biggest tax breaks now available would be limited and redesigned to spread the benefits to more moderate- and low-income taxpayers. The home mortgage interest deduction would be converted to a credit worth 15 percent of interest paid during the year, with a cap on the size of a mortgage eligible for the benefit.

The unlimited tax breaks for health benefits would be limited to total value of health insurance provided to members of Congress, $11,500 in premiums for family coverage and $5,000 for individuals.

The ideas immediately came under fire from Republicans and Democrats worried that taxpayers in their states would lose out under the new rules.

House Minority Whip Steny Hoyer, D-Md., and Rep. Rahm Emanuel, D-Ill., called both proposals a "bait and switch." "What the panel seems to offer with one hand, it apparently wants to take away with the other," they said.

Sen. Chuck Schumer, D-N.Y., said eliminating the state and local tax deduction would slap a $12 billion tax on New Yorkers.

Rep. Steve Israel, D-N.Y., and Rep. Katherine Harris, R-Fla., said shrinking homeowners' tax breaks will hurt families in states with expensive housing. "Reducing the interest deduction is a shortsighted attempt to balance budgets on the back of the middle class," they said.

Panelist Charles O. Rossotti, a former Internal Revenue Service commissioner, urged taxpayers and lawmakers not to jump to the conclusion that they would be worse off under their simpler plan.

"Take a look at what your bottom line is," he said.

On the Net: President's Advisory Panel on Federal Tax Reform, www.taxreformpanel.gov.

Recommended income tax reforms

Options likely to be in the tax panel's final report include:

Simplified income tax:

Four tax brackets would replace the current six, with 75 percent of filers in the lowest 15 percent tax bracket and 75 percent of capital gains on profits from U.S. company stocks tax-free. Under this plan:

The deduction for state and local income, sales and property taxes would die.
The Alternative Minimum Tax projected to hit one third of taxpayers by 2010 would die, too.

The current $1 million home mortgage and $100,000 home equity deductions would be replaced with a mortgage credit for the principal residence, whether the homeowner itemizes or not. The credit would equal the average Federal Housing Administration insured loan by region, which ranges from $172,000 to almost $313,000.

The $500,000-a-couple tax break on profits from home sales would expand to $600,000 and be adjusted for inflation, but any capital gains on a home sale above that limit would be taxed as ordinary income.

Health insurance through work would be tax-free up to $11,500 for families, $5,000 for individuals. Taxpayers without employer-provided coverage would get an equivalent tax break for individual policies they buy. Other fringe benefits would be taxed as income.

A single-family tax credit would replace the plethora of personal exemptions and family tax breaks, and charitable contributions above 1 percent of income could be deducted even by non-itemizers.

Savings accounts for retirement, health and education would be replaced with three savings accounts, all funded with after-tax income that grow tax-free and are tax-free at withdrawal. One would be for workplace retirement savings, the second for personal retirement savings and the third for family savings.
'Progressive consumption' tax

The six tax brackets would shrink to three — 15, 25 and 35 percent — for wages and salary, but investment income would be tax-free. Alternately, capital gains, dividends and interest could be taxed a flat 15 percent rate to ensure that high-income people who live off investments pay at least a little. Under this plan:

• A streamlined business tax of 35 percent of cash flow after costs would compensate for ending or lowering individual taxes on dividends and capital gains.
• The Alternative Minimum Tax would be eliminated, and a family tax credit similar to the streamlined income tax's provision would adjust for family size.
• There would be a similar home-mortgage credit and charity deduction for contributions above 1 percent of income. Health-care benefits through work would be tax-free only up to $8,400 a family, or $4,000 for singles.

— Mary Deibel, Scripps Howard News Service

Copyright 2005 Associated Press.

 

[Greg]

imported post

Australian study finds alcohol linked to croc attacks

Oct 19 1:33 PM US/Eastern

Almost one in three people bitten by deadly saltwater crocodiles in Australia had been drinking alcohol before the animal attacked, new research has found.

An Australian review of unprovoked crocodile attacks on humans between 1971 and 2004 found that 29 percent of the 62 attacks had involved some alcohol consumption by the victim.

"About one-third of the people who had been attacked had actually been drinking alcohol," study co-author Charlie Manolis told AFP Wednesday.

"But it doesn't mean they were ... (drunk) when they fell into the river -- although it did happen."

Manolis said the research found that crocodiles were opportunistic predators and that when people took risks while in their habitat, they sometimes paid the ultimate price.

"Sometimes when people do drink they throw caution to the wind," he said.

The study, published in the US-based Wilderness Medical Society journal, found that fatal attacks had remained roughly stable at about two per year since the 1970s.

"But the number of non-fatal attacks has increased markedly," Manolis said.

Non-fatal attacks increased sharply from about 0.1 per year between 1971 and 1980 to 3.3 per year from 2001 to 2004, according to the study.

The research found that most attacks (81 percent) occurred while the victim was swimming or wading and that all fatal attacks involved water.

Manolis said the dramatic increase in the saltwater crocodile population since the species was protected in the early 1970s was not necessarily responsible for the increase in attacks.

The number of wild "salties" estimated to live in the Northern Territory has jumped from as few as 3,000 in 1971 to more than 75,000 currently.

But he said because the average size of crocodiles had increased over that time, the animals attacking humans had often changed from a small "hatchling" to a four-metre giant weighing hundreds of kilograms.

Last month a man was killed by a five-metre crocodile while diving near Darwin, five days after a British snorkeller was taken and killed by a croc.

But Manolis does not think culling is the answer.

"It's people being sensible," he said.

Copyright AFP 2005

 

[cowboy]

imported post

Greg wrote:

Australian study finds alcohol linked to croc attacks

Oct 19 1:33 PM US/Eastern

Almost one in three people bitten by deadly saltwater crocodiles in Australia had been drinking alcohol before the animal attacked, new research has found.

An Australian review of unprovoked crocodile attacks on humans between 1971 and 2004 found that 29 percent of the 62 attacks had involved some alcohol consumption by the victim.

"About one-third of the people who had been attacked had actually been drinking alcohol," study co-author Charlie Manolis told AFP Wednesday.

"But it doesn't mean they were ... (drunk) when they fell into the river -- although it did happen."

Manolis said the research found that crocodiles were opportunistic predators and that when people took risks while in their habitat, they sometimes paid the ultimate price.

"Sometimes when people do drink they throw caution to the wind," he said.

The study, published in the US-based Wilderness Medical Society journal, found that fatal attacks had remained roughly stable at about two per year since the 1970s.

"But the number of non-fatal attacks has increased markedly," Manolis said.

Non-fatal attacks increased sharply from about 0.1 per year between 1971 and 1980 to 3.3 per year from 2001 to 2004, according to the study.

The research found that most attacks (81 percent) occurred while the victim was swimming or wading and that all fatal attacks involved water.

Manolis said the dramatic increase in the saltwater crocodile population since the species was protected in the early 1970s was not necessarily responsible for the increase in attacks.

The number of wild "salties" estimated to live in the Northern Territory has jumped from as few as 3,000 in 1971 to more than 75,000 currently.

But he said because the average size of crocodiles had increased over that time, the animals attacking humans had often changed from a small "hatchling" to a four-metre giant weighing hundreds of kilograms.

Last month a man was killed by a five-metre crocodile while diving near Darwin, five days after a British snorkeller was taken and killed by a croc.

But Manolis does not think culling is the answer.

"It's people being sensible," he said.

Copyright AFP 2005

LoL! I wonder how much this guy is raking in from the Australian government annually. Increase in population of gators from 3,000 to 75,000 but it had no impact. Lets see now. Thepopulation increases 25 fold and possibly 3 out of 4 people on the beach are having a brewskie. Gators are optunistic creatures so it was the alcohols fault. The reasoning is the gators got bigger. LOL! With more gators I believe,yes, you would have more bigger gators. Sounds like Australia needs to start a gator season! If you are a diver would you be drinking? mmmm? Seems like it would give a new definition to the bends. :shock:

 

[Greg]

imported post

Amex Sues CEO Over $241,000 Topless Bill

Oct 21 12:37 PM US/Eastern
By SAMUEL MAULL
NEW YORK

American Express is suing the CEO of a communications company for payment of $241,000 worth of disputed credit card charges at a Manhattan topless club.

American Express says in papers filed in state court that Savvis Inc. chief executive officer Robert A. McCormick was in the club Scores in October 2003 with at least three other men.

After McCormick got the $241,000 corporate credit card bill, Savvis called American Express and complained that some of the charges were fraudulent, the lawsuit says. The communications company said its chief disputed all but about $20,000, according to the lawsuit.

"We firmly believe that Mr. McCormick was the victim of fraud," said Deena Williamson, Savvis's deputy general counsel. She declined to comment further.

Lonnie Hanover, a Scores spokesman, said he had not talked to all of the employees involved with McCormick and could not say what the CEO purchased.

The lawsuit filed Wednesday against McCormick and Savvis is at least the third in the past two years involving contested credit card charges at Scores. One patron sued the club after he got a $28,000 bill and another disputed $129,000 in charges.

After a lawsuit last year, Hanover said that "high rollers" visiting Scores' "super elite Presidents' Club" spend thousands of dollars on single bottles of champagne and tip strippers as much as $10,000 for lap dances and for spending time with them.

The district attorney's office has said it is investigating alleged overcharging at Scores.

Hanover said that each time a patron spends $10,000, Scores calls the customer's credit card company to get the charges approved. Scores even fingerprints the customer and requires him to get on the telephone with a credit card representative, he said.

"We got authorization for all of the charges," Hanover said of McCormick's visit. "We followed proper procedures and documentation, and we were paid."

Court papers say American Express asked McCormick several times to provide in writing his basis for calling the charges fraudulent. McCormick failed to respond, and when he was billed again he once again objected to the charges, the lawsuit says.

American Express says McCormick finally responded in writing in September 2004, reiterating that some charges on the Scores bill were bogus, the lawsuit says.

Scores has been paid in full, American Express's court papers say, while neither Savvis nor McCormick has paid any of the charges. Failure to pay is a violation of the American Express corporate credit card agreement, court papers say.

An American Express spokeswoman, Judy Tenzer, said she had no comment.

Copyright 2005 The Associated Press.

 

[Greg]

imported post

Delphi Asks UAW to OK Large Wage Cuts

Tuesday October 25, 7:31 PM EDT

DETROIT (AP) — Delphi Corp., which filed for bankruptcy protection earlier this month, is asking the United Auto Workers to agree to pay cuts of more than 60 percent for hourly workers and to relinquish health and pension benefits and vacation time, according to a summary of the auto supplier's proposal distributed to union members in Indiana.

The summary was posted Tuesday on the Web site of UAW Local 292 in Kokomo, Ind., as well as a Web site run by Kokomo-area union members.

According to the summary, Delphi wants to cut base wages to $9.50 to $10.50 an hour for production workers and to $19 for skilled trades workers. New production workers would start at a base rate of $9 an hour. Right now, Delphi hourly workers make $27 an hour or more.

Under the proposal, Troy-based Delphi would eliminate a jobs bank that gives full pay and benefits to around 4,000 laid-off workers, which Delphi says costs it $400 million each year. It also would have the right to sell, close or consolidate any plant.

Delphi's pension plan would be frozen and accept no new participants after Jan. 1, according to the summary. Delphi also could reduce retiree benefits or terminate the pension plan, but no further details were given in the summary.

Delphi and its former parent, General Motors Corp., are still settling how much GM owes Delphi's retirees. GM has said it could be liable for up to $12 billion in pension obligations but expects to pay much less.

Hourly workers would be asked to pay health care deductibles for the first time, of $900 per individual and $1,800 per family. Dental and vision care would be eliminated. The proposal would drop annual paid holidays from 16 to 10, including a paid week of vacation between Christmas and Jan. 1. It also would eliminate annual cost-of-living adjustments.

Neither Delphi nor UAW leadership has officially released details of the proposal, since U.S. Bankruptcy Judge Robert Drain granted Delphi's request to keep its contract proposals confidential. Delphi is scheduled to appear in bankruptcy court Thursday.

A Delphi spokeswoman did not immediately return a call for comment Tuesday night.

A spokesman at the UAW's Detroit headquarters declined to comment Tuesday. Union leaders criticized the proposal harshly when Delphi presented it to them last week.

"Delphi's proposal is designed to hasten the dismantling of America's middle class by importing Third World wages to the United States," UAW President Ron Gettelfinger and Vice President Richard Shoemaker said in a joint statement.

The UAW represents most of Delphi's approximately 34,000 U.S. hourly workers.

Delphi Chairman and CEO Robert S. "Steve" Miller has said he understands workers are angry, but the company is paying wage and benefit packages worth $65 an hour, which is two to three times more than its competitors.

Miller has expressed optimism that a deal with Delphi's unions can be reached by mid-December. If an agreement to cut wages and benefits isn't reached, Delphi could ask the bankruptcy court to void its contracts. The court could then impose new contracts in the first part of next year.

Todd Jordan, 28, who works at a Delphi plant in Kokomo, said there is no way he and his wife, who also works for Delphi, could support their two children on the proposed wages.

On Tuesday in Dayton, Ohio, approximately 70 Delphi workers, local UAW leaders and city officials marched from a plant to a union hall to protest any possible plant closings. The Dayton area has five Delphi plants that employ 6,000 people.

Details of the proposals also have been leaked by other unions. In a memo posted on its Web site last week, the International Union of Electrical Workers-Communications Workers of America said Delphi wants to reduce the number of IUE-CWA-represented workers from 8,500 to 3,000 through plant sales, plant closings, retirements and layoffs. Delphi also wants to sell or close six of IUE-CWA's 10 facilities and reduce wages to $9-$10 an hour, the memo said.

 

[Greg]

imported post

The real price of gold
It weighs 1oz. It costs £1,000. And it creates 30 tons of toxic waste

By Daniel Howden
Published: 26 October 2005

The lust for gold has reached record levels worldwide as India and China have joined developed nations in demanding more jewellery. On the back of this surge, gold prices have reached a 17-year high, and yesterday rose $7.70 (£4.30) to more than $474 per ounce. But the world's remaining gold deposits are microscopic and the environmental costs of extracting them are profound.

A £1,000 wedding ring - equivalent to one ounce of gold - creates up to 30 tons of toxic waste. To produce that single ounce, miners have to quarry hundreds of tons of rock, which are then doused in a liquid cyanide solution to separate the gold. Payal Sampat, the campaign director for Earthworks, the mining watchdog, told The Independent: "Gold mining is arguably the world's dirtiest and most polluting industry."

A growing alliance of conservationists and local communities affected by mining operations is pushing governments, corporations and consumers to consider the real cost of gold. "The industry has not been under public scrutiny and people don't really know where their gold is coming from," Ms Sampat said. "The mining industry could be making changes which could provide consumers with a product which is far more clean."

Writers from Shakespeare to Shelley have lamented the lure of this precious metal, but today's gold fever neither seeks to bolster empires nor underpin currencies. It is fuelled by our desire for jewellery.

Of the gold mined today, a total of 80 per cent is produced to feed the demand for status symbols. Campaigners are trying to dissuade shoppers from buying "dirty gold", which is extracted using cyanide leaching. But they face an uphill struggle. Newly affluent consumers have pushed jewellery sales to a record $38bn this year, according to the World Gold Council.

With the best ore already mined in most developed countries, the industry is turning to the poorest countries in the world. Up to 70 per cent of gold is mined in developing countries such as Peru and the Philippines. Vast tracts of the developing world are being laid to waste, leaving a multibillion-pound toxic time-bomb.

Environment agencies in the US have described disused heavy metal mines as an equivalent to nuclear waste dumps, which must be secured and maintained for the foreseeable future. America's Environmental Protection Agency estimates that the costs associated with the clean-up of metal mines could rise to $58bn, according to The New York Times.

The mining industry argues that it is bringing much needed investment, infrastructure and jobs to the poor. And it is an argument that is backed by the World Bank, which has pushed more than 100 governments into making tax breaks and subsidies to big mining companies.

A flood of complaints, protests and lethal spillages prompted the bank into a two-year moratorium on financing mining in 2001. That resulted in calls for the mining industry to reduce the use of cyanide and stop dumping toxic waste.

However, these calls were dismissed by the industry as impractical and the World Bank is now giving multimillion-pound loans to multinationals. The first loan after the moratorium went to the Canadian company Glamis Gold, for a project in Guatemala that has faced heavy opposition from Mayan Indians.

At the root of the environmental problem is the industry's reliance on old mining technology called "heap-leaching". Leach mining allows miners to coax tiny flecks of gold from low-grade ore. Cyanide is the chemical of choice and more than 90 per cent of the 2,500 tons of annual global gold production is extracted in this way.

In a typical heap-leach operation, huge quantities of rock are crushed and stacked on top of clay and plastic liners to create piles the size of pyramids, which are then drizzled with the cyanide solution for years. As the chemical passes through the rock layers, it teases the gold out of the ore, where it is collected at the bottom and processed further. As little as one ounce of gold can be extracted from 30 tons of low-grade ore.

Cyanide is a toxic chemical - one teaspoon of 2 per cent cyanide solution is enough to kill a human being. This dangerous chemical is used in gold extraction operations from Peru to Ghana. And it has left a toxic legacy in its wake.

The cyanide waste produced from gold mining is stored in reservoirs. Spills from these lakes have made their way into water systems with fatal consequences for the environment, wildlife and local communities.

Just such a leak in Romania in 2000 led to the worst environmental disaster in the region since the meltdown of the nuclear reactor at Chernobyl. Tons of cyanide-laced water broke through a dam and poured into the Tisza and Danube rivers from the Aural gold mine near Baia Mare. The results were devastating; more than 1,000 tons of fish were killed, while plantlife and birds along the river were devastated.

The Tisza disaster has been replicated at mines all over the world. In the five years since the Baia Mare accident, mines owned by international corporations have been responsible for spills in Ghana, Western Australia, Papua New Guinea, China, Honduras and Nicaragua. During that time the UN Environment Programme has been locked in negotiations with the mining industry to produce a self-regulatory code.

Desta Mebratu, a Unep official, admitted that the mining industry's activities presented a serious environmental hazard but said they were working towards lessening this. "We're working with the mining companies to help prevent the occurrence of accidents," he said. But the code, which was finally unveiled this month, has been dismissed by environmental watchdogs as toothless. A review of the voluntary code by Bankwatch and Friends of the Earth Europe said the code was "greenwashing intended to create the appearance that mining companies are addressing environmental issues".

Australia's remote Lake Cowal in New South Wales is the latest battleground between mining multinationals and indigenous peoples. Neville Williams, 61, who represents the Mooka traditional owners council clan of the Wiradjuri nation, says the fight is essential, although he knows the odds are stacked against them as the mining companies enjoy government backing.

"We have no resources but we are taking the fight for all the peoples because of the prospect of cyanide poisoning."

© 2005 Independent News & Media (UK) Ltd.

 

[Greg]

imported post

Erotic images can turn you blind

* 18:09 12 August 2005
* NewScientist.com news service
* Gaia Vince

Researchers have finally found evidence for what good Catholic boys have known all along – erotic images make you go blind. The effect is temporary and lasts just a moment, but the research has added to road-safety campaigners’ calls to ban sexy billboard-advertising near busy roads, in the hope of preventing accidents.

The new study by US psychologists found that people shown erotic or gory images frequently fail to process images they see immediately afterwards. And the researchers say some personality types appear to be affected more than others by the phenomenon, known as “emotion-induced blindness”.

David Zald, from Vanderbilt University in Nashville, Tennessee, and Marvin Chun and colleagues from Yale University in Connecticut, showed hundreds of images to volunteers and asked them to pick a specific image from the rapid sequence. Most of the images were landscape or architectural scenes, but the psychologists included a few emotionally charged images, portraying violent or sexually provocative scenes.

The closer these emotionally charged images occurred prior to the target image, the more frequently people failed to spot the target image, the researchers found.

“We observed that people failed to detect visual images that appeared one-fifth of a second after emotional images, whereas they can detect those images with little problem after neutral images,” Zald says.
Primitive brain

“We think there is essentially a bottleneck for information processing and if a certain type of stimulus captures attention, it can jam up the bottleneck so subsequent information can’t get through,” Zald explains. “It appears to happen involuntarily. The stimulus captures attention and once allocated to that particular stimulus, no other stimuli can get through” for several tenths of a second.

He believes that a primitive part of the brain, known as the amygdala, may play a part. That region is involved in evaluating sensory input according to its emotional relevance and has an autonomic role, influencing heart rate and sweating.

“It is possible that emotionally-charged stimuli produce preferential rapid routing of the impulse that bypasses the slower cortical route via the amygdala," Zald told New Scientist. "Patients with amygdala lesions pick out the target image without reacting to violent images, although they show normal blindness reactions when sexual images are introduced, which suggests another mechanism may also be involved.”
Harm avoiders

The researchers think emotion-induced blindness could lead to drivers simply not seeing another car or pedestrian if they have just witnessed an emotionally charged scene, such as an accident or sexually explicit billboard.

The effect could exacerbate the more obvious problem of drivers simply being distracted by large, arresting images. "It's the responsibility of drivers to ensure that when they are behind the wheel they keep their eyes on the job in hand," says a spokeswoman from Brake, a UK road safety organisation.

And some people are more vulnerable than others. The study assessed participants using a personality questionnaire, rating them according to their level of “harm avoidance”. Those scoring highly were more fearful, careful and cautious; those scoring low were more carefree and more comfortable in difficult or dangerous situations.

The researchers found that those with low harm avoidance scores were better able to stay focused on a target image than those with high harm avoidance scores.

“People who are more harm avoidant may not be detecting negative stimuli more than other people, but they have a greater difficulty suppressing that information,” Zald suggests.

The Brake spokeswoman says companies should think about the consequences of placing emotionally charged billboards at dangerous road junctions: “We should be concerned if drivers are experiencing split-second breaks in concentration, which could result in an accident or death on the roads.”

Journal reference: Psychonomic Bulletin and Review (August 2005 issue)