Emma -:- Flipping -:- Sat, May 28, 2005 at 11:40:38 (EDT)

Emma -:- A Gift to Japanese Women -:- Sat, May 28, 2005 at 11:17:09 (EDT)

Emma -:- The Unwanted-Job Myth -:- Sat, May 28, 2005 at 11:11:17 (EDT)

Emma -:- An American's Paycheck in London -:- Sat, May 28, 2005 at 10:37:05 (EDT)

Emma -:- Janus Funds: Everybody Loves a Loser -:- Sat, May 28, 2005 at 10:16:04 (EDT)

Emma -:- Valuing the Yuan -:- Sat, May 28, 2005 at 09:28:13 (EDT)

Emma -:- Relax? Not if You're FedEx -:- Sat, May 28, 2005 at 09:26:24 (EDT)

Emma -:- Is Your House Overvalued? -:- Sat, May 28, 2005 at 09:24:10 (EDT)
_ Terri -:- REITs Again -:- Sat, May 28, 2005 at 10:32:37 (EDT)

Terri -:- Diversity and Protection of Portfolios -:- Sat, May 28, 2005 at 07:02:53 (EDT)

unlawflcombatnt -:- Outsourcing Reduces Global Wages -:- Sat, May 28, 2005 at 00:37:27 (EDT)

Terri -:- Preparing in a Bubble -:- Fri, May 27, 2005 at 18:32:45 (EDT)

Thomas -:- Tobin Tax -:- Fri, May 27, 2005 at 17:08:01 (EDT)
_ Terri -:- Re: Tobin Tax -:- Fri, May 27, 2005 at 18:03:32 (EDT)
__ Thomas -:- Re: Tobin Tax -:- Fri, May 27, 2005 at 18:26:18 (EDT)
___ Terri -:- Re: Tobin Tax -:- Fri, May 27, 2005 at 18:50:28 (EDT)

Terri -:- Bubble and Deficit -:- Fri, May 27, 2005 at 16:19:14 (EDT)

Emma -:- Spread of AIDS in India -:- Fri, May 27, 2005 at 14:09:23 (EDT)

Terri -:- A Housing Bubble, Then What? -:- Fri, May 27, 2005 at 13:59:22 (EDT)

Emma -:- China and Water -:- Fri, May 27, 2005 at 11:52:21 (EDT)

Emma -:- Where's the Boeuf? -:- Fri, May 27, 2005 at 11:02:31 (EDT)

Emma -:- The Social Safety Net -:- Fri, May 27, 2005 at 10:59:17 (EDT)

Emma -:- U.S. Softens Its Warning to Beijing -:- Fri, May 27, 2005 at 10:46:01 (EDT)

Emma -:- Hedge Fund and Hedge Fund Salaries -:- Fri, May 27, 2005 at 10:35:38 (EDT)

Terri -:- Hedge Fund Returns -:- Fri, May 27, 2005 at 09:56:38 (EDT)

Terri -:- Utilities and Treasuries -:- Fri, May 27, 2005 at 09:54:03 (EDT)

Terri -:- European Integration -:- Fri, May 27, 2005 at 05:53:41 (EDT)
_ Setanta -:- Re: European Integration -:- Fri, May 27, 2005 at 09:55:45 (EDT)
__ Terri -:- Re: European Integration -:- Fri, May 27, 2005 at 11:00:42 (EDT)
_ Setanta -:- Re: European Integration -:- Fri, May 27, 2005 at 09:53:35 (EDT)

Terri -:- Flexible Markets -:- Fri, May 27, 2005 at 05:48:02 (EDT)

Terri -:- Request to Bobby -:- Fri, May 27, 2005 at 05:38:46 (EDT)
_ Terri -:- Re: Request to Bobby -:- Fri, May 27, 2005 at 05:40:20 (EDT)

Terri -:- Hedge Fund Returns -:- Fri, May 27, 2005 at 05:31:32 (EDT)
_ Terri -:- Re: Hedge Fund Returns -:- Fri, May 27, 2005 at 05:34:01 (EDT)

Terri -:- Utility Companies -:- Thurs, May 26, 2005 at 22:20:11 (EDT)

Terri -:- Bond Fund Protection -:- Thurs, May 26, 2005 at 22:02:45 (EDT)

Terri -:- Thoughts on Interest Rates -:- Thurs, May 26, 2005 at 17:12:41 (EDT)

Pete Weis -:- ? -:- Thurs, May 26, 2005 at 14:56:16 (EDT)

Emma -:- 15 Years on the Bottom Rung -:- Thurs, May 26, 2005 at 11:50:45 (EDT)

Terri -:- Looking for Relative Value -:- Thurs, May 26, 2005 at 11:49:24 (EDT)

Setanta -:- Italy says ciao to la dolce vita... -:- Thurs, May 26, 2005 at 05:59:03 (EDT)
_ Terri -:- Re: Italy says ciao to la dolce vita... -:- Thurs, May 26, 2005 at 05:57:45 (EDT)
__ Terri -:- Re: Italy says ciao to la dolce vita... -:- Thurs, May 26, 2005 at 07:13:57 (EDT)

Terri -:- Vanguard Bond Funds -:- Thurs, May 26, 2005 at 05:37:32 (EDT)
_ Terri -:- Bonds and Bond Funds -:- Thurs, May 26, 2005 at 05:55:10 (EDT)

Terri -:- European Interest Rates are Too High -:- Wed, May 25, 2005 at 21:28:31 (EDT)
_ Pete Weis -:- Euro is high still -:- Wed, May 25, 2005 at 22:10:16 (EDT)
__ Terri -:- Re: Euro is high still -:- Thurs, May 26, 2005 at 05:54:15 (EDT)
___ Pete Weis -:- Re: Euro is high still -:- Thurs, May 26, 2005 at 08:58:45 (EDT)
____ Terri -:- Re: Euro is high still -:- Thurs, May 26, 2005 at 10:21:16 (EDT)
____ Pete Weis -:- Re: Euro is high still -:- Thurs, May 26, 2005 at 09:30:13 (EDT)

Terri -:- Fannie Mae and Freddie Mac -:- Wed, May 25, 2005 at 20:16:51 (EDT)
_ Terri -:- High Yield Bonds -:- Wed, May 25, 2005 at 22:00:22 (EDT)
__ Pete Weis -:- An alternate view -:- Wed, May 25, 2005 at 22:13:44 (EDT)
___ Terri -:- Re: An alternate view -:- Thurs, May 26, 2005 at 07:18:55 (EDT)

Emma -:- Steep Rise in Prices for Homes -:- Wed, May 25, 2005 at 15:14:58 (EDT)

Emma -:- New Rule on Endangered Species -:- Wed, May 25, 2005 at 12:55:13 (EDT)

Pancho Villa -:- Greg vs. Paul (Part II) -:- Wed, May 25, 2005 at 12:44:40 (EDT)
_ Pete Weis -:- Re: Greg vs. Paul (Part II) -:- Wed, May 25, 2005 at 15:34:00 (EDT)
__ Pete Weis -:- Additional thoughts -:- Wed, May 25, 2005 at 20:36:04 (EDT)
___ Paul G. Brown -:- Re: Additional thoughts -:- Wed, May 25, 2005 at 21:09:23 (EDT)
____ Pete Weis -:- Re: Additional thoughts -:- Wed, May 25, 2005 at 21:37:33 (EDT)
____ Terri -:- Re: Additional thoughts -:- Wed, May 25, 2005 at 21:34:36 (EDT)

Setanta -:- Don't cry for me, Mr. Greenspan -:- Wed, May 25, 2005 at 12:38:23 (EDT)

Emma -:- France and the European Constitution -:- Wed, May 25, 2005 at 11:32:56 (EDT)

Terri -:- Europe's Interest Rates -:- Wed, May 25, 2005 at 11:28:07 (EDT)
_ Terri -:- America's Interest Rates -:- Wed, May 25, 2005 at 11:50:49 (EDT)

Emma -:- Growth and the Poor: Latin America -:- Wed, May 25, 2005 at 10:59:04 (EDT)

Emma -:- Utilities Utilities Utilities -:- Wed, May 25, 2005 at 10:51:17 (EDT)

Emma -:- German Leader Gambles in Election Call -:- Wed, May 25, 2005 at 10:45:42 (EDT)

Emma -:- China, New Land of Shoppers -:- Wed, May 25, 2005 at 10:39:09 (EDT)

Terri -:- Who are the Riskier Mortgage Holders -:- Tues, May 24, 2005 at 21:20:09 (EDT)

Terri -:- Long and Short Term Interest Rates -:- Tues, May 24, 2005 at 21:13:20 (EDT)
_ Terri -:- The Euro has Weakened -:- Tues, May 24, 2005 at 22:03:02 (EDT)
__ Pancho Villa -:- Re: The Euro has Weakened -:- Wed, May 25, 2005 at 09:54:30 (EDT)

Emma -:- No Degree and No Way Back -:- Tues, May 24, 2005 at 19:31:33 (EDT)

Pete Weis -:- 85% not 90% -:- Tues, May 24, 2005 at 15:18:53 (EDT)

Emma -:- Sugar Cane As Fuel: Brazil -:- Tues, May 24, 2005 at 14:00:48 (EDT)

Emma -:- The Long-Term Unemployed -:- Tues, May 24, 2005 at 12:34:21 (EDT)

Emma -:- Bolivia and Natural Resources -:- Tues, May 24, 2005 at 11:53:49 (EDT)

Emma -:- Panama Fights for Its Forests -:- Tues, May 24, 2005 at 11:50:06 (EDT)

Emma -:- Gidant and a Defibrillator Flaw -:- Tues, May 24, 2005 at 11:23:28 (EDT)

Emma -:- China's Risk of Inflation -:- Tues, May 24, 2005 at 11:21:21 (EDT)

Emma -:- Companies Recruiting New Graduates -:- Tues, May 24, 2005 at 11:19:34 (EDT)

Emma -:- The College Dropout Boom -:- Tues, May 24, 2005 at 10:10:36 (EDT)

Pete Weis -:- Barbarians at the gate -:- Mon, May 23, 2005 at 23:11:40 (EDT)
_ Terri -:- Re: Barbarians at the gate -:- Tues, May 24, 2005 at 05:42:26 (EDT)

Pancho Villa -:- 'Lessons?' from the yen-dollar talks -:- Mon, May 23, 2005 at 22:27:03 (EDT)
_ Pete Weis -:- Time running out -:- Mon, May 23, 2005 at 22:57:26 (EDT)
__ David E.. -:- Isnt it too late? -:- Mon, May 23, 2005 at 23:33:44 (EDT)
___ Pete Weis -:- Re: Isnt it too late? -:- Tues, May 24, 2005 at 09:14:37 (EDT)
____ Pete Weis -:- The latest -:- Tues, May 24, 2005 at 09:37:48 (EDT)
___ Terri -:- Re: Isnt it too late? -:- Tues, May 24, 2005 at 07:31:16 (EDT)

Pete Weis -:- From where will change come? -:- Mon, May 23, 2005 at 21:32:09 (EDT)

Emma -:- Men Just Want Mommy -:- Mon, May 23, 2005 at 17:56:40 (EDT)

Emma -:- Climbing Bond Prices -:- Mon, May 23, 2005 at 15:02:57 (EDT)

Emma -:- The Birds of Delaware Bay -:- Mon, May 23, 2005 at 12:01:37 (EDT)

Terri -:- Paul Krugman in Bangkok -:- Mon, May 23, 2005 at 11:24:37 (EDT)

Emma -:- No Old-Age Security in Private Sector -:- Mon, May 23, 2005 at 11:17:44 (EDT)

Pete Weis -:- Reality to catch up with spin? -:- Mon, May 23, 2005 at 11:06:49 (EDT)
_ Terri -:- Re: Reality to catch up with spin? -:- Mon, May 23, 2005 at 11:47:36 (EDT)

Emma -:- Marriage, Money and Class -:- Mon, May 23, 2005 at 11:02:55 (EDT)

Emma -:- Indigo Bunting -:- Sun, May 22, 2005 at 22:37:46 (EDT)
_ Terri -:- Re: Indigo Bunting -:- Mon, May 23, 2005 at 10:00:48 (EDT)

Emma -:- Paul Krugman -:- Sun, May 22, 2005 at 19:47:06 (EDT)

Emma -:- So You Want to Be a Venture Capitalist -:- Sun, May 22, 2005 at 18:56:41 (EDT)
_ Setanta -:- Re: So You Want to Be a Venture Capitalist -:- Mon, May 23, 2005 at 07:38:43 (EDT)
__ Emma -:- Where are the Birds? -:- Mon, May 23, 2005 at 12:02:32 (EDT)
__ Terri -:- Re: So You Want to Be a Venture Capitalist -:- Mon, May 23, 2005 at 10:00:16 (EDT)

Emma -:- BMW and a High Design Assembly Line -:- Sun, May 22, 2005 at 18:49:08 (EDT)

Emma -:- Decoding Health Insurance -:- Sun, May 22, 2005 at 18:43:55 (EDT)

Emma -:- Coal Plants Could Be Much Cleaner -:- Sun, May 22, 2005 at 16:57:28 (EDT)

Emma -:- China, the World's Capital -:- Sun, May 22, 2005 at 16:21:38 (EDT)
_ Setanta -:- Re: China, the World's Capital -:- Mon, May 23, 2005 at 11:01:58 (EDT)

Emma -:- On a Christian Mission to the Top -:- Sun, May 22, 2005 at 14:26:15 (EDT)

Terri -:- Dollar Up, Dollar Down -:- Sun, May 22, 2005 at 14:13:39 (EDT)
_ Terri -:- Re: Dollar Up, Dollar Down -:- Sun, May 22, 2005 at 14:50:21 (EDT)
__ Pete Weis -:- Re: Dollar Up, Dollar Down -:- Sun, May 22, 2005 at 17:13:21 (EDT)
___ Terri -:- Re: Dollar Up, Dollar Down -:- Sun, May 22, 2005 at 17:54:18 (EDT)
____ Pete Weis -:- Supply & demand -:- Sun, May 22, 2005 at 20:32:10 (EDT)

Paul G. Brown -:- Okrent on Krugman (Well, op eds in general) -:- Sun, May 22, 2005 at 01:37:44 (EDT)
_ Auros -:- Re: Okrent on Krugman (Well, op eds in general) -:- Tues, May 24, 2005 at 12:57:24 (EDT)
_ Terri -:- Re: Okrent on Krugman (Well, op eds in general) -:- Sun, May 22, 2005 at 06:02:20 (EDT)
__ Paul G. Brown -:- Re: Okrent on Krugman (Well, op eds in general) -:- Sun, May 22, 2005 at 15:04:30 (EDT)
___ Paul G. Brown -:- Re: Okrent on Krugman (Well, op eds in general) -:- Mon, May 23, 2005 at 12:25:41 (EDT)
____ Emma -:- Re: Okrent on Krugman (Well, op eds in general) -:- Mon, May 23, 2005 at 15:05:15 (EDT)
_____ Paul G. Brown -:- Re: Okrent on Krugman (Well, op eds in general) -:- Mon, May 23, 2005 at 16:16:03 (EDT)
______ Emma -:- Re: Okrent on Krugman (Well, op eds in general) -:- Mon, May 23, 2005 at 17:53:09 (EDT)
___ Terri -:- Re: Okrent on Krugman (Well, op eds in general) -:- Sun, May 22, 2005 at 16:26:46 (EDT)
__ Terri -:- Re: Okrent on Krugman (Well, op eds in general) -:- Sun, May 22, 2005 at 06:09:10 (EDT)
___ Emma -:- Re: Okrent on Krugman (Well, op eds in general) -:- Sun, May 22, 2005 at 12:26:59 (EDT)
____ Pete Weis -:- I wonder...... -:- Sun, May 22, 2005 at 13:47:06 (EDT)
_____ Ryan -:- Re: I wonder...... -:- Mon, May 23, 2005 at 02:53:36 (EDT)
______ Setanta -:- Re: I wonder...... -:- Mon, May 23, 2005 at 11:11:18 (EDT)
______ Pete Weis -:- Agree with you, Ryan -:- Mon, May 23, 2005 at 10:43:50 (EDT)
_______ Terri -:- Re: Agree with you, Ryan -:- Mon, May 23, 2005 at 11:48:52 (EDT)

Emma -:- S.U.V.'s are Us? -:- Sat, May 21, 2005 at 13:37:23 (EDT)
_ Setanta -:- Re: S.U.V.'s are Us? -:- Mon, May 23, 2005 at 12:45:24 (EDT)
__ Pete Weis -:- The idiot light business model -:- Mon, May 23, 2005 at 14:08:54 (EDT)
___ Pancho Villa -:- Re: The idiot light business model -:- Mon, May 23, 2005 at 22:37:31 (EDT)
____ Pancho Villa -:- Re: The idiot light business model -:- Mon, May 23, 2005 at 22:45:28 (EDT)
_ Pete Weis -:- US auto execs are...... -:- Sat, May 21, 2005 at 15:29:14 (EDT)
__ Terri -:- Re: US auto execs are...... -:- Sat, May 21, 2005 at 16:25:55 (EDT)

Terri -:- The Trade Deficit and the Dollar -:- Sat, May 21, 2005 at 11:06:49 (EDT)
_ Terri -:- Re: The Trade Deficit and the Dollar -:- Sat, May 21, 2005 at 11:52:33 (EDT)

Emma -:- Canada's Medical System -:- Sat, May 21, 2005 at 10:12:34 (EDT)

Emma -:- Zimbabwe -:- Sat, May 21, 2005 at 10:09:31 (EDT)

Emma -:- 'Against Depression' -:- Sat, May 21, 2005 at 10:08:31 (EDT)

Emma -:- Starbucks Aims to Alter China -:- Sat, May 21, 2005 at 09:36:21 (EDT)

Emma -:- Rising Interest Rates or Falling? -:- Fri, May 20, 2005 at 22:46:15 (EDT)
_ Pete Weis -:- Re: Rising Interest Rates or Falling? -:- Sat, May 21, 2005 at 01:53:13 (EDT)
__ Emma -:- Re: Rising Interest Rates or Falling? -:- Sat, May 21, 2005 at 06:51:50 (EDT)
___ Pete Weis -:- Re: Rising Interest Rates or Falling? -:- Sat, May 21, 2005 at 12:18:22 (EDT)
____ Emma -:- Re: Rising Interest Rates or Falling? -:- Sat, May 21, 2005 at 16:56:23 (EDT)

Emma -:- Housing and Currency -:- Fri, May 20, 2005 at 22:09:02 (EDT)
_ Emma -:- Housing or Real Estate -:- Fri, May 20, 2005 at 22:11:24 (EDT)

Emma -:- Alan Greenspan's Argument -:- Fri, May 20, 2005 at 18:31:52 (EDT)
_ Pete Weis -:- Re: Alan Greenspan's Argument -:- Sat, May 21, 2005 at 02:22:31 (EDT)
__ Terri -:- Re: Alan Greenspan's Argument -:- Sat, May 21, 2005 at 17:59:33 (EDT)

Auros -:- Fantastic article at Slate -:- Fri, May 20, 2005 at 18:00:10 (EDT)
_ Terri -:- Re: Fantastic article at Slate -:- Fri, May 20, 2005 at 20:38:31 (EDT)
__ David E.. -:- It is clear- -:- Fri, May 20, 2005 at 22:11:59 (EDT)

Emma -:- Household Debt and Government Debt -:- Fri, May 20, 2005 at 13:45:37 (EDT)
_ Pete Weis -:- Re: Household Debt and Government Debt -:- Fri, May 20, 2005 at 16:16:05 (EDT)
_ Emma -:- Should -:- Fri, May 20, 2005 at 13:46:55 (EDT)

Terri -:- Is Real Estate Too Expensive? -:- Fri, May 20, 2005 at 12:56:21 (EDT)
_ Pete Weis -:- Re: Is Real Estate Too Expensive? -:- Fri, May 20, 2005 at 14:26:05 (EDT)
__ Terri -:- Re: Is Real Estate Too Expensive? -:- Fri, May 20, 2005 at 18:22:42 (EDT)
___ Pete Weis -:- Japan vs US -:- Sat, May 21, 2005 at 01:42:41 (EDT)
____ Terri -:- Re: Japan vs US -:- Sat, May 21, 2005 at 17:58:02 (EDT)
_____ Pete Weis -:- Re: Japan vs US -:- Sun, May 22, 2005 at 12:52:55 (EDT)
______ Terri -:- Re: Japan vs US -:- Sun, May 22, 2005 at 19:49:48 (EDT)

Emma -:- At Sunbeam, Big Guys Won, Public Lost -:- Fri, May 20, 2005 at 12:51:23 (EDT)

Emma -:- Morgan Stanley's Comeuppance -:- Fri, May 20, 2005 at 10:56:38 (EDT)

Emma -:- Saving Energy, Without a Suit -:- Fri, May 20, 2005 at 10:49:43 (EDT)

Emma -:- Europe: The Unlevel Playing Field -:- Fri, May 20, 2005 at 10:21:22 (EDT)

Terri -:- How Can We Value REITs -:- Fri, May 20, 2005 at 05:55:33 (EDT)

Terri -:- The REIT Stock Index -:- Thurs, May 19, 2005 at 20:54:18 (EDT)
_ Terri -:- What is a Healthy Real Estate Market? -:- Fri, May 20, 2005 at 05:52:47 (EDT)
__ Pete Weis -:- Depends on one's....... -:- Fri, May 20, 2005 at 11:05:57 (EDT)

Terri -:- Real Estate Speculation -:- Thurs, May 19, 2005 at 19:42:50 (EDT)

Pancho Villa alias 'Madness' -:- 'Our House' -:- Thurs, May 19, 2005 at 18:14:50 (EDT)
_ Pete Weis -:- Winners vs losers -:- Thurs, May 19, 2005 at 22:50:39 (EDT)
__ Terri -:- Re: Winners vs losers -:- Fri, May 20, 2005 at 05:34:03 (EDT)

unlawflcombatnt -:- CAFTA, Slave Labor, & Outsourcing -:- Thurs, May 19, 2005 at 18:08:58 (EDT)
_ Ryan -:- Re: CAFTA, Slave Labor, & Outsourcing -:- Fri, May 20, 2005 at 12:12:56 (EDT)
__ unlawflcombatnt -:- Re: CAFTA, Slave Labor, & Outsourcing -:- Sat, May 28, 2005 at 00:35:05 (EDT)

Terri -:- China Has to Raise the Value of the Yuan -:- Thurs, May 19, 2005 at 17:14:25 (EDT)

Pete Weis -:- Paul Krugman in the Asia Times -:- Thurs, May 19, 2005 at 15:18:29 (EDT)
_ Terri -:- Re: Paul Krugman in the Asia Times -:- Thurs, May 19, 2005 at 17:16:55 (EDT)
__ Pancho Villa -:- Re: Paul Krugman in the Asia Times -:- Thurs, May 19, 2005 at 18:52:23 (EDT)

Emma -:- China Rejects Calls for Currency Changes -:- Thurs, May 19, 2005 at 12:15:05 (EDT)

Emma -:- Up From the Holler: Two Worlds -:- Thurs, May 19, 2005 at 10:58:44 (EDT)

Emma -:- Hong Kong Acts on Currency -:- Thurs, May 19, 2005 at 10:24:57 (EDT)

Emma -:- China's Growth Ebbs -:- Thurs, May 19, 2005 at 10:03:59 (EDT)

Emma -:- When Richer Weds Poorer -:- Thurs, May 19, 2005 at 09:53:40 (EDT)

Terri -:- Stocks and Bonds -:- Thurs, May 19, 2005 at 07:18:00 (EDT)

Terri -:- Alan Greenspan -:- Wed, May 18, 2005 at 18:57:52 (EDT)

Terri -:- Thinking About Long Term Treasuries -:- Wed, May 18, 2005 at 18:23:33 (EDT)

Terri -:- Vanguard Returns -:- Wed, May 18, 2005 at 18:07:25 (EDT)
_ Terri -:- Sector Stock Indexes -:- Wed, May 18, 2005 at 19:27:27 (EDT)

Terri -:- America and China -:- Wed, May 18, 2005 at 15:09:11 (EDT)

Emma -:- Refining Oil -:- Wed, May 18, 2005 at 12:55:41 (EDT)

Terri -:- Low Interest Cushion the Economy -:- Wed, May 18, 2005 at 12:26:59 (EDT)

Emma -:- Condo Fever and Apartments -:- Wed, May 18, 2005 at 10:38:12 (EDT)

Emma -:- Beijing Brushes Off U.S. Warning -:- Wed, May 18, 2005 at 10:33:45 (EDT)

Terri -:- Notice the Bond Market -:- Wed, May 18, 2005 at 10:05:16 (EDT)

Terri -:- Bond Market Adjustment -:- Wed, May 18, 2005 at 07:21:18 (EDT)

Pete Weis -:- Impending heavyweight showdown -:- Tues, May 17, 2005 at 22:42:11 (EDT)
_ Terri -:- Re: Impending heavyweight showdown -:- Wed, May 18, 2005 at 05:48:19 (EDT)
__ Pete Weis -:- Common sense vs ego -:- Wed, May 18, 2005 at 09:07:39 (EDT)
___ Terri -:- Re: Common sense vs ego -:- Wed, May 18, 2005 at 09:56:20 (EDT)
____ Pete Weis -:- Hope you are right Terri -:- Wed, May 18, 2005 at 14:48:18 (EDT)
_____ Terri -:- Re: Hope you are right Terri -:- Wed, May 18, 2005 at 15:13:31 (EDT)

Emma -:- Dispute Tears at Mumbai: India -:- Tues, May 17, 2005 at 16:10:07 (EDT)

Terri -:- Bond Positions are Stabilizing -:- Tues, May 17, 2005 at 12:34:50 (EDT)

Terri -:- Credit Risk Interest Rate Spreads -:- Tues, May 17, 2005 at 11:56:29 (EDT)

Emma -:- Social Security in France? -:- Tues, May 17, 2005 at 10:42:29 (EDT)

Terri -:- Jewel to Jewel -:- Tues, May 17, 2005 at 10:30:29 (EDT)

Emma -:- Forest's Colorful Jewels in Danger -:- Tues, May 17, 2005 at 10:17:30 (EDT)

Terri -:- Gmail -:- Tues, May 17, 2005 at 09:39:42 (EDT)
_ Terri -:- Re: Gmail -:- Tues, May 17, 2005 at 10:39:06 (EDT)

Terri -:- For All of Us a Gift -:- Tues, May 17, 2005 at 05:56:59 (EDT)
_ Pete Weis -:- Re: For All of Us a Gift -:- Tues, May 17, 2005 at 08:53:44 (EDT)

David E.. -:- Drastic change to this site? -:- Tues, May 17, 2005 at 03:51:26 (EDT)
_ Terri -:- All Will Be Well -:- Wed, May 18, 2005 at 06:00:15 (EDT)
__ Terri -:- Re: All Will Be Well -:- Wed, May 18, 2005 at 07:23:20 (EDT)
_ Terri -:- Re: Drastic change to this site? -:- Tues, May 17, 2005 at 05:51:27 (EDT)
__ Terri -:- All Will Be Well -:- Tues, May 17, 2005 at 07:12:04 (EDT)
___ Pete Weis -:- Over time.... -:- Tues, May 17, 2005 at 08:47:21 (EDT)
____ David E.. -:- Immediate effect -:- Tues, May 17, 2005 at 12:55:55 (EDT)
_____ Terri -:- Re: Immediate effect -:- Tues, May 17, 2005 at 13:59:44 (EDT)
______ Terri -:- Re: Immediate effect -:- Tues, May 17, 2005 at 14:19:17 (EDT)
_______ Terri -:- Re: Immediate effect -:- Tues, May 17, 2005 at 17:42:57 (EDT)
________ David E.. -:- Re: Immediate effect -:- Wed, May 18, 2005 at 00:21:42 (EDT)
_________ Terri -:- Re: Immediate effect -:- Wed, May 18, 2005 at 21:37:58 (EDT)
_________ Terri -:- Re: Immediate effect -:- Wed, May 18, 2005 at 05:56:39 (EDT)
__________ Terri -:- Re: Immediate effect -:- Wed, May 18, 2005 at 05:59:35 (EDT)
_________ Ryan -:- Re: Immediate effect -:- Wed, May 18, 2005 at 03:51:45 (EDT)
__________ Terri -:- Re: Immediate effect -:- Wed, May 18, 2005 at 18:24:29 (EDT)

Terri -:- Interest Rates and Bond Fund Returns -:- Mon, May 16, 2005 at 11:48:19 (EDT)

Pete Weis -:- Should we set a time table to... -:- Mon, May 16, 2005 at 11:37:02 (EDT)
_ Pete Weis -:- Re: Should we set a time table to... -:- Mon, May 16, 2005 at 18:14:29 (EDT)
__ Paul G. Brown -:- Re: Should we set a time table to... -:- Mon, May 16, 2005 at 21:16:11 (EDT)
_ Paul G. Brown -:- Re: Should we set a time table to... -:- Mon, May 16, 2005 at 17:10:57 (EDT)
__ Pete Weis -:- Oops! -:- Mon, May 16, 2005 at 18:17:05 (EDT)
___ Paul G. Brown -:- Re: Oops! -:- Mon, May 16, 2005 at 21:18:41 (EDT)
____ Terri -:- Re: Oops! -:- Tues, May 17, 2005 at 05:54:24 (EDT)

Pete Weis -:- Beneath the surface -:- Mon, May 16, 2005 at 10:33:55 (EDT)
_ Terri -:- Re: Beneath the surface -:- Mon, May 16, 2005 at 11:22:02 (EDT)
__ Terri -:- Re: Beneath the surface -:- Mon, May 16, 2005 at 12:58:24 (EDT)
___ Terri -:- Re: Beneath the surface -:- Mon, May 16, 2005 at 14:56:55 (EDT)

Emma -:- Life at the Top in America: Healthier -:- Mon, May 16, 2005 at 09:47:42 (EDT)

Terri -:- Social Security -:- Mon, May 16, 2005 at 06:16:17 (EDT)

Terri -:- The Dollar -:- Mon, May 16, 2005 at 06:05:13 (EDT)
_ Pete Weis -:- Re: The Dollar -:- Mon, May 16, 2005 at 10:05:43 (EDT)

Terri -:- Hedge Fund Returns -:- Mon, May 16, 2005 at 06:00:10 (EDT)

Terri -:- Portfolio Balance Over time -:- Mon, May 16, 2005 at 05:45:28 (EDT)
_ Pete Weis -:- Re: Portfolio Balance Over time -:- Mon, May 16, 2005 at 10:15:40 (EDT)
__ Terri -:- Re: Portfolio Balance Over time -:- Mon, May 16, 2005 at 11:51:21 (EDT)
__ Pete Weis -:- Value? -:- Mon, May 16, 2005 at 10:55:48 (EDT)
___ Terri -:- Re: Value? -:- Mon, May 16, 2005 at 11:28:29 (EDT)

Terri -:- Comparing Stock and Bond -:- Mon, May 16, 2005 at 05:43:56 (EDT)

Emma -:- The Evolution of Reluctant Capitalists -:- Sun, May 15, 2005 at 21:37:21 (EDT)

Emma -:- Class in America -:- Sun, May 15, 2005 at 11:48:49 (EDT)

Emma -:- Sugar Sugar -:- Sun, May 15, 2005 at 09:13:31 (EDT)

Emma -:- Troubles at Mexico's Oil Monopoly -:- Sun, May 15, 2005 at 09:02:07 (EDT)

Emma -:- Who's Preying on Your Grandparents? -:- Sun, May 15, 2005 at 08:32:51 (EDT)
_ Terri -:- A Most Important Article -:- Sun, May 15, 2005 at 09:05:12 (EDT)
__ Pete Weis -:- Re: A Most Important Article -:- Sun, May 15, 2005 at 11:20:09 (EDT)
___ Emma -:- Re: A Most Important Article -:- Sun, May 15, 2005 at 15:02:19 (EDT)
___ Terri -:- Re: A Most Important Article -:- Sun, May 15, 2005 at 13:10:58 (EDT)

Terri -:- Saving Culture -:- Sun, May 15, 2005 at 06:26:47 (EDT)
_ Terri -:- Re: Saving Culture -:- Sun, May 15, 2005 at 08:42:27 (EDT)

Terri -:- Growth and Debt -:- Sat, May 14, 2005 at 22:12:25 (EDT)
_ Terri -:- Re: Growth and Debt -:- Sat, May 14, 2005 at 22:17:40 (EDT)

Emma -:- Cellphone Taxes -:- Sat, May 14, 2005 at 19:00:22 (EDT)

Terri -:- Soft or Hard Landing -:- Sat, May 14, 2005 at 18:57:30 (EDT)
_ Pete Weis -:- housing market is key -:- Sat, May 14, 2005 at 21:59:48 (EDT)
__ Terri -:- Re: housing market is key -:- Sat, May 14, 2005 at 22:15:25 (EDT)

Terri -:- Why Should Interest Rates Be Higher? -:- Sat, May 14, 2005 at 16:53:45 (EDT)
_ Terri -:- Re: Why Should Interest Rates Be Higher? -:- Sat, May 14, 2005 at 17:00:26 (EDT)

Pete Weis -:- As the tide rolls out -:- Sat, May 14, 2005 at 16:33:42 (EDT)
_ Terri -:- Re: As the tide rolls out -:- Sat, May 14, 2005 at 16:46:06 (EDT)

Emma -:- Therapies Cut Risk in Breast-Cancer -:- Sat, May 14, 2005 at 15:12:27 (EDT)

Terri -:- Health Care Stocks -:- Sat, May 14, 2005 at 11:42:24 (EDT)

Emma -:- Biotech Drugs Are Producing Gains -:- Sat, May 14, 2005 at 11:28:56 (EDT)

Emma -:- 'Ford Has a Better Idea' ??? -:- Sat, May 14, 2005 at 11:04:17 (EDT)

Emma -:- Late Mutual Fund Trading -:- Sat, May 14, 2005 at 11:02:17 (EDT)
_ Terri -:- Re: Late Mutual Fund Trading -:- Sat, May 14, 2005 at 19:10:14 (EDT)
__ Terri -:- Please Read -:- Sat, May 14, 2005 at 19:54:09 (EDT)

Emma -:- U.S. Moves to Limit Imports From China -:- Sat, May 14, 2005 at 09:32:10 (EDT)

Jennifer -:- The Difference in Bond and Stock Returns -:- Sat, May 14, 2005 at 09:01:43 (EDT)

Terri -:- Diversity and Protection of Portfolios -:- Sat, May 14, 2005 at 07:03:29 (EDT)

Terri -:- Protecting Portfolios -:- Sat, May 14, 2005 at 06:47:34 (EDT)

Terri -:- Housing in Britain -:- Fri, May 13, 2005 at 16:54:19 (EDT)

Emma -:- A Hot TV Soap in a Cool China -:- Fri, May 13, 2005 at 16:10:21 (EDT)

Terri -:- Bond Market Lessons -:- Fri, May 13, 2005 at 14:52:26 (EDT)

Terri -:- Growth -:- Fri, May 13, 2005 at 14:24:44 (EDT)

mikekr -:- Bush’s Gambling Debts -:- Fri, May 13, 2005 at 13:25:47 (EDT)
_ Pete Weis -:- Re: Bush’s Gambling Debts -:- Fri, May 13, 2005 at 15:03:41 (EDT)
_ mikekr -:- Re: I forgot -:- Fri, May 13, 2005 at 13:34:58 (EDT)

Emma -:- Attention: Deficit Disorder -:- Fri, May 13, 2005 at 10:56:38 (EDT)

Emma -:- American Interest Rates and China? -:- Fri, May 13, 2005 at 10:21:21 (EDT)

Emma -:- A Chinese Deal Gone Awry -:- Fri, May 13, 2005 at 10:19:12 (EDT)

Emma -:- A Reinvented Irish Bourse -:- Fri, May 13, 2005 at 10:16:40 (EDT)

Emma -:- China Acts on Property Speculation -:- Fri, May 13, 2005 at 10:13:57 (EDT)

Terri -:- Italy -:- Fri, May 13, 2005 at 07:16:10 (EDT)
_ Setanta -:- Re: Italy -:- Fri, May 13, 2005 at 08:54:27 (EDT)
__ Emma -:- Re: Italy -:- Fri, May 13, 2005 at 10:03:34 (EDT)

Terri -:- Europe -:- Fri, May 13, 2005 at 07:11:28 (EDT)

Terri -:- Stock Market Valuations -:- Fri, May 13, 2005 at 05:46:15 (EDT)
_ Pete Weis -:- Stockular Momentum -:- Fri, May 13, 2005 at 08:52:55 (EDT)

Terri -:- Sector Stock Indexes -:- Thurs, May 12, 2005 at 18:11:52 (EDT)

Terri -:- US Real Wages Fall -:- Thurs, May 12, 2005 at 14:20:09 (EDT)

Emma -:- The Young and the Jobless -:- Thurs, May 12, 2005 at 10:55:58 (EDT)

Emma -:- Chinese Learn Value of Perks -:- Thurs, May 12, 2005 at 10:46:35 (EDT)

Emma -:- Cambodia's Garment Makers -:- Thurs, May 12, 2005 at 10:37:39 (EDT)

Terri -:- Monetary and Fiscal Policy -:- Thurs, May 12, 2005 at 10:33:32 (EDT)

Terri -:- Monetary Policy Works -:- Thurs, May 12, 2005 at 05:49:41 (EDT)

Terri -:- Fiscal Policy Works -:- Thurs, May 12, 2005 at 05:38:56 (EDT)

Pete Weis -:- If they knew what we know now -:- Wed, May 11, 2005 at 22:54:01 (EDT)
_ Terri -:- Re: If they knew what we know now -:- Thurs, May 12, 2005 at 01:48:15 (EDT)
__ Pete Weis -:- Re: If they knew what we know now -:- Thurs, May 12, 2005 at 09:12:03 (EDT)

Terri -:- Thank You All For This Wonderful Board -:- Wed, May 11, 2005 at 22:31:45 (EDT)

Pancho Villa -:- 'No Comment.' -:- Wed, May 11, 2005 at 18:53:23 (EDT)
_ Terri -:- Re: 'No Comment.' -:- Wed, May 11, 2005 at 21:56:26 (EDT)

Terri -:- Better Economic Growth -:- Wed, May 11, 2005 at 14:11:46 (EDT)

Emma -:- United Air Wins On Pension Default -:- Wed, May 11, 2005 at 13:35:51 (EDT)
_ Pete Weis -:- Re: United Air Wins On Pension Default -:- Wed, May 11, 2005 at 15:21:32 (EDT)
__ Terri -:- Re: United Air Wins On Pension Default -:- Wed, May 11, 2005 at 22:28:36 (EDT)

Emma -:- Morgan Stanley Says Earnings May Falter -:- Wed, May 11, 2005 at 09:28:20 (EDT)

Terri -:- Bond Values -:- Wed, May 11, 2005 at 07:30:25 (EDT)

Terri -:- REITs -:- Wed, May 11, 2005 at 06:01:07 (EDT)
_ David E.. -:- Re: REITs -:- Sat, May 14, 2005 at 15:58:14 (EDT)

Pancho Villa -:- The return of Robert 'Bonaparte' -:- Tues, May 10, 2005 at 15:52:45 (EDT)
_ Pete Weis -:- Re: The return of Robert 'Bonaparte' -:- Tues, May 10, 2005 at 22:02:20 (EDT)

Emma -:- Duke Energy Will Acquire Cinergy -:- Tues, May 10, 2005 at 12:26:42 (EDT)

Emma -:- The Oh-So-French Bistro: Chinese? -:- Tues, May 10, 2005 at 11:24:14 (EDT)

Emma -:- More Bad Faith on Social Security -:- Tues, May 10, 2005 at 10:37:05 (EDT)
_ Emma -:- More Bad Faith on Social Security - 1 -:- Tues, May 10, 2005 at 10:38:13 (EDT)

Emma -:- Nature at Bay -:- Mon, May 09, 2005 at 19:01:34 (EDT)

Setanta -:- China Syndrome -:- Mon, May 09, 2005 at 14:05:31 (EDT)
_ Terri -:- Re: China Syndrome -:- Mon, May 09, 2005 at 20:52:43 (EDT)

Pete Weis -:- Why the 30yr bond? -:- Mon, May 09, 2005 at 13:38:10 (EDT)
_ David E.. -:- It makes sense- -:- Wed, May 11, 2005 at 23:45:27 (EDT)
_ Emma -:- Re: Why the 30yr bond? -:- Tues, May 10, 2005 at 05:47:53 (EDT)
_ Terri -:- Re: Why the 30yr bond? -:- Mon, May 09, 2005 at 20:53:22 (EDT)

Pete Weis -:- Japan vs US -:- Mon, May 09, 2005 at 13:30:29 (EDT)
_ Pancho Villa -:- Re: An old joke -:- Tues, May 10, 2005 at 06:48:04 (EDT)
__ Pete Weis -:- Re: An old joke -:- Tues, May 10, 2005 at 09:15:36 (EDT)
_ Emma -:- Re: Japan vs US -:- Tues, May 10, 2005 at 06:08:28 (EDT)

Pete Weis -:- Your interest vs their interest -:- Mon, May 09, 2005 at 12:48:58 (EDT)

Emma -:- States Propose Changes to Trim Medicaid -:- Mon, May 09, 2005 at 12:26:09 (EDT)

Emma -:- No New Refineries in 29 Years? -:- Mon, May 09, 2005 at 11:40:31 (EDT)

Emma -:- Progressive -:- Mon, May 09, 2005 at 08:17:54 (EDT)

Emma -:- Pressing the Reset Button on Stocks -:- Sun, May 08, 2005 at 17:16:59 (EDT)
_ Pete Weis -:- What's wrong with the reset? -:- Mon, May 09, 2005 at 11:44:50 (EDT)
__ Emma -:- Savings -:- Tues, May 10, 2005 at 05:49:31 (EDT)
___ Pete Weis -:- Why? -:- Tues, May 10, 2005 at 09:07:09 (EDT)
____ Emma -:- Re: Why? -:- Tues, May 10, 2005 at 21:34:38 (EDT)
_____ Pete Weis -:- Re: Why? -:- Wed, May 11, 2005 at 09:06:03 (EDT)
______ Emma -:- Re: Why? -:- Wed, May 11, 2005 at 16:16:40 (EDT)
_______ Pete Weis -:- Re: Why? -:- Wed, May 11, 2005 at 21:47:50 (EDT)
________ Terri -:- Re: Why? -:- Wed, May 11, 2005 at 22:30:22 (EDT)
_________ Pete Weis -:- Re: Why? -:- Thurs, May 12, 2005 at 01:00:35 (EDT)

Emma -:- Medicine or Food? -:- Sun, May 08, 2005 at 16:46:33 (EDT)
_ Emma -:- Food or Medicine? -:- Mon, May 09, 2005 at 06:15:01 (EDT)
__ Emma -:- Re: Food or Medicine? -:- Mon, May 09, 2005 at 06:22:42 (EDT)
_ Terri -:- Re: Medicine or Food? -:- Sun, May 08, 2005 at 20:31:19 (EDT)
__ Pancho Villa -:- Re: Medicine and Food? -:- Mon, May 09, 2005 at 18:53:44 (EDT)

Emma -:- The Perfect Economic Storm -:- Sun, May 08, 2005 at 10:18:41 (EDT)
_ Pete Weis -:- Re: The Perfect Economic Storm -:- Sun, May 08, 2005 at 10:42:58 (EDT)
__ johnny5 -:- Cigars? -:- Mon, May 09, 2005 at 00:00:31 (EDT)

Emma -:- Drug Makers Reap Benefits of Tax Break -:- Sun, May 08, 2005 at 09:33:44 (EDT)

Emma -:- Genentech and Susan Desmond-Hellmann -:- Sat, May 07, 2005 at 20:07:59 (EDT)

Emma -:- Feeling Shortchanged, Genteelly -:- Sat, May 07, 2005 at 11:53:36 (EDT)
_ Setanta -:- Re: Feeling Shortchanged, Genteelly -:- Mon, May 09, 2005 at 14:41:04 (EDT)
__ Terri -:- Re: Feeling Shortchanged, Genteelly -:- Mon, May 09, 2005 at 20:52:06 (EDT)
_ Terri -:- An Important Article -:- Sat, May 07, 2005 at 19:32:59 (EDT)

Emma -:- Ford and General Motors -:- Sat, May 07, 2005 at 10:56:52 (EDT)
_ Terri -:- Should We Be Surprised? -:- Sat, May 07, 2005 at 11:03:50 (EDT)

Emma -:- Creation of Jobs Surges -:- Sat, May 07, 2005 at 10:49:56 (EDT)
_ Pete Weis -:- Re: Creation of Jobs Surges -:- Sun, May 08, 2005 at 00:36:22 (EDT)
__ Terri -:- Re: Creation of Jobs Surges -:- Sun, May 08, 2005 at 06:23:43 (EDT)
___ Emma -:- Re: Creation of Jobs Surges -:- Sun, May 08, 2005 at 09:08:09 (EDT)
____ Pete Weis -:- Re: Creation of Jobs Surges -:- Sun, May 08, 2005 at 10:24:19 (EDT)
_____ Emma -:- Re: Creation of Jobs Surges -:- Sun, May 08, 2005 at 10:41:16 (EDT)
______ Poyetas -:- Re: Creation of Jobs Surges -:- Mon, May 09, 2005 at 07:22:26 (EDT)
_______ Ryan -:- Re: Creation of Jobs Surges -:- Wed, May 11, 2005 at 03:01:02 (EDT)
_______ Pete Weis -:- Re: Creation of Jobs Surges -:- Mon, May 09, 2005 at 11:57:15 (EDT)

Emma -:- China Braces for a More Valuable Yuan -:- Sat, May 07, 2005 at 09:02:05 (EDT)

johnny5 -:- More lies in Appraisals -:- Sat, May 07, 2005 at 07:49:50 (EDT)

Bill Gilwood -:- China Price -:- Fri, May 06, 2005 at 23:11:01 (EDT)
_ Pancho Villa -:- Re: Ipsa Scientia Potestas Est -:- Sat, May 07, 2005 at 08:01:20 (EDT)
_ Jennifer -:- Re: China Price -:- Sat, May 07, 2005 at 07:01:42 (EDT)
__ Bill Gilwood -:- Re: China Price -:- Sat, May 07, 2005 at 17:54:37 (EDT)
__ Bill Gilwood -:- Re: China Price -:- Sat, May 07, 2005 at 17:54:06 (EDT)
___ Pancho Villa -:- Re: China Price -:- Sat, May 07, 2005 at 21:11:46 (EDT)

Pancho Villa -:- PK's immunity? -:- Fri, May 06, 2005 at 17:56:46 (EDT)
_ Emma -:- Re: PK's immunity? -:- Fri, May 06, 2005 at 19:53:50 (EDT)
__ Pancho Villa -:- Re: PK's immunity? -:- Sat, May 07, 2005 at 08:04:24 (EDT)

Pancho Villa -:- I couldn't care less, could eye? -:- Fri, May 06, 2005 at 17:43:52 (EDT)
_ Setanta -:- Re: I couldn't care less, could eye? -:- Mon, May 09, 2005 at 14:54:07 (EDT)
_ Pete Weis -:- There will be...... -:- Fri, May 06, 2005 at 21:40:25 (EDT)

Terri -:- Education -:- Fri, May 06, 2005 at 16:44:33 (EDT)

Terri -:- A Monetary Policy Success -:- Fri, May 06, 2005 at 16:31:40 (EDT)

Terri -:- Strong, Broad-Based Job Growth -:- Fri, May 06, 2005 at 13:35:28 (EDT)

Terri -:- Satisfying Employment Numbers -:- Fri, May 06, 2005 at 12:18:11 (EDT)
_ Terri -:- A Mild Slowing -:- Fri, May 06, 2005 at 13:05:42 (EDT)

Emma -:- Kenya: A Better Way to Fight Poverty -:- Fri, May 06, 2005 at 11:18:48 (EDT)
_ Mik -:- What? -:- Fri, May 06, 2005 at 16:49:00 (EDT)
__ Emma -:- Re: What? -:- Fri, May 06, 2005 at 20:11:22 (EDT)

Emma -:- States and Employers and Health Care -:- Fri, May 06, 2005 at 10:22:13 (EDT)

Emma -:- Credit Rankings of G.M. and Ford -:- Fri, May 06, 2005 at 10:19:05 (EDT)

Emma -:- I.B.M. Job Cuts Will Hit Europe Hard -:- Fri, May 06, 2005 at 10:04:39 (EDT)

Poyetas -:- Socialist Economics -:- Fri, May 06, 2005 at 09:47:23 (EDT)
_ Emma -:- Re: Socialist Economics -:- Fri, May 06, 2005 at 10:27:15 (EDT)
__ Pete Weis -:- You have to wonder.... -:- Fri, May 06, 2005 at 21:46:11 (EDT)

Pete Weis -:- Those earnings reports -:- Fri, May 06, 2005 at 09:14:05 (EDT)

Setanta -:- Protectionist moves -:- Fri, May 06, 2005 at 09:00:51 (EDT)
_ Pancho Villa alias Triché II -:- Re: Kudos to GS for... -:- Fri, May 06, 2005 at 17:16:09 (EDT)

Terri -:- Japan's Deflation -:- Fri, May 06, 2005 at 06:01:06 (EDT)
_ Pete Weis -:- Re: Japan's Deflation -:- Fri, May 06, 2005 at 09:37:17 (EDT)
__ Terri -:- Re: Japan's Deflation -:- Fri, May 06, 2005 at 14:38:27 (EDT)
_ Terri -:- Education -:- Fri, May 06, 2005 at 07:27:33 (EDT)
__ Setanta -:- Re: Education -:- Fri, May 06, 2005 at 09:11:55 (EDT)
___ Pancho Villa -:- Re: One Step Beyond -:- Fri, May 06, 2005 at 16:45:49 (EDT)
___ Pete Weis -:- You speak truth Setanta -:- Fri, May 06, 2005 at 09:38:45 (EDT)
____ Emma -:- Re: You speak truth Setanta -:- Fri, May 06, 2005 at 10:12:53 (EDT)

johnny5 -:- Japan conundrum -:- Fri, May 06, 2005 at 05:27:18 (EDT)
_ Terri -:- Re: Japan conundrum -:- Fri, May 06, 2005 at 20:47:50 (EDT)

Terri -:- Credit Ratings and Bond Fund Prices -:- Thurs, May 05, 2005 at 20:06:06 (EDT)

Terri -:- New York City Revenue Streams -:- Thurs, May 05, 2005 at 18:55:09 (EDT)

Terri -:- Productivity and Labor Demand -:- Thurs, May 05, 2005 at 16:29:58 (EDT)
_ Terri -:- Productivity and Economic Growth -:- Thurs, May 05, 2005 at 17:18:25 (EDT)
__ Poyetas -:- Re: Productivity and Economic Growth -:- Fri, May 06, 2005 at 09:12:33 (EDT)
__ johnny5 -:- Teens getting on Drugs -:- Fri, May 06, 2005 at 05:17:05 (EDT)

Terri -:- Whole Foods and Trader Joe's: Hmmm -:- Thurs, May 05, 2005 at 14:19:03 (EDT)
_ Dorian -:- Re: Whole Foods and Trader Joe's: Hmmm -:- Fri, May 06, 2005 at 04:31:33 (EDT)
__ Terri -:- Re: Whole Foods and Trader Joe's: Hmmm -:- Fri, May 06, 2005 at 06:08:02 (EDT)
___ Terri -:- Re: Whole Foods and Trader Joe's: Hmmm -:- Fri, May 06, 2005 at 06:32:27 (EDT)

Terri -:- General Motors and Ford -:- Thurs, May 05, 2005 at 13:33:48 (EDT)
_ Setanta -:- Re: General Motors and Ford -:- Fri, May 06, 2005 at 06:56:18 (EDT)
__ Poyetas -:- Re: General Motors and Ford -:- Fri, May 06, 2005 at 11:10:40 (EDT)

Emma -:- As Britain Votes -:- Thurs, May 05, 2005 at 12:32:25 (EDT)

Emma -:- Politicizing Public Broadcasting -:- Thurs, May 05, 2005 at 11:43:14 (EDT)

Terri -:- International Borrowing -:- Thurs, May 05, 2005 at 11:37:11 (EDT)

Terri -:- Housing and Growth -:- Thurs, May 05, 2005 at 11:35:57 (EDT)
_ Pete Weis -:- Re: Housing and Growth -:- Thurs, May 05, 2005 at 15:26:57 (EDT)
__ Terri -:- Re: Housing and Growth -:- Thurs, May 05, 2005 at 19:05:55 (EDT)
_ Ryan -:- Re: Housing and Growth -:- Thurs, May 05, 2005 at 15:26:17 (EDT)
__ Terri -:- Re: Housing and Growth -:- Thurs, May 05, 2005 at 17:32:58 (EDT)

Pancho Villa -:- -:-
It's just an illusion -:- Thurs, May 05, 2005 at 11:28:32 (EDT) > -:- Thurs, May 05, 2005 at 11:28:32 (EDT)

Mona Smith -:- Social Security -:- Thurs, May 05, 2005 at 10:50:39 (EDT)
_ Susan D. -:- Re: Conservatives and GOP hate Social Security -:- Thurs, May 05, 2005 at 15:08:02 (EDT)
__ Mona -:- Re: Conservatives and GOP hate Social Security -:- Thurs, May 05, 2005 at 17:01:56 (EDT)
_ Emma -:- Re: Social Security -:- Thurs, May 05, 2005 at 11:05:06 (EDT)
_ johnny5 -:- we FEEL you -:- Thurs, May 05, 2005 at 10:59:54 (EDT)
__ Setanta -:- Re: we FEEL you -:- Thurs, May 05, 2005 at 12:05:22 (EDT)
___ Emma -:- Re: we FEEL you -:- Thurs, May 05, 2005 at 12:13:08 (EDT)
__ Mona Smith -:- Re: we FEEL you -:- Thurs, May 05, 2005 at 11:49:36 (EDT)
___ johnny5 -:- Mental Midgets -:- Fri, May 06, 2005 at 04:58:45 (EDT)
____ Susan -:- Re: Mental Midgets -:- Sun, May 08, 2005 at 06:57:27 (EDT)
___ Mona Smith -:- Re: we FEEL you -:- Thurs, May 05, 2005 at 11:55:32 (EDT)
____ Emma -:- Income Insurance -:- Thurs, May 05, 2005 at 12:11:20 (EDT)
_____ Poyetas -:- Re: Income Insurance -:- Fri, May 06, 2005 at 09:34:09 (EDT)
______ JimBob -:- Re: Income Insurance -:- Fri, May 06, 2005 at 11:05:40 (EDT)

Emma -:- The Thrift Imperative -:- Thurs, May 05, 2005 at 10:47:13 (EDT)

Terri -:- Employment -:- Thurs, May 05, 2005 at 10:12:08 (EDT)
_ Ryan -:- Re: Employment -:- Thurs, May 05, 2005 at 15:19:09 (EDT)
__ Terri -:- Re: Employment -:- Thurs, May 05, 2005 at 16:48:34 (EDT)

Emma -:- Germany Faults Overseas Investors -:- Thurs, May 05, 2005 at 09:55:37 (EDT)

Emma -:- I.B.M. Lay Offs in Europe -:- Thurs, May 05, 2005 at 09:53:42 (EDT)

Terri -:- Social Security and Treasury Bonds -:- Thurs, May 05, 2005 at 06:25:16 (EDT)

Terri -:- Treasury Bond Market Duration -:- Thurs, May 05, 2005 at 06:00:00 (EDT)

Terri -:- A Promising Stock Market -:- Wed, May 04, 2005 at 14:58:59 (EDT)
_ Terri -:- Economic Worries -:- Thurs, May 05, 2005 at 10:56:31 (EDT)
__ Pete Weis -:- 1994 vs 2005 -:- Thurs, May 05, 2005 at 15:21:01 (EDT)
_ johnny5 -:- Deja Vu -:- Thurs, May 05, 2005 at 08:40:23 (EDT)
_ Pete Weis -:- Re: A Promising Stock Market -:- Wed, May 04, 2005 at 21:30:27 (EDT)
__ Terri -:- Re: A Promising Stock Market -:- Thurs, May 05, 2005 at 05:52:02 (EDT)
___ Pete Weis -:- Paul Volker and this..... -:- Thurs, May 05, 2005 at 09:24:36 (EDT)

Terri -:- Health Care in South Africa -:- Wed, May 04, 2005 at 13:49:04 (EDT)
_ Mik -:- Re: Health Care in South Africa -:- Thurs, May 05, 2005 at 13:32:34 (EDT)
__ Terri -:- Re: Health Care in South Africa -:- Thurs, May 05, 2005 at 16:36:20 (EDT)
___ Terri -:- Re: Health Care in South Africa -:- Thurs, May 05, 2005 at 18:17:13 (EDT)

Emma -:- Why Can't Wal-Mart Pay More? -:- Wed, May 04, 2005 at 13:04:19 (EDT)

johnny5 -:- David Tice Prudent Bear on CNBC 2pm -:- Wed, May 04, 2005 at 11:23:42 (EDT)

Emma -:- A New 'China Syndrome' -:- Wed, May 04, 2005 at 10:31:39 (EDT)
_ Pancho Villa -:- Re: A New 'China Syndrome' -:- Wed, May 04, 2005 at 11:21:56 (EDT)

Pancho Villa -:- Pozen Pill (Prozac?) -:- Wed, May 04, 2005 at 08:55:34 (EDT)
_ Jennifer -:- Re: Pozen Pill (Prozac?) -:- Wed, May 04, 2005 at 09:50:52 (EDT)

Terri -:- Saving Bluefin Tuna -:- Wed, May 04, 2005 at 05:51:38 (EDT)
_ Terri -:- Re: Saving Bluefin Tuna -:- Wed, May 04, 2005 at 05:53:52 (EDT)

Emma -:- Hitting the Middle Class, Again -:- Tues, May 03, 2005 at 20:15:37 (EDT)
_ Terri -:- Social Security is Wonderful -:- Wed, May 04, 2005 at 06:07:37 (EDT)

unlawflcombatnt -:- Outsourcing to a Ship -:- Tues, May 03, 2005 at 18:14:45 (EDT)
_ unlawflcombatnt -:- Outsourcing to a Ship -:- Tues, May 03, 2005 at 18:18:24 (EDT)

Terri -:- Federal Reserve Policy -:- Tues, May 03, 2005 at 17:07:01 (EDT)
_ Pete Weis -:- Re: Federal Reserve Policy -:- Tues, May 03, 2005 at 21:36:17 (EDT)
__ Terri -:- Re: Federal Reserve Policy -:- Wed, May 04, 2005 at 05:44:05 (EDT)

Terri -:- Bond Price Stability -:- Tues, May 03, 2005 at 15:47:15 (EDT)
_ Pete Weis -:- Re: Bond Price Stability -:- Tues, May 03, 2005 at 21:40:23 (EDT)
__ Terri -:- Re: Bond Price Stability -:- Wed, May 04, 2005 at 05:41:35 (EDT)

Pete Weis -:- Insider selling -:- Tues, May 03, 2005 at 15:02:04 (EDT)
_ Terri -:- Re: Insider selling -:- Tues, May 03, 2005 at 15:13:15 (EDT)
__ Terri -:- What is Being Bought -:- Wed, May 04, 2005 at 05:47:02 (EDT)
___ Pete Weis -:- Re: What is Being Bought -:- Wed, May 04, 2005 at 08:56:25 (EDT)

Emma -:- Tracking the Imperiled Bluefin -:- Tues, May 03, 2005 at 12:47:39 (EDT)
_ Pete Weis -:- It's amazing to watch..... -:- Tues, May 03, 2005 at 21:49:17 (EDT)
__ Terri -:- Saddening -:- Wed, May 04, 2005 at 05:48:53 (EDT)

Emma -:- A.I.G. Accounting -:- Tues, May 03, 2005 at 11:23:13 (EDT)
_ Setanta -:- Re: A.I.G. Accounting -:- Wed, May 04, 2005 at 09:35:06 (EDT)
_ Pete Weis -:- The tide...... -:- Tues, May 03, 2005 at 21:37:50 (EDT)
__ Terri -:- Thanks Eliot Spitzer -:- Wed, May 04, 2005 at 05:46:01 (EDT)
___ Pete Weis -:- Re: Thanks Eliot Spitzer -:- Wed, May 04, 2005 at 09:11:44 (EDT)
____ Jennifer -:- Re: Thanks Eliot Spitzer -:- Wed, May 04, 2005 at 09:47:59 (EDT)

Emma -:- On Path to China-Taiwan Détente -:- Tues, May 03, 2005 at 10:53:02 (EDT)

Emma -:- Modified Rice May Benefit China -:- Tues, May 03, 2005 at 10:32:23 (EDT)

Emma -:- Beijing and Tokoyo -:- Tues, May 03, 2005 at 10:28:31 (EDT)

Setanta -:- The counter-revolutionaries -:- Tues, May 03, 2005 at 08:59:09 (EDT)

Terri -:- Interest Rates -:- Tues, May 03, 2005 at 06:21:53 (EDT)
_ Pete Weis -:- The great bind -:- Tues, May 03, 2005 at 09:00:50 (EDT)
__ Terri -:- Re: The great bind -:- Tues, May 03, 2005 at 10:25:42 (EDT)
___ johnny5 -:- My jobless friends -:- Tues, May 03, 2005 at 10:35:38 (EDT)

Terri -:- Monetary Policy -:- Tues, May 03, 2005 at 06:13:10 (EDT)
_ johnny5 -:- Arnold says Girlie Men Liberals bad -:- Tues, May 03, 2005 at 10:29:44 (EDT)

johnny5 -:- Girl Power as Boy Bashing -:- Tues, May 03, 2005 at 05:54:02 (EDT)

johnny5 -:- Mr. Chavez viva la revolution! -:- Tues, May 03, 2005 at 02:46:17 (EDT)

Mik -:- Obsession with Privatisation -:- Mon, May 02, 2005 at 14:19:42 (EDT)
_ Terri -:- Re: Obsession with Privatisation -:- Mon, May 02, 2005 at 14:51:20 (EDT)
__ Mik -:- Re: Obsession with Privatisation -:- Wed, May 04, 2005 at 10:56:32 (EDT)
___ Terri -:- Re: Obsession with Privatisation -:- Wed, May 04, 2005 at 12:14:54 (EDT)

Emma -:- Methods to Reduce Blood Pressure -:- Mon, May 02, 2005 at 12:50:45 (EDT)

Emma -:- 'Normal' Blood Pressure -:- Mon, May 02, 2005 at 12:05:14 (EDT)

Pancho Villa -:- How Now, Dow Ow -:- Mon, May 02, 2005 at 10:54:48 (EDT)

Emma -:- A Jolt to Team Japan: Bonus Demands -:- Mon, May 02, 2005 at 10:53:32 (EDT)

Emma -:- Republicans Exerts Pressure on PBS -:- Mon, May 02, 2005 at 09:54:37 (EDT)
_ Terri -:- A Tragedy -:- Tues, May 03, 2005 at 08:47:46 (EDT)

byron -:- something to think about -:- Sun, May 01, 2005 at 23:14:18 (EDT)
_ Pete Weis -:- The fundamental reasons... -:- Mon, May 02, 2005 at 18:20:29 (EDT)

Terri -:- The Health of Nations: England -:- Sun, May 01, 2005 at 20:27:48 (EDT)

johnny5 -:- Britains QUESTION TIME -:- Sun, May 01, 2005 at 19:38:19 (EDT)

Emma -:- Social Security -:- Sun, May 01, 2005 at 19:22:39 (EDT)
_ Emma -:- Social Security ? -:- Sun, May 01, 2005 at 20:07:39 (EDT)
__ johnny5 -:- Broke retirees -:- Sun, May 01, 2005 at 22:19:06 (EDT)
_ johnny5 -:- Judged by how you treat the least of you -:- Sun, May 01, 2005 at 19:56:16 (EDT)

johnny5 -:- Thomas Friedman on Cspan for Emma -:- Sun, May 01, 2005 at 19:06:11 (EDT)

Terri -:- Social Security? If You Were Wondering -:- Sun, May 01, 2005 at 10:31:44 (EDT)

Emma -:- For Buffett, the One That Got Away -:- Sun, May 01, 2005 at 10:02:46 (EDT)

Emma -:- The Wealth of Yet More Nations -:- Sun, May 01, 2005 at 09:49:36 (EDT)

Emma -:- Bowling for Democracy -:- Sun, May 01, 2005 at 09:44:30 (EDT)
_ johnny5 -:- The gladiators of Rome -:- Sun, May 01, 2005 at 19:18:20 (EDT)

Emma -:- Vietnam, 30 Years Later -:- Sun, May 01, 2005 at 09:30:33 (EDT)
_ johnny5 -:- Wealth Gap rising -:- Sun, May 01, 2005 at 22:04:56 (EDT)

Emma -:- China and Taiwan Come Closer -:- Sun, May 01, 2005 at 09:27:48 (EDT)

johnny5 -:- Economic Forecasting - Laugh it up Pete -:- Sun, May 01, 2005 at 08:14:34 (EDT)
_ Pete Weis -:- Funny -:- Sun, May 01, 2005 at 11:58:13 (EDT)

Terri -:- Long Term Short Term Interest -:- Sun, May 01, 2005 at 07:18:13 (EDT)

Terri -:- American Saving -:- Sun, May 01, 2005 at 06:32:44 (EDT)

johnny5 -:- Oracle down for the count - but not out -:- Sat, Apr 30, 2005 at 19:19:02 (EDT)

Emma -:- Global Playing Field -:- Sat, Apr 30, 2005 at 15:37:43 (EDT)

Emma -:- South Africa: A Would-Be Pilot -:- Sat, Apr 30, 2005 at 11:52:31 (EDT)
_ Gary Walther -:- Re: South Africa: A Would-Be Pilot -:- Fri, May 06, 2005 at 17:25:09 (EDT)

Pete Weis -:- Reaganomics lives on -:- Sat, Apr 30, 2005 at 11:00:01 (EDT)

Emma -:- China and Taiwan -:- Sat, Apr 30, 2005 at 10:15:22 (EDT)

Emma -:- China: A Currency Afloat -:- Sat, Apr 30, 2005 at 10:14:03 (EDT)

Emma -:- 'What, Me Worry?' -:- Sat, Apr 30, 2005 at 10:00:55 (EDT)

Emma -:- Norway: The $6.66-a-Gallon Solution -:- Sat, Apr 30, 2005 at 09:38:50 (EDT)

Terri -:- Vanguard Sector Indexes -:- Fri, Apr 29, 2005 at 21:02:53 (EDT)
_ Terri -:- Vanguard Fund Returns -:- Fri, Apr 29, 2005 at 21:15:46 (EDT)

Emma -:- The Natural and the Sacred in China -:- Fri, Apr 29, 2005 at 12:58:24 (EDT)

Emma -:- Cut Medicaid, Cut Taxes, Repeat -:- Fri, Apr 29, 2005 at 12:09:28 (EDT)

Terri -:- Bond Funds are Faring Well -:- Fri, Apr 29, 2005 at 11:57:00 (EDT)

Emma -:- Mystery of India's Poverty -:- Fri, Apr 29, 2005 at 10:52:33 (EDT)

Pete Weis -:- It's not about your time horizon...... -:- Fri, Apr 29, 2005 at 10:33:27 (EDT)
_ Terri -:- Re: It's not about your time horizon...... -:- Fri, Apr 29, 2005 at 11:22:20 (EDT)

Emma -:- Europe is and is Not Working -:- Fri, Apr 29, 2005 at 09:48:06 (EDT)

Terri -:- Saving and Investing -:- Fri, Apr 29, 2005 at 08:20:54 (EDT)

Terri -:- China and America -:- Fri, Apr 29, 2005 at 08:17:33 (EDT)

Terri -:- Savings -:- Fri, Apr 29, 2005 at 06:31:46 (EDT)

Terri -:- Social Security -:- Fri, Apr 29, 2005 at 06:17:54 (EDT)

Terri -:- Slowing Growth -:- Fri, Apr 29, 2005 at 05:58:53 (EDT)
_ johnny5 -:- Bush kisses the saud -:- Fri, Apr 29, 2005 at 17:51:13 (EDT)

Pete Weis -:- Our President seems to be....... -:- Thurs, Apr 28, 2005 at 23:43:54 (EDT)
_ Terri -:- Energy Conservation and Efficiency -:- Fri, Apr 29, 2005 at 05:46:55 (EDT)

Terri -:- Slow Growth and Low Inflation -:- Thurs, Apr 28, 2005 at 14:25:10 (EDT)

Terri -:- Monetary and Fiscal Policy -:- Thurs, Apr 28, 2005 at 13:11:34 (EDT)

Emma -:- Low-Tech Businesses Are Booming -:- Thurs, Apr 28, 2005 at 11:58:12 (EDT)

Emma -:- Why Bubbles May Happen -:- Thurs, Apr 28, 2005 at 10:24:29 (EDT)

Pete Weis -:- The present looks more & more like past -:- Thurs, Apr 28, 2005 at 09:33:55 (EDT)

johnny5 -:- Bogle 70% bond funds - worried about economy -:- Thurs, Apr 28, 2005 at 09:24:53 (EDT)
_ Ari -:- Re: Bogle 70% bond funds - worried about economy -:- Thurs, Apr 28, 2005 at 09:44:47 (EDT)
__ David E.. -:- Re: Bogle 70% bond funds - worried about economy -:- Thurs, Apr 28, 2005 at 21:07:09 (EDT)
___ Terri -:- Re: Bogle 70% bond funds - worried about economy -:- Thurs, Apr 28, 2005 at 21:54:53 (EDT)

Terri -:- European Integration -:- Thurs, Apr 28, 2005 at 08:52:16 (EDT)
_ Setanta -:- Re: European Integration -:- Thurs, Apr 28, 2005 at 11:37:21 (EDT)

johnny5 -:- Greenspan Confidant sees America = Argentina -:- Thurs, Apr 28, 2005 at 08:31:23 (EDT)
_ Terri -:- Re: Greenspan Confidant sees America = Argentina -:- Thurs, Apr 28, 2005 at 10:15:28 (EDT)

Terri -:- Japanese Growth -:- Thurs, Apr 28, 2005 at 06:15:02 (EDT)

Terri -:- Europe as a Whole -:- Thurs, Apr 28, 2005 at 06:03:54 (EDT)
_ johnny5 -:- Johnny's Ukraine Friends -:- Thurs, Apr 28, 2005 at 08:34:20 (EDT)

Terri -:- European Growth is Slowing -:- Thurs, Apr 28, 2005 at 05:57:59 (EDT)

johnny5 -:- Bogle on CNBC squawk BOX this morning -:- Thurs, Apr 28, 2005 at 05:43:33 (EDT)

Setanta -:- ECB interest rates -:- Thurs, Apr 28, 2005 at 04:16:47 (EDT)
_ johnny5 -:- the 6 trillion dollar question -:- Thurs, Apr 28, 2005 at 05:11:13 (EDT)

johnny5 -:- Voter Eligible Population -:- Thurs, Apr 28, 2005 at 00:36:18 (EDT)

Emma -:- Prothonotary Warbler Taking a Drink -:- Wed, Apr 27, 2005 at 21:25:59 (EDT)

Terri -:- Buget Arguments -:- Wed, Apr 27, 2005 at 18:50:07 (EDT)
_ David E.. -:- Re: Buget Arguments -:- Wed, Apr 27, 2005 at 20:26:06 (EDT)
__ Terri -:- Budget Projections -:- Wed, Apr 27, 2005 at 20:39:43 (EDT)
_ Terri -:- Budget Arguments -:- Wed, Apr 27, 2005 at 18:51:06 (EDT)

johnny5 -:- Politics to the redneck -:- Wed, Apr 27, 2005 at 18:22:28 (EDT)
_ johnny5 -:- The point is Terri -:- Wed, Apr 27, 2005 at 18:24:05 (EDT)

Emma -:- In Ethiopian Hills -:- Wed, Apr 27, 2005 at 15:53:07 (EDT)

Ken -:- Filibuster -:- Wed, Apr 27, 2005 at 14:16:13 (EDT)

Emma -:- By Cheese Possessed -:- Wed, Apr 27, 2005 at 12:27:52 (EDT)
_ Emma -:- Well, I Like Cheese -:- Wed, Apr 27, 2005 at 12:43:06 (EDT)

Emma -:- The Hapless British Tories -:- Wed, Apr 27, 2005 at 12:12:38 (EDT)

Terri -:- On Income Taxes -:- Wed, Apr 27, 2005 at 10:40:49 (EDT)
_ johnny5 -:- Positive Thinking -:- Wed, Apr 27, 2005 at 18:11:27 (EDT)
_ Terri -:- Re: On Income Taxes -:- Wed, Apr 27, 2005 at 11:07:03 (EDT)
__ johnny5 -:- Less income tax - more wealth tax -:- Wed, Apr 27, 2005 at 18:12:53 (EDT)
___ jimsum -:- Re: Less income tax - more wealth tax -:- Wed, Apr 27, 2005 at 22:31:15 (EDT)

Pete Weis -:- The approaching energy gap -:- Wed, Apr 27, 2005 at 10:16:40 (EDT)

Emma -:- Fears Mount That Germany Faces Recession -:- Wed, Apr 27, 2005 at 10:11:15 (EDT)

Terri -:- Deficits and Taxes -:- Wed, Apr 27, 2005 at 08:40:40 (EDT)
_ johnny5 -:- Why do you believe this? -:- Wed, Apr 27, 2005 at 10:17:50 (EDT)

Terri -:- REITs and Treasuries -:- Wed, Apr 27, 2005 at 08:02:01 (EDT)
_ David E.. -:- Re: REITs and Treasuries -:- Wed, Apr 27, 2005 at 12:00:39 (EDT)

Emma -:- Private Pensions in Chile -:- Wed, Apr 27, 2005 at 06:28:21 (EDT)
_ David E.. -:- Re: Private Pensions in Chile -:- Wed, Apr 27, 2005 at 11:59:14 (EDT)
__ David E.. -:- Private Pensions in Texas -:- Wed, Apr 27, 2005 at 15:33:32 (EDT)
___ Emma -:- Re: Private Pensions in Texas -:- Wed, Apr 27, 2005 at 15:50:08 (EDT)
____ David E.. -:- Re: Private Pensions in Texas -:- Wed, Apr 27, 2005 at 16:21:16 (EDT)
_____ Emma -:- Re: Private Pensions in Texas -:- Wed, Apr 27, 2005 at 16:47:50 (EDT)
______ Emma -:- Re: Private Pensions in Texas -:- Wed, Apr 27, 2005 at 17:02:54 (EDT)

Emma -:- Chile: The Proof's in the Pension -:- Tues, Apr 26, 2005 at 18:06:07 (EDT)
_ David E.. -:- Re: Chile: The Proof's in the Pension -:- Tues, Apr 26, 2005 at 19:24:29 (EDT)
__ Emma -:- Re: Chile: The Proof's in the Pension -:- Tues, Apr 26, 2005 at 19:56:39 (EDT)
___ jimsum -:- Re: Chile: The Proof's in the Pension -:- Tues, Apr 26, 2005 at 21:12:53 (EDT)
____ Emma -:- Re: Chile: The Proof's in the Pension -:- Tues, Apr 26, 2005 at 22:10:45 (EDT)
_____ jimsum -:- Re: Chile: The Proof's in the Pension -:- Wed, Apr 27, 2005 at 21:41:45 (EDT)
____ David E.. -:- Re: Chile: The Proof's in the Pension -:- Tues, Apr 26, 2005 at 21:21:25 (EDT)
_____ Emma -:- Re: Chile: The Proof's in the Pension -:- Tues, Apr 26, 2005 at 22:12:48 (EDT)
_____ Emma -:- Re: Chile: The Proof's in the Pension -:- Tues, Apr 26, 2005 at 21:42:00 (EDT)

Emma -:- Venezuela and America -:- Tues, Apr 26, 2005 at 16:25:50 (EDT)

johnny5 -:- Bush gives muslim friends Pork sandwich!! -:- Tues, Apr 26, 2005 at 12:51:15 (EDT)

Emma -:- About the Oceans, Attention Must Be Paid -:- Tues, Apr 26, 2005 at 12:19:53 (EDT)

Pete Weis -:- Fed comforted by sluggish wages? -:- Tues, Apr 26, 2005 at 10:33:49 (EDT)
_ johnny5 -:- Less wages = less stock purchasers no? -:- Tues, Apr 26, 2005 at 12:32:58 (EDT)
_ Terri -:- Re: Fed comforted by sluggish wages? -:- Tues, Apr 26, 2005 at 12:01:17 (EDT)

Terri -:- Fiscal and Monetary Policy -:- Tues, Apr 26, 2005 at 10:28:58 (EDT)
_ johnny5 -:- Richies like taxes - new study on afflient -:- Tues, Apr 26, 2005 at 13:30:11 (EDT)
_ johnny5 -:- Richies like taxes - new study on afflient -:- Tues, Apr 26, 2005 at 13:30:07 (EDT)
_ Terri -:- Export Taxes -:- Tues, Apr 26, 2005 at 11:33:03 (EDT)
_ Pete Weis -:- Read 'A(C)C/D(C)C' -:- Tues, Apr 26, 2005 at 11:07:59 (EDT)

Emma -:- China and Efforts to Restore Quotas -:- Tues, Apr 26, 2005 at 10:02:02 (EDT)

Terri -:- The REIT Index -:- Tues, Apr 26, 2005 at 06:16:32 (EDT)

David E.. -:- Greenspan has critics - -:- Mon, Apr 25, 2005 at 23:19:13 (EDT)
_ David E.. -:- typo -:- Mon, Apr 25, 2005 at 23:21:29 (EDT)
__ johnny5 -:- General Ralph Landry -:- Tues, Apr 26, 2005 at 03:15:47 (EDT)

johnny5 -:- Hu's strangling grip -:- Mon, Apr 25, 2005 at 21:47:37 (EDT)

johnny5 -:- Teach them to buy 600 dollar jeans! -:- Mon, Apr 25, 2005 at 20:50:29 (EDT)

David E.. -:- Vanguard and demutualization -:- Mon, Apr 25, 2005 at 19:47:08 (EDT)
_ Terri -:- Mutual Status is Secure -:- Tues, Apr 26, 2005 at 05:59:56 (EDT)
__ David E.. -:- Re: Mutual Status is Secure -:- Tues, Apr 26, 2005 at 12:00:09 (EDT)

Pancho Villa -:- www.blog.com -:- Mon, Apr 25, 2005 at 17:54:44 (EDT)

Pancho Villa -:- A(C)C/D(C)C -:- Mon, Apr 25, 2005 at 17:17:05 (EDT)
_ Pete Weis -:- The sane solution..... -:- Mon, Apr 25, 2005 at 17:55:08 (EDT)
__ Emma -:- Thank You -:- Mon, Apr 25, 2005 at 17:59:35 (EDT)

Pete Weis -:- Man the barricades! -:- Mon, Apr 25, 2005 at 15:06:16 (EDT)

Emma -:- Microsoft and Chinese Technical Skill -:- Mon, Apr 25, 2005 at 14:17:38 (EDT)

Emma -:- China and Quotas on Textiles -:- Mon, Apr 25, 2005 at 12:37:18 (EDT)

Pete Weis -:- 'They all fudge don't they' -:- Mon, Apr 25, 2005 at 10:41:51 (EDT)

Emma -:- A Hundred Cellphones Bloom in China -:- Mon, Apr 25, 2005 at 10:32:39 (EDT)

Emma -:- A Tax Benefit for Big Donors -:- Mon, Apr 25, 2005 at 10:21:30 (EDT)

Emma -:- Fiscal Growth in Latin Lands Fails -:- Mon, Apr 25, 2005 at 10:14:57 (EDT)

Emma -:- The Feng Shui Kingdom -:- Mon, Apr 25, 2005 at 10:12:27 (EDT)

Emma -:- A Fragile Success in Africa -:- Mon, Apr 25, 2005 at 10:09:24 (EDT)

Emma -:- A Road Runs Through Tara -:- Mon, Apr 25, 2005 at 10:08:25 (EDT)
_ Setanta -:- Re: A Road Runs Through Tara -:- Tues, Apr 26, 2005 at 10:10:36 (EDT)

Paul G. Brown -:- PK channels Dr. Gonzo (Just for Terri) -:- Mon, Apr 25, 2005 at 02:29:59 (EDT)

Bambitroll -:- Missing articles on NYT -:- Mon, Apr 25, 2005 at 01:59:36 (EDT)
_ Bambitroll -:- Re: Missing articles on NYT -:- Mon, Apr 25, 2005 at 09:16:59 (EDT)
__ Emma -:- Re: Missing articles on NYT -:- Mon, Apr 25, 2005 at 10:03:06 (EDT)

johnny5 -:- One Nation Under Therapy Cspn2 - 6am -:- Mon, Apr 25, 2005 at 00:34:04 (EDT)

Terri -:- Health Care, Energy, Precious Metals -:- Sun, Apr 24, 2005 at 19:35:05 (EDT)
_ Pete Weis -:- Very true Terri -:- Sun, Apr 24, 2005 at 19:57:53 (EDT)

Terri -:- Aging Investors -:- Sun, Apr 24, 2005 at 18:54:10 (EDT)
_ Pete Weis -:- Best time to invest...... -:- Sun, Apr 24, 2005 at 20:18:19 (EDT)
__ johnny5 -:- Bear issues -:- Sun, Apr 24, 2005 at 23:47:09 (EDT)

Terri -:- Health Care Comparisons -:- Sun, Apr 24, 2005 at 18:23:07 (EDT)

EconomicPopulistCommentary www.unlawflcombatnt.blogspot.com/

Subject: Preparing in a Bubble From: Terri To: All Date Posted: Fri, May 27, 2005 at 18:32:45 (EDT) Email Address: Not Provided Message: The problem with bubbles is that they can last and last. We do not know for sure whether there is a broad housing or even a commercial real estate bubble, we do not know how long it may go on, or what effect there might be in an ending. Nonetheless, as in 2000, we need to be invested but to be prepared for a market turn.

Subject: Tobin Tax From: Thomas To: All Date Posted: Fri, May 27, 2005 at 17:08:01 (EDT) Email Address: tosi@gmx-ist-cool.de Message: Hi there Did Krugman advance an opinion on Tobin's tax? Thanks & best, Thomas

Subject: Re: Tobin Tax From: Terri To: Thomas Date Posted: Fri, May 27, 2005 at 18:03:32 (EDT) Email Address: Not Provided Message: See the terrific search for this site. Note Krugman: The New York Times, 3.12.02 on James Tobin. There is more.

Subject: Re: Tobin Tax From: Thomas To: Terri Date Posted: Fri, May 27, 2005 at 18:26:18 (EDT) Email Address: tosi@gmx-ist-cool.de Message: See the terrific search for this site. Note Krugman: The New York Times, 3.12.02 on James Tobin. There is more. --- In this article Krugman does neither approve nor disapprove the Tobin Tax though from his other articles it becomes clear that he prefers capital controls. However, I look for clear opinions of outstanding left wing economists on the Tobin Tax like Krugman, Bhagwati, Stiglitz, etc.

Subject: Re: Tobin Tax From: Terri To: Thomas Date Posted: Fri, May 27, 2005 at 18:50:28 (EDT) Email Address: Not Provided Message: Frankly, a fine question to which I do not know the answer. I would suspect Krugman would generally favor the tax over capital controls as Stiglitz does. But, for China capital controls seem to almost everyone to be working well. The answer then may more likely be conditional to the economy.

Subject: Bubble and Deficit From: Terri To: All Date Posted: Fri, May 27, 2005 at 16:19:14 (EDT) Email Address: Not Provided Message: There are alternate resolutions to the deficit and housing strains in the economy. There is minimal household saving and a federal deficit which has resulted in a balance of trade deficit. The trade deficit is being funded by importing capital. China, Japan, Brazil, South Africa, and others are supporting our trade deficit. Should the dollar begin to seriously decline in value against the Chinese Yuan in particular capital inflows would lessen and long term interest rates would rise. But, this brings us to housing. An increase in interest rates could seriously threaten the housing market and a weakening housing market would threaten the economy. We are then vulnerable to any lessening of capital inflows. But, we are as well vulnerable to a slowing in the housing market as the Federal Reserve continues to raise short term interest rates. A slowing in housing growth induced by the Fed would weaken the economy as surely as a decline in the value of the dollar against the Yuan, though long term interest rates in this instance would decline. We have then alternate resolutions to our growing imbalances, and both of the resolutions are rather ominous. What troubles me is finding no ready and likely policy to counter the dangers of the housing bubble and deficits.

Subject: Spread of AIDS in India From: Emma To: All Date Posted: Fri, May 27, 2005 at 14:09:23 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/27/international/asia/27aids.html?pagewanted=all Spread of AIDS in India Outpaces Scant Treatment Effort By SOMINI SENGUPTA MUMBAI, India - On an ordinary Thursday morning at the city's largest public hospital, an ordinary group of Indians sat around a table, exchanging advice on life and death. A middle-aged man in a button-down shirt said he had long ago stopped having sex with his wife. A wisp of a woman sat quietly in a black burqa, her large eyes screaming bafflement at what she was being told. A plump woman in a brown sari requested that nothing be mailed to her home, for fear that her family would discover her secret. They were all living with AIDS. Two counselors issued a stream of instructions. Come to the hospital yourself if you want free medicines. Don't send relatives. Don't go to your village for so long this summer that you cannot come back in time for your next dose. Never skip a dose. 'There's no need to be afraid,' one said, though the counselors' noses were shielded by surgical masks. The scene in this sunny hallway of J. J. Hospital here in Mumbai, formerly Bombay, offered a front-line snapshot of the first efforts to treat AIDS in India, where stigma, poverty, an anemic public health system and the sheer scale of the pandemic combine in a daunting challenge. The government estimates that India has 5.1 million people infected with H.I.V., second only to South Africa. Only a year ago did the government start offering free drug therapy. Today, in a country that famously exports low-cost generic AIDS drugs across the world, less than 2 percent of the half-million Indians who are likely to need it receive free treatment. 'Our government works in a snail's pace,' said Neville Selhore, director of an advocacy group in Delhi called Sahara. 'The whole H.I.V. response has been very slow.' In a country of a billion people, 5.1 million cases are, as the government points out, a drop in the bucket. But as public health workers note, India is at a pivotal moment. It could go the way of South Africa, where a lack of treatment allowed the virus to explode, or that of Brazil, where early and aggressive treatment programs checked the spread of infection. Given India's population, the AIDS pandemic, if not immediately tackled, could far outstrip the devastation visited on many African countries, AIDS advocates warn. In January the World Health Organization called attention to India, as well as Nigeria and South Africa, for not moving fast enough on treatment. Among Indians, AIDS already is no longer confined to the high-risk groups who are believed to have been responsible for its early spread: prostitutes, their customers and users of injected drugs. Nor does it remain a city disease. The number of local districts considered high-prevalence areas doubled in 2004. Perhaps most worrisome, the majority of Indians who are infected do not know that they have the virus or are spreading it. Offering access to treatment, health workers say, is the best way to persuade people to be tested. It is also the only way to quash the stigma still associated with AIDS. 'India is at a real turning point,' said Ira C. Magaziner, chairman of the Clinton Foundation's H.I.V./AIDS Initiative. 'If they can address it now with treatment and prevention programs, they can turn it around.' [Former President Bill Clinton was in India on Thursday to announce a training program for 150,000 private doctors treating AIDS cases. His visit followed an announcement by the government that it had succeeded in slowing the growth rates of the infection. Compared with 520,000 new infections in 2003, government health officials announced, only 28,000 new cases turned up in 2004.] Still, the government is behind on its own treatment pledge. Last year, when India began its free drug therapy program, it promised to extend coverage to 100,000 patients by April of this year, but only 8,000 now receive it. The government recently repeated its 100,000 pledge, this time giving itself a deadline of 2007. The private sector, meanwhile, has proved more aggressive, serving at least 20,000 Indians who have purchased antiretroviral drugs, according to government estimates. But the kinds of doctors treating them, and how well, remains a mystery. One private practitioner in central Mumbai, Dr. Prakash Bora, said he had tended to 3,500 H.I.V.-positive people in the last 12 years. Patients visit his office, he said, to avoid the crowds, long lines and humiliation associated with the public system. As if on cue one evening, a government clerk walked in. He said he had done everything possible to avoid a public hospital; he had not even disclosed his H.I.V. status to his wife, and he declined to divulge his name to a reporter. The patient said he had not yet thought about how he would afford antiretroviral therapy if he should need it. At the moment he spends roughly $25 a month for vitamins and the traditional Ayurvedic medicines that Dr. Bora prescribes. Today, antiretroviral therapy for first-time patients costs about $25 a month at a city pharmacy, a hefty amount for many working-class Indians. Those who develop resistance to the first-line treatment, or those who need an alternative drug 'cocktail' pay more than twice that amount. The impact of India's new patent law, which bars Indian companies from producing new low-cost generic drugs, has yet to be felt. Sometimes, Dr. Bora said, if patients are buying their own medicines, a crimp in the family budget can force them to go off the medicines, or skip a dose or two to stretch out the prescription. That so few Indians have gotten government-financed treatment points to a host of problems, from the lack of confidence in public hospitals, to a shortage of trained doctors and supplies in parts of the country, to the scarcity of hospitals and health centers where testing and treatment are available. In short, AIDS has tested the fragility of a public health system financed by less than one percent of the country's gross domestic product. In one state, Manipur, the head of the state AIDS agency, Binod Kumar Sharma, said there was simply not enough medicine or money to meet the demand, nor enough equipment for tests. At the moment, he said, 432 people are under treatment, but another 1,500 are eligible. 'India has a long, long way to go in scaling up wide-scale access to testing and treatment,' Dr. Richard Feachem, director of the Geneva-based Global Fund for AIDS, Tuberculosis and Malaria, said in a telephone interview. 'Can India afford it? Certainly. Does India have the human resources, the institutional resources to mount an effective response? Certainly.' Of the $107 million allocated by the Global Fund for AIDS prevention and treatment programs in India, only $12 million has been disbursed. Dr. Feachem said that was because of 'a certain slowness in utilization of funds.' For their part, Indian government officials say a hasty distribution of antiretroviral drugs without proper training and infrastructure would cause other problems, including people dropping out of the treatment program. 'You cannot just start everything under a tree,' said Dr. S. Y. Quraishi, chief of India's National AIDS Control Organization. 'This is totally new in India,' Dr. Quraishi said. 'One of the problems is that patients themselves have to come forward. As word is going around, people are coming. Their numbers will go up.' He said that before the end of the year he hoped to make antiretroviral treatment available in 100 hospitals and health centers across India, up from 25 now. Why so few Indians are able to get treatment came into sharp relief at a Catholic-run hospice in a far-flung suburb in New Mumbai, about an hour's drive from J. J. Hospital. Only one of the 38 patients housed there gets free treatment from J. J. Hospital. The Catholic nuns who run the hospice, the Sisters of the Destitute, say they have no means to ferry their patients to the hospital, wait in line and return for follow-up appointments. The hospital asks each patient to bring a relative to monitor treatment. The hospice's patients have no one to bring. They have no money to commute to and from the hospital. 'There are many thousands in Bombay,' Sister Bede, the administrator, said. 'Many many are in need of it.' Of the 850 patients admitted to the hospice in the last five years, Sister Bede said, 350 have died.

Subject: A Housing Bubble, Then What? From: Terri To: All Date Posted: Fri, May 27, 2005 at 13:59:22 (EDT) Email Address: Not Provided Message: Then we appear to have a housing bubble, and the problem if we do and the bubble bursts as all must burst is what then? So, I am finally worried. From here I think once again what portfolio protection means, and I think more conservatively than I have since 2000. Of course, in 2000 we had wonderful bond yields but not so now. Still, even a level priced housing market would weaken an economy so heavily depending on housing and this will keep long term interests rates from rising. The problem deepens.

Subject: China and Water From: Emma To: All Date Posted: Fri, May 27, 2005 at 11:52:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/27/international/asia/27lake.html A Crescent of Water Is Slowly Sinking Into the Desert By JIM YARDLEY DUNHUANG, China - At the bottom of the mountainous dunes once traversed by traders and pilgrims on the ancient Silk Road, Wang Qixiang stood with a camera draped around his neck. He was a modern-day pilgrim of sorts, a tourist. He and his wife had traveled by train more than 2,000 miles from eastern China to the forbidding emptiness of the Gobi Desert to glimpse at a famous pool of water known as Crescent Lake. They came because the lake has been rapidly shrinking into the desert sand, and they feared it might soon disappear. 'It is a miracle of the desert,' said Mr. Wang, 67. In this desert oasis where East once met West and that is home to one of the world's greatest shrines to Buddhism, the water is disappearing. Crescent Lake has dropped more than 25 feet in the last three decades while the underground water table elsewhere in the area has fallen by as much as 35 feet. An ancient city that once served as China's gateway to the West, Dunhuang is now threatened by very modern demands. A dam built three decades ago to help local farming, combined with a doubling of the population, have overstressed a fragile desert hydrology that had been stable for thousands of years. 'I would call it an ecological crisis,' said Zhang Mingquan, a professor at Lanzhou University who specializes in the region's hydrology. 'The problem is the human impact. People are overusing the amount of water that the area can sustain.' Here as elsewhere in western China, the country's poorest region, the emphasis in recent decades has been on economic development at all costs. Isolated by the desert, Dunhuang has virtually no industry, so agriculture has dominated the local economy. In the 1970's, the government dammed the Dang River, which once flowed past the city, to provide better irrigation for farmland and to help relieve poverty. Farming did improve, but in a fashion that brought a larger burden: a desert oasis that had fewer than 100,000 people before the dam now has roughly 180,000. As more people arrived, the underground water table that is the city's main source of drinking water started dropping. The pressure now to preserve Dunhuang is amplified by the growing recognition of the city's major cultural and historic significance. The nearby Mogao Caves, painted with murals dating to the fourth century, were built by the monks who helped bring Buddhism from India. The caves have been designated as a World Heritage Site by the United Nations. The caves are a legacy of Dunhuang's emergence more than 2,000 years ago during the Han Dynasty as a crucial entranceway into China by the Silk Road, which served as the principal trade route to the West. Merchants and pilgrims made the journey by following the string of oases that skirted the brutal Taklamakan Desert, which many considered haunted by demons and ghosts. 'At times one can hear soughing, or sobbing, but suddenly one does not know where to turn. ... Thus many perish,' the seventh-century Chinese monk Xuanzang wrote of the voices he heard in the brutal heat. He described the desert as so bleak and empty that travelers stacked up bones as landmarks. Farming in Dunhuang also dates to the Han Dynasty, and among the tens of thousands of manuscripts found inside the Mogao Caves was a map that detailed the region's critical water sources. Now, in the village of Zhabacha, about seven miles north of the city center, the water table has dropped more than three feet in the past five years alone. Beneath a midday sun on Tuesday that had driven other farmers into their crumbling adobe homes, He Zhailin flooded a small plot of wheat with irrigated water. Mr. He said that he tripled his amount of cultivated land during the last decade and that some farmers had expanded even more. Until recently, he said, government officials had encouraged farmers to plant more crops. 'There was a lot of water so the government encouraged people to cultivate the land,' recalled Mr. He, 40. 'At the time, it never dried up.' Now, local officials have introduced a strict policy known as the 'Three Forbids' that bans any new farmland, forbids new migrants from moving to the city and prohibits any new wells. The need to protect the underground water is magnified by the fact that almost 90 percent of water from the Dang Reservoir is dedicated to agriculture. Mr. Zhang, the Lanzhou University professor, stressed that reducing consumption was the solution to the problem and noted that the supply of glacial melt from the Qilian Mountains that feeds the Dang River - and by extension the rest of the oasis - remained largely unchanged from centuries ago. Even so, there are proposals to divert water from a river in Tibet, though the likelihood of such a plan is far from certain. Conservation has become particularly crucial because Dunhuang has emerged as one of the leading tourist attractions in western China, giving the city a veneer of prosperity rare in rural regions. Last year, more than 430,000 tickets were sold to the Mogao Caves. In all likelihood, even more people visited Crescent Lake, which is nestled in the picturesque dunes known as the Singing Sands. The lake, also a World Heritage Site, began shrinking in the 1970's and is now about a third of its original size. In the 1990's, officials tried pumping in water but quit because the transfers were polluting the lake. More recently, reservoirs have been built a short distance away in hopes that water would seep into the ground and help Crescent Lake, also called Crescent Moon Lake and Crescent Spring. 'As local people, we are very worried,' said Fan Cun, who heads the agency overseeing the lake. 'We would have failed future generations if we watch this lake disappear.'

Subject: Where's the Boeuf? From: Emma To: All Date Posted: Fri, May 27, 2005 at 11:02:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/27/opinion/27tournier.html Where's the Boeuf? By VINCENT TOURNIER Grenoble, France WITH its project for a European Constitution, is Europe reliving the history of the United States? The Europeans take the comparison very seriously: they baptized the assembly charged with writing the document the 'Convention,' in imitation of the Constitutional Convention in Philadelphia. The president of the Convention, Valéry Giscard d'Estaing, even proposed 'Federalist papers' on the model of those written by the founders of the American democracy. Americans would no doubt be astonished by the comparison. Even a cursory look at the Constitutions drawn up by both Conventions demonstrates how far off Mr. Giscard is. In a few pages, the American Constitution established a foundation for the growth of democracy. In 450 pages, the European Constitution - which establishes power-sharing among European Union members, provides for a foreign minister and full-time president and states more precisely the functions of the union and the member states - enshrines a plethora of rules and regulations while ignoring the fundamental needs of democracy. When the French vote on Sunday on whether to accept the Constitution, one can ask if a resounding 'non' that would send the document back to the drawing board would be a far greater service to Europe than the 'oui' that French and European Union officials are urging. Even before the 105 delegates to the Convention sat down to write the draft Constitution, the European-American comparison was strained. First, of course, the 25 European states are clearly more diverse than the 13 former colonies, with neither the same language nor the same cultural traditions. They are old nations whose identities have been fashioned over the centuries by wars that have pitted one against the other. That's why the debates about the 'European project' have mainly concerned each nation's prerogatives, each government putting a priority on preserving its sovereignty and assuring itself a leading role in the power structure. Discussions about democratic principles like the separation of powers and fundamental rights have been relegated to the background. Second, while the American Constitution stemmed from the fight for independence, the European Constitution is disconnected from history. Even though the union likes to say that Europe was born from the ashes of World War II, it is obvious that there is no particular reason for a European project at this particular moment. That has affected how the Constitution was conceived and written. The participants in the Convention (who were appointed, not elected) certainly have good intentions, but are they worthy of such a lofty task? In exceptional circumstances, when history demands it, exceptional personalities emerge, people with an acute sense of what the times demand. When things are quiet, second-raters take up the job. That is why the 'founders' of Europe have no hope of one day being considered in the same light as Washington, Madison and Franklin. That is also why, from the beginning, the European Union has been so marked by bureaucracy and run by unelected 'experts.' These two factors help explain what is called the 'democratic deficit' of the union: the absence of a separation of powers, the weak Parliament and an inaccessible judiciary whose final role hasn't even been decided yet. The Constitution does not offer any solutions for these problems, aside from minor alterations that don't deal with the underlying causes. The text, which has as many exceptions as rules, isn't written for the ordinary citizen, but for the bureaucrat. Even its equivalent of the Bill of Rights, presented as a great democratic advance, raises serious problems, to such a point that the national governments have had to introduce numerous safeguards to limit its effects. The question that Europeans face today is whether a united Europe is more important than these democratic considerations. Some countries have said yes by approving the Constitution; in others, like France, opposition has been running strong. Certainly, factors having little to do with the Constitution have contributed to public hostility in this country, like the unpopularity of the government and the troubled economy. The European message is also muddled. For some, the union has not kept its promises, notably with the single currency, which was presented as a miracle remedy for economic problems. In addition, the union is founded on a contradiction (protecting itself from globalization while preaching the opening of markets and frontiers); there is also the uncertainty about integrating the new members from Eastern Europe and, eventually, Turkey. So the French, understandably, regard the Constitution with distrust. Now, the French may have many defects, but they are also an old political people who have seen many constitutions come and go. It's an error to explain their reluctance simply as their traditional scorn, or worse, as a refusal of the idea of Europe. They are expressing a genuine unease that is founded in a Constitution whose flaws are admitted even by its supporters. By voting no, the French will not topple Europe - the union will continue under its current rules - but they may provide the impetus for a Constitution that would be truly democratic and a truly historic document. Vincent Tournier is a professor at the Institute of Political Studies in Grenoble. This article was translated by The Times from the French.

Subject: The Social Safety Net From: Emma To: All Date Posted: Fri, May 27, 2005 at 10:59:17 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/27/opinion/l27krugman.html The Social Safety Net To the Editor: Americans who work hard and play by the rules are having the rug pulled out from under them ('America Wants Security,' by Paul Krugman, column, May 23). Our social safety networks have radically changed; family members have moved all over the map for opportunities, making it difficult to be there for one another when times are tough. The concepts of career, family and community have changed radically, and the genie won't be going back into the bottle. That is why Democrats need to take every opportunity to articulate plans and sponsor policies to strengthen the safety net, instead of being complicit in weakening it. Wendy Beck San Francisco, May 24, 2005

Subject: U.S. Softens Its Warning to Beijing From: Emma To: All Date Posted: Fri, May 27, 2005 at 10:46:01 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/27/business/worldbusiness/27yuan.html U.S. Softens Its Warning to Beijing By EDMUND L. ANDREWS WASHINGTON - Even as it publicly presses China to let its currency rise in value, the Bush administration has quietly softened a crucial demand. In a calculated shift, administration officials have stopped demanding that China let its currency, the yuan, float freely against other major currencies. Instead, American officials are telling Chinese leaders that they can keep their policy of a fixed exchange rate - at least for now - if they increase the value of the yuan by 10 to 15 percent. The policy switch reflects a growing realization that Beijing is simply not going to let its currency soar, which would make its exports more expensive and could disrupt China's troubled banking system. But the switch also highlights the administration's limited leverage over China. Having failed to budge Chinese leaders with polite financial diplomacy, administration officials are struggling to find ways to apply pressure without resorting to import barriers. 'I don't think it is in our interest or in their interest in going immediately to a full float,' Treasury Secretary John W. Snow said at a hearing on Thursday at the Senate Banking Committee. 'I see them as on a path to a full float.' Mr. Snow refused to say how much he wanted China to revalue the yuan. But people close to the administration said it was privately demanding an immediate increase of 10 to 15 percent. So far, Chinese officials have shown little inclination to go even that far. The People's Bank of China, in an annual report, said this week that it planned to keep its currency stable at a 'reasonable and well-balanced level,' according to The China Daily. Antagonism toward China and its trade surplus with the United States, which reached $162 billion last year and is still rising, has intensified in Congress recently. On Thursday, Republicans and Democrats on the Senate Banking Committee sharply criticized Mr. Snow for being too easy on China. Senator Paul S. Sarbanes, Democrat of Maryland, warned Mr. Snow that Chinese officials appeared to be suggesting a very small revaluation of 3 to 5 percent - 'preposterous figures,' Mr. Sarbanes said. Senator Elizabeth Dole, Republican of North Carolina, told Mr. Snow she was 'frankly astounded' that the Treasury Department declined to accuse China of currency manipulation in its report last week on foreign exchange practices. Senator Richard C. Shelby, Republican of Alabama and chairman of the banking committee, said the Treasury Department had 'punted' on the issue by saying that China's foreign exchange policies did not meet the 'technical' definition of currency manipulation. China has kept the value of the yuan at a fixed exchange rate of 8.3 to the dollar for more than 10 years, despite a soaring trade surplus with the United States that would normally lift the value of its currency. Many analysts estimate that the yuan is undervalued by more than 25 percent, which makes Chinese exports to the United States cheaper than they would be otherwise. To keep the yuan from rising in value, the Chinese government has bought large volumes of Treasury bonds and other dollar-denominated securities. Last year, it added $215 billion to its foreign reserves, which reached $647 billion, according to the International Monetary Fund. For two years, Mr. Snow and his deputies have been trying without success to persuade China to adopt flexible exchange rates. Though they have hedged their demands in public, administration officials have urged Chinese officials in private to let their currency float freely. Some experts have argued that Mr. Snow's seemingly tough stance was a mistake, because it was hopelessly unrealistic and might cause financial shocks to the Chinese banking system. 'This is not an administration that is comfortable relying on market signals,' said Morris Goldstein, a senior economist at the Institute for International Economics in Washington, referring to the Chinese government. Even if China did announce a floating exchange rate, he added, it would continue to intervene heavily in currency markets to keep the yuan from rising too much. By contrast, he said, a big upward revaluation would be a 'large down payment' that moved China's currency closer to what it would be in a free market. Mr. Snow adopted a new position last week, when he said it had been a 'misconception' that the United States was calling on China to adopt floating exchange rates immediately. 'What we are calling for is an intermediate step that reflects underlying market conditions and allows for a smooth transition - when appropriate - to a full float,' Mr. Snow said on May 17. That was the first time Mr. Snow had publicly mentioned the possibility of 'intermediate' steps and the first time he had explicitly denied that the United States was demanding a floating exchange rate for China. Tony Fratto, a spokesman for Mr. Snow, said the softer line was a mere refinement. 'We've been pretty disciplined and precise in talking about flexibility,' Mr. Fratto said. 'We've almost never talked about a float.' But industry lobbyists and policy experts said the shift was significant. 'They've come around to where we've been all along,' said Frank Vargo, vice president for international economics at the National Association of Manufacturers, which has been demanding that China revalue its currency for years. But Senator Charles E. Schumer, Democrat of New York and a critic of the administration's dealings with China, said Mr. Snow should push for more. 'China has to let their currency float,' he said. 'The administration has now stepped into the batter's box. Now you need to swing at the pitch.'

Subject: Hedge Fund and Hedge Fund Salaries From: Emma To: All Date Posted: Fri, May 27, 2005 at 10:35:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/27/business/27hedge.html Hedge Funds Are Stumbling but Manager Salaries Aren't By RIVA D. ATLAS At hedge funds, the rich just keep getting richer. Across Wall Street, fees for businesses from trading stocks to investing in mutual funds have been falling. But at hedge funds, those exclusive investment partnerships for the wealthy and institutions like pension funds, fees have stayed dizzyingly high, even as billions of dollars have poured into the industry and performance, on average, has faltered. Last year, the top-paid hedge fund manager, Edward S. Lampert of ESL Investments, earned $1 billion, according to a survey to be released today by Alpha, a magazine published by Institutional Investor that follows hedge funds. That is the highest sum in the four years the magazine has been tracking these managers' incomes. The average hedge fund manager on Institutional Investor's list of the top 25 earners made $251 million in 2004, up from nearly $136 million three years earlier. The secret to the wealth of hedge fund managers is how they get paid. Instead of receiving a fixed percentage of the funds they manage, as mutual fund managers do, hedge fund managers generally make '1 and 20' - 1 percent of assets under management and 20 percent of profits. That means that a $1 billion hedge fund manager earns $10 million just for opening the doors, and a lot more if his fund performs well. Investors are willing to pay more for these managers' talents because, at a time when stocks are doing poorly and yields on short-term Treasury securities are low, hedge funds hold out the hope of a better return. This promise has become so seductive that the top hedge fund managers can basically name their price. 'You don't mind paying higher fees if you are getting rewarded properly,' said Michael Strauss, chief economist for Commonfund, which invests on behalf of foundations and endowments. Steven A. Cohen of SAC Capital Advisors, for example, takes as much as 50 percent of all profits his hedge funds earn, netting him $450 million last year, according to Institutional Investor. Even after this big cut, his funds still returned around 23 percent, not bad in a year when the Standard & Poor's 500-stock index rose 8.99 percent. Another manager on the list, Kenneth C. Griffin, has a novel twist on the fees he charges. His firm, Citadel Investment, which managed some $11 billion at year-end and has close to 1,000 employees - large for a hedge fund - does not charge a fixed fee for expenses. Instead, Mr. Griffin bills investors annually for whatever it cost to run the fund that year, a figure that fluctuates, but has been as high as 6 percent of assets, according to investors. Last year, Mr. Griffin's largest fund returned 9.87 percent, far below its compound average annual return of 26 percent. Spokesmen for Mr. Cohen and Mr. Griffin declined to comment. Still, some longtime investors in hedge funds worry that the steep compensation may make managers like Mr. Griffin less motivated to perform. Already, overall performance of hedge funds is faltering. Through April, hedge funds were down 0.7 percent, according to an index by Hedge Fund Research, a data firm. That is better than the S.&. P. 500, which was down about 4 percent in the period. But hedge fund investors are bracing for further losses for the month of May, after some complex derivatives trades went against a number of fund managers. 'When managers were earning double-digit returns, high expenses did not matter as much,' said Antoine Bernheim, publisher of the U.S. Offshore Funds Directory. 'But when you are in a low single-digit return environment, investors can end up breaking even or losing money. This is not a sustainable situation.' Somehow, though, hedge fund managers continue to attract huge sums under ever richer terms. Investors were clamoring to get into Eton Park, the $3 billion hedge fund started last November by Eric Mindich, a former Goldman Sachs executive. Investors in the new fund agreed not to withdraw any of their money for as long as three and a half years. Another recent start-up, by the financier Carl C. Icahn, charges a 2.5 percent fee for expenses and 25 percent of the profits. Many of the 25 managers on the Institutional Investor list of top earners had outstanding returns. Mr. Lampert's estimated $1 billion profit, for example, came after returning some 69 percent to his investors, who benefited from the spectacular rise in the price of Kmart, the discount retailer that Mr. Lampert has merged with Sears, Roebuck. The second-best performer on the list, James H. Simons of Renaissance Technologies, made $670 million after posting a 24.9 percent return last year, even after deducting his 5 percent management fee and 44 percent cut of the profits. A spokesman for Mr. Lampert declined comment; executives at Renaissance did not return calls. But other celebrated managers had disappointing results, yet continued to earn hundreds of millions. Last year, George Soros made $305 million, even as his Quantum Endowment Fund rose just 4.6 percent. Mr. Soros's large earnings reflects the fact that much of the money managed by his firm now represents his own capital. Outside investors pulled money from Soros Fund Management in recent years, after Mr. Soros announced that he would be investing more conservatively. His goal is to earn enough to support his charitable efforts, rather than to make big, risky bets like his famous multibillion-dollar gamble against the British pound in 1992. Mr. Soros is not the only manager aiming for lower, less volatile results. Much of the vast sums flowing into hedge funds these days comes from pension funds and other institutions, which prize predictable performance over outsize returns. The average pension fund is looking to make just 8 percent, after deducting fees, on its hedge fund investments, according to a recent study by the Bank of New York and Casey, Quirk & Associates, a consulting firm. That is a far cry from the returns of more than 25 percent generated by celebrated managers like Mr. Soros and Michael Steinhardt at their peaks. Now that the performance bar has been lowered, there is less incentive for managers to make more aggressive bets, consultants said, especially when they can still charge the same steep fees they did in the past. Investors in hedge funds say they are resigned to paying dearly for top hedge fund talent. 'It's the law of supply and demand,' said William Lawrence, chief executive of Meridian Capital Partners, which manages portfolios of hedge funds. 'Over time, if the fees are not borne out by performance, the market will react.'

Subject: Hedge Fund Returns From: Terri To: All Date Posted: Fri, May 27, 2005 at 09:56:38 (EDT) Email Address: Not Provided Message: There is no question in my mind but that a lot of hedge fund money will turn out to have been foolish money, though I can cite otherwise. When a part of a market grows large enough to move the market, there is reason to expect returns to match index returns minus the cost of investment and hedge funds are costly critters.

Subject: Utilities and Treasuries From: Terri To: All Date Posted: Fri, May 27, 2005 at 09:54:03 (EDT) Email Address: Not Provided Message: http://flagship2.vanguard.com/VGApp/hnw/FundsVIPERByName Perfect. I can buy the 10yr Treasury note at a 4.1% yield or the Vanguard Utilities Index with a dividend of 3.41% and hold for 10 years. What do I do? The dividend is taxed at 15%, while the Treasury is taxed at my moarginal rate. So what if I am an institution, however conservative? There is no choice :)

Subject: European Integration From: Terri To: All Date Posted: Fri, May 27, 2005 at 05:53:41 (EDT) Email Address: Not Provided Message: The likely rejection of the European Constitution will be an interesting test for Europe and for us. I hope for an increasingly united Europe, and have no sense of whether this will prove a serious set-back.

Subject: Re: European Integration From: Setanta To: Terri Date Posted: Fri, May 27, 2005 at 09:55:45 (EDT) Email Address: Not Provided Message: Oops, made a little boo-boo...heres what should have been posted! As a citizen of the aforementioned Union I agree with your comments Terri. I think the only way to prevent another European war, not to mention solve the border squabble in the Northern Ireland, is through an increasingly federal union of European states. I work with Polish, Spanish, Germans, Italians, English and Welsh and truly feel an affinity with them as do they with us. we are more than cousins, we feel as if we are part of a greater thing than just our nations. i am european first and irish second. i feel at home in any of the EU countries i visit or holiday in, my EU symbol on my passport and citizenship affords me the same treatment in those countries as their own citizens have. for me, this union is more than currency union or customs union. it always has and always will be political more than economic despite the nomenclature (Coal & Steel Pact, European Economic Commission etc.) i hope that people can see the Great Experiment for what it is...the historic joining of some of the world oldest states who have warred amongst eachother each century since time immorial ( for all you history buffs out there - officially the period of history preceding Richard Plantagenet or King Richard the Lionheart of Robin Hood fame). I hope the nationalists in each country (especially the UK) realise that national pride is healthy but it shouldn't interfere with the development of europe. indeed the two are not incompatible, i am fiercely proud of my nation, its sons and daughters, and its achievements, but that does not take away from my affinity with europeans and all things european. regardless of the vote in france this weekend, the EU will trundle on. it is too great and important for any one person, group or party to dismantle (Kilroy Silk was elected to the European Parliament on the promise that he would wreck it from within, unfortunately this went down well with English voters but fortunately he only lasted in the parliament for 8 months!) I am confident it will survive a rejection by the French. In fact, hopefully we can get a constitution worthy of our continent should they be forced to redraft it. its a little bulky and is a very trying read.

Subject: Re: European Integration From: Terri To: Setanta Date Posted: Fri, May 27, 2005 at 11:00:42 (EDT) Email Address: Not Provided Message: A thoroughly cheering statment :)

Subject: Re: European Integration From: Setanta To: Terri Date Posted: Fri, May 27, 2005 at 09:53:35 (EDT) Email Address: Not Provided Message:

Subject: Flexible Markets From: Terri To: All Date Posted: Fri, May 27, 2005 at 05:48:02 (EDT) Email Address: Not Provided Message: If sizeable hedge fund losses have had so little evident effect on stock and bond markets, I am most pleased. I have been as pleased with the performance of the Vanguard Utility Index, which appears to tell us that low long term interest rates really are justified and that energy cost increases are being well handled. Economic and market flexibility should well please us.

Subject: Request to Bobby From: Terri To: All Date Posted: Fri, May 27, 2005 at 05:38:46 (EDT) Email Address: Not Provided Message: Dear Bobby, thank you always for all you do. Could you possibly leave about 50 to 100 messages on the board when you clean? This will make current thoughts easier to follow. Whatever you think best of course will be lovely. Please know how much you are appreciated.

Subject: Re: Request to Bobby From: Terri To: Terri Date Posted: Fri, May 27, 2005 at 05:40:20 (EDT) Email Address: Not Provided Message: Fifty messages will leave a full page to refer to.

Subject: Hedge Fund Returns From: Terri To: All Date Posted: Fri, May 27, 2005 at 05:31:32 (EDT) Email Address: Not Provided Message: The Financial Times considers there have been massive hedge fund losses this year, but I find the corporate bond market almost completely settled, with a slight ripple perhaps still playing out in the prices of better quality high yield bonds. The slight effect of hedge fund losses on the markets in general pleases me considerably.

Subject: Re: Hedge Fund Returns From: Terri To: Terri Date Posted: Fri, May 27, 2005 at 05:34:01 (EDT) Email Address: Not Provided Message: We should watch the Vanguard Utility Index for anticipating interest rate changes. I find the performance of utilities quite pleasing.

Subject: Utility Companies From: Terri To: All Date Posted: Thurs, May 26, 2005 at 22:20:11 (EDT) Email Address: Not Provided Message: By the way, the strength of utility stocks here and in Europe may give us a sense that either long term interest rates are really expected to stay low for quite some time or that the economics of utility companies is changing in a fundamental way. I have been paying attention to regulated utilities for several years now and the economics grows more interesting.

Subject: Bond Fund Protection From: Terri To: All Date Posted: Thurs, May 26, 2005 at 22:02:45 (EDT) Email Address: Not Provided Message: This has been a day of surprises, so some thoughts must wait, but we need to remember that bond funds for a portion of a portfolio can be wonderful havens of safety with decent returns. The Vanguard GNMA Bond Fund as an example I often use has a duration of 2.8 years and a yield of 4.54%. The bonds are completely guaranteed by the Treasury, so defult is never a possibility. A sudden rise of 1 percentage point in interest rates would cause the price of the fund to fall about 2.8% while the yield gradually climbed. There are Vanguard bond funds just as secure with lower safer durations. The point is that a shock to the economy can be insulated in a portfolio with a conservative bond fund holding. We may use no bond fund, but we should know how if necessary.

Subject: Thoughts on Interest Rates From: Terri To: All Date Posted: Thurs, May 26, 2005 at 17:12:41 (EDT) Email Address: Not Provided Message: The people who worry me are those who try to tell us they know just what is happening in the bond market and criticize monetary policy from this perspective. This is the most unusual bond market I have found and has been for a while. The Federal Reserve has raised short term rates 8 times, but long term interest rates began to fall shortly after the initial Fed increase and have stayed remarkably low. A traditional bond analyst would have to conclude that investors are convinced long term inflation will be completely under control, and that possibly economic growth will soon falter causing the Fed to reverse policy. But, economic growth shows no signs of faltering and inflation has shown a modest tendency to increase. The very confusing feel of the bond market leads me to think the Fed has acted properly these last years, keeping the mandate to spur employment when possible ever in view. There may be pressures building expecially in the housing market, but I would not wish to have the Fed accelerate interest rate increases. So we act with caution, hope the bond market really is healthy, and learn.

Subject: ? From: Pete Weis To: All Date Posted: Thurs, May 26, 2005 at 14:56:16 (EDT) Email Address: Not Provided Message: Whether tariffs are instituted or the yuan goes on a currency basket float or a total float how will it affect the bond market? From Associated Press: Snow: China Must Change Currency Policies Thursday May 26, 1:16 pm ET By Martin Crutsinger, AP Economics Writer John Snow Says China Must 'Move Without Delay' to Change Currency Practices WASHINGTON (AP) -- The Bush administration said Thursday that China should 'move without delay' to change currency practices that American manufacturers blame for soaring trade deficits and the loss of U.S. jobs. Facing heavy criticism for the failure to cite China last week as a currency manipulator, Treasury Secretary John Snow told the Senate Banking Committee that the administration's nearly two-year effort to pressure China to stop pegging its currency tightly to the U.S. dollar was showing results. He said the Chinese had now taken all the steps needed to prepare their financial system for the move to a more flexible currency. 'China is now ready and should move without delay in a manner and magnitude that is sufficiently reflective of underlying market conditions,' Snow said in his prepared testimony. Snow repeated a warning made in last week's currency report: China could be cited by the United States as a currency manipulator, a process that could lead to economic sanctions, if it does not act soon. 'If current trends continue without substantial alteration, China's policies will likely meet the technical requirements of the statute for designation,' Snow said. Both Democrats and Republicans on the committee expressed exasperation with China's current policies and pressed Snow to define what China would need to do to avoid being branded as a currency manipulator when the next Treasury report is due in October. 'Many of us see this as approaching a crisis status,' Sen. Paul Sarbanes, D-Md., told Snow. Sarbanes said he was disturbed by reports that China might end up allowing its currency to rise by as little as 5 percent in value against the dollar. That would do little to make a dent in America's huge trade deficit with China, he said. Snow refused to say how much of a revaluation of China's currency against the U.S. dollar would be sufficient, but he said the adjustment would have to be large enough that it would 'significantly close the gap' between the current value of the yuan and a 'more appropriate value' against the dollar. The administration's tougher approach to China is coming at a time when it is scrambling for votes to win congressional passage of a new free trade agreement with Latin American nations -- the Central American Free Trade Agreement. The administration has moved to re-impose quotas on a flood of Chinese imports of clothing and textile into the United States in response to pleas from U.S. manufacturers and has also increased pressure on China to halt rampant piracy of U.S. movies, music and computer software. Snow told senators that he believed that China would move to introduce more flexibility before the next Treasury report is due in October. 'I fully anticipate that before our return, before we conclude the next report, we will have seen the sort of action that we are calling for,' Snow said. However, the Chinese so far have refused to set a timetable for when they might move to a more flexible currency system. The administration has faced heavy criticism for its failure to cite China last week in a report that it is required to present to Congress twice a year. The pressure to designate China has grown as America's trade deficit with that country has soared to all-time highs, hitting $162 billion last year out of a total U.S. trade deficit of $617 billion, also a record. American manufacturers contend that China's decade-long practice of keeping its currency valued at around 8.28 yuan to the dollar, has resulted in the Chinese currency being undervalued by as much as 40 percent, giving the Chinese a huge competitive advantage. A cheaper Chinese currency makes Chinese goods cheaper for American consumers and U.S. products more expensive for Chinese consumers. Legislation has been introduced in both the Senate and the House to impose across-the-board tariffs of 27.5 percent if China does not act to change its currency policies. Snow made clear in his testimony that the administration was not insisting that China move immediately to a currency whose value was set totally in global currency markets, a practice known as floating. 'We are not calling for an immediate full float with fully liberalized capital markets. This would be a mistake at this time -- China's banking sector is not prepared,' Snow said. 'What we are calling for is an intermediate step that reflects underlying market conditions and allows for a smooth transition -- when appropriate -- to a full float.' Outside experts have said China could stop linking its currency only to the U.S. dollar and instead peg it to several currencies or it could allow the yuan to trade in a band rather than keeping it pegged at 8.28 yuan for each dollar. That would allow the yuan to be revalued higher.

Subject: 15 Years on the Bottom Rung From: Emma To: All Date Posted: Thurs, May 26, 2005 at 11:50:45 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/26/national/class/MEXICANS-FINAL.html?pagewanted=all 15 Years on the Bottom Rung By ANTHONY DePALMA In the dark before dawn, when Madison Avenue was all but deserted and its pricey boutiques were still locked up tight, several Mexicans slipped quietly into 3 Guys, a restaurant that the Zagat guide once called 'the most expensive coffee shop in New York.' For the next 10 hours they would fry eggs, grill burgers, pour coffee and wash dishes for a stream of customers from the Upper East Side of Manhattan. By 7:35 a.m., Eliot Spitzer, attorney general of New York, was holding a power breakfast back near the polished granite counter. In the same burgundy booth a few hours later, Michael A. Wiener, co-founder of the multibillion-dollar Infinity Broadcasting, grabbed a bite with his wife, Zena. Just the day before, Uma Thurman slipped in for a quiet lunch with her children, but the paparazzi found her and she left. More Mexicans filed in to begin their shifts throughout the morning, and by the time John Zannikos, one of the restaurant's three Greek owners, drove in from the North Jersey suburbs to work the lunch crowd, Madison Avenue was buzzing. So was 3 Guys. 'You got to wait a little bit,' Mr. Zannikos said to a pride of elegant women who had spent the morning at the Whitney Museum of American Art, across Madison Avenue at 75th Street. For an illiterate immigrant who came to New York years ago with nothing but $100 in his pocket and a willingness to work etched on his heart, could any words have been sweeter to say? With its wealthy clientele, middle-class owners and low-income work force, 3 Guys is a template of the class divisions in America. But it is also the setting for two starkly different tales about breaching those divides. The familiar story is Mr. Zannikos's. For him, the restaurant - don't dare call it a diner - with its $20 salads and elegant décor represents the American promise of upward mobility, one that has been fulfilled countless times for generations of hard-working immigrants. But for Juan Manuel Peralta, a 34-year-old illegal immigrant who worked there for five years until he was fired last May, and for many of the other illegal Mexican immigrants in the back, restaurant work today is more like a dead end. They are finding the American dream of moving up far more elusive than it was for Mr. Zannikos. Despite his efforts to help them, they risk becoming stuck in a permanent underclass of the poor, the unskilled and the uneducated. That is not to suggest that the nearly five million Mexicans who, like Mr. Peralta, are living in the United States illegally will never emerge from the shadows. Many have, and undoubtedly many more will. But the sheer size of the influx - over 400,000 a year, with no end in sight - creates a problem all its own. It means there is an ever-growing pool of interchangeable workers, many of them shunting from one low-paying job to another. If one moves on, another one - or maybe two or three - is there to take his place. Although Mr. Peralta arrived in New York almost 40 years after Mr. Zannikos, the two share a remarkably similar beginning. They came at the same age to the same section of New York City, without legal papers or more than a few words of English. Each dreamed of a better life. But monumental changes in the economy and in attitudes toward immigrants have made it far less likely that Mr. Peralta and his children will experience the same upward mobility as Mr. Zannikos and his family. Of course, there is a chance that Mr. Peralta may yet take his place among the Mexican-Americans who have succeeded here. He realizes that he will probably not do as well as the few who have risen to high office or who were able to buy the vineyards where their grandfathers once picked grapes. But he still dreams that his children will someday join the millions who have lost their accents, gotten good educations and firmly achieved the American dream. Political scientists are divided over whether the 25 million people of Mexican ancestry in the United States represent an exception to the classic immigrant success story. Some, like John H. Mollenkopf at the City University of New York, are convinced that Mexicans will eventually do as well as the Greeks, Italians and other Europeans of the last century who were usually well assimilated after two or three generations. Others, including Mexican-Americans like Rodolfo O. de la Garza, a professor at Columbia, have done studies showing that Mexican-Americans face so many obstacles that even the fourth generation trails other Americans in education, home ownership and household income. The situation is even worse for the millions more who have illegally entered the United States since 1990. Spread out in scores of cities far beyond the Southwest, they find jobs plentiful but advancement difficult. President Vicente Fox of Mexico was forced to apologize this month for declaring publicly what many Mexicans say they feel, that the illegal immigrants 'are doing the work that not even blacks want to do in the United States.' Resentment and race subtly stand in their way, as does a lingering attachment to Mexico, which is so close that many immigrants do not put down deep roots here. They say they plan to stay only long enough to make some money and then go back home. Few ever do. But the biggest obstacle is their illegal status. With few routes open to become legal, they remain, like Mr. Peralta, without rights, without security and without a clear path to a better future. 'It's worrisome,' said Richard Alba, a sociologist at the State University of New York, Albany, who studies the assimilation and class mobility of contemporary immigrants, 'and I don't see much reason to believe this will change.' Little has changed for Mr. Peralta, a cook who has worked at menial jobs in the United States for the last 15 years. Though he makes more than he ever dreamed of in Mexico, his life is anything but middle class and setbacks are routine. Still, he has not given up hope. Querer es poder, he sometimes says: Want something badly enough and you will get it. But desire may not be enough anymore. That is what concerns Arturo Sarukhan, Mexico's consul general in New York. Mr. Sarukhan recently took an urgent call from New York's police commissioner about an increase in gang activity among young Mexican men, a sign that they were moving into the underside of American life. Of all immigrants in New York City, officials say, Mexicans are the poorest, least educated and least likely to speak English. The failure or success of this generation of Mexicans in the United States will determine the place that Mexicans will hold here in years to come, Mr. Sarukhan said, and the outlook is not encouraging. 'They will be better off than they could ever have been in Mexico,' he said, 'but I don't think that's going to be enough to prevent them from becoming an underclass in New York.' Different Results There is a break in the middle of the day at 3 Guys, after the lunchtime limousines leave and before the private schools let out. That was when Mr. Zannikos asked the Mexican cook who replaced Mr. Peralta to prepare some lunch for him. Then Mr. Zannikos carried the chicken breast on pita to the last table in the restaurant. 'My life story is a good story, a lot of success,' he said, his accent still heavy. He was just a teenager when he left the Greek island of Chios, a few miles off the coast of Turkey. World War II had just ended, and Greece was in ruins. 'There was only rich and poor, that's it,' Mr. Zannikos said. 'There was no middle class like you have here.' He is 70 now, with short gray hair and soft eyes that can water at a mention of the past. Because of the war, he said, he never got past the second grade, never learned to read or write. He signed on as a merchant seaman, and in 1953, when he was 19, his ship docked at Norfolk, Va. He went ashore one Saturday with no intention of ever returning to Greece. He left behind everything, including his travel documents. All he had in his pockets was $100 and the address of his mother's cousin in the Jackson Heights-Corona section of Queens. Almost four decades later, Mr. Peralta underwent a similar rite of passage out of Mexico. He had finished the eighth grade in the poor southern state of Guerrero and saw nothing in his future there but fixing flat tires. His father, Inocencio, had once dreamed of going to the United States, but never had the money. In 1990, he borrowed enough to give his first-born son a chance. Mr. Peralta was 19 when he boarded a smoky bus that carried him through the deserted hills of Guerrero and kept going until it reached the edge of Mexico. With eight other Mexicans he did not know, he crawled through a sewer tunnel that started in Tijuana and ended on the other side of the border, in what Mexicans call el Norte. He had carried no documents, no photographs and no money, except what his father gave him to pay his shifty guide and to buy an airline ticket to New York. Deep in a pocket was the address of an uncle in the same section of Queens where Mr. Zannikos had gotten his start. By 1990, the area had gone from largely Greek to mostly Latino. Starting over in the same working-class neighborhood, Mr. Peralta and Mr. Zannikos quickly learned that New York was full of opportunities and obstacles, often in equal measure. On his first day there, Mr. Zannikos, scared and feeling lost, found the building he was looking for, but his mother's cousin had moved. He had no idea what to do until a Greek man passed by. Walk five blocks to the Deluxe Diner, the man said. He did. The diner was full of Greek housepainters, including one who knew Mr. Zannikos's father. On the spot, they offered him a job painting closets, where his mistakes would be hidden. He painted until the weather turned cold. Another Greek hired him as a dishwasher at his coffee shop in the Bronx. It was not easy, but Mr. Zannikos worked his way up to short-order cook, learning English as he went along. In 1956, immigration officials raided the coffee shop. He was deported, but after a short while he managed to sneak back into the country. Three years later he married a Puerto Rican from the Bronx. The marriage lasted only a year, but it put him on the road to becoming a citizen. Now he could buy his own restaurant, a greasy spoon in the South Bronx that catered to a late-night clientele of prostitutes and undercover police officers. Since then, he has bought and sold more than a dozen New York diners, but none have been more successful than the original 3 Guys, which opened in 1978. He and his partners own two other restaurants with the same name farther up Madison Avenue, but they have never replicated the high-end appeal of the original. 'When employees come in I teach them, 'Hey, this is a different neighborhood,' ' Mr. Zannikos said. What may be standard in some other diners is not tolerated here. There are no Greek flags or tourism posters. There is no television or twirling tower of cakes with cream pompadours. Waiters are forbidden to chew gum. No customer is ever called 'Honey.' 'They know their place and I know my place,' Mr. Zannikos said of his customers. 'It's as simple as that.' His place in society now is a far cry from his days in the Bronx. He and his second wife, June, live in Wyckoff, a New Jersey suburb where he pampers fig trees and dutifully looks after a bird feeder shaped like the Parthenon. They own a condominium in Florida. His three children all went far beyond his second-grade education, finishing high school or attending college. They have all done well, as has Mr. Zannikos, who says he makes about $130,000 a year. He says he is not sensitive to class distinctions, but he admits he was bothered when some people mistook him for the caterer at fund-raising dinners for the local Greek church he helped build. All in all, he thinks immigrants today have a better chance of moving up the class ladder than he did 50 years ago. 'At that time, no bank would give us any money, but today they give you credit cards in the mail,' he said. 'New York still gives you more opportunity that any other place. If you want to do things, you will.' He says he has done well, and he is content with his station in life. 'I'm in the middle and I'm happy.' A Divisive Issue Mr. Peralta cannot guess what class Mr. Zannikos belongs to. But he is certain that it is much tougher for an immigrant to get ahead today than 50 years ago. And he has no doubt about his own class. 'La pobreza,' he says. 'Poverty.' It was not what he expected when he boarded the bus to the border, but it did not take long for him to realize that success in the United States required more than hard work. 'A lot of it has to do with luck,' he said during a lunch break on a stoop around the corner from the Queens diner where he went to work after 3 Guys. 'People come here, and in no more than a year or two they can buy their own house and have a car,' Mr. Peralta said. 'Me, I've been here 15 years, and if I die tomorrow, there wouldn't even be enough money to bury me.' In 1990, Mr. Peralta was in the vanguard of Mexican immigrants who bypassed the traditional barrios in border states to work in far-flung cities like Denver and New York. The 2000 census counted 186,872 Mexicans in New York, triple the 1990 figure, and there are undoubtedly many more today. The Mexican consulate, which serves the metropolitan region, has issued more than 500,000 ID cards just since 2001. Fifty years ago, illegal immigration was a minor problem. Now it is a divisive national issue, pitting those who welcome cheap labor against those with concerns about border security and the cost of providing social services. Though newly arrived Mexicans often work in industries that rely on cheap labor, like restaurants and construction, they rarely organize. Most are desperate to stay out of sight. Mr. Peralta hooked up with his uncle the morning he arrived in New York. He did not work for weeks until the bakery where the uncle worked had an opening, a part-time job making muffins. He took it, though he didn't know muffins from crumb cake. When he saw that he would not make enough to repay his father, he took a second job making night deliveries for a Manhattan diner. By the end of his first day he was so lost he had to spend all his tip money on a cab ride home. He quit the diner, but working there even briefly opened his eyes to how easy it could be to make money in New York. Diners were everywhere, and so were jobs making deliveries, washing dishes or busing tables. In six months, Mr. Peralta had paid back the money his father gave him. He bounced from job to job and in 1995, eager to show off his newfound success, he went back to Mexico with his pockets full of money, and he married. He was 25 then, the same age at which Mr. Zannikos married. But the similarities end there. When Mr. Zannikos jumped ship, he left Greece behind for good. Though he himself had no documents, the compatriots he encountered on his first days were here legally, like most other Greek immigrants, and could help him. Greeks had never come to the United States in large numbers - the 2000 census counted only 29,805 New Yorkers born in Greece - but they tended to settle in just a few areas, like the Astoria section of Queens, which became cohesive communities ready to help new arrivals. Mr. Peralta, like many other Mexicans, is trying to make it on his own and has never severed his emotional or financial ties to home. After five years in New York's Latino community, he spoke little English and owned little more than the clothes on his back. He decided to return to Huamuxtitlán (pronounced wa-moosh-teet-LAHN), the dusty village beneath a flat-topped mountain where he was born. 'People thought that since I was coming back from el Norte, I would be so rich that I could spread money around,' he said. Still, he felt privileged: his New York wages dwarfed the $1,000 a year he might have made in Mexico. He met a shy, pretty girl named Matilde in Huamuxtitlán, married her and returned with her to New York, again illegally, all in a matter of weeks. Their first child was born in 1996. Mr. Peralta soon found that supporting a family made it harder to save money. Then, in 1999, he got the job at 3 Guys. 'Barba Yanni helped me learn how to prepare things the way customers like them,' Mr. Peralta said, referring to Mr. Zannikos with a Greek title of respect that means Uncle John. The restaurant became his school. He learned how to sauté a fish so that it looked like a work of art. The three partners lent him money and said they would help him get immigration documents. The pay was good. But there were tensions with the other workers. Instead of hanging their orders on a rack, the waiters shouted them out, in Greek, Spanish and a kind of fractured English. Sometimes Mr. Peralta did not understand, and they argued. Soon he was known as a hothead. Still, he worked hard, and every night he returned to his growing family. Matilde, now 27, cleaned houses until the second child, Heidi, was born three years ago. Now she tries to sell Mary Kay products to other mothers at Public School 12, which their son, Antony, 8, attends. Most weeks, Mr. Peralta could make as much as $600. Over the course of a year that could come to over $30,000, enough to approach the lower middle class. But the life he leads is far from that and uncertainty hovers over everything about his life, starting with his paycheck. To earn $600, he has to work at least 10 hours a day, six days a week, and that does not happen every week. Sometimes he is paid overtime for the extra hours, sometimes not. And, as he found out in May, he can be fired at any time and bring in nothing, not even unemployment, until he lands another job. In 2004, he made about $24,000. Because he is here illegally, Mr. Peralta can easily be exploited. He cannot file a complaint against his landlord for charging him $500 a month for a 9-foot-by-9-foot room in a Queens apartment that he shares with nine other Mexicans in three families who pay the remainder of the $2,000-a-month rent. All 13 share one bathroom, and the established pecking order means the Peraltas rarely get to use the kitchen. Eating out can be expensive. Because they were born in New York, Mr. Peralta's children are United States citizens, and their health care is generally covered by Medicaid. But he has to pay out of his pocket whenever he or his wife sees a doctor. And forget about going to the dentist. As many other Mexicans do, he wires money home, and it costs him $7 for every $100 he sends. When his uncle, his nephew and his sister asked him for money, he was expected to lend it. No one has paid him back. He has middle-class ornaments, like a cellphone and a DVD player, but no driver's license or Social Security card. He is the first to admit that he has vices that have held him back; nothing criminal, but he tends to lose his temper and there are nights when he likes to have a drink or two. His greatest weakness is instant lottery tickets, what he calls 'los scratch,' and he sheepishly confesses that he can squander as much as $75 a week on them. It is a way of preserving hope, he said. Once he won $100. He bought a blender. Years ago, he and Matilde were so confident they would make it in America that when their son was born they used the American spelling of his name, Anthony, figuring it would help pave his passage into the mainstream. But even that effort failed. 'Look at this,' his wife said one afternoon as she sat on the floor of their room near a picture of the Virgin of Guadalupe. Mr. Peralta sat on a small plastic stool in the doorway, listening. His mattress was stacked against the wall. A roll of toilet paper was stashed nearby because they dared not leave it in the shared bathroom for someone else to use. She took her pocketbook and pulled out a clear plastic case holding her son's baptismal certificate, on which his name is spelled with an 'H.' But then she unfolded his birth certificate, where the 'H' is missing. 'The teachers won't teach him to spell his name the right way until the certificate is legally changed,' she said. 'But how can we do that if we're not legal?' Progress, but Not Success An elevated subway train thundered overhead, making the afternoon light along Roosevelt Avenue blink like a failing fluorescent bulb. Mr. Peralta's daughter and son grabbed his fat hands as they ran some errands. He had just finished a 10-hour shift, eggs over easy and cheeseburgers since 5 a.m. It had been especially hard to stand the monotony that day. He kept thinking about what was going on in Mexico, where it was the feast day of Our Lady of the Rosary. And, oh, what a feast there was - sweets and handmade tamales, a parade, even a bullfight. At night, fireworks, bursting loud and bright against the green folds of the mountains. Paid for, in part, by the money he sends home. But instead of partying, he was walking his children to the Arab supermarket on Roosevelt Avenue to buy packages of chicken and spare ribs, and hoping to get to use the kitchen. And though he knew better, he grabbed a package of pink and white marshmallows for the children. He needed to buy tortillas, too, but not there. A Korean convenience store a few blocks away sells La Maizteca tortillas, made in New York. The swirl of immigrants in Mr. Peralta's neighborhood is part of the fabric of New York, just as it was in 1953, when Mr. Zannikos arrived. But most immigrants then were Europeans, and though they spoke different languages, their Caucasian features helped them blend into New York's middle class. Experts remain divided over whether Mexicans can follow the same route. Samuel P. Huntington, a Harvard professor of government, takes the extreme view that Mexicans will not assimilate and that the separate culture they are developing threatens the United States. Most others believe that recent Mexican immigrants will eventually take their place in society, and perhaps someday muster political clout commensurate with their numbers, though significant impediments are slowing their progress. Francisco Rivera-Batiz, a Columbia University economics professor, says that prejudice remains a problem, that factory jobs have all but disappeared, and that there is a growing gap between the educational demands of the economy and the limited schooling that the newest Mexicans have when they arrive. But the biggest obstacle by far, and the one that separates newly arrived Mexicans from Greeks, Italians and most other immigrants - including earlier generations of Mexicans - is their illegal status. Professor Rivera-Batiz studied what happened to illegal Mexican immigrants who became legal after the last national amnesty in 1986. Within a few years, their incomes rose 20 percent and their English improved greatly. 'Legalization,' he said, 'helped them tremendously.' Although the Bush administration is again talking about legalizing some Mexicans with a guest worker program, there is opposition to another amnesty, and the number of Mexicans illegally living in the United States continues to soar. Desperate to get their papers any way they can, many turn to shady storefront legal offices. Like Mr. Peralta, they sign on to illusory schemes that cost hundreds of dollars but almost never produce the promised green cards. Until the 1980's, Mexican immigration was largely seasonal and mostly limited to agricultural workers. But then economic chaos in Mexico sent a flood of immigrants northward, many of them poorly educated farmers from the impoverished countryside. Tighter security on the border made it harder for Mexicans to move back and forth in the traditional way, so they tended to stay here, searching for low-paying unskilled jobs and concentrating in barrios where Spanish, constantly replenished, never loses its immediacy. 'Cuidado!' Mr. Peralta shouted when Antony carelessly stepped into Roosevelt Avenue without looking. Although the boy is taught in English at school, he rarely uses anything but Spanish at home. Even now, after 15 years in New York, Mr. Peralta speaks little English. He tried English classes once, but could not get his mind to accept the new sounds. So he dropped it, and has stuck with only Spanish, which he concedes is 'the language of busboys' in New York. But as long as he stays in his neighborhood, it is all he needs. It was late afternoon by the time Mr. Peralta and his children headed home. The run-down house, the overheated room, the stacked mattress and the hoarded toilet paper - all remind him how far he would have to go to achieve a success like Mr. Zannikos's. Still, he says, he has done far better than he could ever have done in Mexico. He realizes that the money he sends to his family there is not enough to satisfy his father, who built stairs for a second floor of his house made of concrete blocks in Huamuxtitlán, even though there is no second floor. He believes Manuel has made it big in New York and he is waiting for money from America to complete the upstairs. Manuel has never told him the truth about his life up north. He said his father's images of America came from another era. The older man does not know how tough it is to be a Mexican immigrant in the United States now, tougher than any young man who ever left Huamuxtitlán would admit. Everything built up over 15 years here can come apart as easily as an adobe house in an earthquake. And then it is time to start over, again. A Conflict Erupts It was the end of another busy lunch at 3 Guys in late spring 2003. Mr. Peralta made himself a turkey sandwich and took a seat at a rear table. The Mexican countermen, dishwashers and busboys also started their breaks, while the Greek waiters took care of the last few diners. It is not clear how the argument started. But a cross word passed between a Greek waiter and a Mexican busboy. Voices were raised. The waiter swung at the busboy, catching him behind the ear. Mr. Peralta froze. So did the other Mexicans. Even from the front of the restaurant, where he was watching the cash register, Mr. Zannikos realized something was wrong and rushed back to break it up. 'I stood between them, held one and pushed the other away,' he said. 'I told them: 'You don't do that here. Never do that here.' ' Mr. Zannikos said he did not care who started it. He ordered both the busboy and the waiter, a partner's nephew, to get out. But several Mexicans, including Mr. Peralta, said that they saw Mr. Zannikos grab the busboy by the head and that they believed he would have hit him if another Mexican had not stepped between them. That infuriated them because they felt he had sided with the Greek without knowing who was at fault. Mr. Zannikos said that was not true, but in the end it did not matter. The easygoing atmosphere at the restaurant changed. 'Everybody was a little cool,' Mr. Zannikos recalled. What he did not know then was that the Mexicans had reached out to the Restaurant Opportunities Center, a workers' rights group. Eventually six of them, including Mr. Peralta, cooperated with the group. He did so reluctantly, he said, because he was afraid that if the owners found out, they would no longer help him get his immigration papers. The labor group promised that the owners would never know. The owners saw it as an effort to shake them down, but for the Mexicans it became a class struggle pitting powerless workers against hard-hearted owners. Their grievances went beyond the scuffle. They complained that with just one exception, only Greeks became waiters at 3 Guys. They challenged the sole Mexican waiter, Salomon Paniagua, a former Mexican army officer who, everyone agreed, looked Greek, to stand with them. But on the day the labor group picketed the restaurant, Mr. Paniagua refused to put down his order pad. A handful of demonstrators carried signs on Madison Avenue for a short while before Mr. Zannikos and his partners reluctantly agreed to settle. Mr. Zannikos said he felt betrayed. 'When I see these guys, I see myself when I started, and I always try to help them,' he said. 'I didn't do anything wrong.' The busboy and the Mexican who intervened were paid several thousand dollars and the owners promised to promote a current Mexican employee to waiter within a month. But that did not end the turmoil. Fearing that the other Mexicans might try to get back at him, Mr. Paniagua decided to strike out on his own. After asking Mr. Zannikos for advice, he bought a one-third share of a Greek diner in Jamaica, Queens. He said he put it in his father's name because the older man had become a legal resident after the 1986 amnesty. After Mr. Paniagua left, 3 Guys went without a single Mexican waiter for 10 months, despite the terms of the settlement. In March, an eager Mexican busboy with a heavy accent who had worked there for four years got a chance to wear a waiter's tie. Mr. Peralta ended up having to leave 3 Guys around the same time as Mr. Paniagua. Mr. Zannikos's partners suspected he had sided with the labor group, he said, and started to criticize his work unfairly. Then they cut back his schedule to five days a week. After he hurt his ankle playing soccer, they told him to go home until he was better. When Mr. Peralta came back to work about two weeks later, he was fired. Mr. Zannikos confirms part of the account but says the firing had nothing to do with the scuffle or the ensuing dispute. 'If he was good, believe me, he wouldn't get fired,' he said of Mr. Peralta. Mr. Peralta shrugged when told what Mr. Zannikos said. 'I know my own work and I know what I can do,' he said. 'There are a lot of restaurants in New York, and a lot of workers.' When 3 Guys fired Mr. Peralta, another Mexican replaced him, just as Mr. Peralta replaced a Mexican at the Greek diner in Queens where he went to work next. This time, though, there was no Madison Avenue address, no elaborate menu of New Zealand mussels or designer mushrooms. In the Queens diner a bowl of soup with a buttered roll cost $2, all day. If he fried burgers and scraped fat off the big grill for 10 hours a day, six days a week, he might earn about as much as he did on Madison Avenue, at least for a week. His schedule kept changing. Sometimes he worked the lunch and dinner shift, and by the end of the night he was worn out, especially since he often found himself arguing with the Greek owner. But he did not look forward to going home. So after the night manager lowered the security gate, Mr. Peralta would wander the streets. One of those nights he stopped at a phone center off Roosevelt Avenue to call his mother. 'Everything's O.K.,' he told her. He asked how she had spent the last $100 he sent, and whether she needed anything else. There is always need in Huamuxtitlán. Still restless, he went to the Scorpion, a shot-and-beer joint open till 4 a.m. He sat at the long bar nursing vodkas with cranberry juice, glancing at the soccer match on TV and the busty Brazilian bartender who spoke only a little Spanish. When it was nearly 11 p.m., he called it a night. Back home, he quietly opened the door to his room. The lights were off, the television murmuring. His family was asleep in the bunk bed that the store had now threatened to repossess. Antony was curled up on the top, Matilde and Heidi cuddled in the bottom. Mr. Peralta moved the plastic stool out of the way and dropped his mattress to the floor. The children did not stir. His wife's eyes fluttered, but she said nothing. Mr. Peralta looked over his family, his home. 'This,' he said, 'is my life in New York.' Not the life he imagined, but his life. In early March, just after Heidi's third birthday, he quit his job at the Queens diner after yet another heated argument with the owner. In his mind, preserving his dignity is one of the few liberties he has left. 'I'll get another job,' he said while baby-sitting Heidi at home a few days later. The rent is already paid till the end of the month and he has friends, he said. People know him. To him, jobs are interchangeable - just as he is to the jobs. If he cannot find work as a grillman, he will bus tables. Or wash dishes. If not at one diner, then at another. 'It's all the same,' he said. It took about three weeks, but Mr. Peralta did find a new job as a grillman at another Greek diner in a different part of New York. His salary is roughly the same, the menu is roughly the same (one new item, Greek burritos, was a natural), and he sees his chance for a better future as being roughly the same as it has been since he got to America. A Long Day Closes It was now dark again outside 3 Guys. About 9 p.m. Mr. Zannikos asked his Mexican cook for a small salmon steak, a little rare. It had been another busy 10-hour day for him, but a good one. Receipts from the morning alone exceeded what he needed to take in every day just to cover the $23,000 a month rent. He finished the salmon quickly, left final instructions with the lone Greek waiter still on duty and said good night to everyone else. He put on his light tan corduroy jacket and the baseball cap he picked up in Florida. 'Night,' he said to the lone table of diners. Outside, as Mr. Zannikos walked slowly down Madison Avenue, a self-made man comfortable with his own hard-won success, the bulkhead doors in front of 3 Guys clanked open. Faint voices speaking Spanish came from below. A young Mexican who started his shift 10 hours earlier climbed out with a bag of garbage and heaved it onto the sidewalk. New Zealand mussel shells. Uneaten bits of portobello mushrooms. The fine grounds of decaf cappuccino. One black plastic bag after another came out until Madison Avenue in front of 3 Guys was piled high with trash. 'Hurry up!' the young man shouted to the other Mexicans. 'I want to go home, too.'

Subject: Looking for Relative Value From: Terri To: All Date Posted: Thurs, May 26, 2005 at 11:49:24 (EDT) Email Address: Not Provided Message: Though economic growth was a healthy 3.5% for the first quarter, with inflation at only 2.2%, there are reasons to worry about the economy from the rapid rise in the price of housing to the government budget and trade deficits. So, in looking ahead there is reason for caution and a need to know what caution might be. Caution for Warren Buffett we have seen for several years is buying utility companies here and abroad. But, we are not Warren Buffett. We can choose to invest in Berkshire Hathaway or buy shares of the Vanguard Utility Index, but there is of course more in relative value and safety to be found.

Subject: Italy says ciao to la dolce vita... From: Setanta To: All Date Posted: Thurs, May 26, 2005 at 05:59:03 (EDT) Email Address: Not Provided Message: ...and is it the single currency at fault? Italy's economic woes are our woes, too, because of their effects on the currency and interest rates 'ECONOMIA in crisi!' ran the headline in the Corrierre della Serra. Even my non-existent Italian could follow that, if not the text underneath. But, sad sack that I am, even on holiday I could not resist looking at the numbers on the graphs. One wonders what the Italian is for 'Holy smoke!' Clothing production down 12pc, car production down 8pc, machinery down 16pc. This was the second successive quarter when output fell, so the Italian economy is technically in recession. Inside, the newspaper had a four-page special, doubtless full of weeping and gnashing of teeth. For an Irishman, it was like a visit to another planet, or at least to another time. But of course, Italy is not even a foreign country in the normal sense of the word. It is a fellow-member of the euro area with which we share a currency - and an interest rate. What I did not know until I returned was that these shocking figures coincided with the OECD annual review of the Italian economy. Italy's problems were then highlighted by the Economist magazine in a cover story entitled, 'The Real Sick Man of Europe'. Thanks to the euro, those problems are all our problems, because of their effects on the currency and interest rates, and because they illustrate the unresolved issue facing all euro members - how to live with a single currency when productivity, demand and inflation differ widely. Just a few months ago there were snorts of derision when Morgan Stanley analysts suggested the European Central Bank might end up cutting interest rates this year. The snorts would not be so loud now. The 'soft patch' which the eurozone economy suddenly hit at the end of last year has turned into something much swampier. After feebly approaching something like normal growth for the first time in four years last year, it now seems pretty certain that 2005 will be another below-par performance with the total eurozone economy lucky to expand by more than one per cent. The OECD's economists think the situation so serious that they called for an immediate cut in ECB interest rates. Their models say that, even if this were a whopping half-point drop to 1.5pc, economic growth would be only 1.2pc this year and still below potential at 1.9pc next year. The global soft patch also turned out softer and deeper than most expected. Oil prices are probably to blame. But, as the Italian statistics showed, the large eurozone economies are especially vulnerable because industrial production and exports have been the main source of growth. There is too little domestic demand to smooth the ups and downs of the global markets. But there are significant differences between the 'big three' of Germany, France and Italy, which between them account for 70pc of eurozone output (indeed, in statistical terms they are the eurozone). French domestic demand is not quite so sickly, and there was a good bounce in household spending last month. Germany's external competitiveness is better than that of the other two. Not enough attention has been paid to the remarkable way German companies have squeezed costs and increased productivity when faced with a rising euro and falling prices. German exporters remain singularly successful and able to take advantage of any fall in the currency or upturn in global markets. But then, they have plenty of experience at this kind of thing. The old deutschmark appreciated for most of its 50-year history and German exporters had to up their game continually to remain competitive. Even if the deutschmark entered the euro at too high a rate, as some analysts think, it was just another such episode and the German cost adjustment is probably complete by now. The Italian experience was very different. Italy dealt with loss of competitiveness through periodic devaluations of the lira. It was quite a successful strategy too - northern Italy is as rich as Germany - but it is no longer available. Probably because of this different history, Italy has not been able to make the 'real' adjustments to costs and productivity which the Germans have done. Inflationary habits are hard to kill. According to the OECD, Italian unit labour costs have risen 40pc faster than Germany's since 2000. The country is losing competitiveness within the eurozone, as well as facing the threat of cheap competition, and cheap currencies, in Asia. This helps put the interest rate debate into perspective - a complicated perspective. ECB council members immediately rejected the OECD call for cheaper money. They say this is not compatible with a low inflation policy, and they have some evidence to back them up. A recent study found that Germany is the only euro member where the ECB's 2pc interest rate could be described as 'tight'. That is because German inflation - wage and cost inflation as well as consumer prices - is so low. In other countries, including 'sick man' Italy, higher inflation means the real interest rate is a loose, accommodating one. This is why the Frankfurt bank will be so reluctant to cut rates. But the pressure will be immense, especially given this week's political events in Germany. It seems reasonable to conclude that the unpopularity of Chancellor Schro¨der's government has much to do with the squeeze on German wages and working hours, as well as structural reforms designed to increase productivity and reduce costs further. When the effects of that squeeze and those reforms eventually come through, it is not too fanciful to think that Germany will again be the economic success story of Europe. 'Eventually' may not be that long in coming either. But it will not be before the autumn election Mr Schro¨der is seeking. Meanwhile, the German economy must struggle on with interest rates that are too tight. The ECB may have to relent, although it will have to move soon to avoid charges of political favouritism. This would amount to backing the German horse, and why not? Interest rates appropriate for Europe's biggest and, if the truth be told, most adaptable economy, might produce better results than one based on some notional eurozone average. Growth would be better, which would help government finances, confidence and domestic demand. True, eurozone inflation would be higher too, but, as Italy is finding out, there is another constraint on inflation besides the cost of money. Unemployment. In a single currency, failure to keep wages and costs (including government costs) in line with productivity will mean loss of jobs. And that, by the way, applies to everyone, not just Italians.

Subject: Re: Italy says ciao to la dolce vita... From: Terri To: Setanta Date Posted: Thurs, May 26, 2005 at 05:57:45 (EDT) Email Address: Not Provided Message: We should be especially worried about Italy. There must be a change to service industry in Italy, but such a change can be wrenching. I will respond later this day.

Subject: Re: Italy says ciao to la dolce vita... From: Terri To: Terri Date Posted: Thurs, May 26, 2005 at 07:13:57 (EDT) Email Address: Not Provided Message: This is a wonderful excuse to watch 'La Dolce Vita,' and more of Italian film.

Subject: Vanguard Bond Funds From: Terri To: All Date Posted: Thurs, May 26, 2005 at 05:37:32 (EDT) Email Address: Not Provided Message: Though there have long been worries of bond bubbles and rushes away from bonds, we have in fact been in a bull market in long term bonds that began in December 1981 and extends to this day. A recent bull market in bonds within the longer bull market began in January 2000. The bull market in bonds from January 2000 till now has been the most wonderful provider of returns and safety for those who know how to use the market properly, for me that means using Vanguard bond funds. By following Vanguard principles in using bond funds, investors have avoided the bear market in stocks completely and earned stock like returns since January 2000. Though I believe the bull market in bonds is about over, I am not frightened of bond funds with fairly constant and moderate durations. Remember, the Vanguard short term bond index has a duration of about 2 years. So, a full percentage point increase in interest rates will only result in a loss in fund price of about 2% while yield will gradually increase. Since the quality and diversity of Vanguard investment-grade bond funds is extremely high, where is the fear? Since there are attractive value in stock sectors, an investor can choose to reduce holding in bond funds at this time but fear is not warranted with the proper bond fund investments. This day I will write several times on bond funds.

Subject: Bonds and Bond Funds From: Terri To: Terri Date Posted: Thurs, May 26, 2005 at 05:55:10 (EDT) Email Address: Not Provided Message: What is interesting is that at just the time I am becoming more cautious on bond funds, Bill Gross has become more bullish on bonds. Remember, I choose to buy bonds only through funds and so think in terms of bond funds though I try to follow the bond market as a whole.

Subject: European Interest Rates are Too High From: Terri To: All Date Posted: Wed, May 25, 2005 at 21:28:31 (EDT) Email Address: Not Provided Message: What is driving the weaker European economies is still American imports, America is surely not the cause of European slowness of growth. American long term interest rates are surprisingly low despite 8 increases in short term rates by the Federal Reserve, and surely our mix of interest rates is not preventing Europe from lowering short term rates. By growing below potential, Europe is not providing for the future nor preventing inflation but needlessly limiting living standards.

Subject: Euro is high still From: Pete Weis To: Terri Date Posted: Wed, May 25, 2005 at 22:10:16 (EDT) Email Address: Not Provided Message: Terri. Probably the single largest problem for the European economy is the high value of the Euro vs the US dollar and Asian currencies. European corporations are having to forego profit margins to maintain market share, but they are losing at both. A lot of it could be the lack of ability for EU central banks to agree on a common policy that would push the Euro lower. Really it's Alan Greenspan and the US central bank which has created this problem for Europe. The EU either must begin policies to start sinking the Euro or suffer further loss of export trade and higher unemployment. They didn't want this 'race to the bottom' but the US central bank has forced the issue.

Subject: Re: Euro is high still From: Terri To: Pete Weis Date Posted: Thurs, May 26, 2005 at 05:54:15 (EDT) Email Address: Not Provided Message: We must further discuss this important issue. There is a single Euro central bank, and this bank sets short term interest rates for all the Euro countries. This bank has had overly restrictive monetary policy for the last 5 years, and this policy has in no way been dictated by America's Federal Reserve. America and Europe should consult on monetary policy, but each monetary system is and should be independent. Along with the Euro bank, there are central banks for Britain and Sweden and Switzerland as non-Euro countries. Each central bank is highly independent, though all the world central banks are linked through currency flows.

Subject: Re: Euro is high still From: Pete Weis To: Terri Date Posted: Thurs, May 26, 2005 at 08:58:45 (EDT) Email Address: Not Provided Message: 'There is a single Euro central bank, and this bank sets short term interest rates for all the Euro countries.' But is there a single EU central banker with the power of an Alan Greenspan? The Europeans have not followed the lead of the Japanese and Chinese with regard to heavy purchasing of US treasuries in an exchange of euros for dollars. Do you think they will start, especially if the dollar and Asian currencies continue to fall against the euro?

Subject: Re: Euro is high still From: Terri To: Pete Weis Date Posted: Thurs, May 26, 2005 at 10:21:16 (EDT) Email Address: Not Provided Message: The Chair of the Euro Bank has been stronger than I would have expected both within the bank and with regard to the Euro governments. The mandate of the bank is only to limit inflation, unlike our Federal Reserve which is also asked to work towards high employment. The Euro countries have a trade surplus, so foreign exchange is accumulated, but the only course that seems wise would be collect a basket of currencies rather than too many dollars as China and Japan have accumulated. There is a both a wish for a strong Euro and a weak Euro, so buying dollars to generate exports is not likely to occur.

Subject: Re: Euro is high still From: Pete Weis To: Pete Weis Date Posted: Thurs, May 26, 2005 at 09:30:13 (EDT) Email Address: Not Provided Message: 'The Europeans have not followed the lead of the Japanese and Chinese with regard to heavy purchasing of US treasuries in an exchange of euros for dollars. Do you think they will start, especially if the dollar and Asian currencies continue to fall against the euro?' On second thought this is a dumb question. The Europeans would obviously be uninterested in absorbing more risky dollars. They would also be uninterested in bolstering the US consumer so he could continue buying mostly goods from Japan and Asia. But they may be forced to find other ways to weaken the euro and lowering interest rates, as you (Terri) point out, would be one way. The highly valued euro, relative to the dollar, is tempting Europeans to invest in assets outside Europe and in US assets like Florida real estate. They would like to see more investment stay at home.

Subject: Fannie Mae and Freddie Mac From: Terri To: All Date Posted: Wed, May 25, 2005 at 20:16:51 (EDT) Email Address: Not Provided Message: http://www.washingtonpost.com/wp-dyn/content/article/2005/05/24/AR2005052401614.html Greenspan Misfires on Fannie, Freddie By Steven Pearlstein I have in my hand a report by the Fed professional staff titled, 'Concentration of Risk in the OTC Market for U.S. Dollar Interest Rate Options.' Until I inquired after it Monday, this report was not going to see the light of day, ostensibly because it is based on confidential information provided by Fannie, Freddie and the major dealers in interest-rate swaps. But it comes to three interesting conclusions, which I'll attempt to paraphrase using the Queen's English: (1) The risks to the financial system posed by Fannie and Freddie's use of the derivatives market to hedge interest-rate and mortgage-prepayment risks are less than most of us thought. (2) If either Fannie or Freddie were to fail, these derivatives markets would not melt down. (3) The availability of these hedging instruments allows Fannie, Freddie and big banks to load up their balance sheets with mortgages and, indirectly, lower mortgage interest rates.

Subject: High Yield Bonds From: Terri To: Terri Date Posted: Wed, May 25, 2005 at 22:00:22 (EDT) Email Address: Not Provided Message: Notice that the prices of high yield bonds have stabilized, and better quality high yield bond prices are rising.

Subject: An alternate view From: Pete Weis To: Terri Date Posted: Wed, May 25, 2005 at 22:13:44 (EDT) Email Address: Not Provided Message: Bond bubble, American-style By Jack Crooks The past seldom obliges by revealing to us when wildness will break out in the future. Wars, depressions, stock-market booms and crashes, and ethnic massacres come and go, but they always seem to arrive as surprises. After the fact, however, when we study the history of what happened, the source of the wildness appears to be so obvious to us that we have a hard time understanding how people on the scene were oblivious to what lay wait for them. - Peter Bernstein, Against the Gods We believe a nasty popping of the bond-market bubble lies in wait for investors. Why? In short, yields are too low, bond prices too high, and quality spreads too tight. The gargantuan rally, which actually peaked in June 2003, as evidenced in the monthly chart of 30-year bond futures below, should soon be history. The primary source of the 'wildness' seems easy to pinpoint ahead of time - this time. It's the US Federal Reserve. It was the engineering of the emergency Fed Funds rate, to save the world from the clutches of deflation (denying this as the proper cleansing agent for economic sins past) that proved most impressive as bubble fuel. It's now the long march toward the elusive 'normalization' of benchmark interest rates that will draw Zeppelin-like comparisons from observers as long-bond prices head toward earth. We wouldn't be surprised to see a surprise in the form of inflation scare, major hedge-fund collapse, or foreign bank reserve reallocation to hasten the descent of fixed income prices across the entire spectrum: from Treasury to junk. Those holding junk bonds, now the darling of yield chasers, will soon understand the moniker. Here are a few tidbits of anecdotal evidence for your perusal: Net purchases of all US fixed-income securities rose to a record high in October on a rolling 12-month basis. Custody holdings of US debt hit a new high of US$1.329 trillion. Foreign purchases of US corporate bonds hit a record high on a rolling 12-month basis. Foreign purchases of US Agency paper hit a record high on a rolling 12-month basis. US high-yield, or junk, bond issuance has reached record levels; issuance to date totaled $139.8 billion, beating $136 billion in the previous year and just edging ahead of 1998's $137.8 billion. Interest-rate derivatives held by US commercial banks increased to a record $73 trillion (notional value) in the third quarter of 2004. The credit spreads on double- B-rated securities are tighter than they were on the eve of the Long Term Capital Management debacle. Strong investor demand for the debt has pushed the premium over Treasuries to historically low levels. Sources: Thomson Financial, OCC Report, Financial Times, Weldon Money Monitor, Grant's This historic level of love for bonds did give bonds a boost recently. But bond futures didn't reach the highs made in early 2004 and are well below record highs made in June 2003. Prices have stalled and are turning over. It appears as a classic technical pattern of a failed high, leading to a series of lower highs that will lead to a series of lower lows. The market now realizes the Fed is serious about hiking the Fed Funds rate. That, we believe, is why the price action is turning negative. There is a good chance that Fed Funds may rise more quickly than now believed. If the thinking at the Fed is anywhere close to that of Morgan Stanley economist Ted Wieseman, the rush out of bonds may morph to a stampede. 'In an economy growing at a sustained 4% real rate, experiencing near-record low national savings, a corresponding record high current account gap and rising inflation, bubble seems the only reasonable way to describe real short rates of barely over 0%, real five-year rates of less than 1%, real 10-year rates of 1.6%, and real 20-year rates of less than 2%, probably 200 to 300 bp [basis points] below sustainable fair-value levels depending on maturity,' writes Wieseman. Many economists believe a hike in interest rates will improve the dismal US savings picture. 'The net national savings rate has averaged 1.7% through the first three quarters of 2004, just above the record low of 1.2% hit in 2002,' according to Wieseman. The structural dearth in savings rates adds to the US dependence on international investors for funding of the gaping twin deficits - the double-Ds of doom, so to speak. Thus higher rates will play a role in healing US and global 'imbalances'. This is the weighty justification the Fed will use for political cover. The Fed's 'policy mistake' was its decision to run the printing press 24/7 in order save the US economy from what it perceived as a Japan-style deflation. It was a conscious decision by the Fed to create asset bubbles rather than face the painfully healing music of recession. These asset bubbles and artificially lower interest rates have distorted consumer preferences. Instead of relying on genuine old-fashioned income growth to fund consumption, consumers have leveraged wealth off the stock and real-estate bubbles. And precisely because the yield on cash was at historic lows, both professional and not-so-professional investors quickly realized the advantages of borrowing short and lending long. In other words, the Fed has engineered the largest one-way bet in history. The bet: long rates will stay low as far as the eye can see. Risk and uncertainty don't enter into the equation when there's such 'easy' money to be made. What seems to be coming into focus is our 'understanding how people on the scene' are 'oblivious to what lay wait for them'. Jack Crooks has traded in global equity, fixed income, commodity, and currency markets for more than 20 years. He is president of Black Swan Capital, a currency and commodities market advisory firm - BlackSwanTrading.com.

Subject: Re: An alternate view From: Terri To: Pete Weis Date Posted: Thurs, May 26, 2005 at 07:18:55 (EDT) Email Address: Not Provided Message: We must remember, as I keep repeating how much safety there is in moderate or low duration Vanguard bonds funds. Fear of the Vanguard GNMA Bond Fund makes no sense to me, though there may and hopefully will be other investments that are superior. There is no reason to let bond bubblers panic us as they have sought to do these 20 years.

Subject: Steep Rise in Prices for Homes From: Emma To: All Date Posted: Wed, May 25, 2005 at 15:14:58 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/25/business/25home.html?pagewanted=all Steep Rise in Prices for Homes Adds to Worry About a Bubble By DAVID LEONHARDT Home prices rose more quickly over the last year than at any point since 1980, a national group of Realtors reported yesterday, raising new questions about whether some local housing markets may be turning into bubbles destined to burst. With mortgage rates still low and job growth accelerating, the real estate market is defying yet another round of predictions that it was on the verge of cooling. The number of homes sold also jumped in April, after having been flat for almost a year. Nationwide, the median price for sales of existing homes, which does not factor in newly built ones, rose to $206,000 last month, up 15.1 percent over the last year and breaking the $200,000 level for the first time, the National Association of Realtors said. Adjusted for inflation, the median price - the point at which half cost more and half cost less - has increased more than a third since 2000. 'We've had robust markets before,' said Maurice J. Veissi, the president of a real estate agency in Miami, who has been a broker for 30 years. 'But this one is so much broader and deeper.' Even before this surge, housing prices had risen more steeply over the last 10 years than during any such period since World War II. A growing number of economists worry that real estate is to this decade what technology stocks were to the 1990's, with many people assuming that home values will rise forever. Over all, home prices have never fallen by a significant amount, and Alan Greenspan, the chairman of the Federal Reserve, said on Friday that a national drop in price remained unlikely. But they have sometimes fallen sharply in certain locations, including New York and Los Angeles, and Mr. Greenspan, in his strongest warning to date, stated that some metropolitan areas were clearly showing signs of 'froth.' Having been sanguine about real estate in recent years, Mr. Greenspan began to change his tone in March, when he cited some analysts' concern that the housing market might 'implode.' Prices continue to rise most rapidly in the places where they are already highest, including Florida, the Boston-Washington corridor and along the West Coast. In the late 1980's, a typical house in San Diego cost about as much as two typical houses in Syracuse, according to the Realtors' association; today, someone could buy six Syracuse houses for the price of one in San Diego. Prices have jumped most sharply over the last year in the West - up 21 percent in April from a year earlier, compared with an increase of 14 percent in the calendar year 2004. Price increases also accelerated in the Midwest, to almost 13 percent, while they remained roughly similar in the Northeast at 16 percent, and the South, where they are up about 8 percent compared with a year earlier. In a separate report, the Census Bureau said Tuesday that the percentage of homes worth at least a million dollars had almost doubled from 2000 to 2003. California had the highest share of million-dollar homes in 2003, with more than 4 percent valued above that amount. It was followed by Connecticut; Washington, D.C.; Massachusetts; and New York, where an estimated 2.1 percent of the homes were valued at more than $1 million. Nationally, 1 percent are worth more than that. 'There's clearly speculative excess going on,' said Joshua Shapiro, the chief United States economist at MFR Inc., an economic research group in New York. 'A lot of people view real estate as a can't lose.' Until the April surge, the overall housing market had seemed to have reached a plateau. Economists, even some working for real estate lobbying groups, predicted that sales would decline a little in 2005 and prices would rise more modestly. But even as the Fed has steadily lifted its benchmark short-term interest rate, mortgage rates have remained low. The average interest rate for a 30-year fixed loan is now 5.71 percent, down from 6.30 percent a year ago, according to Freddie Mac, the government-sponsored mortgage buyer. Mortgage rates are closely tied to the market for long-term government bonds, which are benefiting from purchases by foreign governments, particularly in Asia, that continue to buy Treasury bonds, as well as from investors looking for a haven from risky corporate securities. As the economy has gained strength this year, the still low rates and creative financing arrangements appear to have wooed a new group of homebuyers into the market. Some are trading up to larger houses, while others are buying a vacation homes or putting money into real estate simply as an investment. 'Mortgage rates are doing this,' said David A. Lereah, chief economist of the Realtors' association. 'They're near historic lows.' The number of existing homes that changed hands in April increased 4.5 percent, the biggest monthly gain since early 2004. Sales of condominiums, particularly popular among real estate speculators, rose faster than sales of free-standing homes. Condo prices rose faster, too. To economists worried about a bubble, the growing gap between house prices and almost everything else - rents, incomes, population growth - is the surest sign of trouble. A typical apartment, for example, costs less to rent than it did five years ago, taking inflation into account, according to the National Real Estate Index, which is published by Global Real Analytics, a research company based in San Francisco. The last time that house prices increased more than 15 percent over a 12-month period was in 1980, according to the Realtors' group. But overall inflation was also high at the time, helping to drive home values higher as well. Inflation has been modest in recent years. Mr. Shapiro of MFR said that even a moderate rise in mortgage rates now had the potential to cause a price decline in some expensive markets. A rate increase would change the calculation for people buying residential real estate as an investment, he said, and could make other buyers realize that the recent price jumps could not continue. But other economists predict that powerful demographic forces will keep prices increasing in most of the country. Many baby boomers are buying second homes, and their children - like many immigrants who have arrived in the last generation - are destined, in this view, to buy their first, continuing to stoke demand. Construction companies have also avoided the kind of overbuilding that plagued some regions during the real estate downturn of the early 1990's. Fewer than 2.5 million homes remained on the market in April, equal to only about four months' worth of home sales, and that is near a record low. 'Obviously, there are some local bubbles,' said Mr. Lereah, of the Realtors' group, who called last month's price increase unsustainable. 'But I tend to think that with most of the bubbles, the air will come out slowly, rather than popping.'

Subject: New Rule on Endangered Species From: Emma To: All Date Posted: Wed, May 25, 2005 at 12:55:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/national/24species.html New Rule on Endangered Species in the Southwest By FELICITY BARRINGER WASHINGTON - The southwestern regional director of the United States Fish and Wildlife Service has instructed members of his staff to limit their use of the latest scientific studies on the genetics of endangered plants and animals when deciding how best to preserve and recover them. At issue is what happens once a fish, animal, plant or bird is included on the federal endangered species list as being in danger of extinction and needing protection. Dale Hall, the director of the southwestern region, in a memorandum dated Jan. 27, said that all decisions about how to return a species to robust viability must use only the genetic science in place at the time it was put on the endangered species list - in some cases the 1970's or earlier - even if there have been scientific advances in understanding the genetic makeup of a species and its subgroups in the ensuing years. His instructions can spare states in his region the expense of extensive recovery efforts. Arizona officials responsible for the recovery of Apache trout, for example, argue that the money - $2 million to $3 million in the past five years - spent on ensuring the survival of each genetic subgroup of the trout was misdirected, since the species as a whole was on its way to recovery. In his memorandum, Mr. Hall built upon a federal court ruling involving Oregon Coast coho salmon. The judge in that case said that because there was no basic genetic distinction between hatchery fish and their wild cousins, both had to be counted when making a determination that the fish was endangered. In the policy discussion attached to his memorandum, Mr. Hall wrote, 'genetic differences must be addressed' when a species is declared endangered. Thereafter, he said, 'there can be no further subdivision of the entity because of genetics or any other factor' unless the government goes through the time-consuming process of listing the subspecies as a separate endangered species. The regional office, in Albuquerque, covers Arizona, Oklahoma, New Mexico and Texas. Mr. Hall's memorandum prompted dissent within the agency. Six weeks later, his counterpart at the mountain-prairie regional office, in Denver, sent a sharp rebuttal to Mr. Hall. 'Knowing if populations are genetically isolated or where gene flow is restricted can assist us in identifying recovery units that will ensure that a species will persist over time,' the regional director, Ralph O. Morgenweck, wrote. 'It can also ensure that unique adaptations that may be essential for future survival continue to be maintained in the species.' Mr. Hall's policy, he wrote, 'could run counter to the purpose of the Endangered Species Act' and 'may contradict our direction to use the best available science in endangered species decisions in some cases.' One retired biologist for the southwestern office, Sally Stefferud, suggested in a telephone interview that the issue went beyond the question of whether to consider modern genetics. 'That's a major issue, of course,' Ms. Stefferud said. 'But I think there's more behind it. It's a move to make it easier' to take away a species's endangered status, she said. That would make it easier for officials to approve actions - like construction, logging or commercial fishing - that could reduce a species's number. Mr. Hall was on vacation and not available for comment Monday. Mr. Morgenweck could not be reached late Monday afternoon, but his assistant confirmed he had sent the rebuttal. The memorandums were provided by the Center for Biological Diversity and Public Employees for Environmental Responsibility, two groups that opposed Mr. Hall's policy. They said that species whose recovery could be impeded by the policy included the Gila trout and the Apache trout. Mr. Hall's ruling fits squarely into the theory advanced by the Pacific Legal Foundation, a property-rights group in California, that endangered species be considered as one genetic unit for purposes of being put on the endangered species list and in subsequent management plans. In an e-mail message on Monday, Russ Brooks, the lawyer who worked on the Oregon case for the foundation, wrote, 'Having read the memo, I can say that I agree with it.' Bruce Taubert, the assistant director for wildlife management at the Arizona Game and Fish Department, said of the new policy, 'We support it,' adding, in the case of the endangered Apache trout, 'Why should we spend an incredible amount of time and money to do something with that species if it doesn't add to the viability and longevity of the species that was listed?' 'By not having to worry about small genetic pools, we can do these things faster and better,' Mr. Taubert said. But Philip Hedrick, a professor of population genetics at Arizona State University, said that it made no sense to ignore scientific advances in his field. 'Genetics and evolutionary thinking have to be incorporated if we're going to talk about long-term sustainability of these species,' he said. 'Maybe in the short term you can have a few animals closely related and inbred out there, but for them to survive in any long-term sense you have to think about this long-term picture that conservation biologists have come up with over the last 25 years.' Professor Hedrick added that cutting off new genetic findings that fell short of providing evidence that a separate species had evolved was 'completely inappropriate, because as everyone knows, we're able to know a lot more than we did five years ago.' He added, 'They talk about using the best science, but that's clearly not what they're trying to do here.' In a telephone interview from the Albuquerque fish and wildlife office, Larry Bell, a spokesman, said that Mr. Hall's interpretation meant that 'the only thing that we have to consider in recovery is: does the species exist?' 'We don't have to consider whether various adaptive portions of a species exist,' he said. Asked about why an Oregon ruling would have an impact on policies in the southwest, he said: 'My belief is that because it's the only court decision that addresses the issue of genetics. While we're not within this region bound by the Oregon decision per se, it would provide guidance.'

Subject: Greg vs. Paul (Part II) From: Pancho Villa To: All Date Posted: Wed, May 25, 2005 at 12:44:40 (EDT) Email Address: panchovillan@yahoo.com Message: http://www.fortune.com/fortune/articles/0,15114,1064384-1,00.html

Subject: Re: Greg vs. Paul (Part II) From: Pete Weis To: Pancho Villa Date Posted: Wed, May 25, 2005 at 15:34:00 (EDT) Email Address: Not Provided Message: 'I had Paul as a teacher at MIT. And when I was at CEA in '82 and '83, he was there as well. I was a junior staffer in the Reagan administration. Two members of the senior staff were Krugman and (former Harvard economics professor, Clinton Treasury Secretary and current Harvard president Lawrence) Summers. At that time he was a brilliant economist. I thought he'd win a Nobel prize. I think there's a good chance he still will. His early work on international trade theory deserves it.' 'It's strange what's happened since then. When he became a New York Times columnist, he decided to abandon writing about economics as an economist does. He's very liberal, which is fine—most of my friends at Harvard are liberal—but whenever someone disagrees with him, his first inclination is to think that person is either a liar or a fool. It's amazing to me that an academic would behave that way. The one thing that I value about academia is open-mindedness, the premise that all ideas and different points of view should be considered. No one has a monopoly on the truth. The one defining characteristic of a good professor is to be open to all viewpoints.' 'I guess if you're a columnist, you want to be widely talked about and be the most e-mailed. It's the same thing that drives talk show hosts to become Jerry Springer. You end up overstating the case because it makes good reading. The problem is that economists by their nature—with a lot of 'on the one hand' and 'on the other hand' in their prose—can make boring reading.' - Greg Mankiw He's clearly bitter about being hammered for supporting Bush economic policies, especially by Paul Krugman. It drew blood and he wants to draw blood in return. In this interview he still supports Bush administration fiscal policies which he had a hand in. He'd prefer economists to do melba toast analysis of our present economic direction. Over time, as things play out, I expect his bitterness to increase. He seems, IMO, to be out of touch (as is the Bush administration) with the plight of the middle-class. Thanks to economists like Paul Krugman they have a voice. We have far, far too many economists in this world who are nothing more than a glass of water. I'm sorry I have to say that, but throughout history that generally has been true.

Subject: Additional thoughts From: Pete Weis To: Pete Weis Date Posted: Wed, May 25, 2005 at 20:36:04 (EDT) Email Address: Not Provided Message: I don’t remember reading any material by Paul Krugman of a personal nature with regard to Greg Mankiw. Everything I’ve read by Paul krugman regarding policies, whether economic or political, instigated by the Bush administration have not contained personal assaults on the economists involved. He has pointed to changing and sometimes hypocritical (my word) positions by Alan Greenspan. He has talked about the falsehoods which led to the Iraq war and he has named names. He has talked about the relationship between corporate insiders and members of the Bush administration, especially when it related to energy policy. He has chronicled the sins of George W (the Harkin insider stock sales, etc.) when we live in a time of corporate accounting corruption. This interview in Fortune, however, is a very personal in its attack on the integrity of Paul Krugman. IMO, it reveals that Mankiw feels very attached to the Bush administration economic policies and is very bitter with Paul Krugman’s criticisms and takes it very personally. With regard to Mankiw’s views that economists should be “opened minded” which translates into being less critical, we have to realize what were talking about here. If one is a physicist and comes up with a flawed theory regarding the dark matter in the universe, few pay a price for the bad physics. If a surgeon works from a bad diagnosis and then performs the wrong surgery, the patient can pay a heavy price indeed. If an influential economist working for an administration is responsible or partly responsible for flawed economic policies, millions will pay for those mistakes. So it isn’t just about coldly calculated numbers – it’s about real pain. I don’t think Mankiw feels the pain (except to his ego).

Subject: Re: Additional thoughts From: Paul G. Brown To: Pete Weis Date Posted: Wed, May 25, 2005 at 21:09:23 (EDT) Email Address: Not Provided Message: A wise man of my acquaintance once gave me a tremendously useful piece of advice. He told me that when judging a person's worth we are as well to give as much weight to the quality of their enemies as we do their selection of friends. Okrent and Mankiw have declared themselves.

Subject: Re: Additional thoughts From: Pete Weis To: Paul G. Brown Date Posted: Wed, May 25, 2005 at 21:37:33 (EDT) Email Address: Not Provided Message: Paul. Good advice indeed.

Subject: Re: Additional thoughts From: Terri To: Paul G. Brown Date Posted: Wed, May 25, 2005 at 21:34:36 (EDT) Email Address: Not Provided Message: These are discerning and helpful comments indeed.

Subject: Don't cry for me, Mr. Greenspan From: Setanta To: All Date Posted: Wed, May 25, 2005 at 12:38:23 (EDT) Email Address: Not Provided Message: In the past few weeks, the world's financial markets have acted in a confused, counter-intuitive, bipolar fashion. Are investors risk-seeking or becoming more risk-averse? The recent rally in equity markets suggests the former; the fall in Treasury bond yields and the widening of credit spreads suggest the latter. So what is going on? Is the global outlook improving or not? Is everything hunky dory or about to implode? Or can we steer a Goldilocks-style middle ground of not too hot and not too cold? Bond markets are sanguine about inflation because they think that Greenspan and Co are not going to let inflation rip. This is probably a bit too charitable, as inflation is already on the march. Anyone who cares to go shopping in this country already knows that. Try having a conversation that does not come around eventually to prices rising. Were it not for cheap Chinese-manufactured clothes and appliances, inflation would already be much worse. However, the growing protectionist sentiment - articulated again last week in the US and the EU - suggests that the benign influence of cheap imports is beginning to be outweighed by considerations of their malign influence on US and European manufacturing industries. Think Dungarvan. But all this is secondary. Even the increasingly grim reality in Iraq and the stubborn persistence of high oil prices - the two phenomena are strongly correlated in my opinion - are not the chief cause of the declining US economy. The real issue is - would you believe - money. But before explaining what the money problem is, let's pose the following question: is it conceivable that, even one year ago, serious journalists working for respected publications would have dared suggest that the US might end up like Argentina? Suggesting that the currency might collapse, the banking system crumble and most people's savings be wiped out? A year ago, anyone suggesting that would have been considered - in the best case - “off the wall'‘. Yet an AP reporter, Paul Blustein, has just written a book published by a respected house, in which he describes the process leading up to the implosion of the Argentinian economy in 2001.In his book And The Money Kept Rolling In (And Out) - Wall Street, the IMF and the Bankrupting of Argentina, Blustein says that the US is already going in the same direction. If that is not enough, a senior columnist for Bloomberg (which is now the supplier of financial data and analysis favoured by most of the large financial institutions) has reviewed this book. This review gives prominence to the Argentina-US comparison and, after making all the necessary caveats and qualifications, he applauds and agrees with the AP man's analysis. Let's be clear: the point is not that the US is poised to collapse or even that this is likely. The point is that the US is no win such bad financial shape, that it is perfectly legitimate to suggest that, if something isn't done, the US could end up like Argentina. And the people saying this are not a bunch of nuts holed up in an atomic bunker in the Rockies, equipped with three years' supply of canned food and a copy of Thomas Paine's Rights of Man (who incidentally began his pamphleteering career in Dublin).This is the mainstream. What is it that so concerns these analysts? It can be summed up in the following quotation: “The amount Americans owed on home equity lines of credit, according to the Federal Insurance Deposit Corporation, jumped to about $491 billion at the end of 2004, up 42 per cent from a year earlier, and more than triple the amount at the end of 2000.” This is taken from a recent item on the CNN website. It relates to a phenomenon that has become central to all of us - consumer credit. There are two ways of looking at this phenomenon. The first view is that it is no big deal. This is the perspective of the economic establishment and can be easily summarised by another CNN headline reporting on a speech delivered by the Chairman of the Federal Reserve Bank: “Greenspan: More credit is a good thing'‘. Many people in the global finance game regard Greenspan as the Almighty but, even if he isn't actually God, Greenspan is at least his earthly representative - the Pope of Mammon. He is the man responsible for the expansionary monetary policy of the US - and, by extension, the western world - over the last decade. Greenspan has overseen the creation of more money than anyone else, ever. The result has been a prolonged period of economic expansion and, very significantly, the avoidance of several potential catastrophes. That's why the chairman thinks that credit is a good thing - as he explained, in remarkably simple terms by his standards, in his speech that day. But let's go back to basics and consider how the credit system works. The central bank and its policy is the crucial element in determining how much money is available and hence which direction the economy goes. But the central bank merely provides liquidity; it is the bankers and others who use this liquidity to create new money, where none previously existed. They do this by providing credit to us and our firms.This process is the essence of banking and the reason why banking and the financial system generally (not high-tech, not energy and certainly not health, education or social services) is the heart of the modern economy. That means that the people responsible for the huge increase in home equity loans and consumer credit generally are the bankers. It is their lending policies that have generated this flood of credit. To quote from another recent item on CNN: “Pretty much anyone can get a loan within reason,” said Robert Moulton, president of mortgage brokerage Americana Mortgage Group. Therein lies the real story: banks are now throwing money at anyone capable of signing their name on the loan documents - or even making their mark, if they are illiterate. That explains why the only positive recent data about the US economy relates to the housing market: “New home sales hit a new record, and mortgage applications are also strong.” In short, reports of the imminent demise of the US housing boom have been grossly exaggerated. But is this a good thing? If you accept the orthodox Greenspan/Wall Street approach to the economy, then of course it is. All credit is good, cheap credit is divine and all hail mighty Greenspan for providing so much of it. There are, however, heretics around who reject this dogma. The heretical view is that the reason people are buying more and more houses - in the US, Britain, Australia, Ireland, Spain, South Africa and Canada - is because the banks are ready and willing to finance them. History suggests that this cannot last. The longer it carries on, the worse the ultimate come-uppance will be. Yes, it is still very unlikely that the US economy will implode Argentina-style. But the mere fact that one can suggest a parallel of any sort between US 2005 and Argentina 2001 is instructive. I'm not surprised the markets are confused. The reason equities are rising is the same reason property is rising - because there is abundant credit out there driving prices. Can bonds and equities go up at the same time indefinitely? Well, in the short term, two apparently contradictory things can be true, but longer term, I'm not so sure. Source: www.davidmcwilliams.ie

Subject: France and the European Constitution From: Emma To: All Date Posted: Wed, May 25, 2005 at 11:32:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/international/europe/24france.html?ei=5070&en=497fc3e246ff8892&ex=1117598400&pagewanted=all In Southern France, Strong Opposition to Europe Treaty By ELAINE SCIOLINO MONTPELLIER, France - Over sausage sandwiches and vast amounts of beer and local wine, thousands of Frenchmen stood around and argued over how best to save France. Save France from Europe, that is: the Europe that France played a crucial role in building a half-century ago. But now, say the anti-globalizers and anti-imperialists, the farmers and factory workers who crammed into the smoky exhibition hall in this southern city Friday, Europe has lost its way. They may be treated as traitors and imbeciles by their opponents, they add, but they call themselves patriots. 'I feel like a rock star,' said Jean-Luc Mélenchon, a left-wing Socialist senator from Essonne, as he was hugged and kissed by admirers for breaking with his party and joining the 'no' camp. 'People stop me on the streets to tell me their problems and ask for my opinion about the constitution,' he said. 'I tell them it is absolutely monstrous.' Poll after poll predicts that the French will reject the 458-article constitutional treaty in a referendum on Sunday. If that happens the sky will not fall. The 25-country European Union will go on as before under existing treaties, and France, one of the six founders, will remain one of its most important members. But rejection would have deep repercussions for France and for Europe. It would be a humiliating personal defeat for President Jacques Chirac, who confidently announced last July that the constitution would be decided by popular referendum and not by Parliament, and whose personal approval rating slipped to an eight-year low of 39 percent in a BVA-L'Express poll released Friday. It could paralyze decision-making in the European Union for months, delay agreement on the group's next seven-year budget, slow down the torturous process of admitting new members, inhibit the ability of the European Union to project power as a bloc in foreign and economic policy and possibly weaken the euro further and make it even more difficult to impose discipline on member nations' spending and inflation levels. Even if a decision is made to continue the ratification process until all members decide which way to go, the constitution needs a unanimous yes to come into force. In short, a no vote in France would at the very least slow down the forward momentum of a Europe as a united force. The 'partisans for the no,' as the rejectionists on both ends of the political spectrum are called, are already celebrating. On Friday night it was a gathering of leftists. They wore badges and carried balloons declaring that to love Europe is to vote no. They bought $5-a-bottle merlot made by a cooperative in the area with custom-designed labels that said no. They sang along to Edith Piaf's 'Non, je ne regrette rien.' ('I regret nothing.') They chanted, 'No, no, all together, all together,' as speaker after speaker told them they were right. A handful of workers from the local IBM factory told stories of jobs that had moved to places like Slovakia, the Philippines and China. 'This is a democratic insurrection,' José Bové, the sheep farmer and union leader who is France's most visible opponent of globalization, told the cheering crowd. He proposed what he called an 'amusing action' for the day after the referendum: he said all French voters should take the copies of the constitution that they received in their mailboxes, 'put them in envelopes and send them back' to President Chirac. The rally was one of dozens of events scheduled for the frenzied final days of the national referendum campaign. Mr. Chirac's center-right government has joined forces with the Socialist Party and other mainstream political parties, France's business establishment and most of the political and economic elite of Europe in a desperate, last-ditch effort to turn the tide. As election day approaches, the issue has seized France. The major newspapers have published thick sections with major excerpts from the constitution, along with commentary, and debates on the issue dominate radio and television. Political figures and the major parties have churned out DVD's urging voters to vote yes. Five of the country's 10 top nonfiction best sellers deal with the constitution. The desperation of the 'yes' side has made strange bedfellows, including a joint campaign appearance by two rival presidential hopefuls: Nicolas Sarkozy, the leader of the center-right party UMP, and François Hollande, the Socialist Party leader. Much of the elite has spoken of the constitution's defeat in apocalyptic terms. Mr. Chirac has said that France 'would cease to exist politically in the bosom' of Europe if France votes no. Some 100 French business leaders have issued a manifesto saying that while a no vote would not cause immediate economic trauma, it would be 'a grave error' for France in the long term. Mario Monti, the European Union's former competition commissioner, has warned that a rejection would set off a crisis of confidence among investors that could turn Europe into a 'suburb of Shanghai.' Romano Prodi, former president of the European Commission, has gone further, predicting 'the end of Europe.' But some French political figures have warned of the risks of overdramatizing the consequences of a no, which could further alienate voters. 'I'm not going to play it up as the apocalypse,' François Fillon, the national education minister, was quoted as telling a small gathering at a private home outside Paris earlier this month. 'I will not tell you that if the no passes, Europe is going to stop and France will be banished from the union.' Both the left and the right have preyed on fears held by voters that the constitution is an 'ultraliberal' treaty, in the sense that it would enshrine a market economy, robbing them of their generous health, employment, educational and pension benefits. Jean-Marie Le Pen, the leader of the far-right National Front, which opposes the treaty, has weighed in with another reason to oppose it. He has said - incorrectly - that ratification would mean Turkey's admission to the European Union and mass waves of what he calls 'non-European' Turkish immigrants, along with Gypsies from Romania and Bulgaria, and other 'miserable native populations of the east.' The campaign underscores another political phenomenon as well: the vast gap between the French elite and ordinary voters. 'There is a real division in French society today between France from on high and France from below,' said Jean-Paul Fournier, the center-right mayor of Nîmes, who supports the constitution but whose constituents voted in 1992 against the European Union treaty that ushered in the euro. In a poll in the Montpellier-based daily Midi Libre released Friday, 61 percent of those surveyed in the province of Gard, which includes Nîmes, said they would vote no. Mr. Fournier and his administrators have lobbied for the constitution in neighborhoods throughout the city, which suffers from more than 15 percent unemployment and where the Communist Party and the National Front are both strong. In some of its tough suburbs, unemployment is as high as 40 percent. One of the challenges the mayor faces is that the constitution promises nothing tangible and immediate. 'I get asked all the time, 'What's in this for France?' ' Mr. Fournier said in an interview in his office. 'The problem is that I can't say to the unemployed worker, 'If you vote for the constitution, you will get a job.' I would be lying. I tell them this is a vision for the long term, for their children and grandchildren.' Paradoxically, some union leaders in Nîmes are in favor of the constitution, arguing that in the long run a strong Europe will help the French worker. But they also are finding it hard to persuade their rank and file that their future is to be found in the streamlined, more rational European Union that they say the constitution will bring. 'Our politicians have done a great job of blaming the European Union when things go bad,' said Patrice Couderc, a union leader from the Gard region, 'but never praising it when its money helps build a bridge or a hospital, when it imposes an improvement in working conditions or equal rights for women. The worker, the person in the street, doesn't understand the debate of the elite.'

Subject: Europe's Interest Rates From: Terri To: All Date Posted: Wed, May 25, 2005 at 11:28:07 (EDT) Email Address: Not Provided Message: Sluggish European growth is a factor in threatening a French vote in a few days against the European Constitution, the same growth problem has threatened Germany's government in fairly modest labor reforms and led to a difficult call for early elections. Though European market adjustment to interest rate changes is not as effecient as in America, because work does not move as readily region to region, interest rates have been too high.

Subject: America's Interest Rates From: Terri To: Terri Date Posted: Wed, May 25, 2005 at 11:50:49 (EDT) Email Address: Not Provided Message: Frankly, though I am listening carefully to all sorts of arguments, I am concerned about short term American interest rates rising too much. I just can not quite understand what a long term Treasury rate of 4.02% represents for our economy. There is little issue of 10 year Treasury notes, there is central bank demand for dollar securities and after all the dollar is strengthening against the Euro, but why are long term interest rates so low?

Subject: Growth and the Poor: Latin America From: Emma To: All Date Posted: Wed, May 25, 2005 at 10:59:04 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/25/opinion/25wed3.html Growth and the Poor Last year should have been a good one for Latin America's poor; the region's economies grew by 5.8 percent. Yet outside Chile, Latin America's high growth rate is not cause for rejoicing. In places with relatively egalitarian income distribution, growth helps everyone. But in unequal countries, where the poor get only a few cents out of every new dollar, growth bypasses the poorest. Latin America is the world's most unequal region. That means growth will not reduce poverty unless Latin American governments redirect it to the poor. The first thing they must do is keep growing. Chile's achievements are in part the product of sustained growth. Unfortunately, most countries in Latin America are growing not because they have improved productivity, but because of the rise in the price of oil and other commodities, quick booms that lend themselves to quick busts. Many countries also are carrying debt loads far above what is considered sustainable and spend a big chunk of their treasury on servicing their debts. For three very poor countries, Honduras, Nicaragua and Bolivia, the international banks and their members are reducing debt, although not enough. But there is no help in sight for heavily indebted Uruguay, Peru, Argentina, Brazil and other countries. Latin American nations also typically take in far too little in taxes. To reduce poverty with what they do have, Latin American countries would do well to follow the model set by Chile, which has cut extreme poverty by 65 percent since 1990 by carefully targeting its spending. Chile makes direct payments to poor households. It has invested in rural primary education and helps buy housing for the poorest people. These programs have been successful because Chile is well governed enough to measure accurately which families need help and deliver it with little corruption. Some other countries have similar programs. Since 1997, Mexico has helped more than four million of the poorest families keep their children in school, eat better and stay healthier. In many countries, these programs need closer oversight to keep local politicians from siphoning off aid. But in general, such targeted help can make a difference. In Mexico, it is a safety net for the most marginalized. With sustained growth, however, such programs could help lift millions of people out of poverty.

Subject: Utilities Utilities Utilities From: Emma To: All Date Posted: Wed, May 25, 2005 at 10:51:17 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/25/business/25place.html Buffett Pays $5.1 Billion for Utility and Promises More Deals By HEATHER TIMMONS and JAD MOUAWAD LONDON - Warren E. Buffett struck a deal on Tuesday to buy the electric utility PacifiCorp for $5.1 billion from Scottish Power, his largest purchase in eight years. Sounding a bullish note for the energy industry in general, he promised to buy similar assets in the future. Mr. Buffett, whose investing style has been scrutinized this year because of an investigation into the insurance industry, one of his longstanding favorites, said Tuesday that energy companies were a good fit with his company, Berkshire Hathaway, because they need capital and provide steady returns. He also trumpeted an eagerness to do big deals and a willingness to look outside the United States. 'There is no limit to the amount of money we would have available for the right acquisition,' Mr. Buffett said during a news conference in London about the PacifiCorp deal. 'Frankly, the bigger, the better,' he said. Berkshire Hathaway has more than $40 billion to invest at the moment, he said. 'If you have a big one out there, try us out.' Berkshire Hathaway will also assume $4.3 billion in debt in the deal. The purchase of PacifiCorp is Mr. Buffett's largest since Berkshire bought the General Re reinsurance business in 1998. That acquisition has not paid off as expected. A deal in 2000 between General Re and the American International Group is a focus of an investigation by government officials and regulators into transactions that made A.I.G.'s financial condition look better than it was. Mr. Buffett is not a target of the investigation, but he has cooperated as a witness. In the deal announced on Tuesday, PacifiCorp, which provides electricity to 1.6 million customers in six states in the Northwest, will become part of MidAmerican Energy Holdings, Mr. Buffett's utility company, which is based in Des Moines. The purchase will create a company with $10 billion in annual revenue. Energy will be 'an important industry 10, 20, 50 years from now, and Berkshire Hathaway hopes to expand its investments' in the sector, Mr. Buffett said during the news conference, where he appeared by teleconference. 'We will look at energy assets around the world,' he said, and invest through MidAmerican. MidAmerican owns CE Electric UK in Northeastern England. 'The energy field is one that I basically like,' Mr. Buffett said in a phone interview later on Tuesday. 'It's not a business you can dream about, however. It's a capital-intensive business that provides decent returns. It's stable and it's predictable.' Scottish Power, which bought PacifiCorp in 1999 for about $10 billion, will record a £927 million ($1.7 billion) charge because of the sale, which is expected to close early next year. The deal is subject to regulatory approval. PacifiCorp has been a disappointment to Scottish Power investors. The company, based in Glasgow, failed to increase PacifiCorp's revenue as predicted and said on Tuesday that the unit's earnings were below expectations. Over all, Scottish Power reported pretax profit of £1 billion ($1.83 billion) for the year ended March 31. In November, Scottish Power started a review of PacifiCorp, which provides about half its earnings. Scottish Power executives said Tuesday that after looking at capital requirements and regulatory developments, they decided to sell the business. 'This cash-consumptive, low-return profile was clearly too much to bear' given the stronger performances of the company's other divisions, Merrill Lynch said Tuesday in a research report about the deal. The company is a good fit for Berkshire Hathaway's investors, who have different needs, Mr. Buffett said. Unlike Scottish Power investors, Berkshire investors would rather see their profits reinvested than receive dividends, he said. Shares of Berkshire rose $2,010 on Tuesday, or 2.4 percent, to $85,500. Scottish Power rose 27.75 pence, or more than 6 percent, to 469.75 pence in London. Some analysts said the PacifiCorp acquisition could be a precursor to a buyout of Portland General Electric in Oregon, which is owned by Enron. Both companies are based in Portland, and a combination could provide some savings. 'It would make sense to own both of these utilities,' said Doug Fisher, an electric utility analyst at A. G. Edwards. Erik Sten, a Portland city commissioner , said, 'Any effort to consolidate PacifiCorp and Portland General Electric would be a divisive issue and would bolster support by industrial customers for the city to take over Portland G.E.' The city is negotiating with Enron to acquire the utility. Mr. Sten said the city could significantly cut rates because it would not owe federal income taxes and could raise capital more cheaply than any for-profit owner. The PacifiCorp deal comes as a new wave of buyers are showing interest in utilities like water and electricity worldwide. Cash-rich investors looking for a place to park their money are attracted to the relatively unglamorous, generally highly regulated industries because of their steady returns. The Bill and Melinda Gates Foundation was part of an effort to buy Portland G.E., which Oregon regulators rejected in March. Bill Gates serves on the board of Berkshire Hathaway and is Mr. Buffett's frequent bridge partner. In Britain, local and American banks and private equity investors have bought up a large portion of the country's water industry. Private equity investors have been particularly drawn to the sector because the steady revenue allows them to take out hefty loans against the companies. Banks, meanwhile, can turn the steady stream of revenue into securities, which they package and sell to bond investors. In the United States, utility companies, which operate as regulated monopolies, are trying to expand through acquisition after several quarters of streamlining businesses. But they face intense regulatory scrutiny and a long approval process, analysts said, which might slow future purchases. 'There is no doubt the industry is consolidating,' said Paul Patterson, an analyst at Glenrock Associates in New York. 'But I don't think there will be a wave of mergers. There are several barriers to entry, namely at the state and federal level, and there's been little recent track record of how the regulators will ultimately treat such mergers.' Mr. Buffett said he did not expect regulatory opposition to his offer. 'We're the kind of owners they will be looking for,' he said during the interview. 'We will be the last owners of these properties, and we have the capital to invest in them.' Heather Timmons reported from London for this article, and Jad Mouawad from New York. David Cay Johnston contributed reporting.

Subject: German Leader Gambles in Election Call From: Emma To: All Date Posted: Wed, May 25, 2005 at 10:45:42 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/25/business/worldbusiness/25euro.html German Leader Gambles in Call for Early Election By MARK LANDLER FRANKFURT - By calling for an early national election in Germany this autumn, Chancellor Gerhard Schröder is doing something radical for a normally opportunistic politician: depriving himself of the windfall of a potential upturn in the German economy. While the portents are still faint - and the latest indicators continue to be negative - most economists agree that Germany is at the bottom of its economic cycle and is likely to bounce back later this year and in 2006. Some of that recovery may be due to the very economic policies that inflicted pain on Germans in recent months, like Mr. Schröder's overhaul of labor laws, which contributed to the devastating defeat of his Social Democratic Party last Sunday in the state of North Rhine-Westphalia. 'He's losing the chance to run on the fruits of his reforms,' said Holger Schmieding, the chief European economist at Bank of America in London. 'If it hadn't been for the oil shock, which kept the economy down, some of those fruits would have shown up in the numbers already.' Mr. Schröder, experts say, has compelling reasons to move up the election by a year - not least to head off a split in his own party. But catching a favorable economic wave is decidedly not one of them. 'I don't see any short-term economic rationale for the move,' said Norbert Walter, the chief economist at Deutsche Bank. 'This is not the cool economic calculation of a politician. At the end of the day, he values the solidarity and cohesion of his party above his policy triumphs.' With oil prices expected to remain at current high levels for the next several months, few economists think the outlook in Germany will brighten between now and mid-September, when Mr. Schröder is expected to face the conservative leader, Angela Merkel, at the polls. For Mr. Schröder to lose to Ms. Merkel would be a bitter twist, since she is expected to accelerate, rather than pull back, the 'pain now, gain later' policies that cost Mr. Schröder his popularity with voters. The Organization for Economic Cooperation and Development on Tuesday cut its growth forecast for Germany this year to 1 percent, from 1.2 percent. And investor confidence unexpectedly dropped in a monthly survey by the ZEW Center for European Economic Research in Mannheim. Nationwide polls put the Social Democrats as much as 17 points behind Ms. Merkel's party, the Christian Democratic Union, prompting many economists to speak about the chancellor in the past tense. 'If there are no miracles, he will lose,' said Thomas Mayer, the chief European economist at Deutsche Bank. Still, Mr. Mayer noted that Germany was 'working its way out of its position as the sick man of Europe,' thanks to the country's exports, which continue to surge, despite the slackness of the domestic economy. This reflects the heightened competitiveness of German industry. Companies like Siemens and Volkswagen have managed to keep a lid on wage increases, in part by threatening to move jobs outside the country. Italy, whose competitive position has eroded in recent years, has slipped into a recession and has now replaced Germany as the 'sick man of Europe.' The German government did its part in this process by adopting a new labor-market law, known as Hartz IV, after Peter Hartz, the Volkswagen executive who helped devise it. The law makes it difficult for people to collect welfare checks for indefinite periods, forcing them back into the job market. Hartz IV caused an increase in the number of jobless people, to more than five million, after it took effect last January, as many on the welfare rolls were reclassified as unemployed. But over time, economists believe, it will make Germany's labor market more resilient, strengthening the economy. 'The German government has been doing some things to prepare for the future, and it should be commended for its courage,' said Jean-Philippe Cotis, the chief economist at the O.E.C.D. in Paris. 'In Germany,' he added, 'the problem is, how can you reestablish confidence?' Unemployment, which is at its highest level since World War II, has sapped the confidence of German consumers. As long as they do not spend, the German economy will remain becalmed. Yet in the last couple of months, the number of full-time jobs in Germany has stabilized, according to Jörg Krämer, chief economist at the HVB Group in Munich. That should help finally rekindle domestic consumption, he said. Mr. Krämer is predicting a modest acceleration in growth in the second half of this year. To be sure, a German recovery would not be sensational. The O.E.C.D. projects it will grow 1.6 percent next year, about its normal rate, given population trends. The betting among economists is that Ms. Merkel and the Christian Democrats would push farther than Mr. Schröder, particularly in areas like overhauling the health care system. The chancellor, by putting his job on the line, might be opening the door to more sweeping changes.

Subject: China, New Land of Shoppers From: Emma To: All Date Posted: Wed, May 25, 2005 at 10:39:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/25/business/worldbusiness/25mall.html?pagewanted=all China, New Land of Shoppers, Builds Malls on Gigantic Scale By DAVID BARBOZA DONGGUAN, China - After construction workers finish plastering a replica of the Arc de Triomphe and buffing the imitation streets of Hollywood, Paris and Amsterdam, a giant new shopping theme park here will proclaim itself the world's largest shopping mall. The South China Mall - a jumble of Disneyland and Las Vegas, a shoppers' version of paradise and hell all wrapped in one - will be nearly three times the size of the massive Mall of America in Minnesota. It is part of yet another astonishing new consequence of the quarter-century economic boom here: the great malls of China. Not long ago, shopping in China consisted mostly of lining up to entreat surly clerks to accept cash in exchange for ugly merchandise that did not fit. But now, Chinese have started to embrace America's modern 'shop till you drop' ethos and are in the midst of a buy-at-the-mall frenzy. Already, four shopping malls in China are larger than the Mall of America. Two, including the South China Mall, are bigger than the West Edmonton Mall in Alberta, which just surrendered its status as the world's largest to an enormous retail center in Beijing. And by 2010, China is expected to be home to at least 7 of the world's 10 largest malls. Chinese are swarming into malls, which usually have many levels that rise up rather than out in the sprawling two-level style typical in much of the United States. Chinese consumers arrive by bus and train, and growing numbers are driving there. On busy days, one mall in the southern city of Guangzhou attracts about 600,000 shoppers. For years, the Chinese missed out on the fruits of their labor, stitching shoes, purses or dresses that were exported around the world. Now, China's growing consumerism means that its people may be a step or two closer to buying the billion Cokes, Revlon lipsticks, Kodak cameras and the like that foreign companies have long dreamed they could sell. 'Forget the idea that consumers in China don't have enough money to spend,' said David Hand, a real estate and retailing expert at Jones Lang LaSalle in Beijing. 'There are people with a lot of money here. And that's driving the development of these shopping malls.' For sale are a wide range of consumer favorites - cellphones, DVD players, jeans, sofas and closets to assemble yourself. There is food from many regions of China and franchises with familiar names - KFC, McDonald's and IMAX theaters. Stores without Western pedigree sell Gucci and Louis Vuitton goods. While peasants and poor workers may only window-shop, they have joined a regular pilgrimage to the mall that has set builders and developers afire. The developers are spending billions of dollars to create these supersize shopping centers in the country's fastest-growing cities - betting that a nation of savers is on the verge of also becoming a nation of tireless shoppers. For the moment, the world's biggest mall is the six-million-square-foot Golden Resources Mall, which opened last October in northwestern Beijing. It has already sparked envy and competitive ambition among the world's big mall builders, who outwardly scoff at the Chinese ascent to mall-dom, even as they plot their own path to build on such scale in China. How big is six million square feet? That mall, which is expected to cost $1.3 billion when completed, spans the length of six football fields and easily exceeds the floor space of the Pentagon, which at 3.7 million square feet is the world's largest office building. It is a single, colossal five-story building - with rows and rows of shops stacked on top of more rows and rows of shops - so large that it is hard to navigate among the 1,000 stores and the thousands of shoppers. The shopping-mall building spree, like much economic activity in China these days, is so aggressive that some economists and officials have started to worry that it may be another sign of an overheated economy, and that the country's building frenzy may be lurching toward a fall. So far, though, there is no end in sight - and no evidence that China's long boom is likely to suffer anything more than a modest slowdown. 'These shopping centers are just huge,' said Radha Chadha, who runs Chadha Strategy Consulting in Hong Kong, which tracks shopping malls and the sales of luxury goods in Asia. 'China likes to do things big. They like to make an impact.' Retail sales in China have jumped nearly 50 percent in the last four years, as measured by the nation's biggest retailers, government data says. And with rising incomes, Chinese are spending their money on shoes, bags, clothing and even theme-park-style rides. 'We like this place a lot,' said Ruth Tong, 27, an early visitor to the South China Mall here in Dongguan with her husband and 5-year-old son. 'They have a lot of fun things to do. They have shopping and even rides. So we like it and yes, we'll come back again.' The central government recently ordered state-controlled banks to tighten lending to huge shopping mall projects. But that has not yet tempered the plans of aggressive developers and local government officials for transforming vast tracts of land into huge shopping centers. After all, the demand is certainly growing. Income per person in China has reached the equivalent of about $1,100 a year, up 50 percent since 2000. China is still a land of disparity, though it has a growing middle class that has swelled to as many as 70 million. And as the country rapidly urbanizes and modernizes, open-air food markets and old department stores are being replaced by giant supermarkets and big-box retailers. Ikea and Carrefour, the French supermarket chain, are mobbed with customers. And China's increasingly affluent young people are adopting the American teenager's habit of hanging out at the mall. Big enclosed shopping malls, which came of age in America in the late 1970's and Europe in the late 80's, are sprouting up all over China. According to retail analysts, more than 400 large malls have been built in China in the last six years. And at a time when the biggest malls under construction in the United States measure about a million square feet, developers here are creating malls that are six, seven and eight million square feet. The current titleholder, the Golden Resources Mall, where 20,000 employees work, is the creation of Huang Rulun, an entrepreneur who made a fortune selling real estate in coastal Fujian Province. Six years ago, Mr. Huang acquired a 440-acre tract of land outside Beijing to create a virtual satellite city, which will soon have 110 new apartment buildings, along with schools and offices planted like potted trees around his neon-lighted mall. Perhaps the most aggressive mall building is taking place in Guangdong Province in the south, the seat of China's flourishing Pearl River Delta region. In January, more than 400,000 people showed up in the principal city, Guangzhou, for the opening of the Grandview Mall, which also calls itself the world's largest mall, with three million square feet. It even says it has the tallest indoor fountain. Exactly who has the world's largest shopping mall appears to be in dispute. Some Chinese malls claim the largest floor size; others count leased space. Still others say that what counts is that there is only one roof. Indeed, the Triple Five Group, which owns the Mall of America (2.5 million square feet of leased shopping space) and the West Edmonton Mall in Canada (3.2 million square feet), has not conceded defeat. 'They are just shops, like a bazaar in the Middle East,' Nader Ghermezian, one of the company's principals, said dismissively - and mistakenly - about the Golden Resources Mall, which is under one roof. 'They shouldn't be considered. We are still the largest in the world.' But that raises another question: Are the malls in this country too big? 'It's not so easy to shop at these locations,' Mr. Hand of Jones Lang LaSalle said. 'Most shopping centers survive on repeat customers. To go to a shopping mall so big and so congested, it may be difficult to have repeat customers.' The developers beg to differ. 'Shopping malls are a new concept in China, and we are trying to find our own way to do it,' said Cai Xunshan, vice president of the Golden Resources Mall. 'We don't think we can just copy the format from the U.S.' In Dongguan, the developers of the South China Mall say they traveled around the world for two years in search of the right model. The result is a $400 million fantasy land: 150 acres of palm-tree-lined shopping plazas, theme parks, hotels, water fountains, pyramids, bridges and giant windmills. Trying to exceed even some of the over-the-top casino extravaganzas in Las Vegas, it has a 1.3-mile artificial river circling the complex, which includes districts modeled on the world's seven 'famous water cities,' and an 85-foot replica of the Arc de Triomphe. 'We have outstanding architecture from around the world,' Tong Rui, vice chief executive at Sanyuan Yinhui Investment and Development, the mall's developer, said as he toured a section modeled on Paris. 'You can't see this architecture anywhere else in shopping malls.' Hu Guirong, the man behind the development, made his fortune selling noodles and biscuits in China. His aides say he built his mall in Dongguan, a fast-growing city whose population is estimated as high as eight million, with one of the highest car-to-household ratios in the country, because it is situated at a crossroads of two bustling South China metropolises, Shenzhen and Guangzhou. 'We wanted to do something groundbreaking,' Mr. Tong said, referring to his boss. 'We wanted to leave our mark on history.' But just to keep a seven-million-square-foot shopping center from looking deserted, some retailing specialists say, requires 50,000 to 70,000 visitors a day. Officials of the South China Mall say they will easily surpass those figures. But before the mall is fully open, the Triple Five Group is working to reclaim the world title, with three megamalls in the planning stages that will expand its operations from its base in North America into China. Two of them, the Mall of China and the Triple Five Wenzhou Mall, are each projected to be 10 million square feet. 'You'll see,' Mr. Ghermezian of Triple Five said. 'We are also expanding the Mall of America. There's going to be a Phase 2.'

Subject: Who are the Riskier Mortgage Holders From: Terri To: All Date Posted: Tues, May 24, 2005 at 21:20:09 (EDT) Email Address: Not Provided Message: We really would like to know who the buyers of the riskier mortgages are. These mortgages are not being extended by Freddie Mac or Fannie Mae, but then by whom?

Subject: Long and Short Term Interest Rates From: Terri To: All Date Posted: Tues, May 24, 2005 at 21:13:20 (EDT) Email Address: Not Provided Message: Imagine, the long term Treasury yield is 4.04%. Short term interest rates rise, long term rates fall, the spread betwwen yield grows less and less. No matter what central banks are doing, this bond market is astonishing. Investors are telling us there will be no general price pressure for years to come, no inflation pressure at all. Astonishing, but since the bond market is a better guide to the economy than the stock market, I pay attention.

Subject: The Euro has Weakened From: Terri To: Terri Date Posted: Tues, May 24, 2005 at 22:03:02 (EDT) Email Address: Not Provided Message: Likely the French are going to vote against the European Constitution, and this alone could keep the Euro weak for quite some time.

Subject: Re: The Euro has Weakened From: Pancho Villa To: Terri Date Posted: Wed, May 25, 2005 at 09:54:30 (EDT) Email Address: nma@hotmail.com Message: Absolutely Terri

Subject: No Degree and No Way Back From: Emma To: All Date Posted: Tues, May 24, 2005 at 19:31:33 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/national/class/BLUECOLLAR-FINAL.html No Degree, and No Way Back to the Middle By TIMOTHY EGAN SPOKANE, Wash. - Over the course of his adult life, Jeff Martinelli has married three women and buried one of them, a cancer victim. He had a son and has watched him raise a child of his own. Through it all, one thing was constant: a factory job that was his ticket to the middle class. It was not until that job disappeared, and he tried to find something - anything - to keep him close to the security of his former life that Mr. Martinelli came to an abrupt realization about the fate of a working man with no college degree in 21st-century America. He has skills developed operating heavy machinery, laboring over a stew of molten bauxite at Kaiser Aluminum, once one of the best jobs in this city of 200,000. His health is fine. He has no shortage of ambition. But the world has changed for people like Mr. Martinelli. 'For a guy like me, with no college, it's become pretty bleak out there,' said Mr. Martinelli, who is 50 and deals with life's curves with a resigned shrug. His son, Caleb, already knows what it is like out there. Since high school, Caleb has had six jobs, none very promising. Now 28, he may never reach the middle class, he said. But for his father and others of a generation that could count on a comfortable life without a degree, the fall out of the middle class has come as a shock. They had been frozen in another age, a time when Kaiser factory workers could buy new cars, take decent vacations and enjoy full health care benefits. They have seen factory gates close and not reopen. They have taken retraining classes for jobs that pay half their old wages. And as they hustle around for work, they have been constantly reminded of the one thing that stands out on their résumés: the education that ended with a high school diploma. It is not just that the American economy has shed six million manufacturing jobs over the last three decades; it is that the market value of those put out of work, people like Jeff Martinelli, has declined considerably over their lifetimes, opening a gap that has left millions of blue-collar workers at the margins of the middle class. And the changes go beyond the factory floor. Mark McClellan worked his way up from the Kaiser furnaces to management. He did it by taking extra shifts and learning everything he could about the aluminum business. Still, in 2001, when Kaiser closed, Mr. McClellan discovered that the job market did not value his factory skills nearly as much as it did four years of college. He had the experience, built over a lifetime, but no degree. And for that, he said, he was marked. He still lives in a grand house in one of the nicest parts of town, and he drives a big white Jeep. But they are a facade. 'I may look middle class,' said Mr. McClellan, who is 45, with a square, honest face and a barrel chest. 'But I'm not. My boat is sinking fast.' By the time these two Kaiser men were forced out of work, a man in his 50's with a college degree could expect to earn 81 percent more than a man of the same age with just a high school diploma. When they had started work, the gap was only 52 percent. Other studies show different numbers, but the same trend - a big disparity that opened over their lifetimes. Mr. Martinelli refuses to feel sorry for himself. He has a job in pest control now, killing ants and spiders at people's homes, making barely half the money he made at the Kaiser smelter, where a worker with his experience would make about $60,000 a year in wages and benefits. 'At least I have a job,' he said. 'Some of the guys I worked with have still not found anything. A couple of guys lost their houses.' Mr. Martinelli and other former factory workers say that, over time, they have come to fear that the fall out of the middle class could be permanent. Their new lives - the frustrating job interviews, the bills that arrive with red warning letters on the outside - are consequences of a decision made at age 18. The management veteran, Mr. McClellan, was a doctor's son, just out of high school, when he decided he did not need to go much farther than the big factory at the edge of town. He thought about going to college. But when he got on at Kaiser, he felt he had arrived. His father, a general practitioner now dead, gave him his blessing, even encouraged him in the choice, Mr. McClellan said. At the time, the decision to skip college was not that unusual, even for a child of the middle class. Despite Mr. McClellan's lack of skills or education beyond the 12th grade, there was good reason to believe that the aluminum factory could get him into middle-class security quicker than a bachelor's degree could, he said. By 22, he was a group foreman. By 28, a supervisor. By 32, he was in management. Before his 40th birthday, Mr. McClellan hit his earnings peak, making $100,000 with bonuses. Friends of his, people with college degrees, were not earning close to that, Mr. McClellan said. 'I had a house with a swimming pool, new cars,' he said. 'My wife never had to work. I was right in the middle of middle-class America and I knew it and I loved it.' If anything, the union man, Mr. Martinelli, appreciated the middle-class life even more, because of the distance he had traveled to get there. He remembers his stomach growling at night as a child, the humiliation of welfare, hauling groceries home through the snow on a little cart because the family had no car. 'I was ashamed,' he said. He was a C student without much of a future, just out of high school, when he got his break: the job on the Kaiser factory floor. Inside, it was long shifts around hot furnaces. Outside, he was a prince of Spokane. College students worked inside the factory in the summer, and some never went back to school. 'You knew people leaving here for college would sometimes get better jobs, but you had a good job, so it was fine,' said Mike Lacy, a close friend of Mr. Martinelli and a co-worker at Kaiser. The job lasted just short of 30 years. Kaiser, debt-ridden after a series of failed management initiatives and a long strike, closed the plant in 2001 and sold the factory carcass for salvage. Mr. McClellan has yet to find work, living off his dwindling savings and investments from his years at Kaiser, though he continues with plans to open his own car wash. He pays $900 a month for a basic health insurance policy - vital to keep his wife, Vicky, who has a rare brain disease, alive. He pays an additional $500 a month for her medications. He is both husband and nurse. 'Am I scared just a little bit?' he said. 'Yeah, I am.' He has vowed that his son David will never do the kind of second-guessing that he is. Even at 16, David knows what he wants to do: go to college and study medicine. He said his father, whom he has seen struggle to balance the tasks of home nurse with trying to pay the bills, had grown heroic in his eyes. He said he would not make the same choice his father did 27 years earlier. 'There's nothing like the Kaiser plant around here anymore,' he said. Mr. McClellan agrees. He is firm in one conclusion, having risen from the factory floor only to be knocked down: 'There is no working up anymore.'

Subject: 85% not 90% From: Pete Weis To: All Date Posted: Tues, May 24, 2005 at 15:18:53 (EDT) Email Address: Not Provided Message: From Business Week: Commentary: Why The Greenspan Fix Didn't Work Slower-than-expected wage growth and soaring inequality have wreaked havoc One of the more puzzling questions about the debate over Social Security is why we're even having it again. After all, everyone thought the problem had been fixed in 1983 by the commission headed by Alan Greenspan, who went on to become chairman of the Federal Reserve Board. At the time, the youngest baby boomers were 19. So all of the experts were fully aware of the demographic statistics now cited by President George W. Bush as the root cause of Social Security's shortfall: that the ratio of workers to retirees would plunge from 16 to 1 to 2 to 1 when the last boomers retire decades hence. To eliminate the deficit this would create, the commission suggested hiking the Social Security payroll tax and lifting the retirement age to 67 by 2026. Congress promptly passed legislation doing just that, and President Ronald Reagan signed it. A new study sheds light on what happened since 1983 to bring back the shortfall, which is projected to be $4 trillion over the next 75 years. Two major economic shifts occurred that Greenspan's commission didn't anticipate: The growth of average U.S. wages slowed, and income inequality soared. Together these trends explain 75% of the reemergence of Social Security's long-term deficit, according to a paper by L. Josh Bivens of the Economic Policy Institute in Washington. The upshot: Democrats and Republicans alike may be trying to solve the wrong problem. Rather than focusing on how many workers will be around to support retired boomers, some experts think the logical response is to recapture the revenue lost as rising inequality lifted a greater share of aggregate U.S. wages out of the reach of the 12.4% Social Security payroll tax. This year the taxable income level has been set at $90,000 a year. But the unanticipated spurt in inequality pushed more Americans over that amount. Because Social Security has forgone this extra revenue, it now taxes only 85% of collective payroll earnings, not the 90% that Greenspan and the commission had intended it to. If Congress put the aggregate taxable income level back to 90%, it would eliminate fully 40% of the deficit (or 75% under the smaller shortfall projected by the Congressional Budget Office). The progressive benefit cuts Bush endorsed recently would also remedy the problem, though they may be overly broad, sweeping in even those making as little as $25,000 a year. True, taxing higher incomes would be painful to big earners. A 90% level would put individual taxable income as high as $140,000 a year today. So anyone making that much or more would be on the hook for an extra $3,100 in annual Social Security taxes, as would their employers. The hit to their wallets could hurt small-business owners, possibly dampening job creation, warns David C. John, a research fellow at the conservative Heritage Foundation who supports Bush's private accounts. Still, high earners would also get higher Social Security benefits when they retire. Liberal economists also point out that if Greenspan's design had worked, affluent Americans would have been paying at the higher level for two decades anyway. 'It would be nice to reverse inequality, but meanwhile it makes a lot of sense to restore the tax cap,' says Dean Baker, co-director of the Center for Economic & Policy Research in Washington. No one can blame Greenspan for not anticipating the return of inequality to levels not seen since the Great Depression. Still, his commission's fix barely lasted a year. By 1984, Social Security had slipped back into deficit, where it has remained ever since. What happened? The program's cash intake has been caught in a crunch caused by the interaction of slower average wage growth and heightened income inequality, says Bivens. Every year the Social Security Administration (SSA) adjusts the taxable wage level in tandem with the growth in the average U.S. wage base. So if average payroll growth slows, the annual adjustment in the wage cap does, too -- which is what has happened in the past 20 years. The Greenspan commission assumed that wages would grow at an average long-run pace of 1.5% a year. Today the SSA's Office of the Actuary has chopped its assumption to 1.1%, which compounds to a dramatic slowdown over 75 years. Escaping the System At the same time, rising inequality has lifted a greater share of wages above the taxable amount. So while sluggish wage gains have slowed the increase in the cap, faster pay growth at the top has allowed a greater share of overall income to escape the system. 'No one anticipated this in 1983,' says SSA Chief Actuary Stephen C. Goss, who worked with the Greenspan commission as a young staffer in the actuary's office. Goss says that while his office sees the rise in inequality slowing a decade from now, the long-run trend isn't likely to ever reverse. So if nothing is done, the 85% of all wages taxed today will slip to 84%, says Goss -- and hover there for decades to come. Seen in this light, Social Security's long-run problems seem more fixable. In fact, they may partly fix themselves: The boom of the late 1990s lifted average payroll growth back up to 1.4% a year since 1995. If Congress decided to restore the taxable wage level to 90%, it wouldn't make sense to try to recapture all the billions Social Security lost as the cap sank over the past 20 years; that would entail impractical moves such as retroactive taxes. But it could alter the formula for future years by linking it to a fixed share of payrolls. Even if high earners are given extra benefit payouts, the additional tax raised still would plug 40% of the long-run deficit because every extra dollar of Social Security tax results in less than a dollar of additional retirement benefits. A look back at the Greenspan commission shows that Social Security's problems are economic, not demographic. From this standpoint, private accounts that cut benefits for middle-class Americans don't address the real issue. In debating how to fix the system, we first need to understand what's broken.

Subject: Sugar Cane As Fuel: Brazil From: Emma To: All Date Posted: Tues, May 24, 2005 at 14:00:48 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/business/worldbusiness/24sugar.html?pagewanted=all In Brazil, Sugar Cane Growers Become Fuel Farmers By TODD BENSON CATANDUVA, Brazil - Not long ago, residents of this lush cane-growing region in southern Brazil needed to keep a close eye on the price of sugar in world markets to know if the local farmers were hiring or firing. These days, however, most people in this small farming town seem more preoccupied with the price of oil. And with good reason. Ever since global oil prices started their staggering climb early last year, demand for inexpensive alternative fuels like cane-based ethanol has skyrocketed, helping to line the pockets of Brazilian cane farmers while also making them less vulnerable to the swings of the sugar market. 'Ethanol is on its way to becoming a commodity just like oil, and the price of oil is one of the main reasons why,' said José Fernandes Rio, a director at Usina Cerradinho, one of eight sugar mills and ethanol distilleries scattered around Catanduva, which is spending heavily to increase production. The growing demand for ethanol - or alcohol, as most Brazilians call it - is fueling an investment boom in Brazil's sugar cane industry not seen since the oil crisis of the 1970's. Back then, the country's military dictatorship sought to reduce dependence on costly foreign oil by offering lavish subsidies and tax breaks to sugar millers to refine cane into ethanol, while also financing the construction of a nationwide distribution network for the fuel. Though oil jitters are once again helping to drive the current wave of investment in Brazil's sugar industry, this time the government is not picking up the bill. Flush with cash from a recovery in global sugar prices in recent years, many millers are spending their own money and borrowing from banks to increase production and upgrade port terminals, mills and distilleries to improve service to foreign markets. According to a recent survey by ProCana, a research group in Ribeirão Preto that tracks the sugar and ethanol industry, 12.5 billion reais ($5.1 billion) has already been earmarked for 40 new mills and distilleries over the next five years. Most of that money will be spent here in western São Paulo State, a region that is already home to dozens of sugar mills, generating close to 100,000 jobs in an industry that employs more than a million people. 'Of all the different investment waves that the industry has had, this is clearly the most solid one of all,' said Maurílio Biagi Filho, an executive at CrystalSev, a large sugar and ethanol conglomerate that is putting the finishing touches on a $10 million ethanol terminal at the port of Santos. 'People have money to invest, and both domestic and external demand is on the rise,' added Mr. Biagi, whose family has been in the sugar business since 1920. 'All the ingredients are there.' Not long ago, ethanol's future did not look so bright. In the heyday of the government's pro-alcohol campaign in the mid-1980's, ethanol-only cars accounted for almost 90 percent of new-auto sales in Brazil. But domestic ethanol consumption started declining steadily in 1990, when a poor cane harvest and high sugar prices caused an alcohol shortage that enraged drivers, prompting many to switch back to cars powered by gasoline. Then, three years ago, Volkswagen began selling cars in Brazil that run on either gasoline or ethanol, or any combination of the two. Lured by the low cost of alcohol - it sells for almost half the price of gasoline - Brazilians have been buying these so-called flex-fuel cars in droves, helping to revive the domestic ethanol market. Today, all major automakers in Brazil offer these hybrid vehicles, which now represent 33 percent of new-car sales, a figure that some analysts predict could reach 80 percent by the end of next year. Thanks to the popularity of flex-fuel engines, domestic ethanol consumption is expected to jump 50 percent in the next five years, meaning that a growing percentage of the country's annual cane crop will be used to make fuel. This season, for example, a record 57 percent of the harvest is expected to go to ethanol production, up from less than half in recent years, according to Datagro, a sugar and ethanol consulting firm based in São Paulo. 'People used to say that our only chance to sell more ethanol was to increase exports,' said Eduardo Pereira de Carvalho, president of Unica, the country's largest association of sugar and ethanol producers. 'That changed overnight with flex-fuel cars.' Because no other country has an ethanol distribution network as extensive as Brazil's, it is unlikely that flex-fuel cars will become an international trend any time soon. But with world oil prices hovering around $50 a barrel, governments around the globe are looking for ways to replace gasoline with ethanol. Almost a dozen countries, including Canada, Sweden and the United States, have already begun blending ethanol with gasoline, a practice that has been mandatory in Brazil for years. This helps keep a lid on prices at the pump while also reducing fuel emissions, a requirement for nations that signed environmental treaties like the Kyoto Protocol. Other countries, like Australia and Thailand, are turning to Brazil for help to develop their own ethanol industries to feed demand for affordable energy in Asia, especially from China. India, the world's No. 2 sugar producer after Brazil, is also scrambling to spread the use of ethanol to reduce its reliance on foreign oil as its auto fleet expands along with its middle class. For now, Brazil, with its low production costs, plentiful land and well-established ethanol industry, is benefiting the most. Last year alone, for instance, its ethanol exports tripled to almost $500 million as oil prices soared, with the United States and India topping the list of importers. And as pressure mounts on the European Union to comply with the World Trade Organization's order that it do away with sugar subsidies, making sugar production less profitable there, more foreign sugar producers and trading houses are likely to set their sights on Brazil to keep their businesses alive. Theo Spettman, chief executive of Südzucker of Germany, Europe's biggest sugar producer, said at a seminar this month in São Paulo that the company was looking for investment opportunities in Brazil. If it takes the plunge, Südzucker will follow in the footsteps of French companies like Louis Dreyfus, Tereos and Sucden. All set up shop in Brazil in recent years. 'The big players in the sugar industry in Europe are not going to stop being big just because their subsidies are going to end,' said Josias Messias, president of ProCana, the research group that studies sugar and ethanol. 'They know they're going to have to invest here.'

Subject: The Long-Term Unemployed From: Emma To: All Date Posted: Tues, May 24, 2005 at 12:34:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/business/24jobs.html?pagewanted=all The New Profile of the Long-Term Unemployed By LOUIS UCHITELLE After three years of unemployment, Allen Gruenhut finally landed a job as director of human resources for a company in the stone business on Long Island. His age, 53, worked against him in his long hunt for work, he contends, and so did the six-figure salary he earned at his last job, in banking. 'They would not take me seriously at job interviews when I said I would be happy with a lower salary,' Mr. Gruenhut said. Jackie Ellenwood, 31, is still without a job. She worked for three travel agencies over 13 years, until her last job, in Allen Park, Mich., ended in a layoff nine months ago. The industry is shrinking in response to more Internet bookings and cutbacks in corporate travel so Ms. Ellenwood is looking for work elsewhere and studying to become a nurse, confident that health care will continue to expand in an aging America. 'I'm going to stick to my nursing courses,' Ms. Ellenwood said, 'even if I get a job.' The experiences of Mr. Gruenhut and Ms. Ellenwood help to explain why many of the nation's unemployed are still struggling to get back to work. Not since World War II has long-term joblessness - the percentage of the unemployed out of work for six months or more - been so high for so long after a recession has ended. The current trouble falls most heavily on people trapped by the shifting sands of the economy. Today, the unemployment rate is relatively low at 5.2 percent and overall hiring has started to pick up again, particularly for younger workers coming out of college and professional schools. But the presence of middle-aged women and better educated white-collar workers among the long-term unemployed has increased. 'There are just not new jobs being created in the things these people did before,' said Andrew Stettner, a policy analyst at the National Employment Law Project and co-author of a study of long-term unemployment. 'We are firing fewer people than we did in 2001 and 2002, but we are not hiring many people either, and that cuts off the exit route out of unemployment.' At the same time, the incidence of long-term unemployment among the usual victims of earlier eras - less educated blue-collar workers who often lost their jobs in production cutbacks - has fallen. Several factors seem to be contributing to the rise in long-term unemployment. The swelling cost of company-paid health insurance is 'inducing business to be less aggressive in its hiring,' said Mark Zandi, chief economist at Economy.com, a research group based outside Philadelphia. The baby boomer bulge working its way through the labor force also plays a role; as this large group of workers ages it becomes harder for some who lose their jobs to find new work suited to their skills. And the bursting of the high-tech bubble stranded thousands of workers who are finding it difficult to shift quickly to other fields. While job creation has accelerated lately, to an average of 240,000 additional jobs a month since February, it remains well below the pace of previous recoveries. 'It looks like employers are very hesitant about the future of the economy,' said Lawrence F. Katz, a labor economist at Harvard. 'It may be that we will fall into another weak economic period before we get a good recovery and really robust hiring.' After World War II, when traditional industries dominated the economy, the usual pattern was for long-term unemployment to surge during recessions and die away quickly as recoveries took hold. That changed during the early 1990's and is even more evident in the current recovery, which began in November 2001. Rather than subside as growth resumed, long-term unemployment as a share of total joblessness continued to rise, according to the Bureau of Labor Statistics. It peaked 17 months ago at 23.3 percent and has only gradually tapered off since then, to 21.2 percent in April. Structural changes in the economy and productivity improvements, reflecting the ability of companies to achieve higher output with fewer or the same number of workers, mean that even growing businesses no longer need to dip as much into the pool of displaced workers. For example, Toyota Motors of North America, whose sales are rising more rapidly than other automakers in the United States, is holding back on hiring although its plants are operating flat-out. Its payroll, said Dennis Cuneo, a senior vice president, has grown by only 600 jobs this year - all of them at newly opened plants - to a total of just over 32,000 employees. Existing factories continue on two shifts a day. Overtime and reconfigured work schedules help to squeeze out more production, without adding third shifts and the hiring that the additional shifts would require. 'We are reluctant to bring people on immediately,' Mr. Cuneo said. 'We are going to wait and see what we can still get from improvements in productivity. If the demand is sustained, there will come a point where you have to add a shift.' Other concerns play a role in the reluctance to hire, which in addition to driving up the long-term unemployment rate, drives down the number of people willing to actively seek a job and thus participate in the labor force. Sixty-six percent of the working age population was in the labor force in April, down from 66.7 percent at the start of the recovery. That is 1.6 million missing people, enough to raise the unemployment rate to 6.2 percent from its present 5.2 percent - if they all showed up. Many of those who have stayed in the labor force, seeking work, may be people who were laid off for a long time before they were willing to accept a new job that pays less. Employers, on the other hand, are reluctant to hire those who once earned a higher salary. The fear is they will shift to better jobs at the first opportunity. That is the story of Mr. Gruenhut, who earned a six-figure salary as senior vice president for human resources at Crédit Agricole Indosuez in New York, until his job there ended in 2002. In subsequent job interviews, Mr. Gruenhut said: 'They thought that even though I said I would be happy with a lower salary, I would be out the door as soon as there was an uptick in the job market. That happened at least a dozen times. I couldn't convince them.' Mr. Gruenhut, who has an M.B.A. from New York University and lives in East Meadow, spent 30 years in banking. But the 'implosion in financial services,' as he puts it, dried up jobs, forcing him to look elsewhere. As he branched out, his age worked against him. 'I did not get face time for plum jobs,' he said. And when he did get interviews, his weight sometimes worked against him. Finally, an acquaintance told him about an opening for a chief of human resources at the Innovative Companies, which is based in Hauppauge and sells marble and granite for construction. He clicked with the chief executive, Mr. Gruenhut said, and he went to work at a six-figure salary that was 'considerably lower' than the one he had earned at Crédit Agricole. By that time, he had lost 46 pounds, to just under 200. 'If you think about it,' Mr. Gruenhut said, 'if you have age and over-weight and silver hair, which people were telling me to dye, those are blockades to landing the job that you want.' Ms. Ellenwood had none of these issues, nor Mr. Gruenhut's education. Right after graduating from high school, in 1992, she went to work for a travel agency, booking hotel reservations and airline tickets for corporate clients. By the time she lost her most recent job, at GET Travel last August, she was earning $670 a week. She spent months trying to land similar work at another agency without success. 'Until the spring of 2004,' she said, 'we were very busy. It was really stressful, call after call, and then the calls went down to pretty much nothing. We would sit in the office for an hour or two without the phone ringing.' Her unemployment benefits ran out after six months, but she is living in Dearborn with her fiancé, an employed engineer, and that has given her the means to pursue a nursing degree at a community college. While she studies, she hunts for work. 'My bottom line is that I don't want to work in fast food,' she said. But even that vow could be broken, she added, if that is finally necessary 'to pay the bills.'

Subject: Bolivia and Natural Resources From: Emma To: All Date Posted: Tues, May 24, 2005 at 11:53:49 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/23/international/americas/23bolivia.html Bolivia Epitomizes Fight for Natural Resources By JUAN FORERO LA PAZ, Bolivia - The struggle over globalization and who controls natural resources is being waged across Latin America, but the battle lines are no sharper anywhere than here in Bolivia, where a potent confederation of protesters plans a march on Monday to demand more state control of energy resources. Political analysts say the march - combined with a work stoppage and an Indian-style town hall meeting in a La Paz plaza - could further weaken the already debilitated government of President Carlos Mesa. It was just such a protest over energy policy that forced President Gonzalo Sánchez de Lozada from office in October 2003. Now, with Mr. Mesa politically incapacitated and Congress thoroughly discredited because it is seen as corrupt, protesters have become emboldened, with some calling for the outright expropriation of private gas installations operated by such energy giants as British Gas, Repsol-YPF of Spain and Petrobras of Brazil. Such demands have been gathering force, and they underscore the increasingly deep divisions in this Andean country, which despite its isolation has been at the forefront of a powerful backlash against market overhaul in Latin America. 'I think it's the most polarized the country has been in a long time,' said Jim Shultz, director of the Democracy Center in Cochabamba, which studies the effects of globalization on Bolivia. 'In October 2003, the issue was more volatile, but it was more volatile because it was basically everybody against the government. This isn't everybody against the government. This is a situation where Bolivia is split three or four different ways.' On one side, there are Bolivians like Carlos Alberto López, a former vice minister of energy who was educated at Harvard and the London School of Economics. Mr. López, now a consultant for energy companies, contends that nationalizing the oil industry would be a disaster for the country. He said Bolivia should instead be taking advantage of the fact that it has Latin America's second largest gas reserves by attracting foreign investors with favorable terms and then selling the gas to energy-hungry giants like Brazil or the United States. 'This was our last best hope for Bolivia's economy to grow,' Mr. López, 45, said in an interview. Across this capital, in a small office decorated with posters of the revolutionary icon Che Guevara, another protagonist expresses a sharply opposed viewpoint. 'The people have a right to nationalize and expropriate,' said Jaime Solares, 53, who started working at age 13, has a 10th grade education and heads the Bolivian Workers Central, the country's largest labor confederation. 'The people no longer believe in neo-liberalism.' The movement against market reforms appears to be gaining ground. Last week, Bolivia's Congress, under pressure from protesters, signed into law a new tax-and-royalty scheme so tough that energy experts say oil and gas multinationals will curtail investments. But groups like Mr. Solares's, with hundreds of thousands of members, say the law is too soft and want more restrictions. At the same time, a conservative, pro-globalization movement in the relatively prosperous eastern part of Bolivia is calling for a referendum on whether the region should have more autonomy, including control of its gas fields. Political analysts say the divisive crisis could lead to violence or, in time, the disintegration of a country whose state has little presence or control over its far-flung provinces. The discovery of large gas deposits in the late 1990's was supposed to have brought Bolivia more stability and wealth as the country's leaders tried to position Bolivia as a regional energy power. But the masses of poor indigenous people have never forgotten how the Spanish and a series of corrupt governments plundered the country's silver, tin and gold, leaving them more poverty-stricken than before. Flexing their political muscle, they have carried out protests that resulted in the departure of two foreign water companies and wreaked havoc with the government's energy plans. 'Those companies always come in with big promises, but all they do is rob,' said Rafael Condori, 18, an Aymara Indian who plans to take part in the protest on Monday. Such words could not be more troubling to Juan Carlos Iturri, an economist who said that many protesters are driven by slogans and do not take into account Bolivia's economic realities. 'Nationalization is not real and it cannot be sustained in time,' he said. 'They want a horse and a battle and nothing sounds better than saying, 'Die, transnationals.' ' But Bolivia's history seems to signal that the protests are not likely to fade away. A major revolution in 1952 led to nationalization of the largest tin mines, and charismatic leaders have revived the movement in recent years. Eduardo Gamarra, the Bolivian-born director of Latin American studies at Florida International University in Miami, referred to that history, saying in an interview, 'Bolivia is one of the few places in the world where you have a firm belief that nationalizing key industries is the way to go.'

Subject: Panama Fights for Its Forests From: Emma To: All Date Posted: Tues, May 24, 2005 at 11:50:06 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/science/earth/24pana.html?pagewanted=all To Save Its Canal, Panama Fights for Its Forests By CORNELIA DEAN MIRAFLORES, Panama - A freighter slides slowly into the first of the Miraflores Locks, red, orange and white cargo containers stacked six or seven high on its deck. Gates swing shut and the lock begins to drain, water flowing into the lock below. A few minutes later, when the water levels are equal, gates at the other end of the lock swing open, and the ship moves into the next chamber. Once again, water drains, gates open and the ship and its tons of cargo head out to the Pacific Ocean. Something else is moving, too - about 26 million gallons of water, the amount that drains from the Pedro Miguel and Miraflores Locks each time a ship goes through them to or from the Pacific. The same amount drains into the Atlantic when ships pass through the Gatún Locks on the other side of the isthmus. So each trip through the canal, or lockage, means 52 million gallons of water. On a busy day, there may be as many as 40 lockages. The water comes from Gatún Lake, one of the largest artificial lakes in the world, created during construction of the canal. The canal depends on the lake and its water, and they in turn depend on the health of the surrounding watershed forest. But in the last few decades, half of it has been lost to logging and slash-and-burn agriculture. Panamanians know what will happen if they cannot maintain an adequate supply of water for the canal. In the drought winter of 1990-91, lack of water forced canal operators to curtail lockages to fewer than 30 a day, something no one here is eager to repeat. Although Panama City is a major financial center now, by some estimates the canal and its associated businesses still contribute 40 percent or more of the nation's economy. And if Panamanians vote to upgrade or expand the canal, an issue they are expected to confront in a referendum this fall, the reliability of Gatún Lake's water supply will be even more crucial. 'We need the water for the functioning of the canal,' Reyna Carrillo, a guide at Miraflores, recently told a group of visitors. 'Without the water, we would be the biggest ditch in the whole world.' The Panama Canal Authority and an array of scientists are working together to study Gatún Lake's hydrology, to restore its watershed and to teach the people who live there the importance of preserving it. Gatún Lake is fed chiefly by the Chagres River, which was dammed during the construction of the canal. It straddles the isthmus at the canal's highest elevation, and part of the canal runs through it. Water per se is not its problem. The Chagres drains a tropical jungle where it rains 10 feet or more each year - about three times as much as it rains in Seattle or New York, and in theory more than enough to keep the locks operating at capacity. But the rain does not fall steadily year-round. Most of it comes from May to December, in brief but intense downpours. An inch in an hour is ordinary, and six inches in a day is hardly unheard of. Rain falls so heavily in Panama that early canal builders described storms as turning the air to water. On forested slopes, much of this water soaks into the ground and feeds slowly into watershed streams and then into Gatún Lake. But deforested slopes cannot absorb heavy rains. Floods of water run off into the lake, overflow Gatún Dam and run out to sea - useless for lockage. Meanwhile, eroded sediment ends up on the lake bottom, reducing its storage capacity. One consequence is apparent to those who traverse the Gatún Lake portion of the canal. Between the town of Gamboa and Barro Colorado Island, a dredge anchored offshore drills into the lake bottom, sucking up excess sediment and pumping it through long pipes to shore. The resulting turbulence fills the lake with so much silt that people nearby who rely on it for drinking water have to filter it or use bottled water instead. But the dredging helps maintain the lake's capacity to store water. Columbus and his men were the first Europeans to see the towering forests of the Chagres River basin, with their 1,500 species of trees, some of them growing more than 100 feet tall, and the howler monkeys and toucans and other creatures that inhabit them. Another Spanish seafarer, Juan Corzo Serna, wrote about them in 1524, according to Stanley Heckadon Moreno, a sociologist and research associate at the Smithsonian Tropical Research Institute in Panama. 'He is our first witness to the land,' Dr. Heckadon said. 'He describes it as a monumental forest.' Despite the building of a railroad across the isthmus in the 19th century, the completion of the canal in 1914 and the military buildups of World Wars I and II, the watershed forest was more or less intact until about 1950, Dr. Heckadon said in an interview. But by then the United States had built a highway across the isthmus, from Panama City north to Colón. 'Pretty soon we ended up with 3,000 kilometers of trails built by loggers and followed by cattlemen and slash-and-burn farmers,' Dr. Heckadon said. In the Chagres basin and in the watershed on the other side of the canal, thousands of acres fell to their machetes and chain saws. When the treaty turning the canal over to Panama was negotiated in the Carter administration, 'there was a belief 'now this area is ours, we can go in there,' ' said Luis A. Alvarado Kinkey, a hydrologist who is environmental division manager for the canal authority, known as A.C.P., its initials in Spanish. 'There was a lot of influx from the interior. They started cutting down forest to build pasture at an alarming rate.' Panamanians were such assiduous practitioners of slash-and-burn agriculture that some here began to joke bitterly that they must be born with machetes in their hands. Deforestation peaked in the 1980's, said Dr. Robert F. Stallard, a geologist at the Smithsonian research institute in Panama who studies the hydrology of the watershed. By 2000, when Dr. Heckadon and his colleagues completed a study using satellite imagery and ground surveys, they found 53 percent of the watershed forest had been lost. Today travelers who fly over the isthmus see a patchwork of forest and pasture. The Panamanian government first recruited Dr. Heckadon to examine the issue in the 1980's, when he formed a study group of scientists and technical experts to evaluate the health and future of the watershed. 'One of the main conclusions was the absolute national imperative to protect the surviving forests,' Dr. Heckadon said in an interview. At the urging of the study group, Eric Arturo Delvalle, then the country's president, established Chagres National Park, which covers about 250,000 acres or about a third of the canal watershed. 'I think on that day he bought the insurance policy on the Panama Canal,' Dr. Heckadon said. But things did not go well. Much of the 1980's was 'a lost time,' Dr. Heckadon said, when Panama was under the de facto control of Gen. Manuel Antonio Noriega and deforestation continued. Even after the United States arrested General Noriega in 1990, conditions were initially unsettled and Chagres and smaller watershed parks were not adequately protected. But then things began to change. Dr. Heckadon, who became the nation's first environment minister, said one important step came when leading Panamanian bankers decided to stop financing cattle ranchers who cut down forest for pasture. 'That withdrew the oxygen of the fire of slash and burn,' he said. And with the canal turnover in 1999, government agencies acted again to expand protected watershed areas. Now, Mr. Alvarado says that only negligible amounts of watershed are lost each year to deforestation. But others say that official agencies do not have enough money or staff to patrol the parks as closely as they wish and that, as a result, logging and burning is continuing, even if on a smaller scale. 'With the chain saw these guys can do anything,' Dr. Heckadon said. 'They look at a mahogany tree and they cut it on the weekend, saw it in slabs, get it on someone's pickup. It's a problem.' Dr. Stallard said: 'There are constant threats on the park boundaries. There is always chipping at some border.' So the canal authority and other agencies have also begun community efforts to educate rural Panamanians about the importance of preserving the forest landscape. 'We now employ people the old canal would never imagine it would - social workers for example,' Mr. Alvarado said. 'We work with the communities. We work with the schools.' Meanwhile, efforts are also under way to restore damaged landscapes. A.C.P. has begun a program called the Native Species Reforestation Project - a cooperative arrangement with the Smithsonian, the Yale University School of Forestry, the International Development Center at the Kennedy School at Harvard and other universities and agencies to study ways to protect the canal watershed and restore its native vegetation. The scientists are learning as they go, because little is known about reforesting tropical rain forests, said Dr. Mark S. Ashton, a professor of forest ecology at Yale. Dr. Ashton said in an e-mail message that scientists hoped to restore the landscape in ways that protected the watershed, enhanced biodiversity and identified trees and other plants that could be grown and harvested sustainably, replacing slash-and-burn farming as a source of income. But the effort, known by its Spanish acronym, Prorena, is complicated by the presence of an invasive and persistent form of a grassy plant called wild sugar cane or paja blanca (Saccharum spontaneum). Dr. Stallard said biologists first spotted this grass in the canal area in 1978, and since then it has established itself in huge stands. The plant, apparently an immigrant from Asia, has tenacious roots that hold the soil, an advantage in preventing soil runoff. But it grows aggressively and crowds out potentially useful native plants. 'It might prevent erosion, but it does not have any other use,' Mr. Alvarado said. So the authorities here want to remove as much of it as they can. For many in Panama, the success of these and other efforts to protect the canal watershed means more than the money - $65,000 for an average toll - for ships passing through the canal. 'People came from all over the world to make this dream possible,' Ms. Carrillo tells visitors at the locks at Miraflores. But, she reminds them, 'Even when the Americans were here, if they had cut the forest we would have no canal today.'

Subject: Gidant and a Defibrillator Flaw From: Emma To: All Date Posted: Tues, May 24, 2005 at 11:23:28 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/business/24heart.html?pagewanted=all Guidant Didn't Disclose a Flaw in Defibrillator for 3 Years By BARRY MEIER A medical device maker, the Guidant Corporation, did not tell doctors or patients for three years that a unit implanted in an estimated 24,000 people that is designed to shock a faltering heart contains a flaw that has caused a small number of those units to short-circuit and malfunction. The matter has come to light after the death of a 21-year-old college student from Minnesota, Joshua Oukrop, with a genetic heart disease. Guidant acknowledges that his device, known as a defibrillator, short-circuited. The young man was in Moab, Utah, on a spring break bicycling trip in March with his girlfriend when he complained of fatigue. He then fell to the ground and died of cardiac arrest. Guidant subsequently told his doctors that it was aware of 25 other cases in which the defibrillator, a Ventak Prizm 2 Model 1861, had been affected by the same flaw. Guidant said it had changed its manufacturing processes three years ago to fix the problem. The physicians say that had they known earlier, they would have replaced the unit in their patient because he was at high risk of sudden death. His death is the only one known. A defibrillator is surgically implanted in the chest under the skin. It sends out an electrical charge to try to shock a chaotically beating heart back into normal rhythm. In interviews in recent days, a top Guidant executive, Dr. Joseph M. Smith, said that the company had not seen a compelling reason to issue an alert to physicians about the defibrillators because the failure rate was very low and replacing the devices might pose greater patient risks. But late yesterday, when told that The New York Times was preparing an article about the device, the company issued an advisory to doctors about it. Guidant is recommending that the unit not be replaced because of the electrical problem. The episode highlights an important issue: Doctors and patients are not always told when a medical device maker has data indicating that its product has a flaw that, while rare, poses potential dangers. Also, companies are not required to report immediately all safety modifications to the Food and Drug Administration. In February another defibrillator maker, Medtronic Inc., notified doctors that the battery used in one of its models was draining far faster than expected. At that time, the company had received nine reports among 87,000 affected units, an incidence of failure of 0.01 percent, which is lower than the figure for the affected Guidant defibrillators, which is 0.07 percent, based on 37,000 units manufactured before the modification. The Medtronic devices have not been associated with a death or an injury. However, in its advisory to doctors, Medtronic said its testing indicated that the problem could worsen over time and affect 0.2 percent to 1.5 percent of its units. The Guidant problem, Dr. Smith said, has remained constant over time. One cardiologist said that Medtronic officials told him that physicians had replaced over 11,000 of the devices; a company spokeswoman said the company planned to release data today. Dr. William H. Maisel, who has studied how doctors respond to device alerts, said that companies considering an alert face competing concerns over the cost of replacement versus harm to their reputations. As a result, Dr. Maisel, a cardiologist at Brigham and Women's Hospital in Boston, said there was the potential for a 'huge conflict of interest.' The Guidant executive, Dr. Smith, who is the chief medical officer of Guidant's cardiac rhythm management division, rejected any suggestion that financial or liability concerns had influenced the company's decision. He said that the Model 1861 was among the most reliable defibrillators available, adding that Guidant believed that it would cause more harm than good by publicizing the issue because replacement defibrillators might not perform as well and because surgery also posed risks. While fatalities during defibrillator implantation are extremely rare, the procedure poses an infection rate of about 1 percent. 'We choose to extraordinarily communicate when we have a product that does not live up to our expectations,' Dr. Smith said. He added that issues that could improve patient outcomes would also warrant an alert to doctors. 'In this case, neither condition was met,' he said. Guidant, which is based in Indianapolis, is one of the largest makers of medical devices, with $3.8 billion in sales last year, almost half of that coming from implantable defibrillators. In December, Johnson & Johnson announced it planned to buy Guidant in a deal worth $25.4 billion. Defibrillators need to be replaced every five or six years because their batteries drain. Implanted defibrillators are among the fastest-growing group of medical devices; this year alone, more than 200,000 patients are expected to get one. In 2001, Vice President Dick Cheney received one made by Medtronic. A defibrillator can cost up to $25,000 and hospital and doctor costs can run another $15,000. In interviews, doctors in Minnesota who treated Joshua Oukrop said they were angered by Guidant's decision not to notify physicians because they said the company had received enough reports about the flaw to establish a pattern and because high-risk patients could suffer potentially catastrophic results. Dr. Barry J. Maron of Abbott Northwestern Hospital in Minneapolis said that Dr. Smith was simply using numbers to support his stance. 'It is a statistical argument that has little to do with real people,' Dr. Maron said. He also said that the numbers reported to Guidant might understate the situation because product problems could go undetected or might not be reported. The short circuit can occur when the device builds a charge to deliver the type of high-energy shock needed in emergency situations. In three cases, when doctors intentionally induced abnormal heart rhythms during routine checkups, the Guidant device failed to work, forcing doctors to rescue those patients by jolting them with the type of external defibrillator used in emergency rooms. All the electrical malfunctions involving the particular model occurred in units produced during a two-year period before mid-2002, when the company fixed the flaw. The problem has not happened in any devices made since. F.D.A. regulations permit companies to inform the agency in two different ways about a manufacturing modification to improve safety, either while the company is making it or later, when a device maker files its annual report with the agency. A Guidant spokeswoman, Annette Ruzicka, said that it reported the November 2002 change as part of an annual report submitted to the F.D.A. in August 2003. As reports of individual problems came in, Guidant filed them with the F.D.A. Dr. Robert G. Hauser, also of Abbott Northwestern Hospital in Minneapolis, said he recently started alerting cardiologists about the Guidant unit through a database he maintains that collects data about defibrillator and pacemaker failures. He and Dr. Maron have also submitted an article about their patient's case to a medical journal. One of those contacted, Dr. David S. Cannom, who sits on Guidant's board of outside medical advisers, said in an interview that he believed that doctors should have all the facts. He said that while risks posed by the device were small enough to argue against replacement in many patients, that calculus could shift substantially for high-risk ones. 'At the end of the day, you have to come down on the side of full disclosure,' said Dr. Cannom, the director of cardiology at Good Samaritan Hospital in Los Angeles. Over all, implanted defibrillators have a good record of reliability and are credited with saving countless lives, but the Minnesota case appears to illustrate the consequences that can result when company officials decide not to directly alert doctors to a problem, even for reasons that they believe are justified. Joshua Oukrop suffered from a relatively common genetic disease, hypertrophic cardiomyopathy, which can cause abrupt cardiac arrest. One of his doctors, Dr. Maron, is an expert on the condition and a leading proponent of using implanted defibrillators to reduce deaths caused by the disease. Dr. Hauser, who was also involved in the young man's treatment, is a former chief executive of Cardiac Pacemakers Inc., one of five companies that was spun off by Eli Lilly in 1994 to form Guidant. Joshua's father, Lee Oukrop, said that when his son was 17, he began fainting and falling down at marching band practice or while playing softball. The heart disease had previously been diagnosed in an older son, Jacob, so Mr. Oukrop took Joshua to see Dr. Maron in 2001. The physician determined that the teenager's condition was severe, and an implant was soon performed. Mr. Oukrop, a millwright who lives in Grand Rapids, Minn., a small town about 80 miles west of Duluth, said that Dr. Maron had said 'that this was the fix and that Josh could live with this.' For over three years, Mr. Oukrop said, his son's life was normal. He attended college, where he was studying to be a teacher, and was an outdoor enthusiast who hiked, snowboarded and bicycled. Like other defibrillator users, he saw his doctors every three months so they could check the device. When Guidant inspected the device after Joshua's death, it found that the unit had short-circuited when it was charging up. Because the short circuit also destroyed the device's memory, it is not possible to know whether the failure occurred while Joshua Oukrop was in cardiac arrest or at some other point. 'There was evidence of a device malfunction,' said Dr. Smith, the Guidant executive. After hearing a presentation a few weeks ago by Dr. Smith about the device, Dr. Maron, the genetic heart disease expert, said he asked what Guidant planned to tell doctors. 'The answer was nothing,' Dr. Maron said. Dr. Smith, the Guidant executive, said the overall reliability rate of the Prizm 2 model exceeded company specifications both before and after the wiring fix. So far, Dr. Maron and Dr. Hauser have notified dozens of their patients who got the Guidant unit to discuss possibly replacing it. Dr. Maron said that now that the physicians were aware of the problem they had to consider, besides patient safety, their own responsibilities and potential liability. Last week, Lee Oukrop, who has the same genetic heart disease as his sons and had the same Guidant device as Joshua, underwent a replacement procedure. He also said he was likely to hire a lawyer soon. 'Whoever made this decision at Guidant, I pray he doesn't have a son who this happens to,' Mr. Oukrop said.

Subject: China's Risk of Inflation From: Emma To: All Date Posted: Tues, May 24, 2005 at 11:21:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/business/25cnd-oecd.html Report Says China's Currency Policy Poses Risk of Inflation By BRIAN CHILDS - International Herald Tribune PARIS - China's fixed exchange rate for its currency against the United States dollar is increasing the risk of inflation and overheating in Asia's second-largest economy, the Organization for Economic Cooperation and Development warned today. But the stimulus provided by China's economic expansion should continue to underpin strong growth in Asia, offsetting a slowdown in the United States and sagging confidence in much of Europe, the organization said in a report on the outlook for the global economy. The pegging of the yuan to the dollar has already resulted in a 3 percent drop this year in its effective exchange rate against the currencies of all China's trading partners, the O.E.C.D., a Paris-based think tank, said. In the United States, interest rate increases by the United States Federal Reserve appeared to have put the economy on track for a ``soft landing,' according to Jean-Philippe Cotis, the organization's chief economist. Monetary policy would have to tighten further, he said, ``but they are back on trend.' ``We see subdued recovery and underlying inflation slowing considerably,' Mr. Cotis said. Projections in the report showed United States growth slowing to a 3.3 percent rate in 2006 from 3.6 percent this year and 4.4 percent in 2004. The expected growth rate for this year was revised up from a 3.3 percent rate forecast in December. The report showed United States inflation dipping to 2.2 percent next year from 2.4 percent in 2005, in response to a tightening in short-term interest rates, measured in three-month deposit terms, to 4.9 percent by the fourth quarter of 2006 from 2.3 percent at the end of 2004. But for that to happen, the Federal Reserve, which early this month raised its benchmark by a quarter point to 3 percent in the latest of a series of upward moves, must tighten more, the report said. In contrast, facing flaccid growth in the major economies of the euro zone, the European Central Bank should cut rates, the organization said. Its latest forecasts showed growth in the euro area sagging to a 1.2 percent rate this year, revised down by more than half a percentage point from 1.9 percent projected in December, and recovering to no better that 2 percent in 2006. The report said that the yuan exchange rate, and the flood of textile exports from China after the ending of international textile quotas on Jan 1, will keep China's trade surplus expanding this year and next , it said. The current account, a broad measure of trade in goods and services, is likely to bring in net inflows of $100 billion in 2005 and $101 billion in 2006, after an inflow of $68.7 billion last year. ``The depreciation of the effective exchange rate has both accentuated inflationary pressures and driven actual inflation higher,' the report said. The Chinese government has tried to curb a real estate boom and other signs of overheating by a range of regulatory and administrative measures this year. Despite those efforts, ``the economy is accelerating again,' Mr. Cotis said in an interview on Monday. ``The problem is still to contain activity,' he said. Forecasts in the report showed China's gross domestic product growing at a 9 percent rate this year and accelerating to a 9.2 percent rate in 2006, with inflation picking up to a 4 percent rate this year and next from 3.9 percent last year and only 1.2 percent in 2003. Elsewhere in Asia, the report projected growth in Japan slowing to a 1.5 percent rate this year, down from 2.6 percent in 2004 and below the 2.1 percent rate forecast by the O.E.C.D. in December. The organization also said it expected Japan's consumer price deflation to continue into 2006. Still, Mr. Cotis said, Japan's economic state is ``fairly benign.' ``They went through a soft patch, but then there were strong exports and investment in the first quarter, ' he said. ``There is still some deflation, but we think that, with recovery, deflation will go away by the end of 2006. That's a bit delayed compared with earlier prognostications, but the forward-looking indicators are relatively good.' In particular, he said, a recent improvement in the job market, where employers are increasingly offering secure, long-term contracts, should lead to a recovery in consumer confidence.

Subject: Companies Recruiting New Graduates From: Emma To: All Date Posted: Tues, May 24, 2005 at 11:19:34 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/business/24grads.html?pagewanted=all&position= Companies Recruiting New Graduates By EDUARDO PORTER Rebecca Palmer, who just graduated from Wichita State University, did not have to look for a job. The job found her. Last March, the Cessna Finance Corporation called her to offer a position as a sales administrator in its international division. 'It was very easy,' said Ms. Palmer, 23. 'They had three positions that opened up at the same time.' Just two years ago, even the best prospects coming out of college were accepting second-best job offers, if they were receiving any offers at all. But as tens of thousands of new graduates enter the labor market this month and next, corporate recruiters are snapping them up at a clip not seen since 2001 - before the cooling economy took a heavy toll on campus hiring. Companies expect to hire 13 percent more graduates than last year, according to a poll by the National Association of Colleges and Employers. And 85 percent of employers are offering higher initial salaries than last year. Two years ago, seniors were suffering through grueling rounds of interviews to land even a mediocre job. This year, students across a range of majors, from computer science to liberal arts, are hearing employers knocking on their doors. 'There's a level of competitiveness we hadn't seen in four years,' said John Campagnino, global head of recruiting for Accenture, a consulting firm. 'All of our competitors are out there going after the same students. It's rare if a student we make an offer to doesn't already have an offer from somewhere else.' The job market is not quite back to the free-wheeling days of the late 1990's, when fierce competition for talent from the dot-com economy spawned urban legends about brand new BMW's as sign-up bonuses. But 65 percent of employers plan to offer sign-up bonuses to their most promising recruits, up from 42 percent last year. For Tom Dharte, 22, who received his diploma from the University of Dayton on May 8, the challenging part about the job hunt was choosing among competing offers. 'I had interviews in New York, Chicago, Detroit and Cincinnati,' Mr. Dharte said. 'By December I had an offer in each of those cities.' In the end, he took a job as an analyst at Merrill Lynch's private equity unit in Princeton, N.J., where he did an internship last year. The job market was dreary for everybody in the last few years. But young college graduates, who benefited most from the hiring frenzy among online firms in the late 1990's, were hit particularly hard when the dot-com bubble burst, investment in technology collapsed and dozens of online ventures went under. By the end of last year, only 85.2 percent of 25- to 35-year-old college graduates had a job, down from 87.4 percent in 2000, according to an analysis of census data by Elise Gould of the Economic Policy Institute. Whereas average earnings of young people without a college degree declined by 0.8 percent from 2000 to 2004, to $13.38 an hour, wages of young college graduates fell 2.8 percent, to $22.41. Now, as the job market starts warming up across the country, demand for new college graduates is picking up, too. At Purdue University in West Lafayette, Ind., the number of employers visiting campus has increased 12 percent to 15 percent this year, said Timothy B. Luzader, director of the center for career opportunities. At the University of Dayton in Ohio, Greg Hayes, the executive director of career services, expects a 7 percent increase in the hiring of graduates this year. Marcia B. Harris, director of career services at the University of North Carolina at Chapel Hill, said that this year about 35 percent of graduating seniors had jobs awaiting them, up from 30 percent last year and about 15 percent in 2003. The Department of Labor does not break out statistics on the job status of young college graduates. But it does show that the unemployment rate of workers ages 20 to 24, the typical age at graduation, dropped 1.2 percentage points over the last two years, to 8.9 percent even as the total unemployment rate declined 0.8 percentage point, to 5.2 percent. Some professions are hotter than others. Accounting majors are benefiting after the passage of the Sarbanes-Oxley Act, which forced corporate executives to take responsibility for the accuracy of their accounting. Mr. Hayes added that majors in fields related to national security, from computer science to engineering, are also having a good year. Even manufacturing companies, which for years have done nothing but shed workers, are picking up graduates. At Wichita State, where job prospects depend heavily on the aerospace companies nearby, Jill M. Pletcher, director of career services, said she was 'guardedly optimistic.' Prospects are improving noticeably all the way down to graduates with liberal arts degrees, who typically have the most difficult time finding a job. Starting salaries for liberal arts majors are expected to increase by 4 percent, after a decline of 1.4 percent last year, according to a survey by the college and employer association. Companies are even hiring some of the graduates they shunned in the lean years. Jonathan Narveson, 24, was lucky to have a job offer when he graduated from the University of North Carolina in 2003. It just was not the computer industry job he really wanted. He did about 25 interviews with 15 companies and ended up as a salesman for Newell Rubbermaid in Charlotte, N.C. But last year, with the labor market tauter, Mr. Narveson was able to align his career with his aspirations, taking a job as a consultant in the financial services operating unit of Accenture. These days, he happily wields the appropriate consulting firm lingo. 'From a career acceleration standpoint, this is a great steppingstone,' he said. After three high-strung years, Mr. Luzader at Purdue said, 'There seems to be less anxiety on the student grapevine about opportunities.' Interest in graduate study, a typical indicator of graduates' concerns over getting a job, has declined in some areas. For instance, the Law School Admission Council expects there will be 4.8 percent fewer applicants to law schools this year. Some graduates seem to be starting to feel comfortable again about navigating the job market, and life, at their own pace. Dennis A. DiTullio, who will graduate in June from Ohio State University, plans to work a couple of years at his fraternity, Phi Gamma Delta, teaching leadership courses at chapters around the country, before plunging into the job market. 'I want to move around a little bit; see the world before I plop down in my cube,' Mr. DiTullio said. 'I still get to be around college campuses. I don't have to wake up one day and suddenly mature a lot.'

Subject: The College Dropout Boom From: Emma To: All Date Posted: Tues, May 24, 2005 at 10:10:36 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/24/national/class/EDUCATION-FINAL.html?hp=&pagewanted=all The College Dropout Boom By DAVID LEONHARDT CHILHOWIE, Va. - One of the biggest decisions Andy Blevins has ever made, and one of the few he now regrets, never seemed like much of a decision at all. It just felt like the natural thing to do. In the summer of 1995, he was moving boxes of soup cans, paper towels and dog food across the floor of a supermarket warehouse, one of the biggest buildings here in southwest Virginia. The heat was brutal. The job had sounded impossible when he arrived fresh off his first year of college, looking to make some summer money, still a skinny teenager with sandy blond hair and a narrow, freckled face. But hard work done well was something he understood, even if he was the first college boy in his family. Soon he was making bonuses on top of his $6.75 an hour, more money than either of his parents made. His girlfriend was around, and so were his hometown buddies. Andy acted more outgoing with them, more relaxed. People in Chilhowie noticed that. It was just about the perfect summer. So the thought crossed his mind: maybe it did not have to end. Maybe he would take a break from college and keep working. He had been getting C's and D's, and college never felt like home, anyway. 'I enjoyed working hard, getting the job done, getting a paycheck,' Mr. Blevins recalled. 'I just knew I didn't want to quit.' So he quit college instead, and with that, Andy Blevins joined one of the largest and fastest-growing groups of young adults in America. He became a college dropout, though nongraduate may be the more precise term. Many people like him plan to return to get their degrees, even if few actually do. Almost one in three Americans in their mid-20's now fall into this group, up from one in five in the late 1960's, when the Census Bureau began keeping such data. Most come from poor and working-class families. The phenomenon has been largely overlooked in the glare of positive news about the country's gains in education. Going to college has become the norm throughout most of the United States, even in many places where college was once considered an exotic destination - places like Chilhowie (pronounced chill-HOW-ee), an Appalachian hamlet with a simple brick downtown. At elite universities, classrooms are filled with women, blacks, Jews and Latinos, groups largely excluded two generations ago. The American system of higher learning seems to have become a great equalizer. In fact, though, colleges have come to reinforce many of the advantages of birth. On campuses that enroll poorer students, graduation rates are often low. And at institutions where nearly everyone graduates - small colleges like Colgate, major state institutions like the University of Colorado and elite private universities like Stanford - more students today come from the top of the nation's income ladder than they did two decades ago. Only 41 percent of low-income students entering a four-year college managed to graduate within five years, the Department of Education found in a study last year, but 66 percent of high-income students did. That gap had grown over recent years. 'We need to recognize that the most serious domestic problem in the United States today is the widening gap between the children of the rich and the children of the poor,' Lawrence H. Summers, the president of Harvard, said last year when announcing that Harvard would give full scholarships to all its lowest-income students. 'And education is the most powerful weapon we have to address that problem.' There is certainly much to celebrate about higher education today. Many more students from all classes are getting four-year degrees and reaping their benefits. But those broad gains mask the fact that poor and working-class students have nevertheless been falling behind; for them, not having a degree remains the norm. That loss of ground is all the more significant because a college education matters much more now than it once did. A bachelor's degree, not a year or two of courses, tends to determine a person's place in today's globalized, computerized economy. College graduates have received steady pay increases over the past two decades, while the pay of everyone else has risen little more than the rate of inflation. As a result, despite one of the great education explosions in modern history, economic mobility - moving from one income group to another over the course of a lifetime - has stopped rising, researchers say. Some recent studies suggest that it has declined over the last generation. [Click here for more information on income mobility.] Put another way, children seem to be following the paths of their parents more than they once did. Grades and test scores, rather than privilege, determine success today, but that success is largely being passed down from one generation to the next. A nation that believes that everyone should have a fair shake finds itself with a kind of inherited meritocracy. In this system, the students at the best colleges may be diverse - male and female and of various colors, religions and hometowns - but they tend to share an upper-middle-class upbringing. An old joke that Harvard's idea of diversity is putting a rich kid from California in the same room as a rich kid from New York is truer today than ever; Harvard has more students from California than it did in years past and just as big a share of upper-income students. Students like these remain in college because they can hardly imagine doing otherwise. Their parents, understanding the importance of a bachelor's degree, spent hours reading to them, researching school districts and making it clear to them that they simply must graduate from college. Andy Blevins says that he too knows the importance of a degree, but that he did not while growing up, and not even in his year at Radford University, 66 miles up the Interstate from Chilhowie. Ten years after trading college for the warehouse, Mr. Blevins, 29, spends his days at the same supermarket company. He has worked his way up to produce buyer, earning $35,000 a year with health benefits and a 401(k) plan. He is on a path typical for someone who attended college without getting a four-year degree. Men in their early 40's in this category made an average of $42,000 in 2000. Those with a four-year degree made $65,000. Still boyish-looking but no longer rail thin, Mr. Blevins says he has many reasons to be happy. He lives with his wife, Karla, and their year-old son, Lucas, in a small blue-and-yellow house at the end of a cul-de-sac in the middle of a stunningly picturesque Appalachian valley. He plays golf with some of the same friends who made him want to stay around Chilhowie. But he does think about what might have been, about what he could be doing if he had the degree. As it is, he always feels as if he is on thin ice. Were he to lose his job, he says, everything could slip away with it. What kind of job could a guy without a college degree get? One night, while talking to his wife about his life, he used the word 'trapped.' 'Looking back, I wish I had gotten that degree,' Mr. Blevins said in his soft-spoken lilt. 'Four years seemed like a thousand years then. But I wish I would have just put in my four years.' The Barriers Why so many low-income students fall from the college ranks is a question without a simple answer. Many high schools do a poor job of preparing teenagers for college. Many of the colleges where lower-income students tend to enroll have limited resources and offer a narrow range of majors, leaving some students disenchanted and unwilling to continue. Then there is the cost. Tuition bills scare some students from even applying and leave others with years of debt. To Mr. Blevins, like many other students of limited means, every week of going to classes seemed like another week of losing money - money that might have been made at a job. 'The system makes a false promise to students,' said John T. Casteen III, the president of the University of Virginia, himself the son of a Virginia shipyard worker. Colleges, Mr. Casteen said, present themselves as meritocracies in which academic ability and hard work are always rewarded. In fact, he said, many working-class students face obstacles they cannot overcome on their own. For much of his 15 years as Virginia's president, Mr. Casteen has focused on raising money and expanding the university, the most prestigious in the state. In the meantime, students with backgrounds like his have become ever scarcer on campus. The university's genteel nickname, the Cavaliers, and its aristocratic sword-crossed coat of arms seem appropriate today. No flagship state university has a smaller proportion of low-income students than Virginia. Just 8 percent of undergraduates last year came from families in the bottom half of the income distribution, down from 11 percent a decade ago. That change sneaked up on him, Mr. Casteen said, and he has spent a good part of the last year trying to prevent it from becoming part of his legacy. Starting with next fall's freshman class, the university will charge no tuition and require no loans for students whose parents make less than twice the poverty level, or about $37,700 a year for a family of four. The university has also increased financial aid to middle-income students. To Mr. Casteen, these are steps to remove what he describes as 'artificial barriers' to a college education placed in the way of otherwise deserving students. Doing so 'is a fundamental obligation of a free culture,' he said. But the deterrents to a degree can also be homegrown. Many low-income teenagers know few people who have made it through college. A majority of the nongraduates are young men, and some come from towns where the factory work ethic, to get working as soon as possible, remains strong, even if the factories themselves are vanishing. Whatever the reasons, college just does not feel normal. 'You get there and you start to struggle,' said Leanna Blevins, Andy's older sister, who did get a bachelor's degree and then went on to earn a Ph.D at Virginia studying the college experiences of poor students. 'And at home your parents are trying to be supportive and say, 'Well, if you're not happy, if it's not right for you, come back home. It's O.K.' And they think they're doing the right thing. But they don't know that maybe what the student needs is to hear them say, 'Stick it out just one semester. You can do it. Just stay there. Come home on the weekend, but stick it out.' ' Today, Ms. Blevins, petite and high-energy, is helping to start a new college a few hours' drive from Chilhowie for low-income students. Her brother said he had daydreamed about attending it and had talked to her about how he might return to college. For her part, Ms. Blevins says, she has daydreamed about having a life that would seem as natural as her brother's, a life in which she would not feel like an outsider in her hometown. Once, when a high-school teacher asked students to list their goals for the next decade, Ms. Blevins wrote, 'having a college degree' and 'not being married.' 'I think my family probably thinks I'm liberal,' Ms. Blevins, who is now married, said with a laugh, 'that I've just been educated too much and I'm gettin' above my raisin'.' Her brother said that he just wanted more control over his life, not a new one. At a time when many people complain of scattered lives, Mr. Blevins can stand in one spot - his church parking lot, next to a graveyard - and take in much of his world. 'That's my parents' house,' he said one day, pointing to a sliver of roof visible over a hill. 'That's my uncle's trailer. My grandfather is buried here. I'll probably be buried here.' Taking Class Into Account Opening up colleges to new kinds of students has generally meant one thing over the last generation: affirmative action. Intended to right the wrongs of years of exclusion, the programs have swelled the number of women, blacks and Latinos on campuses. But affirmative action was never supposed to address broad economic inequities, just the ones that stem from specific kinds of discrimination. That is now beginning to change. Like Virginia, a handful of other colleges are not only increasing financial aid but also promising to give weight to economic class in granting admissions. They say they want to make an effort to admit more low-income students, just as they now do for minorities and children of alumni. 'The great colleges and universities were designed to provide for mobility, to seek out talent,' said Anthony W. Marx, president of Amherst College. 'If we are blind to the educational disadvantages associated with need, we will simply replicate these disadvantages while appearing to make decisions based on merit.' With several populous states having already banned race-based preferences and the United States Supreme Court suggesting that it may outlaw such programs in a couple of decades, the future of affirmative action may well revolve around economics. Polls consistently show that programs based on class backgrounds have wider support than those based on race. The explosion in the number of nongraduates has also begun to get the attention of policy makers. This year, New York became one of a small group of states to tie college financing more closely to graduation rates, rewarding colleges more for moving students along than for simply admitting them. Nowhere is the stratification of education more vivid than here in Virginia, where Thomas Jefferson once tried, and failed, to set up the nation's first public high schools. At a modest high school in the Tidewater city of Portsmouth, not far from Mr. Casteen's boyhood home, a guidance office wall filled with college pennants does not include one from rarefied Virginia. The colleges whose pennants are up - Old Dominion University and others that seem in the realm of the possible - have far lower graduation rates. Across the country, the upper middle class so dominates elite universities that high-income students, on average, actually get slightly more financial aid from colleges than low-income students do. These elite colleges are so expensive that even many high-income students receive large grants. In the early 1990's, by contrast, poorer students got 50 percent more aid on average than the wealthier ones, according to the College Board, the organization that runs the SAT entrance exams. At the other end of the spectrum are community colleges, the two-year institutions that are intended to be feeders for four-year colleges. In nearly every one are tales of academic success against tremendous odds: a battered wife or a combat veteran or a laid-off worker on the way to a better life. But over all, community colleges tend to be places where dreams are put on hold. Most people who enroll say they plan to get a four-year degree eventually; few actually do. Full-time jobs, commutes and children or parents who need care often get in the way. One recent national survey found that about 75 percent of students enrolling in community colleges said they hoped to transfer to a four-year institution. But only 17 percent of those who had entered in the mid-1990's made the switch within five years, according to a separate study. The rest were out working or still studying toward the two-year degree. 'We here in Virginia do a good job of getting them in,' said Glenn Dubois, chancellor of the Virginia Community College System and himself a community college graduate. 'We have to get better in getting them out.' 'I Wear a Tie Every Day' College degree or not, Mr. Blevins has the kind of life that many Americans say they aspire to. He fills it with family, friends, church and a five-handicap golf game. He does not sit in traffic commuting to an office park. He does not talk wistfully of a relocated brother or best friend he sees only twice a year. He does not worry about who will care for his son while he works and his wife attends community college to become a physical therapist. His grandparents down the street watch Lucas, just as they took care of Andy and his two sisters when they were children. When Mr. Blevins comes home from work, it is his turn to play with Lucas, tossing him into the air and rolling around on the floor with him and a stuffed elephant. Mr. Blevins also sings in a quartet called the Gospel Gentlemen. One member is his brother-in-law; another lives on Mr. Blevins's street. In the long white van the group owns, they wend their way along mountain roads on their way to singing dates at local church functions, sometimes harmonizing, sometimes ribbing one another or talking about where to buy golf equipment. Inside the churches, the other singers often talk to the audience between songs, about God or a grandmother or what a song means to them. Mr. Blevins rarely does, but his shyness fades once he is back in the van with his friends. At the warehouse, he is usually the first to arrive, around 6:30 in the morning. The grandson of a coal miner, he takes pride, he says, in having moved up to become a supermarket buyer. He decides which bananas, grapes, onions and potatoes the company will sell and makes sure that there are always enough. Most people with his job have graduated from college. 'I'm pretty fortunate to not have a degree but have a job where I wear a tie every day,' he said. He worries about how long it will last, though, mindful of what happened to his father, Dwight, a decade ago. A high school graduate, Dwight Blevins was laid off from his own warehouse job and ended up with another one that paid less and offered a smaller pension. 'A lot of places, they're not looking that you're trained in something,' Andy Blevins said one evening, sitting on his back porch. 'They just want you to have a degree.' Figuring out how to get one is the core quandary facing the nation's college nongraduates. Many seem to want one. In a New York Times poll, 43 percent of them called it essential to success, while 42 percent of college graduates and 32 percent of high-school dropouts did. This in itself is a change from the days when 'college boy' was an insult in many working-class neighborhoods. But once students take a break - the phrase that many use instead of drop out - the ideal can quickly give way to reality. Family and work can make a return to school seem even harder than finishing it in the first place. After dropping out of Radford, Andy Blevins enrolled part-time in a community college, trying to juggle work and studies. He lasted a year. From time to time in the decade since, he has thought about giving it another try. But then he has wondered if that would be crazy. He works every third Saturday, and his phone rings on Sundays when there is a problem with the supply of potatoes or apples. 'It never ends,' he said. 'There's a never a lull.' To spend more time with Lucas, Mr. Blevins has already cut back on his singing. If he took night classes, he said, when would he ever see his little boy? Anyway, he said, it would take years to get a degree part-time. To him, it is a tug of war between living in the present and sacrificing for the future. Few Breaks for the Needy The college admissions system often seems ruthlessly meritocratic. Yes, children of alumni still have an advantage. But many other pillars of the old system - the polite rejections of women or blacks, the spots reserved for graduates of Choate and Exeter - have crumbled. This was the meritocracy Mr. Casteen described when he greeted the parents of freshman in a University of Virginia lecture hall late last summer. Hailing from all 50 states and 52 foreign countries, the students were more intelligent and better prepared than he and his classmates had been, he told the parents in his quiet, deep voice. The class included 17 students with a perfect SAT score. If anything, children of privilege think that the system has moved so far from its old-boy history that they are now at a disadvantage when they apply, because colleges are trying to diversify their student rolls. To get into a good college, the sons and daughters of the upper middle class often talk of needing a higher SAT score than, say, an applicant who grew up on a farm, in a ghetto or in a factory town. Some state legislators from Northern Virginia's affluent suburbs have argued that this is a form of geographic discrimination and have quixotically proposed bills to outlaw it. But the conventional wisdom is not quite right. The elite colleges have not been giving much of a break to the low-income students who apply. When William G. Bowen, a former president of Princeton, looked at admissions records recently, he found that if test scores were equal a low-income student had no better chance than a high-income one of getting into a group of 19 colleges, including Harvard, Yale, Princeton, Williams and Virginia. Athletes, legacy applicants and minority students all got in with lower scores on average. Poorer students did not. The findings befuddled many administrators, who insist that admissions officers have tried to give poorer applicants a leg up. To emphasize the point, Virginia announced this spring that it was changing its admissions policy from 'need blind' - a term long used to assure applicants that they would not be punished for seeking financial aid - to 'need conscious.' Administrators at Amherst and Harvard have also recently said that they would redouble their efforts to take into account the obstacles students have overcome. 'The same score reflects more ability when you come from a less fortunate background,' Mr. Summers, the president of Harvard, said. 'You haven't had a chance to take the test-prep course. You went to a school that didn't do as good a job coaching you for the test. You came from a home without the same opportunities for learning.' But it is probably not a coincidence that elite colleges have not yet turned this sentiment into action. Admitting large numbers of low-income students could bring clear complications. Too many in a freshman class would probably lower the college's average SAT score, thereby damaging its ranking by U.S. News & World Report, a leading arbiter of academic prestige. Some colleges, like Emory University in Atlanta, have climbed fast in the rankings over precisely the same period in which their percentage of low-income students has tumbled. The math is simple: when a college goes looking for applicants with high SAT scores, it is far more likely to find them among well-off teenagers. More spots for low-income applicants might also mean fewer for the children of alumni, who make up the fund-raising base for universities. More generous financial aid policies will probably lead to higher tuition for those students who can afford the list price. Higher tuition, lower ranking, tougher admission requirements: they do not make for an easy marketing pitch to alumni clubs around the country. But Mr. Casteen and his colleagues are going ahead, saying the pendulum has swung too far in one direction. That was the mission of John Blackburn, Virginia's easy-going admissions dean, when he rented a car and took to the road recently. Mr. Blackburn thought of the trip as a reprise of the drives Mr. Casteen took 25 years earlier, when he was the admissions dean, traveling to churches and community centers to persuade black parents that the university was finally interested in their children. One Monday night, Mr. Blackburn came to Big Stone Gap, in a mostly poor corner of the state not far from Andy Blevins's town. A community college there was holding a college fair, and Mr. Blackburn set up a table in a hallway, draping it with the University of Virginia's blue and orange flag. As students came by, Mr. Blackburn would explain Virginia's new admissions and financial aid policies. But he soon realized that the Virginia name might have been scaring off the very people his pitch was intended for. Most of the students who did approach the table showed little interest in the financial aid and expressed little need for it. One man walked up to Mr. Blackburn and introduced his son as an aspiring doctor. The father was an ophthalmologist. Other doctors came by, too. So did some lawyers. 'You can't just raise the UVa flag,' Mr. Blackburn said, packing up his materials at the end of the night, 'and expect a lot of low-income kids to come out.' When the applications started arriving in his office this spring, there seemed to be no increase in those from low-income students. So Mr. Blackburn extended the deadline two weeks for everybody, and his colleagues also helped some applicants with the maze of financial aid forms. Of 3,100 incoming freshmen, it now seems that about 180 will qualify for the new financial aid program, up from 130 who would have done so last year. It is not a huge number, but Virginia administrators call it a start. A Big Decision On a still-dark February morning, with the winter's heaviest snowfall on the ground, Andy Blevins scraped off his Jeep and began his daily drive to the supermarket warehouse. As he passed the home of Mike Nash, his neighbor and fellow gospel singer, he noticed that the car was still in the driveway. For Mr. Nash, a school counselor and the only college graduate in the singing group, this was a snow day. Mr. Blevins later sat down with his calendar and counted to 280: the number of days he had worked last year. Two hundred and eighty days - six days a week most of the time - without ever really knowing what the future would hold. 'I just realized I'm going to have to do something about this,' he said, 'because it's never going to end.' In the weeks afterward, his daydreaming about college and his conversations about it with his sister Leanna turned into serious research. He requested his transcripts from Radford and from Virginia Highlands Community College and figured out that he had about a year's worth of credits. He also talked to Leanna about how he could become an elementary school teacher. He always felt that he could relate to children, he said. The job would take up 180 days, not 280. Teachers do not usually get laid off or lose their pensions or have to take a big pay cut to find new work. So the decision was made. On May 31, Andy Blevins says, he will return to Virginia Highlands, taking classes at night; the Gospel Gentlemen are no longer booking performances. After a year, he plans to take classes by video and on the Web that are offered at the community college but run by Old Dominion, a Norfolk, Va., university with a big group of working-class students. 'I don't like classes, but I've gotten so motivated to go back to school,' Mr. Blevins said. 'I don't want to, but, then again, I do.' He thinks he can get his bachelor's degree in three years. If he gets it at all, he will have defied the odds.

Subject: Barbarians at the gate From: Pete Weis To: All Date Posted: Mon, May 23, 2005 at 23:11:40 (EDT) Email Address: Not Provided Message: How much further punishment are stock holders and workers willing to take before they demand changes? Why are we so dumb as to keep feeding our lifesavings into the stockmarkets and on up the line into the pockets of these executives? Pension plans are on the brink and 401k's are being raided. Where's the anger? From CFO.com: Gillette Awards Options to Top Execs No severance for laid-off workers, however; ''It would seem like this is a tide that's lifting only yachts, and not all boats,'' says a Massachusetts regulator. Stephen Taub, CFO.com May 23, 2005 Gillette disclosed in a Securities and Exchange Commission filing that it has awarded large numbers of options to top executives in advance of its planned $57 billion acquisition by Procter & Gamble Co. The Boston-based consumer products company made its filing on the same day it announced that workers who lose their jobs as a result of the merger will not receive buyout packages. Massachusetts Secretary of State William Galvin, who has been probing certain aspects of the merger agreement, said of the stock options, 'It would seem like this is a tide that's lifting only yachts, and not all boats,' according to the Associated Press. 'The priority is taking care of Mr. Kilts and the people at the top, and not the employees.' The Boston Globe reported that Galvin has subpoenaed Gillette's chairman, president, and chief executive officer, James M. Kilts, to testify under oath about the merger; senior vice president and chief financial officer Charles W. Cramb was questioned Thursday. The newspaper added, however, that Suffolk Superior Court Judge Allan van Gestel ruled that Galvin must limit his probe to determining whether Gillette's two investment banks, Goldman Sachs Group and UBS AG, withheld information that might have valued the company higher than the $57 billion that P&G has agreed to pay. ''The court again observes that it is UBS and Goldman Sachs which are being investigated for fraud committed on Gillette, and possibly Gillette's shareholders, not the other way around,' wrote Judge van Gestel, according to the Globe. The judge also reportedly refused to allow Galvin's staff to search Gillette's computers for deleted e-mails of senior executives. Though Galvin has been critical of Kilts's compensation — he will receive $165 million if the merger goes through — he will not question the CEO about his pay, the Globe added. As for those option grants: Kilts has been awarded options to buy 800,000 shares of stock, according to the Associated Press. Vice chairman Edward F. DeGraan will receive options to buy 160,000 shares; Cramb, the finance chief, will receive options on 96,000 shares; and vice presidents Peter Hoffman and Mark M. Leckie will receive options to buy 76,000 shares apiece. According to Gillette's filing, the options will be granted on June 16 and will have an exercise price equal to the fair-market value on that date. Currently, Kilts's options would be worth about $14 million, observed the AP. According to the wire service, the company also stated that it will not offer buyout packages to the approximately 6,000 employees who are expected to be laid off after the merger, but will offer 'appropriate' severance packages. 'Gillette has never offered widespread voluntary severance packages,' said company spokesman Eric Kraus. 'When you have a merger of this size, P&G and Gillette will decide how to staff and how to run the most effective organization.'

Subject: Re: Barbarians at the gate From: Terri To: Pete Weis Date Posted: Tues, May 24, 2005 at 05:42:26 (EDT) Email Address: Not Provided Message: Thank you for posting this. I heard the report,then forgot to look for an article. So sad.

Subject: 'Lessons?' from the yen-dollar talks From: Pancho Villa To: All Date Posted: Mon, May 23, 2005 at 22:27:03 (EDT) Email Address: nma@hotmail.com Message: Matthew Goodman and Robert Fauver Lessons from the yen-dollar talks Amid the inexorably rising US trade deficit, Washington is crying foul about 'unfair' currency practices by its major trading partners. The leading economies of east Asia are seen as the main culprits, accumulating large trade surpluses and stockpiles of foreign exchange reserves while maintaining exchange rates that appear by all economic measures to be considerably undervalued. If the US Treasury will not act to address these inequities, Congress has threatened to take the issue out of Treasury's hands. Such was the situation confronting the Reagan administration in 1983 as complaints about Japanese trade and currency practices rose to fever pitch. Facing a similar challenge today over China, the Bush administration would do well to consider the Reagan Treasury's innovative approach to financial diplomacy. In November 1983, Donald Regan, US Treasury secretary, and Noboru Takeshita, Japan's finance minister, issued a rare joint statement declaring that 'open, liberal capital markets and the free movement of capital are important to the operation of an effectively functioning international monetary system'. They agreed to establish a working group of senior officials on yen-dollar issues. The group met six times in early 1984 and handed a report to the ministers in May that year. The stated rationale for these so-called 'yen-dollar talks' was to promote liberalisation of Japan's capital markets and internationalisation of the yen. At the time, Japan's financial system was heavily bankcentric, interest rates were strictly controlled by the finance ministry, and markets for yen instruments were limited. Most important from a US perspective, the yen was considered to be substantially undervalued, giving Japan a perceived unfair advantage in trade. Pulling these strands together, Treasury's strategy was to promote a stronger Japanese currency by deepening the market for yen instruments and making yen assets more attractive to foreign investors. No secret was made of this objective: in its May 1984 report, the Yen-Dollar Working Group noted that steps to internationalise the yen and liberalise Japan's capital markets would 'lead to a stronger yen'. The report included far-reaching commitments by Japan, such as a timetable for liberalisation of interest rates, the introduction of funding instruments such as certificates of deposit and enhanced access for foreign financial institutions to Japanese capital markets. As intended, the yen-dollar process contributed to the yen's long-term appreciation from its postwar fixed rate of 360 yen to the dollar to roughly 105 yen today. Financial conditions in China today in many ways parallel those in early-1980s Japan. China's currency, the renminbi, or yuan, as the local equivalent is known, is estimated to be undervalued by as much as 25-40 per cent. Moreover it is not convertible. Capital flows in and out of China are broadly government controlled. Most domestic financial transactions and prices are also heavily regulated, and the range of permitted financial instruments is limited. Domestic capital markets are embryonic, with minimal foreign participation. Of course, China is not Japan. Apart from the specific differences in the two countries' exchange rate regimes - China maintains a rigid peg, Japan a 'dirty float' - China is still a developing country, with per capita income at one-thirtieth the level of Japan's. China's economy is more open to foreign direct investment than Japan's was then (or is now). And, whereas Washington had considerable leverage over Tokyo via their security alliance, the Chinese are widely perceived to be less susceptible to gaiatsu (foreign pressure). But the point is not to replicate the yen-dollar talks precisely. Clearly the agenda, format and public portrayal of any financial dialogue between the US and China would have to be modified substantially to reflect current bilateral realities. Among other things, a dialogue with China today should put more emphasis on promoting sound supervision of banks and better credit risk management. Provided the objective was to open and strengthen China's financial system and facilitate the move to a more flexible, market-based exchange rate, a dialogue that looked very different from the yen-dollar talks could make a valuable contribution to global economic growth and financial stability. If presented as a bold, new initiative with senior-level involvement, such a dialogue could also make political sense for the Bush administration, helping deflect pressure for less market-friendly remedies to perceived unfair Chinese practices. There is even reason to believe it would be welcomed by Beijing, which may not like foreign pressure but has learned it is a reality of its new engagement in the global economy. China knows it could benefit from US experience and advice in tackling its serious financial inefficiencies, which jeopardise sustained growth. The US Treasury has come under renewed domestic fire for failing to name China a currency 'manipulator' in its latest report to Congress. Overt pressure - let alone the trade-restrictive remedies being contemplated on Capitol Hill - is unlikely to persuade Beijing to revalue its currency or fix its banks. In its wrangle with China, launching 'yuan-dollar' talks could be exactly the kind of creative financial diplomacy Treasury used so effectively with Japan. Matthew Goodman, US Treasury attache in Tokyo 1992-97, is vice-president of Stonebridge International in Washington, DC; Robert Fauver, a former US Treasury staff director, is president of Fauver Associates FT Monday May 23 2005

Subject: Time running out From: Pete Weis To: Pancho Villa Date Posted: Mon, May 23, 2005 at 22:57:26 (EDT) Email Address: Not Provided Message: Something needs to happen to avoid a tariff war and the inevitable retaliations. If Bush is going to veto tariff legislation (which I understand likely will have enough votes to pass) he needs something to offer as a replacement solution. But it's the lessons of the 30's on which we should be most focused.

Subject: Isnt it too late? From: David E.. To: Pete Weis Date Posted: Mon, May 23, 2005 at 23:33:44 (EDT) Email Address: Not Provided Message: For Tariffs? I thought I read the Chinese have already slapped a tax on exports. I thought that was very clever of them, they get to keep the money by taxing exports. Of course this is obvious to me, it may not be obvious to the Bush administration. Much of chinese imports is from global companies. Who would back down first, the export tax folks or the import folks? I am pretty confident that global companies have much more influence in Washington than they do in Bejing. So if the US ever passes import taxes -- they will be the first to fold. Just my opinion! Cheers

Subject: Re: Isnt it too late? From: Pete Weis To: David E.. Date Posted: Tues, May 24, 2005 at 09:14:37 (EDT) Email Address: Not Provided Message: David E. The Chinese did institute some export tariffs on clothing and textiles, but I don't think it is enough to stop the vote on import tariffs to take place sometime before July 27. The senate is demanding an unpegging of the yuan which the Chinese have said they will not be pressured into doing. Now if the Chinese instituted higher tariffs on across-the-board exports to the US, then the senate vote might be averted. But wouldn't the Europeans want the same?

Subject: The latest From: Pete Weis To: Pete Weis Date Posted: Tues, May 24, 2005 at 09:37:48 (EDT) Email Address: Not Provided Message: From The Financial Times: China told by US to revalue renminbi by 10% >By Andrew Balls in Washington >Published: May 24 2005 01:49 | Last updated: May 24 2005 04:24 >> The US Treasury has told the Chinese authorities that they must revalue their currency by at least 10 per cent against the dollar to prevent protectionist legislation in the US congress. Henry Kissinger, former US secretary of state, is one of a number of unofficial envoys who have impressed upon China the urgent need for action on the 10 per cent target, and on the seriousness of the threat from Congress, people with familiar with the administration's efforts said. As well as the minimum 10 per cent target revaluation, Dr Kissinger was briefed by the Treasury on the need for other measures, such as a shift to a currency band against the dollar or a basket against a number of currencies to replace the peg. Bill Rhodes, senior vice chairman of Citigroup, and Brent Scowcroft, who was national security adviser to President Ford and President George H. W. Bush, have also acted as unofficial envoys on behalf of the present administration. Mr Kissinger and Mr Scowcroft were not immediately available for comment. Mr Rhodes declined to comment on talks with Beijing but said: “Apart from any external pressure, I think that it is in China's own interest in the coming months to move towards a market-based interest rate regime, accelerate the opening of the capital account, and move to a more flexible exchange rate system.” Tony Fratto, US Treasury spokesman, refused to comment on the 10 per cent minimum target. “We have made it clear that the interim step should be of sufficient magnitude and flexibility to quell speculative financial flows,” he said. “Without commenting on particular individuals, I would say that it is important for the Chinese authorities to hear from respected individuals who can provide an accurate analysis of the American political environment on this issue.” There was a marked shift in the Treasury's strategy ahead of last month's meeting of the Group of Seven leading industrial countries, with talk of the need for currency flexibility replaced by the call for urgent action. The administration has been spurred by concern over a bill championed by Charles Schumer, Democratic senator, that would impose trade sanctions if China does not act within six months. When John Snow, Treasury secretary, released the department's report on trade and exchange rates last week, he said that the Treasury had called for currency flexibility and that an interim step was needed. The message was that China needed to act within the next six months. A senior administration official said at the time that a 5 per cent revaluation would not be enough. Alan Greenspan said on Friday in response to a question at the Economic Club of New York that a notional 20 per revaluation of the renminbi would have little impact on the US trade balance. Many experts on China say that the increased pressure from the United States may make it harder for the Chinese authorities to take action, and in particular for those who favour a shift in the currency regime to win the argument in Beijing.

Subject: Re: Isnt it too late? From: Terri To: David E.. Date Posted: Tues, May 24, 2005 at 07:31:16 (EDT) Email Address: Not Provided Message: Paul Krugman has been in Asia; we must try to get transcripts of the talks. there is much to worry about, alas.

Subject: From where will change come? From: Pete Weis To: All Date Posted: Mon, May 23, 2005 at 21:32:09 (EDT) Email Address: Not Provided Message: 'So where will change come from?' 'Everyone loves historical analogies. Here's my thought: maybe 2004 was 1928. During the 1920's, the national government followed doctrinaire conservative policies, but reformist policies that presaged the New Deal were already bubbling up in the states, especially in New York.' 'In 1928 Al Smith, the governor of New York, was defeated in an ugly presidential campaign in which Protestant preachers warned their flocks that a vote for the Catholic Smith was a vote for the devil. But four years later F.D.R. took office, and the New Deal began.' 'Of course, the coming of the New Deal was hastened by a severe national depression. Strange to say, we may be working on that, too.' - Paul Krugman NYT's 5/23/05 editorial

Subject: Men Just Want Mommy From: Emma To: All Date Posted: Mon, May 23, 2005 at 17:56:40 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/01/13/opinion/13dowd.html?ex=1263358800&en=f871ef134050f2e4&ei=5090&partner=rssuserland Men Just Want Mommy By MAUREEN DOWD WASHINGTON A few years ago at a White House Correspondents' dinner, I met a very beautiful actress. Within moments, she blurted out: 'I can't believe I'm 46 and not married. Men only want to marry their personal assistants or P.R. women.' I'd been noticing a trend along these lines, as famous and powerful men took up with the young women whose job it was to tend to them and care for them in some way: their secretaries, assistants, nannies, caterers, flight attendants, researchers and fact-checkers. Women in staff support are the new sirens because, as a guy I know put it, they look upon the men they work for as 'the moon, the sun and the stars.' It's all about orbiting, serving and salaaming their Sun Gods. In all those great Tracy/Hepburn movies more than a half-century ago, it was the snap and crackle of a romance between equals that was so exciting. Moviemakers these days seem far more interested in the soothing aura of romances between unequals. In James Brooks's 'Spanglish,' Adam Sandler, as a Los Angeles chef, falls for his hot Mexican maid. The maid, who cleans up after Mr. Sandler without being able to speak English, is presented as the ideal woman. The wife, played by Téa Leoni, is repellent: a jangly, yakking, overachieving, overexercised, unfaithful, shallow she-monster who has just lost her job with a commercial design firm. Picture Faye Dunaway in 'Network' if she'd had to stay home, or Glenn Close in 'Fatal Attraction' without the charm. The same attraction of unequals animated Richard Curtis's 'Love Actually,' a 2003 holiday hit. The witty and sophisticated British prime minister, played by Hugh Grant, falls for the chubby girl who wheels the tea and scones into his office. A businessman married to the substantial Emma Thompson falls for his sultry secretary. A writer falls for his maid, who speaks only Portuguese. (I wonder if the trend in making maids who don't speak English heroines is related to the trend of guys who like to watch Kelly Ripa in the morning with the sound turned off?) Art is imitating life, turning women who seek equality into selfish narcissists and objects of rejection, rather than affection. As John Schwartz of The New York Times wrote recently, 'Men would rather marry their secretaries than their bosses, and evolution may be to blame.' A new study by psychology researchers at the University of Michigan, using college undergraduates, suggests that men going for long-term relationships would rather marry women in subordinate jobs than women who are supervisors. As Dr. Stephanie Brown, the lead author of the study, summed it up for reporters: 'Powerful women are at a disadvantage in the marriage market because men may prefer to marry less-accomplished women.' Men think that women with important jobs are more likely to cheat on them. 'The hypothesis,' Dr. Brown said, 'is that there are evolutionary pressures on males to take steps to minimize the risk of raising offspring that are not their own.' Women, by contrast, did not show a marked difference in their attraction to men who might work above or below them. And men did not show a preference when it came to one-night stands. A second study, which was by researchers at four British universities and reported last week, suggested that smart men with demanding jobs would rather have old-fashioned wives, like their mums, than equals. The study found that a high I.Q. hampers a woman's chance to get married, while it is a plus for men. The prospect for marriage increased by 35 percent for guys for each 16-point increase in I.Q.; for women, there is a 40 percent drop for each 16-point rise. So was the feminist movement some sort of cruel hoax? The more women achieve, the less desirable they are? Women want to be in a relationship with guys they can seriously talk to - unfortunately, a lot of those guys want to be in relationships with women they don't have to talk to. I asked the actress and writer Carrie Fisher, on the East Coast to promote her novel 'The Best Awful,' who confirmed that women who challenge men are in trouble. 'I haven't dated in 12 million years,' she said drily. 'I gave up on dating powerful men because they wanted to date women in the service professions. So I decided to date guys in the service professions. But then I found out that kings want to be treated like kings, and consorts want to be treated like kings, too.'

Subject: Climbing Bond Prices From: Emma To: All Date Posted: Mon, May 23, 2005 at 15:02:57 (EDT) Email Address: Not Provided Message: Argue as we will, the bond market is decisively telling us there will be no inflation problem. The long term Treasury yield is 4.06%. We should take these number seriously, for there appears little prospect of inflation from private institutional demand for bonds.

Subject: The Birds of Delaware Bay From: Emma To: All Date Posted: Mon, May 23, 2005 at 12:01:37 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/23/nyregion/23shore.html?pagewanted=all Will the Birds Stop Returning to Delaware Bay? By TINA KELLEY CAPE MAY COURT HOUSE, N.J. - The red knots were already three days late on their flight north from the bottom of the world and the people waiting for them were beginning to get nervous. The birds' dining table was not even set. On the full moon of the fifth month of the year, horseshoe crabs crawl up on the beaches of Delaware Bay to mate, as they have for 200 million years. A decade ago, they covered the beach like cobblestones, and flocks of red knots, chubby brown-flecked shorebirds the size of robins, would stop to eat the crabs' eggs, doubling their body weight before flying nonstop for three days straight to reach Southampton Island in Canada, just below the Arctic Circle. There they would spend a few weeks bulking up again and breeding before flying back to their winter home, Tierra del Fuego, at the southern tip of South America. The annual round-trip migration covers an estimated 20,000 miles. But the horseshoe crabs, so vital to the birds' survival, have fallen in numbers along the shores of Delaware Bay. As a result, the population of red knots spotted in the area plummeted to 13,315 last year from 50,360 in 1998, and scientists predict it will be extinct in five years. So a group of volunteer beach stewards have joined to help the New Jersey Department of Environmental Protection revive the feeding frenzy that used to announce the arrival of summer more loudly than Memorial Day tourists driving along the sparsely populated bay shore. For three years, some beaches have been closed for the feeding season, the last two weeks in May and first week in June, when mating crabs would kick up the buried eggs of crabs that had already mated, exposing the green pinhead-size eggs to the gulls and migrating sanderlings, ruddy turnstones and red knots that feed here. The red knots, listed as a threatened species in New Jersey, are more dependent than other birds on the eggs, an easily found, easily digestible source of fat and protein. On May 14, the first day of the closings, Stacy Carlucci of East Brunswick, one of the volunteers for the department's Division of Fish and Wildlife, said she looked forward to guarding the beaches. 'It's not always fun,' she said. 'You do have to deal with unhappy people sometimes.' Like Ms. Carlucci, Pat and Don Walker of Clarksburg have volunteered with the state's endangered species program for three years, and they have found that the job gets easier as beach visitors learn more about the need for the closings. Last year, the couple had to ask only one person to leave the beach, and later notified the state authorities about low-flying ultralight planes, which scared the birds off the sand. 'We haven't run across anyone who's been arrogant,' Don Walker said as he looked over the beach and the jetty at the end of Reeds Beach. The couple has never had to summon Craig James, a Fish and Wildlife enforcement officer who has the authority to issue tickets of up to $5,000 to anyone harassing wildlife. So far, he has issued only warnings since the beach closings started, he said. Just then, a call came in over Mr. James's radio about personal watercraft around Champagne Island, a sand spit on the Atlantic that was closed for the first time this year. He and researchers with Fish and Wildlife discussed how long it would take to get a boat into the water and reach the island to enforce the ban. At some of the seven closed beaches, the players in the migratory drama were remarkable for their absence. There were few horseshoe crabs to be seen, and gulls had flipped several over and were eating them alive. There were about a thousand sanderlings along a point on a stretch of closed beach, but no red knots. They usually arrive on May 11. In the strict algebra of the red knots' survival, the variables are numerous. When supplies of conch collapsed in the Caribbean in the early 1990's, fishermen began harvesting New Jersey horseshoe crabs as replacement bait, often taking females at the beginning of mating season. Even though the crabs in New Jersey have received some protection, it will take about 10 years for young ones to reach their breeding age. If there are not enough crab eggs, scientists believe, the red knots cannot fatten up in time to make it up north so their chicks can enjoy the bugs available during the brief Arctic summer. After the number of returning red knots dropped precipitously last season, more beaches, including some on the Atlantic Ocean, were closed this year, and 25 volunteers, 10 more than last year, signed up to keep people off the sand and let the birds feast in peace. Terri Allen of Del Haven, a three-year veteran of the beach steward program and a former teacher, was watching over Norbury's Landing, on Delaware Bay. 'The number of people who say, 'You can't legally keep me off the beach' is down,' she said. 'People who live near the beach have a whole different attitude. It's their beach, they've got dogs, and they've always let them run and chase birds.' Ms. Allen referred one such screaming woman to Mr. James. 'Having the backup has been both necessary and really very helpful,' Ms. Allen said. Ms. Allen said she thought the stewards were helping the birds. She recalled how thickly red knots covered the beach 25 years ago. 'It's nothing like that now, even on the very best days,' she said. Ron Porter of Philadelphia volunteers for the state with other birders who put bands on shorebirds and track them to give scientists a better idea of their population's health. 'It's been very rewarding to see political changes because of the data we've collected,' he said. Several volunteers traveled as far as the birds to help their cause, including Clive Minton of Melbourne, Australia. He remembers being 'absolutely horrified' by seeing tens of thousands of female horseshoe crabs harvested and trucked away from Delaware Bay beaches. Mandy Dey, a senior biologist with the state's Endangered and Nongame Species program, was nervously awaiting the arrival of the late birds. 'Last year was the lowest we've ever seen, and we don't know what to expect this year,' she said. 'It could be weather, they could be delayed. We're just holding our breath.' Larry Niles, the chief of the Endangered and Nongame Species Program, said the bird might have to be added to the federal list of endangered species. 'This flyway goes from one end of the world to the other end, through the United States, the richest country, through the richest state on the Eastern Seaboard, and we don't protect this stopover,' he said. As of last night, about 12,000 red knots had arrived in Delaware Bay, but there was no significant crab spawning, and some birds were seen eating clams, considered a sign of desperation. 'We worried that the cool weather might diminish any possibility of crab laying this week,' Dr. Niles said. This season is a decisive one, Dr. Niles said. 'We personally all feel it. When something really inspiring and majestic turns into a pathetic remnant, it affects you personally.'

Subject: Paul Krugman in Bangkok From: Terri To: All Date Posted: Mon, May 23, 2005 at 11:24:37 (EDT) Email Address: Not Provided Message: http://www.bangkokpost.com/Business/19May2005_biz66.php Shift to domestic-led growth may become essential in Asia By PARISTA YUTHAMANOP Imbalances in the global financial market could push Southeast Asian economies to undertake a difficult adjustment in the future toward domestic demand-led growth from export-led growth models, according to US economist Paul Krugman. The Princeton University economist and well-known columnist for the New York Times, made the comment in Bangkok where he has been speaking on global and regional economic trends. Addressing a seminar at the Sofitel Central Plaza Hotel yesterday, Prof Krugman said the US economy was currently unsustainable, with the huge current account deficit and overinvestment in the housing market eventually leading to an economic recession and wiping out the US's role as ''the world's importer of last resort''. Thailand, together with other Asian countries, would need to shift investment to spur domestic demand to help compensate for a decline in exports following a US recession, he said. ''Private investment is currently low by historical standards. Interest rates are also very low. If the current account is going to decline, it would be difficult to figure out where the internal demand will come from. ... Public investment is a reasonable thing to do.'' The Thai government has announced plans to invest 1.7 trillion baht through 2009 in new transport, energy, water and communications projects. Prof Krugman said that while public investment could be a ''stopgap'' for economic adjustment as it would help strengthen private investment, the final benefits would rely on the quality of the projects. ''Thailand would be in a situation resembling Japan in the past, when enormous infrastructure public investments were made purely to increase domestic demand. Many projects had no receivables,'' he said. Prof Krugman cautioned that the adjustment to the present global financial imbalance could be a ''messy'' and ''deeply troubled'' one. ''The US current deficit, at close to 6% of gross domestic product, would be in a danger zone by any standard of a crisis. Most developing countries have no alarms ringing, but the US looks serious.'' The US housing market, he said, was also showing signs of a bubble, marked by high prices and speculative demand. ''Macro indicators suggest that the market is speculative mania. Day trading cannot be sustainable. There is a real bubble mentality in the US housing market,'' Prof Krugman said, adding that prices of US housing were 250% of their real values. A fall in the housing market and investment would spur a US recession and lead to capital outflows. ''There would be a difficult contraction in the US economy. It would be a very difficult contraction for monetary policy to deal with. I think there is 50% chance for a major break in the situation in the US next year.'' Prof Krugman said a US recession would force Asian economies to shift toward domestic demand policies. ''Asia and Japan will see a fall in exports. It will be an end of export-led growth. The US will no longer be an importer of last resort. Asia will need domestic demand for support.'' Prof Krugman said Asian central banks also were expected to increasingly diversify their foreign reserve portfolio away from dollars to euros and yen. Emerging Asian countries, led by China, are the largest investors in the world in US assets. Prime Minister Thaksin Shinawatra welcomed Mr Krugman's words of caution. ''It's good to consider and take heed of the warnings made by a US economist of a potential US economic bubble,'' he said. ''At the same time, we shouldn't become too alarmed.'' Mr Thaksin said Thailand's concerns were to conserve energy and minimise a potential current account deficit. ''We aren't saying that we can't have a deficit, only that we should try to minimise it if possible. We have plentiful foreign reserves and can accept a deficit if need be,'' he said.

Subject: No Old-Age Security in Private Sector From: Emma To: All Date Posted: Mon, May 23, 2005 at 11:17:44 (EDT) Email Address: Not Provided Message: http://www.latimes.com/news/opinion/commentary/la-oe-stiglitz22may22,0,1754893.story?coll=la-news-comment-opinions May 22, 2005 No Old-Age Security in the Private Sector Either By Joseph E. Stiglitz President Bush's plan to reform Social Security requires that we trust the private sector, which isn't all that easy to do given its inability to honor its obligations in pensions or to provide adequate health plans. The recent court decision allowing United Airlines to turn over its pension system to the federal Pension Benefit Guaranty Corp. is likely to raise anxieties still further among Americans already worried about their old-age security. There is a certain irony to what's going on: As the president tries to turn over responsibility for retirement to the private sector, the private sector is simultaneously turning to the government for help. It is the private pension system, not the public one, that is facing the most imminent problem. The shortfall in the United Airlines pension program alone is estimated at nearly $10 billion. The court's decision to have the Pension Benefit Guaranty Corp. take over the airline's obligation was not an act of charity. Without the turnover, United might have gone bankrupt, and then the full liability would have fallen to the government. Indeed, that was the original intent of the Pension Benefit Guaranty Corp. — to ensure that when companies go bankrupt, their employees are not left in the lurch. But it is not just taxpayers who should be unhappy about this turn of events, as the Pension Benefit Guaranty Corp. picks up the tab for United's financial woes. The workers too are disgruntled, because the agency does not fully insure pensions; many of the United pilots, for instance, will see their pensions drastically reduced. What the court's decision has done is change the rules of the game. The only way for other airlines to compete now isn't just to operate more efficiently but to have the government pick up more of their costs. It is expected that Delta Airlines will be the next to try. This apparently is part of the new form of Bush capitalism, involving the nationalization of private liabilities. The bonds of GM and Ford, once bastions of American capitalism, have been downgraded to junk status, their future viability weighed down by their health and retirement obligations to retirees. Is it only a matter of time before they too turn to the government? As company after company has passed off its liabilities to the government, the assets of the Pension Benefit Guaranty Corp., which is supposed to protect retirees, have been wiped out. As of September, it had a deficit of $23 billion. This number is more solid than the problems being projected for Social Security. Social Security's difficulties won't show up for years, if at all. If the economy grows as robustly as the Bush administration predicted when it asked for tax cuts for the wealthy, and if immigration as a percentage of the population remains as strong as it has been, the higher Social Security revenues will mean that the system's problems will take care of themselves, at least for the next 75 years. The problems in the private sector are, in many cases, a combination of bad accounting, greed and lax government regulation that allowed corporations not only to put insufficient pension funds aside in the first place but to raid corporate pension funds they claimed were over-funded. The parallel to what has occurred on the public side is uncanny. A combination of bad accounting and political greed allowed the administration to claim that huge surpluses justified a huge tax cut. The accounting was a mirage; the surpluses soon disappeared, and fiscal solvency of the United States was undermined. If but a fraction of the money spent on the tax cuts had been devoted to Social Security, the fiscal solvency of the program would have been ensured for 75 years, even using conservative projections. America is the richest country in the world. We should have the ingenuity and means to design retirement programs that insures Americans against stock market volatility and inflation. Social Security is the only program that does this for most Americans. United's experience shows that private pension programs cannot be counted on. Private accounts would be subject to the vagaries of the market. And no private program would insulate against inflation. We should be focusing our attention on making our private system work better. Certainly we should do that before we begin Bush's risky path of beginning to dismantle our public one.

Subject: Reality to catch up with spin? From: Pete Weis To: All Date Posted: Mon, May 23, 2005 at 11:06:49 (EDT) Email Address: Not Provided Message: Globalist: China and the politics of a U.S. awash in debt Roger Cohen SATURDAY, MAY 21, 2005 NEW YORK Perhaps the only working class that China's Communist president, Hu Jintao, is still assisting is the American. I am not referring to the flood of cheap Chinese products that are keeping prices down, although that helps the average household. I refer to Hu's policy of using what is widely regarded as an undervalued Chinese yuan to buy United States Treasury securities and so help keep American interest rates down. The United States is awash in debt. Median household debt has risen to more than $100,000 from less than $60,000 in 1990 even as median incomes have increased only slightly. Much of the debt is held by workers ramping up their loans on one credit card after another, or obtaining dubious mortgages in a bid to secure some fraction of the heady lifestyle of an upper class that keeps getting richer. As Bob Davis of The Wall Street Journal pointed out in a recent article, the amount owed by U.S. households with at least one credit card rose to $9,205 in 2003, an increase of almost 25 percent from five years earlier. This increase has occurred as the gap between rich and poor has continued to widen and the visibility of coveted luxury goods on television and the Internet has continued to grow. Some laud the democratization of credit, seeing its availability to wider swaths of the American population as broadening opportunity; some criticize it as the ruthless seduction by financial institutions of working people who will one day face bankruptcy because they will be unable to pay credit-card bills and mortgages. But this much is clear: The spread of debt is one of the more significant social phenomena in the United States today, allowing the less well-off to spend more than they have and so assuage feelings of being left behind by the conspicuous rich. As long as interest rates do not rise steeply, this social process will continue to function. Hence Hu's heft on Main Street. But what are the politics of debt? You might be forgiven for thinking that rank-and-file Americans seeing their wages eroded by international competition as executive compensation rises, and facing burgeoning credit-card bills, would be inclined to vote for the Democratic Party, which has traditionally represented the have-nots. But of course you'd be wrong. Perhaps the single most significant U.S. political phenomenon of the past two decades has been the process that has seen working-class and middle-class Americans with constant or declining incomes identify more with God, the armed forces and the Republican Party than with the Democrats. They have tended, with the conspicuous exception of African-Americans, to be less moved by the strain on their finances than by three other 'Fs' - faith, family and freedom - as successfully promoted by Republicans. Thomas Frank, the author and political analyst, calls these average working people who seem to be voting against economic logic 'backlash conservatives.' In an article in the New York Review of Books, Frank commented: 'The backlash narrative is more powerful than mere facts. According to its central mythology, conservatives are always hardworking patriots who love their country and are persecuted for it, while liberals, who are either high-born weaklings or eggheads hypnotized by some fancy idea, are always ready to sell their nation out.' This narrative, in which the defining characteristic of liberalism becomes what Frank calls 'deracinated upper-classness,' has proved effective. It was precisely as a 'high-born weakling' that Karl Rove, the brilliant political strategist of President George Bush, portrayed the Democratic candidate John Kerry. Bush carried the white working-class vote by a clear margin. So America today presents the picture of a country with wide swaths of its citizens drifting economically, using ever-increasing debt as a means to cushion the blow, but convinced that the Democratic Party has parted company with them by embracing values - same-sex marriage, abortion, secularism - that are unacceptable, not only in their eyes, but also in God's. In this vision of things, it does not matter that Bush spends his time tightening bankruptcy laws to favor the very credit-card companies that are offering loans that may prove unpayable. It matters that Bush is seen as rooted, patriotic, a real man, and, for some, a divine agent in the White House. The Republicans' success in purveying this message is striking. But there is nothing very new in people confronted by economic difficulties turning to God, patriotism and the armed forces. Militant American nationalism - the kind that dismisses most Europeans as wimps, the United Nations as a fatuous talk-shop and all liberals as idiots - is suffused with a pumped-up, feel-good factor common to all nationalisms. Its social roots are probably not that different, either. Which brings us back to Hu. Could the Chinese leader do what the Democrats have failed to do - get more ordinary Americans to focus squarely on their economic situation and conclude that it may be better to vote for a party that might just act in their interests? The U.S. Treasury, alarmed at those spiraling Chinese imports, and under growing protectionist pressure, has now urged Hu to revalue the yuan. If Hu obliges, those U.S. Treasury securities might well look less attractive because, measured in a stronger yuan, their value would decline. If China then reduces its purchases of Treasury bills, and other Asian central banks follow suit, one thing is certain: Interest rates will rise and Joe Six-Pack, from Kansas to Nebraska, will be hurting a lot more when credit-card bills arrive. If the pain is sharp enough, a political alternative - the Democrats - may look more attractive. We live in a wondrous world. It could just be that a Chinese Communist, leading a society hell-bent on capitalism, and prodded by a Republican administration, ends up helping what still passes for the left in America by driving the economic reality of personal debt home to the point where 'moral values' become secondary.

Subject: Re: Reality to catch up with spin? From: Terri To: Pete Weis Date Posted: Mon, May 23, 2005 at 11:47:36 (EDT) Email Address: Not Provided Message: http://www.iht.com/articles/2005/05/20/news/globalist.php Globalist: China and the politics of a U.S. awash in debt Roger Cohen - International Herald Tribune Here is the link....

Subject: Marriage, Money and Class From: Emma To: All Date Posted: Mon, May 23, 2005 at 11:02:55 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/23/opinion/l23class.html Marriage, Money and Class (5 Letters) To the Editor: Re 'A Marriage of Unequals' ('Class Matters' series, front page, May 19): I was raised in a working-class home and taught to treat all people with respect. Having gone to Yale and Stanford, I have 'jumped class,' so to speak. My favorite class story happened in business school when small groups of three were asked to guess one another's least-known attribute. When we stymied each other, I confessed that my parents were factory workers. To my amazement, the second person burst into a smile and said, 'My dad is a garbage man.' The two of us thought it was very amusing, but not our third member. She, obviously of higher class, looked at us strangely and said, 'Aren't you ashamed?' To this day I wish I had shot back that at least we knew that where we were was based on our own talents and not on our parents' money and social standing. Rich people, poor people, sometimes they forget they are all humans and not labels. Nancy C. Langwiser Wellesley, Mass., May 19, 2005 • To the Editor: My parents recently celebrated their 54th wedding anniversary. My mother has a doctorate in social work; my father had to drop out of high school during the Depression. My mother came from a wealthy family of doctors; my father's parents were poor Russian immigrants. What has kept their marriage strong is a deep commitment to the same political ideals that transcends their class differences. And for us, their children, it has been a very interesting household to grow up in. Laurie R. Goldstein New York, May 19, 2005 • To the Editor: While different cultures can and often do create a problem in a marriage, and money plays its role, the core of the problem is who has the money. In our society, it is most often that the man has the money; he is the provider, and inevitably uses that power. Everyone is happy that the woman has made 'a good marriage.' No problem. In your article, with the wife having the money, and the power, it seems to me that the problem is more of gender than of money. For a wife to be the rich one, or even to earn more money than her husband, is a threat to the American male, who has not yet digested the awesome concept of power-sharing and a woman's earning power. It's the gender, ladies and gentlemen, not the money. Hila Colman Bridgewater, Conn., May 19, 2005 • To the Editor: I read with great interest your article about people of different economic classes marrying, as I, too, 'married up.' When I met my future husband, who lived quite modestly, he mentioned that his parents drove used cars. I envisioned a Dodge Dart and a Ford Pinto. Imagine my surprise when I visited them for the first time and saw a Rolls-Royce and a Mercedes convertible parked in their garage! I always chuckle when I remember that introduction to my future in-laws, who turned out to be the warmest couple I know. Ann Sturman Westlake Village, Calif., May 19, 2005 • To the Editor: In our society, we have different classes, cultures, religions, races, sexes and ethnicities. We can celebrate these differences or we can use them as barriers to keep us apart. Some of us mix smoothly and some choose to segregate. At worst, we can respond to fear, or at best, we can grow and learn together. The choice is ours. Jerry Frankel Plano, Tex., May 19, 2005

Subject: Indigo Bunting From: Emma To: All Date Posted: Sun, May 22, 2005 at 22:37:46 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=3252&u=178|303|... Indigo Bunting New York City--Central Park, The Ravine.

Subject: Re: Indigo Bunting From: Terri To: Emma Date Posted: Mon, May 23, 2005 at 10:00:48 (EDT) Email Address: Not Provided Message: I thought this was about baseball.

Subject: Paul Krugman From: Emma To: All Date Posted: Sun, May 22, 2005 at 19:47:06 (EDT) Email Address: Not Provided Message: Economics is really political economics, no matter are wish that it be otherwise. Paul Krugman is honest and open and courageous through times when we can be too timid. Also, the writing is a wonder of clarity. Even when we do not agree with such a thinker, we gain in the necessary argument.

Subject: So You Want to Be a Venture Capitalist From: Emma To: All Date Posted: Sun, May 22, 2005 at 18:56:41 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/22/business/yourmoney/22venture.html?ei=5070&en=f7dd8609844c2ded&ex=1116907200&pagewanted=all So You Want to Be a Venture Capitalist By GARY RIVLIN Menlo Park, Calif. BY all rights Stewart Alsop should have been a terrific venture capitalist. So why did Mr. Alsop, long considered a cyber-prophet among technology leaders, wash out in a profession in which he seemed predestined to succeed? In recent months, as venture capital firms have announced the formation of new investment funds, a hot topic among the Silicon Valley cognoscenti has been the exodus of 'tourist V.C.'s,' as people from nonfinancial backgrounds are known here. Some have left the field because they did not pick enough winners; others have gone on to pursue different projects. Whatever the reason, there are hundreds fewer venture capitalists around today than just two years ago. The business of financing start-ups, it turns out, may not be as easy as it seems. 'There are Darwinian characteristics to venture capital,' said C. Richard Kramlich, a founding partner at New Enterprise Associates, a top Valley firm that hired Mr. Alsop in 1996. 'Below the surface there's a huge amount of turnover.' At first Mr. Alsop seemed destined for venture capital greatness. But for him and others who made the leap into venture capital in the second half of the 1990's, the experience proved humbling. A technology journalist dating back to 1983, Mr. Alsop was the founder of Agenda, an invitation-only computer industry conference that drew the likes of Microsoft's Bill Gates. Part of the appeal was that Mr. Alsop had a talent for spotting promising technologies and undiscovered start-ups before others. But Mr. Alsop and New Enterprise Associates parted ways in December. Mr. Alsop said he left because he felt most comfortable working with nascent technology companies, and, increasingly, N.E.A. has been broadening its focus well beyond investing in very small start-ups. He described his own track record over eight years as good but not great. But Mr. Kramlich, who has worked as a venture capitalist since 1969, put it more harshly. The firm, it seemed, had simply run out of patience with Mr. Alsop, as it did with others who were not seen as pulling their weight. N.E.A. has raised a pair of billion-dollar-plus funds over the last five years, sums high enough to have raised the stakes of the game. 'We can't really have people learning on the job anymore,' Mr. Kramlich said. Two-thirds of the partners who were at N.E.A. in 1997 are no longer at the firm, he said, and then cited an internal study that went a long way in explaining why: the surviving third accounted for 85 percent of the firm's profit. Turnover is the story at many well-known venture firms. Consider Kleiner Perkins Caufield & Byers, widely viewed as one of the two premier venture outfits in Silicon Valley. In February 2004, Kleiner began a $400 million fund, but it isn't managed by any of the half dozen or so of the partners who worked for the firm in the late 90's; they had either left the firm or been relegated to secondary roles. Kleiner has hired three new managing partners since the start of the year. And when Benchmark Capital closed its own $400 million fund last June, the firm announced that David Beirne, who had helped found Benchmark in 1995, was no longer a full partner. 'Sometimes it's true that a partner left a firm over strategic differences or whatever they say, but that's the exception rather than the rule,' said Steve Dow, a venture capitalist with Sevin Rosen. More typically, he said, it's 'because they didn't have a good enough sense of smell about a deal.' Mr. Alsop and Mr. Beirne follow many other illustrious names out of major venture firms. Mitchell D. Kapor, the founder of Lotus Development, whose 1-2-3 spreadsheet software made Lotus one of the early giants of software, should have been a natural as a venture capitalist. Mr. Kapor had enormous success investing for himself in barely-formed start-ups like RealNetworks and UUNet Technologies, both of which provided him with staggering payouts. Yet he did not prove to be a star the years he worked as a professional venture capitalist. 'The fact that it's someone else's money you're investing, and that you're investing as part of a partnership, that was more different than I thought it would be,' said Mr. Kapor, who went to work in 1999 for Accel Partners, another top venture house in Silicon Valley. 'I later found out that everybody who makes the transition like I did says that.' Mr. Kapor failed to choose a single company that made him, his partners and their investors any money. He confesses he was 0-for-5 in the investments he made during his three years at Accel. 'Most of us learned the hard way that venture investing is best left to the professionals,' said Marc Andreessen, the co-founder of Netscape Communications. Shortly after America Online paid $4 billion to buy Netscape, Mr. Andreessen helped bankroll a venture firm called 12 Entrepreneuring, a short-lived partnership forged in early 2000 by Benchmark and a pair of successful Internet entrepreneurs, Halsey M. Minor and Eric Greenberg. But 12 Entrepreneuring ceased operations only 18 months after it started, and the partners, including Mr. Andreessen, lost nearly two-thirds of the money they had invested. 'I think what a lot of these guys learned, some the hard way, is that you're a natural athlete or you're not,' said Sanford Robertson, the co-founder and former chairman of the investment bank Robertson, Stephens & Company, who has been investing in venture funds for more than 20 years. 'Some can do it, and some can't, and like with athletes there's no way of telling until they take the field.' At the end of the 90's, it seemed everyone in Silicon Valley wanted to become a venture capitalist (except those who wanted to be entrepreneurs funded by venture capitalists). As the ranks of venture capitalists more than doubled, according to the National Venture Capital Association, from less than 5,000 in 1995 to nearly 10,000 by 2001, firms started hiring people from outside traditional fields like finance or operations. Suddenly many lawyers, entrepreneurs, journalists and executive recruiters were trying their hand at playing venture capitalist - just as today any number of investment bankers, financial analysts and others seem to be starting their own hedge funds. IT'S easy to understand why so many joined the swelling ranks of venture capitalists. A general partner at a top-tier firm typically earns at least $1 million in salary. But the real payoff is what venture capitalists call 'the carry' - the 20 to 30 percent of the profits they share among themselves before disbursing the rest to investors. An informal survey of venture capitalists suggested that a partner working at a top-tier firm in the 90's could pocket roughly $50 million over the life of a single fund - with venture firms typically raising a new fund every few years. Beyond the vast financial rewards, there are the thrills. A venture capitalist is not unlike a movie producer auditioning tomorrow's stars. 'Being a venture capitalist was viewed as a very exciting, top of the feeding chain sort of thing,' said Scott Dettmer, a founding partner at the Silicon Valley law firm Gunderson Dettmer, who has been providing legal advice to venture capitalists since the 1980's. 'But what I think a lot of people learned is that it's not as much fun or as easy as it might have looked from the outside.' Certainly, the early years are often painful. One of the industry's more legendary investors, John Doerr at Kleiner Perkins (his hits include Google, Amazon, Netscape and Sun Microsystems), used to say that training a new venture capitalist was not unlike preparing a fighter pilot for battle: it takes 'probably six to eight years and you should be prepared for losses of about $20 million. 'Of course, while we take risk, we work like hell to avoid crashes,' Mr. Doerr said. By that standard, Mr. Alsop was successful at N.E.A. He didn't lose money in his eight years, and, by his calculations, earned the partnership a 100 percent return on the investments he oversaw. Shortly after his arrival, he persuaded his partners to pay $1.7 million for an ownership stake in a software start-up called Connectify, which was purchased by Kana Communications. That earned the partnership 22 times its money. He could also take some credit for the success of TiVo, the digital video recorder company that went public in September 1999. Mr. Alsop didn't bring that deal to N.E.A., but he worked closely with the company founders as a member of TiVo's board of directors. He said that the TiVo deal had earned N.E.A. and its investors 11 times their investment. 'I think I've done very well as a venture capitalist, but I'm not in the god category,' Mr. Alsop said. He defines a venture god as someone who has made $100 million to $500 million on a single investment. His list of industry deities includes Mr. Doerr, Mr. Kramlich and Michael Moritz at Sequoia Capital, who was an early investor in Google and Yahoo. Mr. Moritz seems to prove the point that there is no obvious résumé for the perfect venture capitalist. Prior to joining Sequoia in 1986, Mr. Moritz was a business journalist and a writer for Time magazine, though one with an M.B.A. Mr. Kramlich, who has a background in finance, said: 'Venture capital doesn't necessarily take a lot of technical talent. 'I mean, it doesn't hurt, but it's more about people skills and the ability to assess whether there's a market for something.' Certainly Mr. Beirne, formerly of Benchmark, has people skills. Before joining Benchmark in 1995, he had a stellar reputation as an executive recruiter able to persuade the most reluctant candidate to switch jobs. Yet how he performed in his nine years as a general partner at Benchmark depends on whom one asks. MR. BEIRNE acknowledged that many in the clubby V.C. world may think he left because of a mediocre track record, but he disputes that perception. 'I have been personally responsible for returning a billion dollars' to investors, he wrote in an e-mail message. He decided to leave the partnership for a 'personal reason related to one of my children' and 'no other reason.' Yet apparently for some, once a venture capitalist, always a venture capitalist. Mr. Alsop is exploring the possibility of raising a fund for new start-ups. 'I feel at this point I'm very good at this,' he said. It's only a matter of time, he said, before he scores what he describes as a 'godlike hit.'

Subject: Re: So You Want to Be a Venture Capitalist From: Setanta To: Emma Date Posted: Mon, May 23, 2005 at 07:38:43 (EDT) Email Address: Not Provided Message: what a way to make your bread. anyone out there feel confident enough to gamble with $500mil to $1bn of investers money? i wouldn't and would sweat blood at the thought of that much responsibility on my shoulders every day for years! i think i'll stick to banking regulation!

Subject: Where are the Birds? From: Emma To: Setanta Date Posted: Mon, May 23, 2005 at 12:02:32 (EDT) Email Address: Not Provided Message: We need some writing on the birds of Ireland :)

Subject: Re: So You Want to Be a Venture Capitalist From: Terri To: Setanta Date Posted: Mon, May 23, 2005 at 10:00:16 (EDT) Email Address: Not Provided Message: You would be terrific at either.

Subject: BMW and a High Design Assembly Line From: Emma To: All Date Posted: Sun, May 22, 2005 at 18:49:08 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/22/arts/design/22ouro.html?ei=5070&en=ffd66c6045c6ccb0&ex=1116907200&pagewanted=all At BMW, the Auto Assembly Line Meets High Design By NICOLAI OUROUSSOFF Leipzig, Germany OF all of Modernism's sacred cows, few have been more revered - or abused - than the assembly line. At the height of the Modernist movement, the crisp, functional efficiency of this factory staple was a template for everything from housing projects to utopian visions of the metropolis. The new central building at the BMW plant here, designed by the London architect Zaha Hadid, is an antidote to just that sort of mind-numbing, machine-age uniformity. A vast, boomerang-shaped industrial shed with rows of cars streaming by in midair on curving tracks, it is less a model of efficiency than a finely oiled machine for voyeuristic pleasure. In recent years, German automakers have seized on high-profile architecture as a way of bolstering their images. Coop Himmelb(l)au, based in Vienna, is designing a futuristic blend of showrooms, restaurants and shops for a BMW delivery center in Munich; in Stuttgart, the Amsterdam firm UN Studio has designed the Mercedes-Benz Museum, whose interweaving ramps echo the spiral of Frank Lloyd Wright's Guggenheim in Manhattan. Both are scheduled for completion next spring. Yet beyond the obvious marketing value, the Leipzig assembly plant is a sophisticated attempt at social engineering. By creating a fluid work environment in which management, engineers, autoworkers and cars seem intertwined, Ms. Hadid is seeking to break down the hierarchies that have defined the traditional factory. In this world, information flows freely and man and machine live in blissful harmony. And while the sight of glistening black and silver coupes gliding through the air may seem a sci-fi horror to some, it is sure to enchant car fanatics. In many ways, the plant's site on the city's outskirts harks back to old-style Modernism. Even before Ms. Hadid was hired, a team of bulldozers was leveling the area, once farmland, to make room for a vast factory complex - an approach more in keeping with the tabula rasa planning of the postwar years than with the eco-friendly approaches of today. The three main factory buildings - body shop, paint shop and assembly plant - are housed in big prefabricated corrugated metal sheds, generic staples of the industrial landscape. But Ms. Hadid subverts the sequential order of the manufacturing process by having each car loop back through her central building, where autoworkers and engineers can survey their work and, when needed, reconfigure the assembly process. This is ideal territory for this architect. Ever since her student days in the 1970's at the Architectural Association in London, she has been drawn to the vast scale of infrastructure: industrial dams, ribbons of highways, gargantuan urban high-rises. In her 1983 proposal for the Peak, an unbuilt country club in Hong Kong that made her an instant cult figure in architectural circles, buildings resembling big concrete beams looked as if they were about to splinter off into space. Here, all of that feverish energy has been packed inside. Like the surrounding factory buildings, the central structure is wrapped in a taut corrugated-metal skin, but with the corners slightly curved to give it a sleek, contoured look. A bridgelike office structure splits off from the central building and joins two of the factory sheds, framing a small entry courtyard. Supported on massive concrete columns shaped like fins, the office area is engineered like a segment of elevated freeway. But the most dynamic structure here has yet to be built: a low, sloping showroom that will one day be the entrance point for the complex. Arriving from the Autobahn, visitors will slow down to turn past the showroom, then hurtle across a sprawling parking lot set diagonally to the main building. Once they park, they must slip under the office bridge to reach the main entrance, as if they were ricocheting between the buildings. Inside the central building, the first thing that strikes you is the immense scale. Offices are organized as a series of concrete terraces that seem to cascade from one end. A towering stairway sweeps up to a balcony of offices along one side of the room; on the other side, the terraces are linked by a long, narrow ramp. Evoking the silent spacecraft of Stanley Kubrick's '2001,' rows of car bodies stream by on computerized tracks. Because every car is routed through here on its way from the body shop to the paint shop or final assembly plant, you witness them in all their various stages. At certain points, the cars stop and revolve on enormous turntables before heading off in a new direction. The movements are hypnotic, suggesting a mechanical ballet. During shift changes, the sight of hundreds of autoworkers flowing through the corridors adds to the sense of choreography. In traditional automobile plants, of course, car assembly was organized in a linear sequence, with rows of workers and machinery methodically assembling the cars on a factory line, while engineers tinkered away in offices somewhere across town. Together they churned out an endlessly repetitive sequence of cars, one much like the other. Today, a luxury car company like BMW will produce thousands of highly customized cars each week, a process that demands lots of tinkering and intervention. When a new step needs to be added to production, the line can be adjusted with minimal interruption. By channeling all of the work through the central building, Ms. Hadid creates a seamless environment, smoothing that process. The terraces create a kind of loose-knit social hierarchy, breaking down the staff into discrete tiers while allowing engineers to observe or consult with one another without having to pick up a phone. Engineers and workers are in constant contact, too, mingling in the corridors and the cafeteria. Yet the overarching agenda is to keep the eye focused on the machines, with everyone involved in a constant process of fine-tuning. From their office terraces, engineers can step out onto glass-enclosed viewing platforms to watch the huge, swiveling robotic arms that weld the car frames together. Here and there, cars are periodically pulled off the line and examined for defects. And the mechanized tracks converge above the upper-level cafeteria, so that even workers on lunch break are constantly aware of their presence. Ms. Hadid is not the first to approach the automobile plant as part of a broader social experiment. Henry Ford is said to have monitored his assembly line with a stopwatch, seeking to foster worker productivity. Nor is she the first to imbue a factory with sex appeal. In the 1920's in Turin, Italy, Giacomo Mattè-Trucco famously topped the Lingotto Fiat factory with a dynamic rooftop test track. The track summed up the Futurists' obsession with speed, their dream of a society in a state of perpetual motion. Today, such experiments inevitably evoke the dark side of machine worship: the link between Futurism and fascism, for example, and their tendency to reduce human beings to interchangeable parts in a vast, grinding machine. Ms. Hadid is sensitive to these issues. Visually, her early work has all the dynamic energy of a Futurist painting by Boccioni or Balla, but its forms also reflect a desire to reverse Modernism's dehumanizing effects. The patterns of movement in her architecture are about freedom rather than rigid order. Here Ms. Hadid takes on this Modernist past directly and gives it a new twist. The free flow of information replaces the monotony of the assembly line; individual needs and tastes rule over bland repetition; and machines are at the service of man, not vice versa. It's unclear where this vision will lead us, but for now, it's pretty seductive.

Subject: Decoding Health Insurance From: Emma To: All Date Posted: Sun, May 22, 2005 at 18:43:55 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/22/opinion/22cook.html?ei=5070&en=77a9f1553edb10b1&ex=1116907200&pagewanted=all Decoding Health Insurance By ROBIN COOK Boston NEARLY five years ago, President Bill Clinton had an all-star gathering at the White House to announce the completion of the first draft of the human genome's approximately 3.2 billion base pairs. Speaking to an audience that included eminent scientists like Dr. James Watson, who helped discover DNA, Mr. Clinton pronounced that 'today we are learning the language in which God created life.' Prime Minister Tony Blair of Britain chimed in via satellite, 'For most of us, today's developments are too awesome to comprehend.' Turns out that Mr. Blair was right, although not quite in the way that he intended. Despite the high-flying talk and the abundant news media coverage of the announcement, the public greeted the event with vague interest, a touch of bewilderment, varying degrees of ennui - and then quickly forgot about it. This general indifference to one of science's landmark achievements has persisted even as the science and technology involved have yielded some remarkable discoveries. We now know, for example, that a vast majority of our genome is composed of repetitive nonsense sequences, and that instead of humans having the 100,000-plus genes previously predicted, we have somewhere in the neighborhood of 25,000, many of which we share with all other living things, a fact that anchors us firmly in the process of evolution (whether a creative intelligence was involved or not). Of course, people can perhaps be forgiven for not wanting to recognize that they don't have many more genes than round worms or fruit flies - a blow to humanity's ego that's about as powerful as Copernicus's discovery that the earth revolved around the sun instead of vice versa. As a doctor schooled to some degree in science, I believed (and still do) that decoding the human genome might be the most important milestone in the history of medical science. To borrow Mr. Clinton's metaphor, the full genome offers researchers the sequence of all the letters of the human book of life, a monumental resource despite our imperfect understanding of the book's overarching, mind-boggling complexity. As decoding gathers speed, it promises to change just about everything we know about medicine in the form of understanding, prediction, prevention, diagnosis and the treatment of disease. And in so doing, it also offers us a remarkable opportunity to solve the huge and nettlesome problem of paying for health care in the United States. Public skepticism of such grandiose statements is understandable. After all, you might say: 'Where are all the touted breakthroughs, the miracle drugs and diagnostic tests, predicted five years ago? Finding out that humans have about the same number and some of the same genes as a worm may be interesting to somebody, but it's hardly a health care revolution, much less worth the more than $3 billion that have so far been spent on decoding.' Well, the drugs are not here yet, although they are on the horizon. But that doesn't diminish the broader fact that the rapidly developing fields of genomics and bioinformatics hold enormous promise. In simple terms, genomics is the study of the flow of information in a cell orchestrated by the genome, while bioinformatics is the application of computers to make sense of the enormous amount of data coming from genomics. Knowledge of the genome has greatly improved our ability to predict an individual's predilection for a host of diseases. Thousands upon thousands of markers have been identified throughout the genome and linked to particular mutated, deleterious genes associated with specific medical problems. The presence of these markers can be determined by placing a single drop of blood onto a particular type of slide called a microarray. Microarrays, in turn, are read automatically by laser scanners and the results, thanks to bioinformatics, can be analyzed instantly by computers armed with appropriate software and statistical data. The importance of a rapid increase in prognostic ability is underlined by the growing understanding that every disease has a greater or lesser genetic component. Patients can now avail themselves of preventive measures or treatment even before symptoms occur. But there is a down side. First of all, we can predict more and more diseases that are associated with progressive disability and death and which have, as of yet, no treatment. Finding a marker linked to such an illness is thus the cruel equivalent of an extended death sentence. Understandably many people would not want such a test and would hardly classify having one as a positive health care breakthrough. Another, and possibly more important, negative consequence of this new ability to predict illness is the potential for discrimination in one form or another if confidential health information is released. Unfortunately the chances of such a breach of privacy occurring, despite lip service by politicians to prevent it legislatively, are probably inevitable. Not only is microarray technology easily accessible, but for-profit private insurance companies have strong incentives to use it to protect their bottom lines by denying service, claims or even coverage. It is precisely this danger, however, that may lead to a great breakthrough: the inevitable movement to universal health care. In this dawning era of genomic medicine, the result may be that the concept of private health insurance, which is based on actuarially pooling risk within specified, fragmented groups, will become obsolete since risk cannot be pooled if it can be determined for individual policyholders. Genetically determined predilection for disease will become the modern equivalent of the 'pre-existing condition' that private insurers have stringently avoided. As a doctor I have always been against health insurance except for catastrophic care and for the very poor. It has been my experience that the doctor-patient relationship is the most personal and rewarding for both the patient and the doctor when a clear, direct fiduciary relationship exists. In such a circumstance, both individuals value the encounter more, which invariably leads to more time, more attention to potentially important details, and a higher level of patient compliance and satisfaction - all of which invariably result in a better outcome. But with the end of pooling risk within defined groups, there is only one solution to the problem of paying for health care in the United States: to pool risk for the entire nation. (Under the rubric of health care I mean a comprehensive package that includes preventive care, acute care and catastrophic care.) Although I never thought I'd advocate a government-sponsored, obviously non-profit, tax-supported, universal access, single-payer plan, I've changed my mind: the sooner we move to such a system, the better off we will be. Only with universal health care will we be able to pool risk for the entire country and share what nature has dealt us; only then will there be no motivation for anyone or any organization to ferret out an individual's confidential, genetic makeup. There are plenty of compelling arguments for a national, single-payer, universal access plan - like every developed industrialized country has one. But those arguments have so far seemed insufficient. And none of them is nearly as cogent and persuasive as the growing impact of genomics and bioinformatics. Of course, far too many wealthy stakeholders in the current system (thanks to 15 percent of our gross domestic product being thrown at health care) are eager to lobby members of Congress to keep things as they are. The basic challenge is to blast the public and their elected representatives out of their shared apathy toward what the decipherment of the human genome has brought. The day after the White House ceremony in 2000, one letter-writer to this newspaper expressed the wish that the United States would devote the same amount of enthusiasm and resources that it had expended on the human genome project toward the goal of 'assuring access to basic medical care for all Americans.' If the money spent on the genome ends up achieving that health care goal, that wish may yet come true.

Subject: Coal Plants Could Be Much Cleaner From: Emma To: All Date Posted: Sun, May 22, 2005 at 16:57:28 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/22/business/yourmoney/22coal.html?pagewanted=all Dirty Secret: Coal Plants Could Be Much Cleaner By KENNETH J. STIER ALMOST a decade ago, Tampa Electric opened an innovative power plant that turned coal, the most abundant but the dirtiest fossil fuel, into a relatively clean gas, which it burns to generate electricity. Not only did the plant emit significantly less pollution than a conventional coal-fired power plant, but it was also 10 percent more efficient. Hazel R. O'Leary, the secretary of energy at the time, went to the plant, situated between Tampa and Orlando, and praised it for ushering in a 'new era for clean energy from coal.' Federal officials still refer to the plant's 'integrated gasification combined cycle' process as a 'core technology' for the future, especially because of its ability - eventually - to all but eliminate the greenhouse gases linked to global warming. Since that plant opened, however, not a single similar plant has been built in the United States. Abundant supplies of natural gas - a bit cleaner and, until recently, a lot cheaper - stood in the way. But even now, with gas prices following oil prices into the stratosphere and power companies turning back to coal, most new plants - about nine out of 10 on the drawing board - will not use integrated gasification combined-cycle technology. The reason is fairly simple. A plant with the low-pollution, high-efficiency technology demonstrated at the Tampa Electric plant is about 20 percent more expensive to build than a conventional plant that burns pulverized coal. This complicates financing, especially in deregulated markets, while elsewhere utilities must persuade regulators to set aside their customary standard of requiring utilities to use their lowest-cost alternatives. (A federal grant of $143 million covered about a fourth of the construction cost of the Tampa Electric plant, which was originally a demonstration project.) The technology's main long-term advantage - the ability to control greenhouse gas emissions - is not winning over many utilities because the country does not yet regulate those gases. That could be a problem for future national policy, critics say, because the plants being planned today will have a lifetime of a half-century or more. 'It's a very frightening specter that we are going to essentially lock down our carbon emissions for the next 50 years before we have another chance to think about it again,' said Jason S. Grumet, the executive director of the National Commission on Energy Policy. The commission, an independent, bipartisan advisory body, has recommended that the federal government spend an additional $4 billion over 10 years to speed the power industry's acceptance of the technology. In a recent report, the commission concluded that 'the future of coal and the success of greenhouse gas mitigation policies may well hinge to a large extent on whether this technology can be successfully commercialized and deployed over the next 20 years.' Mr. Grumet was more succinct. Integrated gasification combined cycle technology, combined with the sequestration of carbon stripped out in the process, 'is as close to a silver bullet as you're ever going to see, ' he said. Until Congress regulates carbon emissions - a move that many in the industry consider inevitable, but unlikely soon - gasification technology will catch on only as its costs gradually come down. Edward Lowe, general manager of gasification for GE Energy, a division of General Electric that works with Bechtel to build integrated gasification combined-cycle plants, said that would happen as more plants were built. The premium should disappear entirely after the first dozen or so are completed, he added. Even now, Mr. Lowe said, the technology offers operational cost savings that offset some of the higher construction costs. And if Congress eventually does limit carbon emissions, as many utility executives say they expect it to do, the technology's operational advantages could make it a bargain. James E. Rogers, the chief executive of Cinergy, a heavily coal-dependent Midwestern utility, is one of the technology's biggest industry supporters. 'I'm making a bet on gasification,' he said, because he assumes a carbon-constrained world is inevitable. 'I don't see any other way forward,' he said. The operating savings of such plants start with more efficient combustion: they make use of at least 15 percent more of the energy released by burning coal than conventional plants do, so less fuel is needed. The plants also need about 40 percent less water than conventional coal plants, a significant consideration in arid Western states. But for some people, including Mr. Rogers and other utility leaders who anticipate stricter pollution limits, the primary virtue of integrated gasification combined-cycle plants is their ability to chemically strip pollutants from gasified coal more efficiently and cost-effectively, before it is burned, rather than trying to filter it out of exhaust. Proponents say that half of coal's pollutants - including sulfur dioxide and nitrogen oxides, which contribute to acid rain and smog - can be chemically stripped out before combustion. So can about 95 percent of the mercury in coal, at about a tenth the cost of trying to scrub it from exhaust gases racing up a smokestack. The biggest long-term draw for gasification technology is its ability to capture carbon before combustion. If greenhouse-gas limits are enacted, that job will be much harder and more expensive to do with conventional coal-fired plants. Mr. Lowe, the G.E. executive, estimated that capturing carbon would add about 25 percent to the cost of electricity from a combined-cycle plant burning gasified coal, but that it would add 70 percent to the price of power from conventional plants. Gasification technology, although new to the power sector, has been widely used in the chemical industry for decades, and the general manager of the gasification plant run by Tampa Electric, Mark Hornick, said it was not difficult to train his employees to run the plant. Tampa Electric is the principal subsidiary of TECO Energy of Tampa. Disposing of the carbon dioxide gas stripped out in the process, however, is another matter. Government laboratories have experimented with dissolving the gas in saline aquifers or pumping it into geologic formations under the sea. The petroleum industry has long injected carbon dioxide into oil fields to help push more crude to the surface. Refining and commercializing these techniques is a significant part of a $35 billion package of clean energy incentives that the National Commission on Energy Policy is recommending. The Senate considered some of those ideas in a big energy policy bill last week, but it is doubtful whether Congress will approve the funds to enact them because they are tied to regulating carbon emissions for the first time, something that many industry leaders and sympathetic lawmakers oppose. Still, the energy bill may have some incentives for industry to adopt gasification technology, and the Department of Energy will continue related efforts. These include FutureGen, a $950 million project to demonstrate gasification's full potential - not just for power plants but as a source of low-carbon liquid fuels for cars and trucks as well, and, further out, as a source of hydrogen fuel. REGARDLESS of the politics of carbon caps, the Energy Department has made it clear that it intends to push the development of integrated gasification combined-cycle technology. Last month, for example, Mark Maddox, a deputy assistant secretary, said at an industry gathering that the technology 'is needed in the mix - needed now.' Some industry leaders are skeptical, to say the least. 'We would not want to put all of our eggs in one basket as far as a single technology is concerned,' said William Fang, deputy counsel for the Edison Electric Institute, a trade association whose members, shareholder-owned utilities, account for three-quarters of the country's generating capacity. Besides, he added, many of his members think that mandatory carbon controls, in place in much of the world since the Kyoto Protocol came into force in February, can be kept at bay in the United States - possibly indefinitely. It's a risky strategy - for industry and for the climate. 'Coal-fired plants are big targets,' said Judi Greenwald of the Pew Center on Global Climate Change, 'and if we do get serious about climate change, they are going to be on the list of things to do quite early.'

Subject: China, the World's Capital From: Emma To: All Date Posted: Sun, May 22, 2005 at 16:21:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/22/opinion/22kristof.html?hp China, the World's Capital By NICHOLAS D. KRISTOF KAIFENG, China As this millennium dawns, New York City is the most important city in the world, the unofficial capital of planet Earth. But before we New Yorkers become too full of ourselves, it might be worthwhile to glance at dilapidated Kaifeng in central China. Kaifeng, an ancient city along the mud-clogged Yellow River, was by far the most important place in the world in 1000. And if you've never heard of it, that's a useful warning for Americans - as the Chinese headline above puts it, in a language of the future that many more Americans should start learning, 'glory is as ephemeral as smoke and clouds.' As the world's only superpower, America may look today as if global domination is an entitlement. But if you look back at the sweep of history, it's striking how fleeting supremacy is, particularly for individual cities. My vote for most important city in the world in the period leading up to 2000 B.C. would be Ur, Iraq. In 1500 B.C., perhaps Thebes, Egypt. There was no dominant player in 1000 B.C., though one could make a case for Sidon, Lebanon. In 500 B.C., it would be Persepolis, Persia; in the year 1, Rome; around A.D. 500, maybe Changan, China; in 1000, Kaifeng, China; in 1500, probably Florence, Italy; in 2000, New York City; and in 2500, probably none of the above. Today Kaifeng is grimy and poor, not even the provincial capital and so minor it lacks even an airport. Its sad state only underscores how fortunes change. In the 11th century, when it was the capital of Song Dynasty China, its population was more than one million. In contrast, London's population then was about 15,000. An ancient 17-foot painted scroll, now in the Palace Museum in Beijing, shows the bustle and prosperity of ancient Kaifeng. Hundreds of pedestrians jostle each other on the streets, camels carry merchandise in from the Silk Road, and teahouses and restaurants do a thriving business. Kaifeng's stature attracted people from all over the world, including hundreds of Jews. Even today, there are some people in Kaifeng who look like other Chinese but who consider themselves Jewish and do not eat pork. As I roamed the Kaifeng area, asking local people why such an international center had sunk so low, I encountered plenty of envy of New York. One man said he was arranging to be smuggled into the U.S. illegally, by paying a gang $25,000, but many local people insisted that China is on course to bounce back and recover its historic role as world leader. 'China is booming now,' said Wang Ruina, a young peasant woman on the outskirts of town. 'Give us a few decades and we'll catch up with the U.S., even pass it.' She's right. The U.S. has had the biggest economy in the world for more than a century, but most projections show that China will surpass us in about 15 years, as measured by purchasing power parity. So what can New York learn from a city like Kaifeng? One lesson is the importance of sustaining a technological edge and sound economic policies. Ancient China flourished partly because of pro-growth, pro-trade policies and technological innovations like curved iron plows, printing and paper money. But then China came to scorn trade and commerce, and per capita income stagnated for 600 years. A second lesson is the danger of hubris, for China concluded it had nothing to learn from the rest of the world - and that was the beginning of the end. I worry about the U.S. in both regards. Our economic management is so lax that we can't confront farm subsidies or long-term budget deficits. Our technology is strong, but American public schools are second-rate in math and science. And Americans' lack of interest in the world contrasts with the restlessness, drive and determination that are again pushing China to the forefront. Beside the Yellow River I met a 70-year-old peasant named Hao Wang, who had never gone to a day of school. He couldn't even write his name - and yet his progeny were different. 'Two of my grandsons are now in university,' he boasted, and then he started talking about the computer in his home. Thinking of Kaifeng should stimulate us to struggle to improve our high-tech edge, educational strengths and pro-growth policies. For if we rest on our laurels, even a city as great as New York may end up as Kaifeng-on-the-Hudson.

Subject: Re: China, the World's Capital From: Setanta To: Emma Date Posted: Mon, May 23, 2005 at 11:01:58 (EDT) Email Address: Not Provided Message: amazing parallels drawn in this article. i guarantee you that if america keeps neglecting education like it has for the past 5 years or so, the US will be passed by the majority of the world. a diet of OC and MTV Pimp my Ride will do nothing for american competitiveness. america needs to rediscover its drive and ambition. remember, america's victory (soft power crucially, not military)over the USSR in the 1980's was derived from work done in the 1950's and 1960's. i am glad i grew up in a world where global safety was guaranteed by the US. and most of the world is eternally grateful for the security the US provided. the thought of growing up in a world where the USSR, Nazi Germany, Arab Religous Totalitarianism or Chinese Socialism is the supreme superpower makes me shudder. we need the US; the torch of Liberty, Democracy and Justice, to succeed. we need to prove that the democratic capitalist model works and is the best. the world needs the US to pull up its socks!

Subject: On a Christian Mission to the Top From: Emma To: All Date Posted: Sun, May 22, 2005 at 14:26:15 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/22/national/class/EVANGELICALS-FINAL.html?pagewanted=all On a Christian Mission to the Top By LAURIE GOODSTEIN and DAVID D. KIRKPATRICK For a while last winter, Tim Havens, a recent graduate of Brown University and now an evangelical missionary there, had to lead his morning prayer group in a stairwell of the campus chapel. That was because workers were clattering in to remake the lower floor for a display of American Indian art, and a Buddhist student group was chanting in the small sanctuary upstairs. Like most of the Ivy League universities, Brown was founded by Protestant ministers as an expressly Christian college. But over the years it gradually shed its religious affiliation and became a secular institution, as did the other Ivies. In addition to Buddhists, the Brown chaplain's office now recognizes 'heathen/pagan' as a 'faith community.' But these days evangelical students like those in Mr. Havens's prayer group are becoming a conspicuous presence at Brown. Of a student body of 5,700, about 400 participate in one of three evangelical student groups - more than the number of active mainline Protestants, the campus chaplain says. And these students are in the vanguard of a larger social shift not just on campuses but also at golf resorts and in boardrooms; they are part of an expanding beachhead of evangelicals in the American elite. The growing power and influence of evangelical Christians is manifest everywhere these days, from the best-seller lists to the White House, but in fact their share of the general population has not changed much in half a century. Most pollsters agree that people who identify themselves as white evangelical Christians make up about a quarter of the population, just as they have for decades. What has changed is the class status of evangelicals. In 1929, the theologian H. Richard Niebuhr described born-again Christianity as the 'religion of the disinherited.' But over the last 40 years, evangelicals have pulled steadily closer in income and education to mainline Protestants in the historically affluent establishment denominations. In the process they have overturned the old social pecking order in which 'Episcopalian,' for example, was a code word for upper class, and 'fundamentalist' or 'evangelical' shorthand for lower. Evangelical Christians are now increasingly likely to be college graduates and in the top income brackets. Evangelical C.E.O.'s pray together on monthly conference calls, evangelical investment bankers study the Bible over lunch on Wall Street and deep-pocketed evangelical donors gather at golf courses for conferences restricted to those who give more than $200,000 annually to Christian causes. Their growing wealth and education help explain the new influence of evangelicals in American culture and politics. Their buying power fuels the booming market for Christian books, music and films. Their rising income has paid for construction of vast mega-churches in suburbs across the country. Their charitable contributions finance dozens of mission agencies, religious broadcasters and international service groups. On The Chronicle of Philanthropy's latest list of the 400 top charities, Campus Crusade for Christ, an evangelical student group, raised more from private donors than the Boy Scouts of America, the Public Broadcasting Service and Easter Seals. Now a few affluent evangelicals are directing their attention and money at some of the tallest citadels of the secular elite: Ivy League universities. Three years ago a group of evangelical Ivy League alumni formed the Christian Union, an organization intended to 'reclaim the Ivy League for Christ,' according to its fund-raising materials, and to 'shape the hearts and minds of many thousands who graduate from these schools and who become the elites in other American cultural institutions.' The Christian Union has bought and maintains new evangelical student centers at Brown, Princeton and Cornell, and has plans to establish a center on every Ivy League campus. In April, 450 students, alumni and supporters met in Princeton for an 'Ivy League Congress on Faith and Action.' A keynote speaker was Charles W. Colson, the born-again Watergate felon turned evangelical thinker. Matt Bennett, founder of the Christian Union, told the conference, 'I love these universities - Princeton and all the others, my alma mater, Cornell - but it really grieves me and really hurts me to think of where they are now.' The Christian Union's immediate goal, he said, was to recruit campus missionaries. 'What is happening now is good,' Mr. Bennett said, 'but it is like a finger in the dike of keeping back the flood of immorality.' And trends in the Ivy League today could shape the culture for decades to come, he said. 'So many leaders come out of these campuses. Seven of the nine Supreme Court justices are Ivy League grads; four of the seven Massachusetts Supreme Court justices; Christian ministry leaders; so many presidents, as you know; leaders of business - they are everywhere.' He added, 'If we are going to change the world, we have got, by God's power, to see these campuses radically changed.' An Outsider on Campus Mr. Havens, who graduated from Brown last year, is the kind of missionary the Christian Union hopes to enlist. An evangelical from what he calls a 'solidly middle class' family in the Midwest, he would have been an anomaly at Brown a couple of generations ago. He applied there, he said, out of a sense of 'nonconformity' and despite his mother's preference that he attend a Christian college. 'She just was nervous about, and rightfully so, what was going to happen to me freshman year,' Mr. Havens recalled. When he arrived at Brown, in Providence, R.I., Mr. Havens was astounded to find that the biggest campus social event of the fall was the annual SexPowerGod dance, sponsored by the Lesbian Gay Bisexual Transgender Queer Alliance and advertised with dining-hall displays depicting pairs of naked men or women. 'Why do they have to put God in the name?' he said. 'It seems kind of disrespectful.' Mr. Havens found himself a double outsider of sorts. In addition to being devoted to his faith, he was a scholarship student at a university where half the students can afford $45,000 in tuition and fees without recourse to financial aid and where, he said, many tend to 'spend money like water.' But his modest means did not stand out as much as his efforts to guard his morals. He did not drink, and he almost never cursed. And he was determined to stay 'pure' until marriage, though he did not lack for attention from female students. Just as his mother feared, Mr. Havens, a broad-shouldered former wrestler with tousled brown hair and a guileless smile, wavered some his freshman year and dated several classmates. 'I was just like, 'Oh, I can get this girl to like me,' ' he recalled. ' 'Oh, she likes me; she's cute.' And so it was a lot of fairly short and meaningless relationships. It was pretty destructive.' In his sophomore year, though, his evangelical a cappella singing group, a Christian twist on an old Ivy League tradition, interceded. With its support, he rededicated himself to serving God, and by his senior year he was running his own Bible-study group, hoping to inoculate first-year students against the temptations he had faced. They challenged one another, Mr. Havens said, 'committing to remain sexually pure, both in a physical sense and in avoiding pornography and ogling women and like that.' Mr. Havens is now living in a house owned and supported by the Christian Union and is trying to reach not just other evangelicals but nonbelievers as well. Prayers in the Boardrooms The Christian Union is the brainchild of Matt Bennett, 40, who earned bachelor's and master's degrees at Cornell and later directed the Campus Crusade for Christ at Princeton. Mr. Bennett, tall and soft-spoken, with a Texas drawl that waxes and wanes depending on the company he is in, said he got the idea during a 40-day water-and-juice fast, when he heard God speaking to him one night in a dream. 'He was speaking to me very strongly that he wanted to see an increasing and dramatic spiritual revival in a place like Princeton,' Mr. Bennett said. While working for Campus Crusade, Mr. Bennett had discovered that it was hard to recruit evangelicals to minister to the elite colleges of the Northeast because the environment was alien to them and the campuses often far from their homes. He also found that the evangelical ministries were hobbled without adequate salaries to attract professional staff members and without centers of their own where students could gather, socialize and study the Bible. Jews had Hillel Houses, and Roman Catholics had Newman Centers. He thought evangelicals should have their own houses, too, and began a furious round of fund-raising to buy or build some. An early benefactor was his twin brother, Monty, who had taken over the Dallas hotel empire their father built from a single Holiday Inn and who had donated a three-story Victorian in a neighborhood near Brown. To raise more money, Matt Bennett has followed a grapevine of affluent evangelicals around the country, winding up even in places where evangelicals would have been a rarity just a few decades ago. In Manhattan, for example, he visited Wall Street boardrooms and met with the founder of Socrates in the City, a roundtable for religious intellectuals that gathers monthly at places like the Algonquin Hotel and the Metropolitan Club. Those meetings introduced him to an even more promising pool of like-minded Christians, the New Canaan Group, a Friday morning prayer breakfast typically attended by more than a hundred investment bankers and other professionals. The breakfasts started in the Connecticut home of a partner in Goldman, Sachs but grew so large that they had to move to a local church. Like many other evangelicals, some members attend churches that adhere to evangelical doctrine but that remain affiliated with mainline denominations. Other donors to the Christian Union are members of local elites across the Bible Belt. Not long ago, for example, Mr. Bennett paid a visit to Montgomery, Ala., for lunch with Julian L. McPhillips Jr., a wealthy Princeton alumnus and the managing partner of a local law firm. Mr. Bennett, wearing an orange Princeton tie, said he wanted to raise enough money for the Christian Union to hire someone to run a 'healing ministry' for students with depression, eating disorders or drug or alcohol addiction. Mr. McPhillips, who shares Mr. Bennett's belief in the potential of faith healing, remarked that he had once cured an employee's migraine headaches just by praying for him. 'We joke in my office that we don't need health insurance,' he told Mr. Bennett before writing a check for $1,000. Mr. Bennett's database has so far grown to about 5,000 names gathered by word of mouth alone. They are mostly Ivy League graduates whose regular alumni contributions he hopes to channel into the Christian Union. And these Ivy League evangelicals, in turn, are just a small fraction of the large number of their affluent fellow believers. Gaining on the Mainline Their commitment to their faith is confounding a long-held assumption that, like earlier generations of Baptists or Pentecostals, prosperous evangelicals would abandon their religious ties or trade them for membership in establishment churches. Instead, they have kept their traditionalist beliefs, and their churches have even attracted new members from among the well-off. Meanwhile, evangelical Protestants are pulling closer to their mainline counterparts in class and education. As late as 1965, for example, a white mainline Protestant was two and a half times as likely to have a college degree as a white evangelical, according to an analysis by Prof. Corwin E. Smidt, a political scientist at Calvin College, an evangelical institution in Grand Rapids, Mich. But by 2000, a mainline Protestant was only 65 percent more likely to have the same degree. And since 1985, the percentage of incoming freshmen at highly selective private universities who said they were born-again also rose by half, to 11 or 12 percent each year from 7.3 percent, according to the Higher Education Research Institute at the University of California, Los Angeles. To many evangelical Christians, the reason for their increasing worldly success and cultural influence is obvious: God's will at work. Some also credit leaders like the midcentury intellectual Carl F. H. Henry, who helped to found a large and influential seminary, a glossy evangelical Christian magazine and the National Association of Evangelicals, a powerful umbrella group that now includes 51 denominations. Dr. Henry and his followers implored believers to look beyond their churches and fight for a place in the American mainstream. There were also demographic forces at work, beginning with the G.I. Bill, which sent a pioneering generation of evangelicals to college. Probably the greatest boost to the prosperity of evangelicals as a group came with the Sun Belt expansion of the 1970's and the Texas oil boom, which brought new wealth and businesses to the regions where evangelical churches had been most heavily concentrated. The most striking example of change in how evangelicals see themselves and their place in the world may be the Assemblies of God, a Pentecostal denomination. It was founded in Hot Springs, Ark., in 1914 by rural and working-class Christians who believed that the Holy Spirit had moved them to speak in tongues. Shunned by established churches, they became a sect of outsiders, and their preachers condemned worldly temptations like dancing, movies, jewelry and swimming in public pools. But like the Southern Baptists and other conservative denominations, the Assemblies gradually dropped their separatist strictures as their membership prospered and spread. As the denomination grew, Assemblies preachers began speaking not only of heavenly rewards but also of the material blessings God might provide in this world. The notion was controversial in some evangelical circles but became widespread nonetheless, and it made the Assemblies' faith more compatible with an upwardly mobile middle class. By the 1970's, Assemblies churches were sprouting up in affluent suburbs across the country. Recent surveys by Margaret Poloma, a historian at the University of Akron in Ohio, found Assemblies members more educated and better off than the general public. As they flourished, evangelical entrepreneurs and strivers built a distinctly evangelical business culture of prayer meetings, self-help books and business associations. In some cities outside the Northeast, evangelical business owners list their names in Christian yellow pages. The rise of evangelicals has also coincided with the gradual shift of most of them from the Democratic Party to the Republican and their growing political activism. The conservative Christian political movement seldom developed in poor, rural Bible Belt towns. Instead, its wellsprings were places like the Rev. Ed Young's booming mega-church in suburban Houston or the Rev. Timothy LaHaye's in Orange County, Calif., where evangelical professionals and businessmen had the wherewithal to push back against the secular culture by organizing boycotts, electing school board members and lobbying for conservative judicial appointments. 'A Bunch of Heathens' Mr. Havens, the Brown missionary, is part of the upsurge of well-educated born-again Christians. He grew up in one of the few white households in a poor black neighborhood of St. Louis, where his parents had moved to start a church, which failed to take off. Mr. Havens's father never graduated from college. After being laid off from his job at a marketing company two years ago, he now works in an insurance company's software and systems department. Tim Havens's mother home-schooled the family's six children for at least a few years each. Mr. Havens got through Brown on scholarships and loans, and at graduation was $25,000 in debt. To return to campus for his missionary year and pay his expenses, he needed to raise an additional $36,000, and on the advice of Geoff Freeman, the head of the Brown branch of Campus Crusade, he did his fund-raising in St. Louis. 'It is easy to sell New England in the Midwest,' as Mr. Freeman put it later. Midwesterners, he said, see New Englanders as 'a bunch of heathens.' So Mr. Havens drove home each day from a summer job at a stone supply warehouse to work the phone from his cluttered childhood bedroom. He told potential donors that many of the American-born students at Brown had never even been to church, to say nothing of the students from Asia or the Middle East. 'In a sense, it is pre-Christian,' he explained. Among his family's friends, however, encouragement was easier to come by than cash. As the summer came to a close, Mr. Havens was still $6,000 short. He decided to give himself a pay cut and go back to Brown with what he had raised, trusting God to take care of his needs just as he always had when money seemed scarce during college. 'God owns the cattle on a thousand hills,' he often told himself. 'God has plenty of money.' Thanks to the Christian Union, Mr. Haven's present quarters as a ministry intern at Brown are actually more upscale than his home in St. Louis. On Friday nights, he is a host for a Bible-study and dinner party for 70 or 80 Christian students, who serve themselves heaping plates of pasta before breaking into study groups. Afterward, they regroup in the living room for board games and goofy improvisation contests, all free of profanity and even double entendre. Lately, though, Mr. Havens has been contemplating steps that would take him away from Brown and campus ministry. After a chaste romance - 'I didn't kiss her until I asked her to marry me,' he said - he recently became engaged to a missionary colleague, Liz Chalmers. He has been thinking about how to support the children they hope to have. And he has been considering the example of his future father-in-law, Daniel Chalmers, a Baptist missionary to the Philippines who ended up building power plants there and making a small fortune. Mr. Chalmers has been a steady donor to Christian causes, and he bought a plot of land in Oregon, where he plans to build a retreat center. 'God has always used wealthy people to help the church,' Mr. Havens said. He pointed out that in the Bible, rich believers helped support the apostles, just as donors to the Christian Union are investing strategically in the Ivy League today. With those examples and his own father in mind, Mr. Havens chose medicine over campus ministry. He scored well on his medical school entrance exams and, after another year at Brown, he will head to St. Louis University School of Medicine. At the Christian Union conference in April, he was pleased to hear doctors talk about praying with their patients and traveling as medical missionaries. He is looking forward to having the money a medical degree can bring, and especially to putting his children through college without the scholarships and part-time jobs he needed. But whether he becomes rich, he said, 'will depend on how much I keep.' Like other evangelicals of his generation, he means to take his faith with him as he makes his way in the world. He said his roommates at Brown had always predicted that he would 'sell out'- loosen up about his faith and adopt their taste for new cars, new clothes and the other trappings of the upper class. He didn't at Brown and he thinks he never will. 'So far so good,' he said. But he admitted, 'I don't have any money yet.'

Subject: Dollar Up, Dollar Down From: Terri To: All Date Posted: Sun, May 22, 2005 at 14:13:39 (EDT) Email Address: Not Provided Message: No matter the near term direction of the dollar, I would argue as well the dollar will decline in value. There is minimal household saving and a fierce structural government deficit that are driving a trade deficit. Where can the dollar go but down in time? However no near term increase in the value of dollar should surprise us. When everyone is sure of a market direction, as with the dollar in January, there may well be surprises at least for a time.

Subject: Re: Dollar Up, Dollar Down From: Terri To: Terri Date Posted: Sun, May 22, 2005 at 14:50:21 (EDT) Email Address: Not Provided Message: Now, I am told I am wrong about the dollar. How exactly does it weaken? Well, the dollar will likely increase in value at least for a while against the Euro in light of European growth weakness even if the European Constitution is approved by the French and the Dutch. Then there is the Chinese peg against the dollar, and the likelihood that other Asian banks will not wish to have appreciating currencies against the dollar if China keeps the peg. China is opting for export taxes and a change in the peg if it happens will likely be a small change. Japan? Japan is just not about to allow a marked strengthening of the Yen against the dollar until there really is robust growth than last more than a quarter. So, what was I writing about? Darn, I understand, where does a weaker dollar come from?

Subject: Re: Dollar Up, Dollar Down From: Pete Weis To: Terri Date Posted: Sun, May 22, 2005 at 17:13:21 (EDT) Email Address: Not Provided Message: If you are a currency trader or concerned about Boeing's competition with Airbus for commercial aircraft business you focus on the relative decline or rise between currencies. If you are concerned about the power of American paychecks, you focus on how many dollars it takes to buy or build a house, pay for heating for your home and gas for the suv, send your kid to college, buy a gallon of milk or a loaf of bread. If 70% of our economy depends on the buying power of the US consumer - there is where the buying power of the dollar becomes important.

Subject: Re: Dollar Up, Dollar Down From: Terri To: Pete Weis Date Posted: Sun, May 22, 2005 at 17:54:18 (EDT) Email Address: Not Provided Message: Agreed. But, we must think clearly again of the value of the dollar. I am not at all sure the dollar will decline in value anytime soon. There is much more to be argued, and importantly.

Subject: Supply & demand From: Pete Weis To: Terri Date Posted: Sun, May 22, 2005 at 20:32:10 (EDT) Email Address: Not Provided Message: Increasing supply of dollars without a corresponding increasing demand for dollar denominated assets (US products & services, resources, real estate, stocks, bonds, etc) results in a falling dollar. A steady supply of dollars with a corresponding selloff in dollar denominated assets results in a falling dollar. The opposite scenario, as we had with greater demand for US assets in the late 90's when the world was piling into US assets (US stock markets), results a strengthening of the dollar. Recently we have had a slight drop in money supply in the first half of 2005 and demand for US assets, including the main supporting asset (housing), has remained strong. So we have had a short term strengthening of the dollar.

Subject: Okrent on Krugman (Well, op eds in general) From: Paul G. Brown To: All Date Posted: Sun, May 22, 2005 at 01:37:44 (EDT) Email Address: Not Provided Message: '2. Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults. Maureen Dowd was still writing that Alberto R. Gonzales 'called the Geneva Conventions 'quaint' ' nearly two months after a correction in the news pages noted that Gonzales had specifically applied the term to Geneva provisions about commissary privileges, athletic uniforms and scientific instruments. Before his retirement in January, William Safire vexed me with his chronic assertion of clear links between Al Qaeda and Saddam Hussein, based on evidence only he seemed to possess. No one deserves the personal vituperation that regularly comes Dowd's way, and some of Krugman's enemies are every bit as ideological (and consequently unfair) as he is. But that doesn't mean that their boss, publisher Arthur O. Sulzberger Jr., shouldn't hold his columnists to higher standards. I didn't give Krugman, Dowd or Safire the chance to respond before writing the last two paragraphs. I decided to impersonate an opinion columnist.' To my knowledge Krugman bolloxed up one set of numbers that related to taxation as a % of GDP over the period of the Reagan Presidency. On several occasions I looked critically at a PK column through the lens of Luskin's criticism but usually found a) what Luskin was labelling a 'lie' was usually Luskin's complaint that some factor secondary to the main argument was being ignored, or else b) more evidence to support the conclusion that Luskin's a functional innumerate. I note that Okrent doesn't provide one iota of evidence to back up his claim, unlike with Dowd and Safire where he does. And from the fact that a column is attacked it does not follow that what the column says is wrong, or even unfair. To precisely what 'higher standard' does Okrent believe Arthur O. Sulzberger Jr. should hold PK?

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Auros To: Paul G. Brown Date Posted: Tues, May 24, 2005 at 12:57:24 (EDT) Email Address: rmharman@auros.org Message: Check this out: http://dailyhowler.com/dh052305.shtml Scroll down to 'Special report: Exit Okrent!'

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Terri To: Paul G. Brown Date Posted: Sun, May 22, 2005 at 06:02:20 (EDT) Email Address: Not Provided Message: Dear Paul G. Brown Please explain this post a bit more. Paul Krugman is probably the finest columnist in America; definitely the finest economic columnist. There is a wonderful precision and clarity and significance to the writing, and certainly a courage. I do not find an ideology to the writing, other than the wish to always be honest and precise. Critics from the far far right are not honest and should be of no account. I love the New York Times, but I can not bear to read Dan Okrent, for I do not need any such stultifying critic of critics to help me read properly. I have learned how to read. Please explain this sentence, for I did not catch a mistake: 'To my knowledge Krugman bolloxed up one set of numbers that related to taxation as a % of GDP over the period of the Reagan Presidency.' Thank you so much.

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Paul G. Brown To: Terri Date Posted: Sun, May 22, 2005 at 15:04:30 (EDT) Email Address: Not Provided Message: Terri - My instinct is always to give people 'the benefit of the doubt' until such time as they have lost any claim to such benefit (see: Luskin, D). I even give 'Critics from the far far right' the time of day because they often have interesting things to say, even if what they're saying is only interesting from a 'what are they thinking' perspective. In this final column Okrent does make some good points. Whatever else you think about Judith Miller's competence as a journalist, she is showing a measure of integrity by electing to go to jail rather than burn a source (as she sees it) even if that source comitted a crime. And Okrent provides well supported evidence of Dowd & Safire's shortcomings. My complaint is that he provides not one shred of evidence to support his contention that any of the numbers in PK's many columns are incorrect, or misleading. All he does is complain that he's had a lot of complaints. Over on Poor and Stupid, Luskin's just held up his hand and declared that HE is the one Okrent is pointing the finger at. (And then below he complains that PK 'lies' in his 05/09/2005 column when he says that his preferred numbers show that 'middle income' earners are only $3500 worse off rather than $5500 worse off as a consequence of the Bush tax cuts and Social Security reforms ... sheesh.) PK did make a mistake back on 06.08.2004 in his column on Reagan's tax policy. He misreported tax rates at the beginning of the Reagan administration. The corrected numbers, though, don't alter his argument: Reagan wasn't a great lifter of the nation's tax burden. He simply shifted the burden from the upper to the middle and lower classes. But it was a mistake. And PK corrected it.

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Paul G. Brown To: Paul G. Brown Date Posted: Mon, May 23, 2005 at 12:25:41 (EDT) Email Address: Not Provided Message: I note that Brad DeLong this morning delivered Daniel Okrent a pair of almighty smackdowns. Turns out that DO's example of MD's perfidity wasn't an example of perfidity at all. Rather, it was a pretty reasonable reflection of Gonzales' opinions on the 'obselete' Geneva accords. DeLong cites the Attorney General's original language. Ignorance. Bliss. Mine in this case.

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Emma To: Paul G. Brown Date Posted: Mon, May 23, 2005 at 15:05:15 (EDT) Email Address: Not Provided Message: Maureen Dowd knows what she writes about, though a fair number of men seem to object to a woman columnist.

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Paul G. Brown To: Emma Date Posted: Mon, May 23, 2005 at 16:16:03 (EDT) Email Address: Not Provided Message: Not sure it's a gender thing, with Dowd. Although the lack of other female voices on the op-ed pages of the NYT means we've little to contrast her with. I am constantly delighted by the wit and insight of Molly Ivins, for example, and I liked what I read of Anna Quindlen. There are lots of good columnists out there who happen to be women - Katrina Vanden Heuvel on the left, and I'll confess an admiration for Peggy Noonan's work (even if columns on high heels in Washington leave me a bit cold). But I think Dowd is a, well, a lightweight. It's all very well to 'know what you write about'. I just wish she'd write something I remembered for more than 10 minutes. Or invoke an emotion that lingered. Maybe it's just me.

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Emma To: Paul G. Brown Date Posted: Mon, May 23, 2005 at 17:53:09 (EDT) Email Address: Not Provided Message: Of course, my friends and I will remember selected Maureen Dowd columns indefinitely. A Pulitzer Prize winning columnist who is wildly popular among women [funny that]. Peggy Noonan? Oh dear. A quaint idea in what it is to be a 'lightweight.'

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Terri To: Paul G. Brown Date Posted: Sun, May 22, 2005 at 16:26:46 (EDT) Email Address: Not Provided Message: Yes; I found the column and as you, I remember the mistake. You are right to make it a rule to consider several perspectives. I am growing in this direction, I hope....

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Terri To: Terri Date Posted: Sun, May 22, 2005 at 06:09:10 (EDT) Email Address: Not Provided Message: There is simply no equal in economics commentary to Paul Krugman, possibly no equal in general commentary. I do wish the New York Times could find another such columnist for there have been others in the past as Lewis and Baker and Quindlen. Herbert, Dowd, Rich and Friedman are helpful but none writes with the depth of knowledge in a particular subject as Krugman does.

Subject: Re: Okrent on Krugman (Well, op eds in general) From: Emma To: Terri Date Posted: Sun, May 22, 2005 at 12:26:59 (EDT) Email Address: Not Provided Message: Happily, Danny Okrent is as of this day leaving the New York Times. Since he was supposed to have been our representative, I should like to say he most certainly has never been my representative and I could not be more pleased that he is gone. The attack on Paul Krugman was only part of the gratitutious distasteful attacks on New York Times writers and editors. Thoroughly disgraceful.

Subject: I wonder...... From: Pete Weis To: Emma Date Posted: Sun, May 22, 2005 at 13:47:06 (EDT) Email Address: Not Provided Message: through what colored or uncolored lense Danny Okrent believes his own viewpoints are taken? Suppose we all have our own personally crafted spyglass through which we view the world and, in general, the fields of view are becoming narrower.

Subject: Re: I wonder...... From: Ryan To: Pete Weis Date Posted: Mon, May 23, 2005 at 02:53:36 (EDT) Email Address: Not Provided Message: Does everything think Krugman really cares what these people say about them. His academic work with stood blows from some of the most intelligent people in the world. He proved himself among some of the top thinkers in his subject and holds the John Bates Clark award for it. Every class dealing with international economics, reads his work. The point is, the man has proven himself right time and time again. He holds a full position at Princeton, and probably could care less about people like Luskin (college drop out) and Okrent.

Subject: Re: I wonder...... From: Setanta To: Ryan Date Posted: Mon, May 23, 2005 at 11:11:18 (EDT) Email Address: Not Provided Message: 'Every class dealing with international economics, reads his work. ' that should read 'Every class around the world dealing with international economics, reads his work.' i encountered him (rather, his work)and this wonderful website years ago while studying the dismal science in university in Dublin, Ireland.

Subject: Agree with you, Ryan From: Pete Weis To: Ryan Date Posted: Mon, May 23, 2005 at 10:43:50 (EDT) Email Address: Not Provided Message:

Subject: Re: Agree with you, Ryan From: Terri To: Pete Weis Date Posted: Mon, May 23, 2005 at 11:48:52 (EDT) Email Address: Not Provided Message: Same here, well said.

Subject: S.U.V.'s are Us? From: Emma To: All Date Posted: Sat, May 21, 2005 at 13:37:23 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/21/automobiles/21auto.html?ei=5094&en=736d597dff8a6c87&hp=&ex=1116734400&partner=homepage&pagewanted=print&position= A Love Affair With S.U.V.'s Begins to Cool By DANNY HAKIM DETROIT - To believe the commercials, sport utility vehicles can climb the most indomitable mountain, ford any stream and haul around the kids to boot. But gas prices are a more unconquerable force of nature. With higher prices at the pump sinking in as something more than a blip on the radar, and with several new passenger car models winning back customers, America's love affair with S.U.V.'s is taking a breather. For the first time in 14 years, the passenger car is actually taking sales back at the expense of S.U.V.'s and other trucks, according to an analysis of auto sales data. The renewed interest in cars over the first four months of the year, while modest, is a pause in what has been the trend in auto sales for the last decade and a half: the soaring growth of the sport utility vehicle as America's preferred family vehicle. Sales of medium and large sport utility vehicles - like the Ford Explorer and Chevrolet Suburban - have stalled, and the torrid sales growth of large pickups has cooled. While much of the slack is being taken up by smaller and less bulky S.U.V.'s known as crossovers, overall sales of S.U.V.'s are down 1.7 percent while passenger car sales are up 3.1 percent, according to Wards Automotive, which tracks auto sales. 'I just bought a Ford pickup truck and I wish I wouldn't have bought the darn thing,' said Mark House, 45, who was shopping Friday at a Toyota dealership in the Toledo, Ohio, area with his daughter, Monika, 19, who said she wanted a car so she could keep the cost of fill-ups down. 'If gas prices were cheaper, then I'd look into an S.U.V.,' she said. 'It's the gas.' Mr. House, who owns and manages rental properties, said of his truck, 'It's $60 to fill it up, and I don't even want to drive it anymore.' But John Wodarski, a manager at the dealership who has sold cars for 23 years, said talk about gas prices did not always translate into action. 'People rank it up there as one of their biggest concerns, just like losing weight,' he said, 'but no one ever does anything about it.' Weakness in big trucks is bad news for General Motors and Ford Motor, because they largely rely on big S.U.V.'s and pickup trucks for profits. Asian automakers like Toyota have had a stronger position in sales of cars and crossover vehicles. G.M. executives say large S.U.V. sales, which are down 15 percent this year industrywide, are weak not because of gas prices but because G.M.'s models are nearing the end of a product cycle. G.M. will introduce redesigned versions of large S.U.V.'s like the Chevy Suburban and Cadillac Escalade next year. Ford executives, by contrast, have cited gas prices as a major factor in their diminished earnings projections. Phil Martens, Ford's vice president for product creation, said recently that 'fuel economy has gone from not being in the top 10,' among buyer concerns, 'to being in the top 5.' Some analysts see a parade of newer car models as the predominant factor. 'Gas prices are having a much more minor effect than they did in the 80's,' said Tom Libby, the senior director of industry analysis at the Power information network, a unit of the research and consulting firm J. D. Power & Associates. In fact, gas prices, adjusted for inflation, are not nearly as high as they were in the early 1980's. Mr. Libby said a wave of new midsize luxury cars from brands like Acura, Lexus, BMW and Infiniti were increasing car sales. Hot sales of hybrid electric cars, like the Toyota Prius, have also helped, though Toyota's Lexus division and Ford are now also offering hybrid S.U.V.'s. Detroit's recent emphasis on making more credible passenger cars has been a major factor. Two notable cars with strong sales have been Ford's redesigned, Mustang and DaimlerChrysler's Chrysler 300 sedan. 'I never wanted a car before - never,' said Tamika Cooks, a science teacher at Bellaire High School in Houston, in an interview Friday as she was signing the paperwork for her Chrysler 300C. 'But this car has captured my attention. It speaks to me. It calls my name.' Burly and sleek, the 300C has won diverse appeal and convinced many that Detroit can make compelling cars if it is motivated; the rapper Snoop Dogg drives a black 300C. Ms. Cooks preferred satin jade. 'It's soft, it's feminine, it's classy,' she said. 'When you see it passing by, you have to stop and look.' For Ms. Cooks, gas prices, which are $2.09 a gallon for regular at a Shell station nearby, were not part of her decision, and she said she came close to buying a Lexus S.U.V. The 300C, equipped with a gas guzzling Hemi engine, is hardly akin to a Toyota Prius. 'Gas prices worry me with any vehicle,' she said. 'One day they're up, the next day they're slightly down.' Cars now account for 46.3 percent of the nation's vehicle market, up from 45.4 percent in the first four months of 2004, according to Ward's. Before this year, cars had been in decline every year since 1991, when they accounted for 67.4 percent of the market. In 1980, cars made up about four-fifths of sales. The growth of light trucks, a regulatory category that includes minivans, S.U.V.'s and pickup trucks, has had broad effects on the nation's oil consumption. The fuel economy of the average new vehicle sold fell to 20.7 miles a gallon in 2003 models from 22.1 miles a gallon in 1988 models. Regulations permit light trucks to consume significantly more gas than cars; the most recent Congressional effort to tighten the regulatory system was defeated in the Senate this week. Will the growth of cars be sustained? Not likely. Domestic automakers have laid out production plans focusing on more small S.U.V.'s, and Asian automakers are increasing their focus on the pickup truck market, with Toyota building a new pickup truck plant in San Antonio. 'By the end of the decade, sales will be anywhere from two-thirds to three-fourths light trucks,' said Haig Stoddard, the manager of industry analysis at Ward's. Gas could be an X-factor. When prices went up in March, Yves Nau, a nightclub owner in Houston, traded in his GMC Yukon Denali for a Chrysler 300C sedan. Between savings at the gas pump, lower car payments and insurance bills, he said he was saving $700 a month. 'I feel like I'm the smart guy,' he said. 'You save money like that and you can't ignore it.'

Subject: Re: S.U.V.'s are Us? From: Setanta To: Emma Date Posted: Mon, May 23, 2005 at 12:45:24 (EDT) Email Address: Not Provided Message: i said it before and i'll say it again...american auto manufacturers need to retool their factories to comply with reality. gas will never become cheaper. we need either hybrid cars or low consumption/fuel efficient cars. s&p recognised this and degraded GM and Ford to junk bond status. the european and japanese cars will inherit the market. the world has lost its taste for huge gas guzzling behemoths in favor of the highly engineered/ high tech cars such as Volkswagen, Toyota etc. indeed, i'm the proud owner of the BMW 1 Series (2005). its a 1.6 litre engine but with the performance of a 2 litre. unless you are in the haulage business anything more than a 2 litre is a complete waste.

Subject: The idiot light business model From: Pete Weis To: Setanta Date Posted: Mon, May 23, 2005 at 14:08:54 (EDT) Email Address: Not Provided Message: Sell that BMW before the warranty runs out or the car will own you!!! Those idiot lights will drive you nuts and only BMW can turn them off and they won't turn them off until you have emptied your wallet into their cash register. They make very little on car sales, but once you buy....

Subject: Re: The idiot light business model From: Pancho Villa To: Pete Weis Date Posted: Mon, May 23, 2005 at 22:37:31 (EDT) Email Address: nma@hotmail.com Message: ...it's always X-mas time

Subject: Re: The idiot light business model From: Pancho Villa To: Pancho Villa Date Posted: Mon, May 23, 2005 at 22:45:28 (EDT) Email Address: nma@hotmail.com Message: http://www.pelicanparts.com/bmw/techarticles/E36-Service_Lamp/E30-Service_Lamp.htm

Subject: US auto execs are...... From: Pete Weis To: Emma Date Posted: Sat, May 21, 2005 at 15:29:14 (EDT) Email Address: Not Provided Message: out of touch with reality.

Subject: Re: US auto execs are...... From: Terri To: Pete Weis Date Posted: Sat, May 21, 2005 at 16:25:55 (EDT) Email Address: Not Provided Message: Where are they when it comes to imagination, to looking ahead?

Subject: The Trade Deficit and the Dollar From: Terri To: All Date Posted: Sat, May 21, 2005 at 11:06:49 (EDT) Email Address: Not Provided Message: Alan Greenspan in response to a question remarked that a change in the value of the Yuan would not appreciably change America's trade deficit; which is just what I would say. The trade deficit is not being forced on us because there is all sorts of saving needing to be poured in on America to induce us to buy abroad. How can we not have a trade deficit when there is minimal household saving and a fierce government deficit?

Subject: Re: The Trade Deficit and the Dollar From: Terri To: Terri Date Posted: Sat, May 21, 2005 at 11:52:33 (EDT) Email Address: Not Provided Message: I would have enjoyed listening to Greenspan speak to how interest rate changes that stem from currency movement might be handled.

Subject: Canada's Medical System From: Emma To: All Date Posted: Sat, May 21, 2005 at 10:12:34 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/21/international/americas/21chaoulli.html?pagewanted=all A Doctor -Lawyer-Gadfly v. Canada's Medical System By CLIFFORD KRAUSS MONTREAL IT took only one semester for Dr. Jacques Chaoulli to flunk out of a Montreal law school a few years ago after he incessantly challenged professors in the classroom and in exams with his novel legal interpretations. But Dr. Chaoulli, a family physician, never lost his taste for legal argument, or his distaste for Canada's publicly financed health care system. He has taken what was once regarded as a nuisance case, challenging the constitutionality of the system all the way to the Supreme Court - serving as his own lawyer, rolling his cardboard boxes stuffed with files into the chamber and paying for his efforts with a half million dollars out of his own pocket and that of his tolerant Japanese father-in-law. It has been a year since the Canadian Supreme Court heard the case, a rare delay that is raising eyebrows in legal circles. Scholars studying Dr. Chaoulli's challenge say the court is either badly divided or waiting for the appropriate political moment to release a bombshell. They speculate that the justices may agree outright with Dr. Chaoulli (pronounced cha-OOH-li), or are working out instructions to the government to find a way to fix what many agree is an ailing health care network - where doctors are in short supply and patients wait months for diagnostic tests and elective surgeries like cornea transplants and knee replacements. 'If I win, everything will be turned upside down,' Dr. Chaoulli said with a smile, sipping a cup of tea in the living room of his modest stone house in Montreal. 'One constitutional expert told a friend of mine, 'Chaoulli, is he a crazy man or a genius? We will know after the judgment of the Supreme Court.' ' A diminutive man who has trouble keeping his wire-rim glasses on straight, Dr. Chaoulli, 53, hardly looks like the 'freedom fighter' that Canada's conservative news media have called him. But if he wins his case he will tear up the third rail of the nation's politics and raze what many Canadians consider to be the bedrock of their national identity. He argues that regulations that create long waiting times for surgery contradict the constitutional guarantees for individuals of 'life, liberty and the security of the person,' and that the prohibition against private medical insurance and care is for sick patients an 'infringement of the protection against cruel and unusual treatment.' He believes that Canada is disallowing the basic contract rights of doctors and patients, and that the country would serve the sick much better if it had a parallel private health care system, as in France and many other industrialized countries. 'His argument is credible,' said Patrick Monahan, dean of the Osgoode Hall Law School of York University in Toronto. 'The issue of waiting times does raise constitutional issues.' DR. CHAOULLI is a man of passions. He taught himself to paint well enough to make copies of masterworks of Fragonard, Botticelli and Renoir that decorate his house. He has written a couple of books on health care, but sales have been awful. He tried his hand at provincial politics, and put in that stint at the University of Montreal Law School, after he had decided to challenge the constitutionality of the health care system. He describes the legal case as an obsession for which he has sacrificed time with his wife and daughter to comb the stacks of law libraries in search of legal precedents. 'On a very small scale, I feel like Gandhi,' he said. 'You block me, I'll challenge you.' Born in France, Dr. Chaoulli ran away as a teenager from a troubled home in which, he says, his father was abusive to his mother. As a result, he said, 'I grew up with a strong sense of my individual freedom.' He washed dishes and cleaned toilets to support himself while he attended medical school in Paris on a scholarship and then made his way to Quebec when he found it hard to get a job in France. He began practicing medicine in Canada in 1986, serving in a remote rural hospital, clinic and nursing home for two years. When he arrived in Montreal a few years later, he saw a need for a doctor to make emergency house calls. 'Many patients remained at home, untreated,' he recalled. In 1991 he started an emergency house call service, eventually outfitting a white Chevy van as a makeshift ambulance with a red roof light, siren and portable X-ray machine and a police permit to operate the vehicle. His practice grew and he hired six other doctors to help him. But when he opted out of the public system and began charging his patients fees in 1996, the Quebec medical union and regional health board accused him of violating the provincial health act. The local government applied a 30 percent penalty on income from the service, and his six doctors quit. Soon afterward, he set up a tent in downtown Montreal and went on a hunger strike for a month to call attention to his belief that his and his patients' rights were being infringed upon. 'I was desperate, I was deeply humiliated, I didn't know how to fight back using peaceful, legal means,' he recalled, wincing. With penalties mounting, Dr. Chaoulli was forced to abandon his emergency house call business in 1997, and he said he was made to feel impotent as 'my patients begged me not to give up on them.' So he went to court, taking up the case of Georges Zeliotis, a chemical salesman with recurring hip problems who was forced to wait a year for a hip replacement while prohibited from paying privately for surgery. Mr. Zeliotis could have gone to the United States, but since he was also forbidden by Canadian law from purchasing private insurance he would have been forced to pay out of his pocket, which was beyond his financial means, Dr. Chaoulli said. Dr. Chaoulli and Mr. Zeliotis lost in two Quebec provincial courts, but the Supreme Court decided to hear their appeal. VARIOUS medical experts, government representatives and union leaders argued in court that privatization of insurance and services would bring an exodus of medical talent from public to private practices, and make waiting times even longer. Dr. Chaoulli made a philosophical pitch in his oral arguments, saying that Canadian prohibitions against allowing patients to privately contract for medical services were a basic violation of their rights. 'People are dying on waiting lists,' Dr. Chaoulli said in an interview, adding that his goal was to improve the public health care system, not to destroy it. Christopher P. Manfredi, chairman of the McGill University political science department, was in court, and said Dr. Chaoulli's style was a bit amateurish. 'He ran out of time and the justices scolded him,' he recalled. 'It wasn't a great litigation performance.' Still, several of the justices asked probing questions of the government's lawyers and seemed skeptical about their arguments against giving people a choice between private and public services. 'People once saw Chaoulli as a crackpot and discounted what he was trying to do,' said Antonia Maioni, an expert on health care at McGill. 'Well, now, from lone ranger he's become a cause célèbre.'

Subject: Zimbabwe From: Emma To: All Date Posted: Sat, May 21, 2005 at 10:09:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/21/international/africa/21zimbabwe.html?pagewanted=all Zimbabwe, Long Destitute, Teeters Toward Ruin By MICHAEL WINES BULAWAYO, Zimbabwe - In the weeks before parliamentary elections in March, the leaders of this threadbare nation threw open the national larder, wooing voters with stocks of normally scarce gasoline and corn and a flood of freshly printed money. It may have helped: the ruling party, President Robert G. Mugabe's ZANU-PF, was installed for another five years. But Zimbabwe's Potemkin prosperity has evaporated since the elections, replaced by penury and mounting signs of economic collapse. Here in the second largest city, lines of cars stretch a quarter mile and more at fuel-parched service stations, and drivers spend the night in their cars' back seats lest they lose their place in line. Milk, cooking oil and, most of all, corn, the national staple, are a distant memory at most stores. At one downtown grocery, tubes of much-prized American toothpaste are kept in a locked case. Zimbabwe's currency, which traded on the black market at 120 to the dollar in April 2002, went for 6,200 to the dollar last December, 12,000 on April 1, and 17,000 in early May. By mid-May a single American dollar brought as much as 25,000 Zimbabwean dollars, though the rate has since steadied at about 20,000. [Zimbabwe's government steadfastly maintained an official exchange rate of about 6,100 Zimbabwean dollars per American dollar until Thursday, when the nation's reserve bank announced a devaluation. But business managers here say the new official rate - 9,000 per American dollar - is unlikely to have more than a brief impact on the economy.] 'It's running out of control,' one Bulawayo manufacturer said in an interview. 'When you're going down a path of destruction, you can keep putting patches on the tires - patch, patch, patch - but eventually the tire is going to burst.' Business executives interviewed for this article almost uniformly refused to be named, fearing that criticism of economic policies would doom their scant chances of receiving government assistance. One persistent critic, John Robertson, a former government economist, said the government appeared to have exhausted its reserves on the feel-good campaign before the parliamentary elections and was now paying the price. For years, of course, Zimbabwe's economy has been a chewing-gum and baling-wire affair, with 70 percent unemployment, triple-digit inflation and a currency no foreign creditor will accept. Prosperity has been receding since the late 1990's, when the government's attacks on international creditors and its seizure of commercial farms set off a cascade of economic backlashes. Past economic plunges have provoked food riots, gas-line protests and government crackdowns. This time the government has sent the police to quell mobs outside groceries and gas stations, and started rounding up street merchants who deal too openly in black-market goods and selling currency at illicit rates. Yet some say that the current crisis, perhaps the worst since the economy began foundering, may mark a turning point. Zimbabwe's main economic problems - capital flight, a dire shortage of foreign exchange with which to buy imports, and turbocharged inflation - are now so severe that they are eroding what remains of the industrial and agricultural base. Manufacturing has slowed to a trickle, hamstrung by shortages of fuel and imported components. Businesses have been driven to barter and the black market, adding to the inflation. Appeals for government help are mostly fruitless. The government is all but broke. 'The scarcities now are coming from manufacturers who can't deliver enough to retailers to fill their shelves,' Mr. Robertson said in an interview in Harare, the capital. Initially the problem was that manufacturers could not cobble together enough supplies to make their products. 'Now that there are more critical shortages in things like fuel,' he said, 'it's almost academic whether they can get the material, because they can't deliver the products anyway. The end result of the shortages is that prices are rising.' In Harare in the second week of May, rumors that a shipment of sugar had arrived created a line half a mile long outside one suburban supermarket. Yet the problem, Mr. Robertson said, was not so much a shortage of sugar as a shortage of the imported polyethylene bags that hold it. Coca-Cola is being rationed because the gas used for carbonation is in short supply and the local bottler cannot find foreign currency to buy the imported syrup. Virtually any product made of steel is hard to find, because most rolled steel is imported from South Africa, and South African steel mills are demanding cash up front from Zimbabwean customers. 'It's what I call a chain-link economy,' said one Bulawayo maker of a basic steel commodity. 'Company A manufactures parts for Company B, and Company B manufactures a part for Company C, and so on until company F makes the finished product. What's happening is that the links are falling apart.' That manufacturer offers a line of 25 products. Only four are being made, because he cannot find paint, abrasives and braces to make the others. 'They're all imported,' he said of the materials, 'and if there's no foreign currency, then my supplier can't buy them to sell to me.' Zimbabwe's immediate problem is that it has run out of foreign currency. But that is only one domino in a long chain that threatens to bury the economy. Agricultural exports were an economic mainstay. But in the last five years, Zimbabwe's parceling out of 5,000 commercial farms among squatters and peasants has caused the collapse of commercial farming. That has destroyed the businesses that supported it, from tractor sales - the nation needs 50,000, and has fewer than 400 working ones - to irrigation suppliers. That only deepened the export tailspin: Zimbabwean tobacco production is down two-thirds in five years, for instance, and the quality, once world renowned, is so poor that buyers are scarce. Falling exports made foreign currency more expensive, causing exchange rates to rocket. But the government has generally chosen to print more money instead of readjusting the value of its currency; Zimbabwe's money supply rose 226 percent in 2004. The result has been hyperinflation and a thriving black market in money and goods. Hyperinflation and the artificial exchange rate, in turn, have crippled gold mining, Zimbabwe's other big export industry. Production fell 18 percent in the first quarter of 2005. [The government's latest devaluation of the Zimbabwe dollar sets special, higher exchange rates for exports of gold and cotton, two major industries facing collapse in the current crisis. The loss of either would crimp foreign-currency receipts even more; a collapse in cotton would pull Zimbabwe's textile industry down as well. [The higher exchange rates effectively are subsidies, costing the government the equivalent of scores of millions of American dollars. Asked how the government would get the money to subsidize the two industries, the economist, Mr. Robertson, said, 'My feeling is that they'll print it.' [The government said Friday that it would also budget more money to import grain, hoping to avert what some experts say is a looming famine when the harvest that ends in May - by all accounts a dismal failure - has been consumed. [Zimbabwe needs about 1.6 million tons of grain a year, and officials say they intend to purchase 1.2 million tons. But corn imports from South Africa, Zimbabwe's only supplier of note, totaled a bare 37,500 tons in the last month, far short of demand. It is unclear where the government will find the foreign currency it needs to buy grain abroad.] Starved for foreign currency to import crucial supplies, the government now requires all businesses to trade 25 percent of their foreign income at the official exchange rate. That hits businesses with a double whammy: they have less foreign money to buy imported raw materials, and they must raise prices to make up their currency losses. If that seems a formula for more shortages and more inflation, few business managers here would disagree. Tony Rowland, the chief executive of Bulawayo-based Zimplow, employs 400 people to make animaldrawn plows from steel rolled at one of Zimbabwe's few domestic mills. To hedge against the constantly rising price of domestic steel, he reinvests his profits in something that rises with inflation: nuts and bolts. 'I've become a steel dealer,' he said. 'I've had to expand my business to things beyond my core business to keep going.' Were he forced to buy and sell at the official exchange rate, he said, 'I'd be dead in the water.' Mr. Rowland and others say that even partial devaluations of the currency by the government will not revive the economy or save businesses and that an economic overhaul that reflected reality would impose unacceptable suffering on ordinary citizens who already undergo too many hardships. 'Something's got to give,' said another Bulawayo manufacturer, a major exporter. 'The problem is that the decisions to be made are so radical, and would affect the average man so badly, that they'll never be made. Not under the current environment, anyway.' So Zimbabweans muddle through. In Harare, the chief of a major consumer products company said recently that he had junked his accounting software until programmers could adapt a Turkish version to his requirements. The problem: the Zimbabwe spreadsheets cannot accommodate the flood of zeros required for transactions that now run into the billions - even the trillions - of Zimbabwean dollars. 'We've run out of noughts,' he said.

Subject: 'Against Depression' From: Emma To: All Date Posted: Sat, May 21, 2005 at 10:08:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/22/books/review/22ANGIERL.html?pagewanted=all 'Against Depression': Anatomy of Severe Melancholy By NATALIE ANGIER PETER D. KRAMER, author of the phenomenally successful ''Listening to Prozac,'' may be thought of as America's Dr. Depression, and he may have done more than anybody else to illuminate the clawing, scabrous, catastrophic monotony that is depressive illness. But he has never suffered from the mental disorder himself. Not that he's a chipper bon vivant. ''I am easily upset,'' he writes in ''Against Depression.'' ''I brood over failures. I require solitude. . . . In medieval or Renaissance terms, I am melancholic as regards my preponderant humor.'' Still, he has never qualified for a diagnosis of even low-level depression. My first reaction to that biographical detail was to question Kramer's authority on the subject. How can you really understand what pain is, I wondered, if you've never felt the Cuisinart inside? I quickly dropped my objections, however, when I realized I was doing for depression precisely what Kramer warns against in this eloquent, absorbing and largely persuasive book. I was lifting it to the status of the metaphysical, or at least the meta-medical. I was granting to its specific pain the presumed reimbursement of revelation, the power to ennoble, instruct and certify the sufferer. By contrast, I'd never insist that my endocrinologist suffer my autoimmune disorder before treating me or talking publicly about autoimmunity; or that my endodontist, before extracting my infected dental pulp, first be ''enlightened'' with a few root canals of his own. That Kramer has not been depressed may in fact allow him to resist doing what depressives, and those who love them, too readily do, which is romanticize and totemize and finally trivialize the illness. Instead, Kramer, who is a clinical professor of psychiatry at Brown University, sees depression for what it is. ''It is fragility, brittleness, lack of resilience, a failure to heal,'' he writes. It is sadness, hopelessness, chronic exhaustion allied with corrosive anxiety, a loss of any emotion but guilt, of any desire but to stop, please stop, and to stay stopped, forever. ''Depression is a disease of extraordinary magnitude,'' he says, and ''the major scourge of humankind.'' Found by the World Health Organization to be the single most disabling disease, depression afflicts people of every age, class, race, creed and calling: as many as 25 percent of us will be caught in its vise at least once in our lives. The disease blights careers, shatters families and costs billions of dollars in lost workdays a year. Kramer cites studies putting the annual workplace cost in this country alone at $40 billion -- the equivalent of 3 percent of the gross national product. Depression also kills, through suicide, heart disease, pneumonia, accidents. Forget the persistent myth of depression as a source of artistry, soulfulness and rebellion. Depression doesn't fan creative flames. It is photophobic and anhedonic and would rather just drool in the dark. Kramer wrote ''Against Depression'' to dispel what he sees as the lingering charisma of the disease. And yes, people talk about it now as a biological disease rather than a moral or spiritual failing. The stigma of mental illness has mainly faded, and antidepressants are among the most widely prescribed of all medications. Nevertheless, in the dozen years since the publication of ''Listening to Prozac,'' Kramer has seen plenty of resistance to the idea that depression, like cancer, AIDS or malaria, is a disease without redeeming value, best annihilated entirely. He has read stacks of depression memoirs, and though most have parroted the party line that depression is a disease like any other, ''hints of pride almost invariably showed through, as if affliction with depression might after all be more enriching than, say . . . kidney failure.'' The writers couldn't help conveying the message: ''Depression gave me my soul.'' Moreover, whenever Kramer gives a talk, sooner or later an audience member invariably asks The Question. So, Dr. Kramer, what would have happened if van Gogh had taken Prozac? Or Kierkegaard? Or Virginia Woolf? The implication of the question is obvious. Throw out the depression bath water and, whoops, there go ''Starry Night'' and ''Mrs. Dalloway'' with it. Kramer presents a sustained case that depression, far from enhancing cognitive or emotional powers, essentially pokes holes in the brain, killing neurons and causing key regions of the prefrontal cortex -- the advanced part of the brain, located just behind the forehead -- to shrink measurably in size. He lucidly explains a wealth of recent research on the disease, citing work in genetics, biochemistry, brain imaging, the biology of stress, studies of identical twins. He compares the brain damage from depression with that caused by strokes. As a result of diminished blood flow to the brain, he says, many elderly stroke patients suffer crippling depressions. Is stroke-induced depression a form of ''heroic melancholy''? If not, then why pin merit badges on any expression of the disease? Rallying his extensive familiarity with art and literature, Kramer argues that history's depressive luminaries were creative not because of but despite their struggles with mental illness -- as a result of their underlying resilience, a quality he admires. Kramer envisions a utopian future in which neuro-resilience and neuro-regeneration may be easily induced with drugs or gene therapy. How much more intellectually and emotionally courageous might we be, he asks, how much more readily might we venture out on limbs and high wires, if we knew a private trampoline would always break our fall? KRAMER'S narrative is not seamless. He argues that depression has long been very much among us, and he rightly discounts pat evolutionary hypotheses about the disease's ''adaptive value,'' but he doesn't offer much of an explanation himself for how a condition so devastating has come to be so common. Kramer can also sound defensive and willfully dour. To counter possible charges of superficiality or a fondness for smiley-face fixes, he presents his ''bona fides as a person who can appreciate alienation, both the social and existential varieties,'' among them being a New York-born German Jew who lost many relatives in the Holocaust. He rejects our habitual conflation of tragedy with depth and joy with shallowness, yet when A. L. Kennedy, author of the memoir ''On Bullfighting,'' struggles to find some lightness by recalling how her suicidal fantasies clashed with her fear of public embarrassment, Kramer dismisses her attempts as an author's version of ''meeting cute.'' Ah, but self-mockery can be a small source of joy, even redemption, which is why, whenever I lapse into hand-wringing, I recall Ezra Pound's ode to misery, a parody of A. E. Housman: ''O woe, woe, / People are born and die, / We also shall be dead pretty soon / Therefore let us act as if we were dead already.'' Now that's what I call cute.

Subject: Starbucks Aims to Alter China From: Emma To: All Date Posted: Sat, May 21, 2005 at 09:36:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/21/business/worldbusiness/21coffee.html Starbucks Aims to Alter China's Taste in Caffeine By KEITH BRADSHER HONG KONG - The Starbucks Corporation plans to announce soon an accelerated push into the Chinese market, company executives said on Friday, the latest in a series of aggressive efforts by international food and beverage companies to expand in China. What is striking about these efforts, by McDonald's and KFC as well as Starbucks, is that they have made few concessions to Chinese tastes, instead cultivating in China an appetite for Western favorites, like Big Macs and grande lattes. Like many other companies, most notably General Motors, chains like Starbucks have also struggled in China against the copying of their stores and logos. Martin P. Coles, president of Starbucks Coffee International, and Christine M. Day, president of the Starbucks Asia and Pacific group, called a news conference here on Friday, but then said they were not yet ready to announce details of their plans for China. 'When you work with partners, it always takes more time than you think it will,' said Ms. Day, adding that she expected an announcement in 'a couple of weeks.' Starbucks already has 120 stores in mainland China, a market it entered in 1999, and 194 in Hong Kong, Macao and Taiwan. Starbucks has 9,000 stores around the world, 2,600 of them outside the United States. But the focus of growth is clearly outside the United States, with China a special priority, Mr. Coles said. The company's long-term goal - he declined to set a timeline - is to have 30,000 stores, with half of them outside the United States and a very large proportion in China. 'Longer term, it has the potential to be second to the U.S.A. in the number of stores,' Mr. Coles said. The expansion of a coffee shop chain is striking in China, a land of tea drinkers like Japan, where Starbucks is becoming ubiquitous in parts of Tokyo. Starbucks typically offers only three or four kinds of tea in its shops in China, in addition to the usual coffees of all flavors. Starbucks is considering whether to offer more kinds of tea, but it is mostly trying to cultivate a love of coffee in China. The company's market research has found that customers in China tend to come in initially just to find a place to meet, and then begin buying coffee as they become repeat customers. Starbucks entered the Hong Kong market, another place where many drink tea, and now has 51 stores here. Joey Chan, a 35-year-old clerk visiting a Starbucks in Hong Kong at lunchtime on Friday, said that the stores had already become part of the local culture and did not seem like an American import. 'Hong Kong people love chatting, and you can stay here as long as you like without worrying that you will be asked to leave by the waiters,' he said. Ms. Day said that Starbucks had brought a couple of Asian beverages to its American stores, notably green tea frappuccino, and was considering 'four or five' more Asian drinks for Starbucks menus around the world. While Starbucks is growing quickly in China, it has run into some of the same intellectual property disputes that have bedeviled many companies. A single coffee shop in Shanghai registered the Pinyin spelling of the company's name, 'xing ba ke,' before Starbucks got around to doing so, and is now using the name. Ms. Day said that the company had sued and expected a court verdict soon, adding that the shop had already taken down a sign that resembled the Starbucks logo.

Subject: Rising Interest Rates or Falling? From: Emma To: All Date Posted: Fri, May 20, 2005 at 22:46:15 (EDT) Email Address: Not Provided Message: Paul Krugman finds the danger a decrease in cheap lending to America from China, and so an increase in interest rates and an end to the housing bubble. Can the Federal Reserve deal with this? Does the Fed simply lower short term rates?

Subject: Re: Rising Interest Rates or Falling? From: Pete Weis To: Emma Date Posted: Sat, May 21, 2005 at 01:53:13 (EDT) Email Address: Not Provided Message: There is a disconnect between the fed short term rate and long term rates. This is a problem since a number of events which could influence long term rates to rise could not be counteracted by the Fed without the danger of a collapse in the dollar - this is the financial crisis to which Paul Volker refers.

Subject: Re: Rising Interest Rates or Falling? From: Emma To: Pete Weis Date Posted: Sat, May 21, 2005 at 06:51:50 (EDT) Email Address: Not Provided Message: Putting together Paul Krugman's conditions, there will be a time when China allows its currency to appreciate in value against the dollar. Likely this will involve an appreciation in other Asian currencies, though the Yen may changelittle in value. As the Yuan appreciates China will have to buy fewer American securities, and there will be a tendency for our interest rates to increase. Here is the point of complexity. If interest rates increase there may be a decline in housing demand and prices and mortgage refinancing, and from this decline in housing demand a decline in general business activity. Now, from what Alan Greenspan has written, the Fed will intervene and begin to lower short term interest rates. Greenspan has written that the value of the dollar will not be the concern, rather the concern will be the strength of the economy. We could then look for a general decline of the dollar, but there is reason to believe the Fed could in time limit long term interest rate increases. Still, what is not clear is whether changing Fed policy would take effect quickly enough to avoid a recession.

Subject: Re: Rising Interest Rates or Falling? From: Pete Weis To: Emma Date Posted: Sat, May 21, 2005 at 12:18:22 (EDT) Email Address: Not Provided Message: 'Greenspan has written that the value of the dollar will not be the concern, rather the concern will be the strength of the economy.' Emma. Aren't the two intertwined? In other words, if we get a sharply declining dollar without sharply rising wages to offset it, consumption would fall as paychecks buy less. This could lead to rising unemployment. Employment is also a factor (besides interest rates) when it comes to housing valuations. Since much of the better employment we have is due to the housing boom - remember the San Diego Tribune article which attributes 50% of job creation directly to housing in California - a further drop in housing brought on by unemployment elsewhere in the economy will foster even more unemployment. This once again feeds on itself. The way to stem a sharp fall in the dollar is to raise interest rates sharply, but of course this hits housing and reduces general consumption leading to higher unemployment, etc, etc. So there is something fundamentally wrong in our economy (seriously wrong) which the fed alone can not fix. It might have been able to do something about it years ago when they could have put the brakes on in the middle 90's, but now we're in the proverbial 'between a rock and a hard place'. So, IMO, now it's about limiting the damage and requires the cooperation of all our trading partners, an aggressive government directed energy policy (to reduce oil/natural gas imports), and revised US fiscal policies (as you and Terri point out). With regard to working with our trading partners, we need to utilize our 'best' economists and their 'best' economists to figure out a way to convert this house of cards into something which survives and won't collapse, but in which framework all will have to give up something for the greater good.

Subject: Re: Rising Interest Rates or Falling? From: Emma To: Pete Weis Date Posted: Sat, May 21, 2005 at 16:56:23 (EDT) Email Address: Not Provided Message: I understand what you are thinking, and I tend to agree when you argue in this line. I will think a while.

Subject: Housing and Currency From: Emma To: All Date Posted: Fri, May 20, 2005 at 22:09:02 (EDT) Email Address: Not Provided Message: Paul Krugman has set us 2 problems, the problem of a housing bubble and the problem of what must be an eventual increase in the value of the Yuan against the dollar which will limit the cheap credit we are getting from China. There is cause to worry.

Subject: Housing or Real Estate From: Emma To: Emma Date Posted: Fri, May 20, 2005 at 22:11:24 (EDT) Email Address: Not Provided Message: Notice that Krugman uses the expression housing bubble rather than real estate bubble. Krugman may be thinking there is less problem in commercial real estate. I wonder.

Subject: Alan Greenspan's Argument From: Emma To: All Date Posted: Fri, May 20, 2005 at 18:31:52 (EDT) Email Address: Not Provided Message: The argument Alan Greenspan has referred to is that part of the increasing flexibility of the American economy involves households being capable of handling relatively more debt now simply because the assets underlying the debt are more ample. Greenspan seems to be arguing that households are increasingly capable of handling debt as corporations handle debt. This is the basis for Greenspan's remark on the long term advantage of variable rate mortgages. I have been thinking about the remark and argument.

Subject: Re: Alan Greenspan's Argument From: Pete Weis To: Emma Date Posted: Sat, May 21, 2005 at 02:22:31 (EDT) Email Address: Not Provided Message: Isn't this like saying in the late 90's that highly indebted consumers could handle their high levels of debt because the valuations of their 'underlying' hightech portfolios represented more 'ample assets'? Furthermore, at the time Greenspan was pushing ARM's he was fully aware that he was getting ready to gradually raise the fed rate and despite the fact that long term rates are yet to rise, Greenspan has recently expressed some surprise that the fed tightening has not thus far pushed long term rates upward also. So it is clear to me that when he was suggesting that ARM's where a good thing for homeowners, he believed mortgage rates were headed higher. At the time, Paul Krugman pointed out that the good old 30 year fixed was obviously the best choice when we were near the bottom of an interest rate cycle. Greenspan supported the Bush tax cuts and now says our government must do something about it's growing budget deficit. He advised the Reagan administration to institute big increases in payroll taxes to secure social security for future generations and now suggests large cuts in social security for future generations. I'm sorry, but we need to face the fact that we do not have an honest man in the fed chair. IMO, our present chairman may be the Maestro (of BS) but he is not an individual possessing integrity.

Subject: Re: Alan Greenspan's Argument From: Terri To: Pete Weis Date Posted: Sat, May 21, 2005 at 17:59:33 (EDT) Email Address: Not Provided Message: Friends whose judgement I trust are on both sides of the argument.

Subject: Fantastic article at Slate From: Auros To: All Date Posted: Fri, May 20, 2005 at 18:00:10 (EDT) Email Address: rmharman@auros.org Message: The Cram-Down Decade. Very much worth reading; it explores the common thread between Congress and corporate boardrooms -- intentionally mismanaging retirement funds so that the capitalist class can throw up its hands and tell retirees, 'Sorry, there's no money for your pension and healthcare.' The Cram-Down Decade slate.msn.com/id/2119327/

Subject: Re: Fantastic article at Slate From: Terri To: Auros Date Posted: Fri, May 20, 2005 at 20:38:31 (EDT) Email Address: Not Provided Message: What is not clear is how selected pension funds could be poorly managed through these last 25 years when we have experienced astonishing bull markets in stocks, bonds, and real estate. We need more study of individual pension funds in this regard. Thank you for the article notice.

Subject: It is clear- From: David E.. To: Terri Date Posted: Fri, May 20, 2005 at 22:11:59 (EDT) Email Address: Not Provided Message: Pension plans have to be funded-we have gone through several cycles of the government lowering the funding requirements to satisfy corporate requests.

Subject: Household Debt and Government Debt From: Emma To: All Date Posted: Fri, May 20, 2005 at 13:45:37 (EDT) Email Address: Not Provided Message: Alan Greenspan has argued that household debt is not worrying, for houseolds are increasingly better able to handle debt. The problem is federal debt. How are we to deal with the structural budget deficit? Presently, we are dealing with the deficit by insuring that it will increase faster than we can grow. There is the problem. I do not need to be forced to save, though I wish there were more household saving for I worry about our economic health.

Subject: Re: Household Debt and Government Debt From: Pete Weis To: Emma Date Posted: Fri, May 20, 2005 at 16:16:05 (EDT) Email Address: Not Provided Message: 'Alan Greenspan has argued that household debt is not worrying, for houseolds are increasingly better able to handle debt.' With poor aggregate wage performance in this economy and interest rates no longer going down, how are 'households increasingly better able to handle debt'? Oh, wait a minute, I know, I know - interest only mortgages. I almost forgot about those little gems. Boy, Alan just seems like he's right on top of things!

Subject: Should From: Emma To: Emma Date Posted: Fri, May 20, 2005 at 13:46:55 (EDT) Email Address: Not Provided Message: The problem with household saving comes to how secure should we really feel? The initial answer to my question is if there is indeed a real estate bubble, as Paul Krugman now insists, then there should be more household saving since real estate is increasingly used as our 'bank.'

Subject: Is Real Estate Too Expensive? From: Terri To: All Date Posted: Fri, May 20, 2005 at 12:56:21 (EDT) Email Address: Not Provided Message: Let me be more precise in questioning. What are the criteria to look for in buying income property? How are we to understand when property has become too pricey? That is the issue in buying property for a REIT or buying a REIT itself. The answer to the question determines whether there is a bubble in real estate.

Subject: Re: Is Real Estate Too Expensive? From: Pete Weis To: Terri Date Posted: Fri, May 20, 2005 at 14:26:05 (EDT) Email Address: Not Provided Message: Terri. There are books written about how to invest in real estate. There are many considerations involving cash flow: the depreciation life of a particular property, tax benefits of whether you as the owner also live on the property, maintenance costs (is the owner Mr./Mrs. Fix-it or will you need to hire others to maintain), rental history, quality of renters who will likely rent property (job stability, drug problems, etc) - very important since it can be very difficult and expensive to evict, property management costs, periods of time when property is vacant between renters and cost of advertising for new renters. What about utility costs - are they headed higher? Are they included in the rent? Is the renter paying for them? If they are headed higher and subtract from the renters income will this mean less money available for rent or rental increases needed by the landlord to offset higher taxes, maintenance costs, etc? There are the costs of buying and selling (often 8-10% to sell). If you are buying into a high priced market you better be concerned with cash flow - meaning enough rent to offset expenses because you face the possiblilty of declining valuation and you may need to ride it out. Real estate investment is a HIGHLY LEVERAGED investment and so comes with a HIGH LEVEL of risk!!!! When the economy is strong (good for rental income and valuation) and interest rates are starting downward from high levels (good for capital gain), it's possible to do much better than investing in the stock market since you are controlling thru leverage investments valued as much as 10x the amount of actual capital invested. So any gains on capital invested get multiplied 10 fold. Some savy real estate investors are able to find properties which they can get lenders to have appraised at values higher than the purchase price and thus get built-in equity which allows them to invest less capital to purchase the property to begin with. Lately, getting high appraisals for this purpose may be happening like never before. But if the economy is weakening and rates are headed higher then the risk increases dramatically, especially if it follows a big run-up in valuations. Because of the leveraging, a real estate decline has a massive impact on the economy if overall equity is low and the decline severe. Just as the real estate boom feeds on itself so does the decline. As soon as the real estate boom begins to peak and gradually speculators begin losing faith in future short term gains, they will begin to put properties up for sale. This will further increase speculators worries bring even more properties up for sale. At the same time buyers, who had previously been stoked by rising valuations will begin to dwindle. So as Buffet likes to put it - 'there won't be enough room for every one to fit through the exit'. As many investors will find themselves 'upsidedown', mortgage defaults will rise dramatically causing credit standards to tighten. Bond holders in mortgage securities will find themselves getting pounded and will begin to exit, reducing the supply of mortgage money. Rates will have to rise to attract investors to accept the higher risks. This will cause a further decline in real estate and more defaults - hence higher risk and even higher rates, and so on. A very nasty circle of decline. The losses will begin for speculators but will eventually filter down to home owners since it will cause higher mortgage rates and tighter credit requirements. The real estate decline will start a job market decline since so much of the job market is directly or indirectly related to the real estate boom. All of this will bring a great deal of systemic stress to our largest and smallest financial institutions. It will take alot of fancy footwork by the fed and our government to reduce the damage.

Subject: Re: Is Real Estate Too Expensive? From: Terri To: Pete Weis Date Posted: Fri, May 20, 2005 at 18:22:42 (EDT) Email Address: Not Provided Message: Pete, thank you so much for the extensive responses. I understand your argument completely. There will be a break in the real estate market, but the adjustment from there is far from clear. While there will likely be a tightening of credit standards, there may well be a decline in long term interest rates as the economy weakens. This appears to be what happened in Japan. I like your analysis a lot.

Subject: Japan vs US From: Pete Weis To: Terri Date Posted: Sat, May 21, 2005 at 01:42:41 (EDT) Email Address: Not Provided Message: Remember Japan does not have a current account deficit, but rather a current account surplus. So the pressure on the dollar to sink is much greater than for the Yen. The current account deficit in the US is the primary driver for personal debt since we Americans spend considerably more than we produce hence we must borrow to maintain our 'standard of living'. This makes us much more prone to personal bankruptcies and mortgage defaults. Therefore investors in mortgage securities in the US are at greater risk of suffering loses in the event of a severe housing bust where mortgage defaults would be more numerous than they have been in the long drawn out housing bust in Japan. Personal debt in the US after more than two decades of current account deficits is now at exceptionally high levels. At some point interest rates must reflect the risks. This is why GM and Ford now must pay higher rates to borrow since they represent higher risks for bond investors. The same will be true for the US consumer and US home owners.

Subject: Re: Japan vs US From: Terri To: Pete Weis Date Posted: Sat, May 21, 2005 at 17:58:02 (EDT) Email Address: Not Provided Message: 'Personal debt in the US after more than two decades of current account deficits is now at exceptionally high levels. At some point interest rates must reflect the risks. This is why GM and Ford now must pay higher rates to borrow since they represent higher risks for bond investors. The same will be true for the US consumer and US home owners.' This is a good argument, but I must ask after it for I understand if the analogy holds. For some people the relation will hold, but more broadly than some I am not at all sure. Paul Krugman may be telling us just this, but again I am not sure. I will ask.

Subject: Re: Japan vs US From: Pete Weis To: Terri Date Posted: Sun, May 22, 2005 at 12:52:55 (EDT) Email Address: Not Provided Message: All investments involve risks - even US treasuries as we are discovering and central bankers around the world are considering. The question for any investor - is the anticipated rate of real return worth the risk?

Subject: Re: Japan vs US From: Terri To: Pete Weis Date Posted: Sun, May 22, 2005 at 19:49:48 (EDT) Email Address: Not Provided Message: Ha; is this ever so. You always go to the heart of the matter, and this is why I debate myself and you :)

Subject: At Sunbeam, Big Guys Won, Public Lost From: Emma To: All Date Posted: Fri, May 20, 2005 at 12:51:23 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/20/business/20norris.html At Sunbeam, Big Guys Won, Public Lost By FLOYD NORRIS SEVEN years ago, two financiers who were among the most respected and feared in America sat down to make a deal that turned out to be disastrous for almost everyone involved. Everyone, that is, except for the men most directly involved. Long after the public investors toted up their losses, Ronald O. Perelman and Albert J. Dunlap are doing fine. The biggest loser appears to be an investment bank that lost a lot of money financing the deal and now must pay much more to Mr. Perelman. In early 1998, Mr. Dunlap was among the most revered and most reviled chief executives in the country. Credited with having turned around Scott Paper in 1994 and 1995, he then appeared to have done the same thing for Sunbeam, a maker of small home appliances. Its profits had soared and so had its shares. He relished the nickname Chainsaw Al, bestowed for his willingness to fire people. His memoirs had been a best seller in hardcover and were selling well in the paperback edition. Mr. Perelman was also widely respected. To be sure, his Marvel Entertainment had gone bankrupt, leaving public investors with big losses. But shares in Revlon, the cosmetics company he controlled, were trading for twice the price at which they had gone public two years earlier. But behind the scenes, neither man's empire was as solid as it seemed. Revlon's shares were destined to plunge later that year as sales suffered, and since then Mr. Perelman has been forced to put more money into the company, whose stock price is less than a tenth of what it was in early 1998. But Revlon's problems were small compared with Sunbeam's. That company's turnaround was soon to be exposed as being based on false accounting. Sunbeam went bankrupt, with shareholders losing everything. Mr. Perelman was one of those shareholders, because he had sold Coleman, the camping equipment company, to Sunbeam for cash and stock. He may have gotten a higher price for Coleman than its operations warranted, as Sunbeam later claimed, but he did not sell his Sunbeam stock to realize that gain. AFTER Sunbeam unraveled, Mr. Perelman decided to sue. But, for reasons his aides will not discuss now, he did not sue Mr. Dunlap. Instead, he sued Morgan Stanley, which had advised Sunbeam and underwrote the junk bonds and bank loans that financed the Coleman acquisition. Morgan Stanley had intended to syndicate the bank loan to other institutions, but it was not able to do so, and says it lost $300 million on the deal. The judge in Florida hearing Mr. Perelman's suit decided that Morgan Stanley had failed to produce evidence and thus had acted so badly that the jury should assume it was in on the fraud. This week the jury awarded $1.45 billion to Mr. Perelman, most of it in punitive damages. The former public owners of Coleman stock were not in the lawsuit, and will get nothing from it. If this verdict stands, Mr. Perelman will have a large profit, but public investors who followed his lead will have lost nearly everything they invested. Another winner is Mr. Dunlap, whose lawyer did not return telephone calls. He has always denied doing anything wrong, but paid $18.5 million to settle various lawsuits. He appears to have many millions left and he faces no criminal charges. When Sunbeam collapsed, federal prosecutors were not as interested in accounting fraud as they later became, and it was not until 2002 that the Justice Department began an investigation. No indictments followed. By then it had come out that Mr. Dunlap had lied on his résumé, concealing a job in the 1970's. That employer claimed in federal court that Mr. Dunlap had directed an accounting fraud similar to what later happened at Sunbeam, but the employer went bankrupt and the suit was settled without anything being proven. Mr. Perelman and Mr. Dunlap have reason to smile now. Small investors who believed in them do not.

Subject: Morgan Stanley's Comeuppance From: Emma To: All Date Posted: Fri, May 20, 2005 at 10:56:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/20/opinion/20fri4.html Morgan Stanley's Comeuppance The investment bank Morgan Stanley has long been famous for stonewalling in the face of requests to produce documents, but when it tried these tactics in its bruising legal battle with Ronald Perelman, the billionaire financier, it won only grief. The bank has been ordered to pay $1.45 billion in actual and punitive damages to Mr. Perelman, thanks mostly to its persistent and misguided resistance. Mr. Perelman had sued Morgan Stanley, accusing it of helping to falsely inflate the deteriorating finances of the Sunbeam Corporation to induce him to accept that company's stock as partial payment in a buyout transaction. Although the average onlooker may find it hard to believe that Mr. Perelman was all that easy to dupe, he did not even have to prove his case. In midstream, the judge, angry that Morgan Stanley had repeatedly evaded orders to turn over e-mail messages, ruled that under Florida law, the jurors could take it for granted that the bank and Sunbeam had conspired to commit fraud. The burden of proof shifted to Morgan Stanley to prove otherwise, a hurdle it could not overcome. The bank will appeal the verdict, and many analysts expect the two sides to settle. The debacle is already roiling the legal ranks at Morgan Stanley, which brought in a new lawyer to rule over the chief counsel deemed responsible for the intransigent tactics and fired its chief outside law firm - all because someone didn't think it necessary to satisfy disclosure orders from the court.

Subject: Saving Energy, Without a Suit From: Emma To: All Date Posted: Fri, May 20, 2005 at 10:49:43 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/20/business/worldbusiness/20tieless.html?pagewanted=all Is a Salaryman Without a Suit Like Sushi Without the Rice? By JAMES BROOKE TOKYO - The fashion models who prowl the catwalks of Japan tend to be long-legged and slinky. But the latest style setter here has a leonine glare and the kind of commanding bark that makes junior executives sit up and take notice. Hiroshi Okuda, chairman of Toyota Motor, Japan's largest company, is about to make his runway debut, promenading before the cameras for a new national campaign to cajole Japanese men to help the nation save energy by shedding their jackets and ties in summer. This blatant appeal to hierarchy comes as Japan - the world's second-largest oil importer, after the United States - charts a sartorial revolution intended to cut summer air-conditioning bills. The dark business suit, the beloved uniform for generations of salarymen, is supposed to stay at home this summer. All public and private offices - in a bid to save energy and reduce output of global warming gases - are to set their air-conditioners at 28 degrees centigrade, or a sweltering 82.4 degrees Fahrenheit. 'Japanese often feel they cannot do this or that if their bosses are not doing it,' said Yoshihisa Fujita, the environment ministry official in charge of the campaign. 'We targeted top executives of major corporations to lead the movement because smaller company employees would feel, 'We cannot remove neckties when our customer, company people, wear them.' ' Until now, office air-conditioning settings have varied, with some women complaining of glacial temperatures that allow their male colleagues' suits to look crisp. Next Tuesday, a rules committee of the lower house of Parliament is expected to vote to allow members to doff their coats in offices and committee rooms, a throwback to the 1950's, before air-conditioning. With air-conditioners blasting less hot air into streets, the nation's dominant city also hopes to attack its summer 'heat island' syndrome. With few parks, vast swathes of cement and new high-rises blocking sea breezes, Tokyo's number of 'tropical nights' - when thermometers never drop below 77 degrees Fahrenheit - jumped to 41 last year from fewer than 5 a century ago. 'This summer I will not allow anybody with tie or jacket into my office,' the environment minister, Yuriko Koike, told ministry employees on April 1, well in advance of the June 1 unofficial start of the air-conditioning season. In a press conference, she said that Cool Biz, a vaguely American fashion label pronounced 'kuuru bizu,' had been chosen among 3,200 suggestions submitted for Japan's new casual summer look. Some Japanese men sniff a plot by the nation's apparel industry to copy the boom enjoyed by American men's clothing stores a decade ago, when Casual Fridays forced office workers to augment their wardrobes with pressed khakis and nice sports shirts. 'We welcome the Cool Biz move; it is a favorable wind for us,' Masaaki Kato, spokesman for Renown D'urban Holdings, one of Japan's largest apparel companies, said in an interview. 'The fence between business and casual has been crumbling recently. There is a decline in the traditional view that the man who is wearing a suit is a businessman and the man who's not is unemployed.' The catchy Cool Biz name is essential because many Japanese cringe at memories of a fashion crime committed by a prime minister after the 1970's oil shock. Called the 'energy saving' look, this short-lived suit featured jacket sleeves cut off above the elbows. This hybrid salaryman safari suit bombed. Prime Minister Junichiro Koizumi unveiled the casual summer look in April, pitching it as part of Japan's effort to meet its 2012 goal of cutting its emissions of greenhouse gases by 6 percent from 1990's levels. 'The government will take the lead in prevention of global warming,' he said. 'From this summer, government is planning to start no necktie, no jacket.' Japan is the birthplace of the Kyoto Protocol, which only adds to the popularity of the global warming pact here. In an Asahi newspaper telephone poll last November, 79 percent of respondents said they believed that global warming was their 'own problem.' Last month, Mr. Koizumi's entire cabinet approved casual business dress guidelines, a first for Japan. The policy calls on government officials 'during June through the end of September, to work with light clothes with moderation that would not deviate from social norm, except for unavoidable situations brought about by diplomatic protocol, etc.' Bureaucrats mortified by informality can wear pins blaming their casual look on the national drive to meet Kyoto targets: '28 degrees/we are in the summer casual dress campaign to achieve minus 6 percent.' But salarymen are not expected to surrender their dark suits without a fight. On a recent afternoon in Otemachi, Tokyo's financial district, men on their lunch breaks predicted little loosening of one of the world's most conservative dress codes. 'The main obstacle is outside the company,' said Seiichiro Yabui, a 36-year-old salesman. 'How you appear when you meet clients, especially old clients.' Noriyuki Ushiyama, 51, agreed. 'In Japan, the relationship toward the customers is a very delicate one,' he said. 'For a dress code change to become real, you have to start right there.' Members of the Diet have worried that going tieless would erode 'the authority of the Diet.' Others have worried about live TV broadcasts. Several younger men have shown near panic at the idea of having to improvise a wardrobe beyond a white shirt, dark tie and black suit. 'There is something very convenient about wearing suits,' said Naoto Oshima, 33, a systems engineer. 'It is very easy to get dressed in the morning. I don't have to worry about what to wear to work at all.' Tomonari Kori, 25, stated flatly: 'I wouldn't know what to wear if we had to dress down.' Shinro Hayashi, editor of Men's Club, Japan's oldest men's fashion magazine, traced the salaryman's comfort in the anonymity of a dark suit to a group ethic that dates back to feudal days. 'Japanese wear suits so much because of their sense of belonging to a house, sense of belonging to a clan,' he said. 'By wearing uniformed suits, you can hide in the uniform and not reveal your individuality.' Beyond that, the suit means business. 'The suit represents, in a world language, that the guy you are talking to understands the sense of contract, the rules of business,' said Mr. Hayashi, who was wearing blue jeans and a white cotton shirt with French cuffs. 'Twenty years ago representatives of the Chinese Communist Party never wore suits. Look at them now.' To wean more Japanese men from their suits, the government has asked a famous cartoonist, Kenshi Hirokane, to start dressing his main character, a salaryman, in Cool Biz. But bracing for diehard sartorial resistance, the government also is preparing to play fashion hardball. Mr. Okuda of Toyota not only leads Japan's largest company, he is also chairman of the nation's most powerful business group, Keidanren, or the Japan Business Federation. That first Sunday in June, when he walks, or marches, down the catwalk, trailed by 12 lesser executives, it will be national news. 'Mr. Okuda is the top businessman in Japan,' Mr. Hayashi said. 'If he is really serious about the no-tie movement, the father of the house must demonstrate it himself.' But what happens if the following Monday morning, the business-suited legions march on to Tokyo's trains as if nothing had happened? The next step could be random, unannounced office raids by fashion police.

Subject: Europe: The Unlevel Playing Field From: Emma To: All Date Posted: Fri, May 20, 2005 at 10:21:22 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/20/business/worldbusiness/20euro.html?pagewanted=all Europe: The Unlevel Playing Field By MARK LANDLER MADRID - Like thousands of young Spaniards, Rafael Matito left his home village for Madrid 18 months ago, lured by one of Europe's most thriving capitals. After landing a job as a computer instructor, he and his girlfriend set about achieving the Spanish dream: buying their own home. 'We weren't looking for a villa or anything close to it,' Mr. Matito, 28, said. 'We just wanted one or two rooms.' Madrid was out of the question because of the sky-high prices, so they hunted in the suburbs. But even there, apartments were twice what they could afford. Disillusioned, they called off the search until the market cools - if it ever does. Spain is in the seventh year of a housing boom that with interest rates at historically low levels, shows no sign of cresting. Nearly two decades after joining the European Union, Spain is on the leading edge of an emerging, and troubling, dichotomy between dynamic European countries, with fast-rising asset prices, and lumbering countries, with moribund markets, most notably Germany. Far from converging into a more homogeneous bloc, the 12 countries that use the euro currency are dispersing into sprinters and laggards, with different levels of consumer confidence, industrial activity, and economic vigor. Bustling Ireland, with a growth rate of 5 percent, has little in common with becalmed Italy, where output may actually shrink this year. This has created a conundrum for the European Central Bank in Frankfurt, which sets interest rates for much of the Continent. Just as the Federal Reserve, to some extent, must take into account divergent conditions in Ohio and Arizona, the European bank is learning that it is even trickier to devise a monetary policy that works equally well from Finland to Greece. For months, the bank has signaled it wants to lift rates. But it is afraid of hobbling weak countries like Germany and the Netherlands. While the Germans linger on the edge of a recession, Spaniards are surfing on a sea of easy money, taking out cut-rate mortgages to buy and build houses at a furious pace. 'For the Spanish economy, the advantages of being in a monetary union clearly outweigh the disadvantages,' said José Luis Malo de Molina, the director for research at Banco de España, the Spanish central bank. 'But no monetary policy can address every national problem.' The euro has proved remarkably resilient since its debut in 1999, confounding those who warned that a pan-European currency would be inherently unstable or vulnerable to outside shocks. It has withstood the recent surge in oil prices, and has grown in credibility, particularly as the dollar has lost some of its luster. But the widening divide between euro countries has revived some of the warnings about the pitfalls of a monetary union. Those fissures may widen after a referendum in France that symbolizes the fragility of the European experiment. The French are set to vote May 29 on whether to approve a new constitution for the European Union. With unemployment in France running above 10 percent, voters are leaning toward rejecting it as a way to vent their anger at the government of President Jacques Chirac. Spaniards are more sanguine about their future: they approved the constitution by a wide margin in February. But skeptics say fast-rising housing prices here in Spain, as elsewhere, can be a barometer for other dangers, like an explosion in debt caused by too much money in the system. Mr. Malo de Molina said prices had risen 158 percent since 1997. Even more troubling, loans for new houses nearly tripled. Last fall, the Banco de España estimated that prices were overvalued by up to 20 percent. 'If you go back to the mid-1980's, Spain has had the most rapid price increase in housing of any large country in the world,' said Michael Ball, the author of an annual survey of the European housing market published by the Royal Institution of Chartered Surveyors in London. For all that, Mr. Ball and other economists doubt that Spain is at risk of a Japan-style meltdown in property prices. The more likely outcome, he said, is for prices to peak and then decline gradually. As prices continue on their vertiginous path, however, Spaniards are starting to talk about a 'burbuja,' Spanish for bubble. 'Bubbles grow quicker than we think, and they burst quicker than we think,' said José Manuel Campa, a professor of finance at the IESE Business School of the University of Navarra. Spain's housing boom is fueled by other factors, including rising incomes, mass immigration and demographic trends. But the main propellant is interest rates, which the European Central Bank has kept at 2 percent, a record low in the post-World War II era, for nearly two years. With inflation and economic output running well above the European average - both close to 3 percent - economists agree that Spain could easily carry a higher interest rate. Germany is the polar opposite. With an unemployment rate of 11.8 percent and growth of less than 1 percent, prices have been flat or even falling in recent years. Foreign investors are buying German property because it is viewed as a bargain. On the other hand, housing prices are rising at double-digit rates in Ireland and France. 'Housing-price inflation is the first indication of a monetary policy that is too expansionary,' said Jörg Krämer, the chief economist of the HVB Group in Munich. 'If we get a bubble, there is a high risk it will burst.' In fact, the European Central Bank has watched the spiraling prices with concern, viewing them as a potential trigger for economic shocks. In February, the bank's president, Jean-Claude Trichet, warned that 'the combination of ample liquidity and strong credit growth could, in some parts of the euro area, become a source of unsustainable price increases in property markets.' To economists who dissect such statements, that was a signal that the bank intended to increase rates. Yet this month, the bank unexpectedly dropped its expression of concern about housing prices from its statement on interest rates. After a battery of negative economic reports from Germany and Italy, the bank watchers say, Europe's faltering growth has replaced asset inflation as the biggest concern of Mr. Trichet and his colleagues. In such a fragile atmosphere, most economists believe, interest rates are not likely to go up for the rest of 2005. And, some add, they should not: the risk of a recession in Germany, which generates a third of the output of the 'euro zone,' outweighs the risks of a housing bubble in Spain. 'The E.C.B.'s stance is appropriate for the euro zone,' said Manuel Balmaseda, the chief economist of BBVA, the second-largest bank in Spain. The Fed, he noted, is not judged on whether its monetary policy is suitable for New York State, but for all 50 American states. That analogy only goes so far, however. While New York may grow at a different rate from California, the United States can adjust for these regional disparities in ways that Europe cannot. There is more labor mobility and wage flexibility in the United States. Americans think little of moving to faster-growing states, like those in the Sun Belt, for jobs. But Germans are not likely to relocate to Spain, except perhaps to retire or buy a vacation home. In fact, second homes also fuel the Spanish market. More houses will be built this year in sun-kissed Andalusia than in Britain or Germany. 'If there's going to be a crash, it's likely to be in these coastal areas,' Mr. Ball said. With this atmosphere of euphoria tinged by foreboding, Spaniards are like partygoers with one eye on the clock. Storefront real estate brokers have sprouted up all over Madrid and its environs, peddling everything from dingy apartments for $189,000 to elegant villas for $3 million and higher. In the suburbs, rows of freshly built villas and apartments climb the scrub-covered hillsides. Eight miles southwest of Madrid, a sprawling bedroom town known as Boadilla del Monte has taken root next to the campuslike headquarters of Spain's largest bank, Grupo Santander. 'Spaniards have a deeply-rooted love for investing in bricks and mortar,' said Pedro Ruiz-Olivares, the head of Santander's real estate division. Homeownership rates, he noted, are among the highest in Europe. Some property tycoons have taken on the swagger of latter-day conquistadors. Metrovacesa, Spain's biggest real estate developer, recently announced a takeover bid worth $7.35 billion for a much larger French rival, Gecina. Metrovacesa's president, Joaquín Rivero Valcarce, said he viewed France as a hedge against a slowdown in the Spanish market. 'We made a lot of money in the last 10 years because of the boom,' he said. 'But we know that Spain isn't going to keep going like this forever.' José and Francesco González-Tejada can relate to that. The two brothers from Seville turned up at a real estate office here the other day to sell an apartment belonging to their sister, who had recently died. The sister bought the three-bedroom flat in the 1950's for the equivalent of 900 euros. They were hoping to get 240,000 euros, even though it is in one of Madrid's rougher neighborhoods. José, who is 74, said that while he was confident, he wanted to unload it as quickly as possible. 'If we sold it next week, that would be great,' he said. 'We're living in a new Spain, and everything is more expensive.'

Subject: How Can We Value REITs From: Terri To: All Date Posted: Fri, May 20, 2005 at 05:55:33 (EDT) Email Address: Not Provided Message: http://flagship4.vanguard.com/VGApp/hnw/FundsByName What do these numbers mean? The Vanguard REIT Stock Index has a price earning ratio of 38.8, a return on equity of 9.1, and an earnings growth rate of -5.5%. These numbers make absolutely no sense to me. What am I missing about valuation? There surely seems to be a speculative climate for homes in selected American regions, but I wonder if that extends to commercial real estate as well so I thought to use the REIT Index as a gauge. The earnings growth rate extends over 3 years and is heavily negative at -5.5%. So REIT earning have been slowing; actually the earning growth rate has been negative for more than 4 years, but REIT gain in price. How curious.

Subject: The REIT Stock Index From: Terri To: All Date Posted: Thurs, May 19, 2005 at 20:54:18 (EDT) Email Address: Not Provided Message: What do these numbers mean? The Vanguard REIT Stock Index has a price earning ratio of 38.8, a return on equity of 9.1, and an earnings growth rate of -5.5%. These numbers make absolutely no sense to me. What am I missing about valuation?

Subject: What is a Healthy Real Estate Market? From: Terri To: Terri Date Posted: Fri, May 20, 2005 at 05:52:47 (EDT) Email Address: Not Provided Message: This simply cannot be a healthy real estate market as a whole any longer. Price repeatedly seems of no concern whether in neighborhoods I am familiar with and those I read of, or for commercial ventures. That there are regions in which real estate prices are relatively moderate, has nothing to do with what has happened about Boston and New York City, for instance.

Subject: Depends on one's....... From: Pete Weis To: Terri Date Posted: Fri, May 20, 2005 at 11:05:57 (EDT) Email Address: Not Provided Message: viewpoint. From a buyer's/investor's perspective it's when prices are most depressed (have reached a bottom) and there are few buyers compared to sellers. From a seller's perspective it's when prices are most inflated (approaching a top) and there are few sellers compared to buyers. From a real estate agent's perspective it's when the number of buyers is approximately equal to the number of sellers. When life is good for the maximum number of real estate agents it is also good for the maximum number of buyers/sellers - where neither buyer or seller has a greater advantage/disadvantage with regard to the other. This is where, IMO, we have the healthiest real estate market - from the maximum number of viewpoints.

Subject: Real Estate Speculation From: Terri To: All Date Posted: Thurs, May 19, 2005 at 19:42:50 (EDT) Email Address: Not Provided Message: Real estate speculation is being focused on from Fortune on down or up, and the more focus the more there likely will be for a while till some event tempers the demand. Then the question will be whether prices can be at all maintained. REIT stocks are leading the S&P and positive for the year, even after a brilliant 5 year run. This reflects professional real estate ventures. I wonder how much speculation is built into the prices of REITs. I have no guess.

Subject: 'Our House' From: Pancho Villa alias 'Madness' To: All Date Posted: Thurs, May 19, 2005 at 18:14:50 (EDT) Email Address: panchovillan@yahoo.com Message: KENNETH ROGOFF A healthy global economy begins at home The US Treasury tried to walk a legal tightrope this week. In its biannual foreign exchange report to Congress, it declared that while China is not yet guilty of exchange rate manipulation, it will soon become guilty unless it changes its policy. What exactly does this mean? Too many lawyers must have worked on this phrasing, which rivals Bill Clinton's famously evasive line (in response to a question under oath about whether he was having an affair) 'It depends on what the meaning of 'is' is.' To be fair, the Treasury report is very thoughtful overall, aimed at mollifying trade protectionists in Congress who are proposing punitive tariffs on Chinese imports unless Beijing stops intervening to hold the renmimbi down against the dollar. The report rightly aims to deflect attention from US-Chinese trade by focusing on the way that China's current dollar peg blocks an important price mechanism from helping to unwind today's massive global trade and current account imbalances. Of course, what the Treasury report does not say is that 'global imbalances' is a euphemism for 'US borrowing binge'. After all, America is now absorbing 75 per cent of the current account surpluses of the world's surplus countries, not just China. Nor does the report mention how extraordinarily lax US monetary and fiscal policies of the past few years have probably played a far bigger role than China's peg in exacerbating the problem. Now that the US recession has passed, the starting point for reducing global imbalances has to be faster macroeconomic policy normalisation in America. The report spews the official line that the government is already reducing its own fiscal deficit. But the official target of a 50 per cent deficit reduction by 2009 is hardly ambitious enough, even if it were fully credible. Monetary policy, too, needs to compensate for years of low interest rates that have fuelled an increasingly speculative housing price boom, which has in turn contributed to low personal savings and a bigger current account deficit. But China's exchange rate policy also matters. Indeed, it is hard to see any scenario for unwinding the global imbalances in which Asian currencies do not appreciate sharply against the dollar. According to my latest paper* with Maurice Obstfeld, a halving of the US current account from 6 to 3 per cent of gross domestic product over two years would lead to an 18 per cent appreciation of Asian currencies versus the dollar, with China being on the high side. Eliminating the global imbalances would entail a proportionately larger appreciation (35 per cent) of Asian currencies, and a 10-20 per cent appreciation of major non-Asia currencies including the pound and the euro. If, however, Asia sticks to its dollar peg, Europe gets slammed by massive currency appreciation and massive current account deficits. For good measure, Europe suffers the double whammy of huge (15 per cent of European GDP) capital losses on its dollar and Asian currency assets. Asia's surpluses actually grow in this scenario, as they must to maintain Asia's dollar pegs in the face of an improving US current account. We have talked about China's contribution to smooth global adjustment in the face of massive US borrowing, but what policy is best for China? It is a very tough question, not least because China is really two economies rolled into one. Wealthy coastal China has 450m people living in a vibrant emerging market. But the rest of China, particularly the agricultural sector, has 750m still living in a poor developing country. Many outside observers estimate China's rural unemployment at over 150m people. Poor developing countries typically do well with relatively fixed exchange rates, whereas emerging markets typically need more flexible ones. On balance, given that China's future lies with greater globalisation not less, authorities should probably move very soon to a more flexible exchange rate, while the pressures are towards appreciation and relatively easy to handle. An initial step appreciation accompanied by a move to a managed float would seem to be the ticket. But the urgency of the situation really comes from the need for China to take a lead role in dealing with a global problem. In the meantime, the US Treasury ought to focus its next report on getting the country's own fiscal house in order. *Global Current Account Imbalances and Exchange Rate Adjustments; (www.economics.harvard.edu/faculty/rogoff/papers /BPEA2005.pdf) The writer, a former chief economist of the International Monetary Fund, is professor of economics at Harvard University FT Thursday May 19 2005

Subject: Winners vs losers From: Pete Weis To: Pancho Villa alias 'Madness' Date Posted: Thurs, May 19, 2005 at 22:50:39 (EDT) Email Address: Not Provided Message: We humans are very competitive beings. We tend to look at ourselves and others as either being winners or losers in a game of accumulating baubles. It rarely occurs to us that we could all be winners or all be losers in this game. I believe 'modern' economics pushes the idea that we all can be winners eventually, to a degree or less, and it is also possible for us all or nearly all to be losers -it doesn't necessarily follow that for some to win others must lose. Afterall the harnessing of energy has made winners of many and life much easier in the process. But we humans won't cooporate with that idea. We often insist on winning at the other's expense and eventually the 'game' fails nearly all of us. I say nearly all because there are always a tiny few who manipulate the system to their advantage. But I'm not blaming the manipulators - there will always be manipulators. The problem is more fundamental. Our instinctive, competitive behavior has not caught up with the theories of modern economics. If all the players in this game would cooporate, and understand that not working together with some give and take will end up making us all losers, then this game will not fail us. One would think that the lessons of the 30's would have made a difference. But we still seemed to be focused on winners vs. losers and are unwilling to seek solutions that make winners out of us all.

Subject: Re: Winners vs losers From: Terri To: Pete Weis Date Posted: Fri, May 20, 2005 at 05:34:03 (EDT) Email Address: Not Provided Message: A wonderful passage, and I agree completely, but obviously we have not learned to work together nearly well enough. I will think more about this.

Subject: CAFTA, Slave Labor, & Outsourcing From: unlawflcombatnt To: All Date Posted: Thurs, May 19, 2005 at 18:08:58 (EDT) Email Address: unlawflcombatnt@comcast.net Message: CAFTA is the latest anti-worker, pro-slavery, 'free' trade bills being considered in Congress. l urge everyone to write Congress and tell them to vote against CAFTA. This is another bill designed exclusively to facilitate outsourcing of American jobs. The bill is much worse than any of the previous 'free' trade bills. The flaws are even more obvious. It is a dishonest attempt by the Bush administration to portray an outsourcing bill as an attempt at 'opening up markets.' Central American workers are so poor they will NEVER create a market for American goods. Impoverished Central American workers, however, will provide an excellent source of cheap semi-slave labor. This new source of slave-labor will be in direct competition with American labor. The only way American workers will be able to compete is to accept the same slave-labor conditions as their Central American counterparts. CAFTA is nothing but an extension of the disastrous NAFTA scam. American workers will lose jobs, wages will decline, and 0 new jobs will be created. CAFTA's advocates are 100% aware of this. They are simply lying when they talk about 'opening up markets to American goods.' In reality, what they really want is to 'open up' the American labor market to competition with foreign slave-labor. Don't let Benedict Arnold corporations extend their economic treason any further. Americans must continue to stress Economic Patriotism, and oppose this new outsourcing extension. George Bush, and his fellow 'economic terrorists,' continue to espouse outsourcing as being 'good for America.' It is not. And they know it. It helps a selected few at the expense of the many. This bill is a typical product of today's inhuman corporate greed, and its influence on the legislative process. And outsourcing is the epitome of this corporate greed. Again, outsourcing is done exclusively so American corporations can use cheap foreign labor. The underlying motivation behind ALL free trade agreements is to enable American corporations to use the unskilled, impoverished, semi-slave labor of other countries. There has never been any real concern about 'opening up markets.' That is more than just a mistaken concept. It is an outright lie from Bush and the economists that espouse 'opening up markets.' The minuscule income of these 3rd world countries makes it impossible for them to buy American products. Bush knows this. Mankiw knows this. Snow knows this. The man on the moon knows this. Markets are created by aggregate consumer income, not people. Countries with little aggregate consumer income have minuscule-sized markets. Exporting countries that pay their 11-year old slave laborers $2/day will never, ever buy US products. Those wages don't provide enough consumer income to do so. Chinese and Indian industries would collapse if they had to depend on their own populations to purchase the bulk of goods and services they produce. Wages and consumer income are too low for them to survive on domestic sales. They depend on the American consumer market, which is created by American wages (and borrowing). When American industry outsources jobs, it outsources consumer income as well. This is the same income that purchases their products. Loss of jobs also places downward pressure on employed workers' wages. If labor demand decreases, so do wages. If this trend continues, Americans will be unable to purchase 80% of its own goods, as it currently does. Demand for goods, and the labor to produce them, will decrease further. This will further reduce consumer income and buying power. This is a self-perpetuating cycle, which will result in a continued decrease in DEMAND for American production. The price reduction on foreign-produced goods does not make up for the income lost. It is simply illogical to think so. If it did compensate, there would be no benefit to outsourcing. Wal-Mart statistics, provided by Wal-Mart, provide some insight. A Wal-Mart spokesperson recently stated that consumers save $600/year purchasing goods from Wal-Mart. He also admitted, however, that Wal-Mart wages were $2/hour lower than those of the average retail sales worker. Here's the math: $2/hr x 40hr/week x 52weeks = $4160 per year less income for a Wal-Mart employee. However, the $4160 is only a small part of the labor income actually lost, because it is confined to retail sales employees only. Nearly 100% of the labor income from production workers is lost, since Wal-Mart buys most of its products from production facilities ouside the U.S. The loss of income by American production workers is even greater. Does $600/year in consumer savings make up for income lost by retail employees and production workers? Of course not. Aggregate consumer income decreases FAR more than prices decrease. The price savings are MUCH less than the amount of labor income lost. The only income increase is in CEO salaries and corporate profits. And that increase is entirely at the expense of the American worker. Increased corporate profits are EXCLUSIVELY from reduction in labor costs. In other words, this profit comes directly out of the pockets of American workers. American workers are the most highly educated, highly skilled, productive workers on the planet. They produce more goods per hour than any of the workers they are losing their jobs to. But they are not as productive measured in goods per dollar. American workers lack the 'skills' to survive on $2/day. We need to begin retraining them to acquire this skill. Our educational system has completely failed us here. And the ability to survive on $2/day is THE most essential job skill in today's market. We definiely need to increase federal funding to teach this 'skill.' In reality, the 're-training' mantra is just a copout. The solution to outsourcing is not increased worker training. Nor is it increased funding to job-displacement programs. It is not extension of unemployment benefits. The solution to the outsourcing problem is to stop outsourcing. Period. Repeal ALL 'free' trade agreements. We have absolutely no need for any 'free' trade agreements. We already had free trade before any of these agreements were ever created. NAFTA, FTAA, CAFTA and the others have only one real goal -- to reduce the labor costs by using the slave labor of impoverished countries. This makes American workers compete with the exploited labor of poor countries. American workers then become no more than slaves themselves. Is this the job retraining Bush has in mind? Economists speak of 'comparative advantage' with outsourcing. This outdated concept is nothing but economic fantasy. It's what Right-Wing, 'alternate reality' economists hide behind when defending outsourcing. They should lose their economic degrees for even mentioning this in public. It's a long, twisted, completely non-applicable concoction, which is designed to disguise the real reasons for outsourcing. Mankiw and Snow know better than to hide behind the 'comparative advantage' fairy tale. Bush may be too stupid to be held completely accountable for his policies. But Mankiw and Snow are nothing but taxpayer-paid liars. The Bush/Mankiw/Snow/Greenspan 'economic axis-of-evil' may destroy our economy. unlawflcombatnt EconomicPopulistCommentary http://www.unlawflcombatnt.blogspot.com/ EconomicPopulistCommentary www.unlawflcombatnt.blogspot.com/

Subject: Re: CAFTA, Slave Labor, & Outsourcing From: Ryan To: unlawflcombatnt Date Posted: Fri, May 20, 2005 at 12:12:56 (EDT) Email Address: Not Provided Message: Have we been living in the same country for the past 10 years. NAFTA has beneficial to all three economies involved and free trade with Central America will only do the same. One thing you must remember, no one forces workers to attend those jobs. It creates jobs in poor areas, yes maybe not high paying, but jobs. I remember when all the accusations were being placed on Hong Kong, Singapore, and Thailand. Gosh those economies have it so bad because of it! It's time to wake up, we are entering a globalized economy. How can openning small markets to the world be a bad thing for those people. Please reply with your race to the bottom come backs that you learned in your business 101 class. Free trade is good! Last time I checked, even liberal economists are in favor of free trade (PK and others).

Subject: Re: CAFTA, Slave Labor, & Outsourcing From: unlawflcombatnt To: Ryan Date Posted: Sat, May 28, 2005 at 00:35:05 (EDT) Email Address: Not Provided Message: 'Have we been living in the same country for the past 10 years. NAFTA has beneficial to all three economies involved and free trade with Central America will only do the same.' Apparently you've been living in a different country than me. A country founded on the proposition that all truth is 'created,' not discovered. NAFTA has been a complete disaster, and everyone except you knows it. You don't have any specific or logical arguments to make. You simply state that 'even liberal economists favor free trade.' You don't have any idea what you're talking about. Nobel Prize winner Joseph Stiglitz has expressed major reservations. World-renowned economist Paul Samuelson has basically come out against free trade. In case you weren't aware of it, Lou Dobbs also has a degree in economics. Why don't come back with some specific facts, or logical arguments? You're just regurgitating typical pro-free trade soundbites. Do some thinking. You site no facts or logic to support your arrogant Neocon, Neo-Nut comments. Let me help you remove your veil of ignorance. Then you can come back with another of your clever, 'business 101' comments. Free trade advocates often justify their position by stating a desire to uplift the poor in foreign countries. Not only do I oppose that position on nationalistic grounds, I question the benefits to 3rd world countries as well. Lack of benefit to 3rd-world countries is the point I'd like to stress here. Outsourcing does NOT raise aggregate global wages. In fact, outsourcing labor costs to a low-wage country REDUCES global labor wages and income. If a $90/day American laborer is substituted for by $2/day foreign laborer, it reduces aggregate global labor income. Global labor income is what buys production and creates demand. Outsourcing reduces aggregate global labor income, thus reducing total consumer spending world wide. American workers lose income and buying power with outsourcing. That loss is NOT made up for by increase in foreign wages. This is just plain common sense. It's impossible for cost reductions to make up for wage losses. If American workers can't buy America's production, then foreign workers need to pick up the slack. Does anyone really think that's possible? Can $2/day foreign workers make up for the buying power lost by $90/day American workers? That's $88/day/worker in lost labor income per worker. It would take the labor income of 45 $2/day workers to make up that labor income loss. Does anyone really think that'll happen? Of course not. The only benefit to anyone is the short-term cost reduction to American outsourcers, and a slight price decrease for American consumers. The numbers just don't add up. Global labor competition causes aggregate global labor income to drop. It increases the labor supply available to American corporations, and decreases worker bargaining power. This is simple supply and demand. If the supply of labor increases 100-fold, it will drive the 'price' of labor down. Labor 'price' reduction means labor wage reduction. Thus, the end result will be a dramatic reduction in American labor income, as well as a lesser reduction in global wages. Outsourcing and globalization don't 'raise' anybody up. It drags all workers down. Jobs will go to the most impoverished workers, and employers won't pay them a penny more than they have to. We cannot enforce minimum wage laws, or other worker protections in foreign countries. Even more important, however, is that Corporate America doesn't want to. Why would they? It would increase the price of their exploited foreign labor. The poorer the worker, the more willingly they accept poverty-level wages. Their impoverishment is Corporate America's gain. Let's not forget that someone needs to buy the goods produced. Who will buy them if American wages drop to the level of their enslaved foreign counterparts? People can't purchase goods without income. And very low income means very few goods purchased. Demand cannnot be created out of thin air. Consumers must have sufficient income to create that demand. Without demand, there is no need for production, and no need to hire workers. The entire world economy would collapse without the Demand created by American consumers. That demand is created by American income and borrowing. We're almost maxed out on borrowing at present. In addition, inflation-adjusted American wages are declining. They've declined 1% over the last year, and 0.5% over the last 3 months. The last thing the US and the world need is a further decline in American wages. American wage decline hurts the US, as well as the major exporting countries. If aggregate American labor & consumer income declines, so does our ability to buy foreign imports. Increasing American labor competition with enslaved foreign workers is worsening this wage decline. It's not only in our best interests to keep jobs in the US, it's to the advantage of all countries that export to us. We need income to buy their goods. 'Opening up markets' sounds like a good idea. But it's a smokescreen. It's not the real motivation behind 'free' trade agreements. The real motivation is 'opening up' the American labor market to competion with slave-labor. Bush and his neocon supporters know this. They hope we won't see it. Many of us do, however. Hopefully we can make others see this as well. unlawflcombatnt EconomicPopulistCommentary http://www.unlawflcombatnt.blogspot.com/ ___________________________ Investment does NOT create jobs. It only 'allows' for their creation. Demand for goods creates jobs - it requires workers to produce goods. Investment 'permits' job growth. Demand requires it. Investment creates NO jobs w/o demand. America needs a return to Demand-Side economic policies. Consumer spending and demand drive our economy. Investment 'permits' growth, but only DEMAND will cause such growth. Production is limited by Aggregate demand for that production. EconomicPopulistCommentary www.unlawflcombatnt.blogspot.com/

Subject: China Has to Raise the Value of the Yuan From: Terri To: All Date Posted: Thurs, May 19, 2005 at 17:14:25 (EDT) Email Address: Not Provided Message: Do not mistake my comments, China has to move on currency. Export taxes will not suffice, there needs to be several currency adjustments to relieve pressure on China's economy as on ours. Dollar reserves cannot be safely accumulated by China all that much longer. Of this I am convinced. That currency adjustment means a rising value for the Yuan, allows for an implicit boasting that will soften the change and make it more possible. The Chinese economy really should be flexible enough to turn readily to more of a domestic consumption emphasis. My goodness, the domestic saving is surely there.

Subject: Paul Krugman in the Asia Times From: Pete Weis To: All Date Posted: Thurs, May 19, 2005 at 15:18:29 (EDT) Email Address: Not Provided Message: Global Economy May 19, 2005 THE ROVING EYE 'We are a banana republic' By Pepe Escobar BANGKOK - With a playful smile, Paul Krugman says China will inevitably become the world's No 1 economy, depending on the criteria one applies, 'by 2020 to 2040'. You can't be too careful when it's early evening, but the internal clock says it's early morning US East Coast time, you crave for breakfast, but soon have to address a US$250-a-plate dinner. Krugman adds - to the despair of many a neo-con - that a multipolar world is also inevitable, the poles being the US, the European Union, China and India (not Russia). But China has to watch out for environmental constraints and address its pressing water problem ('they say that the Yellow River never reaches the sea'.) Professor Paul Krugman, currently enjoying the status of being the Mick Jagger of political/economic punditry, is in Bangkok to address a seminar on how Thailand should position itself in the global economy - although he's also careful to point out he's no Thailand specialist; he does not even know exactly what 'Thaksonomics' means - a reference to Thai Prime Minister Thaksin Shinawatra's policies. He says Thailand has not experienced a 'searing recovery like Malaysia or even Argentina' and 'has not returned to the growth rate of 1996, before the Asian crisis'. But 'it could be a lot worse'. Thaksin would take that as an endorsement. Krugman, a laid-back, affable personality, forgets about his jet lag when he starts talking to Asia Times Online about the US and the global economy. The facts are known to all: half-a-trillion-dollar deficits, the endless quagmire in Iraq, the weak dollar, loss of industrial competitiveness. If he were Obi wan-Kenobi in this particular galaxy, what would he do to extricate the US from this mess? 'No more budget deficits,' he says. 'We should be running surpluses.' Tax increases: 'We should be getting 28% of GDP [gross domestic product] in revenue. We are only collecting 17%.' And most of all, clean up the foreign-policy mess. Not much of a chance though. 'We are a banana republic. For the moment, all of these things are politically impossible.' Krugman sees three reasons forcing the US to leave Iraq: domestic pressure; military problems, caused by Pentagon chief Donald Rumsfeld's insistence on invading Iraq with a small army; and the fact that the Shi'ites (not the Sunnis) may become more of a problem. 'We do not control Iraq, by all means. It's under the control of militias.' He notes that many in America, like the financial elite in Wall Street, for instance, don't even want to talk about it anymore, pretending the quagmire will vanish by itself. Unlike scores of independent analysts, Krugman does not think much of a possible switch from petrodollars to petroeuros - already contemplated by Russia and some Organization of Petroleum Exporting Countries members: 'It's an overrated issue.' He says the US gets only $20 billion out of all those $100 bills floating around the world. 'The US is already losing position anyway. The Russian mafia is now using euros. This is not a big deal.' He sees a shift toward diversifying reserves as inevitable both in Japan and emerging Asia. And for him, the dollar is not weak enough: 'It should go down more, for instance, against the yen.' He does not realistically expect a major devaluation of the Chinese yuan - maximum 5%. Krugman admits it's hard to predict what happens next: 'It needs a trigger. But I'm convinced it's the collapse of the housing market in the US that will trigger the dollar's decline.' Krugman has never personally met Pascal Lamy - the new director general of the World Trade Organization (WTO) - but says he has only heard good things about the former European trade commissioner, whose job until recently was to vigorously defend European farm subsidies, to the chagrin of the developing world. 'I don't blame him for doing his job. I think he'll be serious at the helm of the WTO. The big players - the US, the EU - respect him. The decisions to be made are politically difficult. But whenever the US applies pressure, something happens.' He does not think that the Doha round has failed. 'At the end, they will come up with something.' Krugman may be a relatively reluctant warrior in his position as one of the most influential pundits on the planet - courtesy of his widely reprinted New York Times columns. 'My life would be much calmer now.' But he wouldn't have been able to live with himself if he hadn't taken the job. He's still amazed by the level of vitriol in current American political discourse - 'and I'm not talking only about the left, you should see what comes from the right and the extreme right'. Krugman recently relocated to Princeton, New Jersey. He's a lover of Thai food - something that prompts him to say, 'people usually think that globalization means Americanization. But look at Thai food, sushi, Hong Kong movies'. Unlike Boston - where he used to live - and New York, 'it's not easy to find a Thai restaurant in the middle of New Jersey'. In the interests of globalization, some gentle souls in the 'banana republic' might as well supply the professor with a proper Thai meal once in a while.

Subject: Re: Paul Krugman in the Asia Times From: Terri To: Pete Weis Date Posted: Thurs, May 19, 2005 at 17:16:55 (EDT) Email Address: Not Provided Message: 'Krugman admits it's hard to predict what happens next: 'It needs a trigger. But I'm convinced it's the collapse of the housing market in the US that will trigger the dollar's decline.'' Precisely as Pete argues. Yes, I worry about this.

Subject: Re: Paul Krugman in the Asia Times From: Pancho Villa To: Terri Date Posted: Thurs, May 19, 2005 at 18:52:23 (EDT) Email Address: panchovillan@yahoo.com Message: http://www.atimes.com/atimes/Global_Economy/GE19Dj01.html

Subject: China Rejects Calls for Currency Changes From: Emma To: All Date Posted: Thurs, May 19, 2005 at 12:15:05 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/19/business/worldbusiness/19yuan.html China Rejects Calls for Currency Changes and Limits on Textile Exports By CHRIS BUCKLEY - International Herald Tribune BEIJING - Chinese officials on Wednesday angrily rebuffed both Washington's blunt demand that China loosen its fixed exchange rate policy and Europe's threat of quotas on a tide of Chinese textiles. The United States should 'put its own house in order before blaming others' for its trade deficit, said Wei Benhua, deputy director of the State Administration of Foreign Exchange, which manages China's currency reserves. Mr. Wei made his comments at a conference in Singapore, according to Bloomberg News. On Tuesday, the United States Treasury made the most stinging official attack so far on China's foreign exchange policy in a report that warned China to revalue its yuan - pegged at 8.28 to the dollar. The report hinted at retaliation if the yuan was not allowed to appreciate. In Beijing on Wednesday, China's minister of commerce, Bo Xilai, criticized the European Union's threat to impose restrictions on Chinese textiles, calling the decision hypocritical. 'Everybody is espousing free trade, but there shouldn't be double standards,' Mr. Bo said to a meeting of international business leaders. 'When you have an absolute advantage, you advocate free trade and make everyone open the door, but when developing countries begin to challenge you, you immediately set limits and shut the door.' But reactions from Chinese bankers and officials, including recent comments from the prime minister, Wen Jiabao, suggest that China is unlikely to revalue its currency soon or to bow to Western limits on Chinese garment exports. Indeed, the public chastisement of China in Washington, and the accompanying burst of market speculation on the timing of an exchange rate shift, may make it less likely China will make the swift changes demanded. 'The U.S. government and experts are entitled to have their views on China's exchange rate, and I don't feel the pressure in itself is a problem,' Li Lihui, the president of the Bank of China, said. 'But the problem is that this public pressure brings in its wake rising speculative factors, and those speculative pressures make it less likely, not more likely, China can move.' China is committed to a 'step by step' loosening of its exchange rate, by expanding the band in which the yuan trades against the dollar, Mr. Li said. 'But the hotter the market speculation, the more we can't move,' he added. Chinese foreign ministry and central bank representatives had no immediate reaction to the Treasury Department's report. The Chinese spokesmen instead pointed to Mr. Wen's comments on Monday defending the country's gradual approach to exchange rate reform and contending that the pressure for change on the currency, known also as renminbi, or RMB, was an affront to sovereignty. 'Reform of the RMB exchange rate belongs to China's sovereignty,' Mr. Wen told a delegation from the United States Chamber of Commerce. 'We'll respect the laws of the market economy, but we won't bow to external pressure, or any pressure or speculation. Politicizing economic issues doesn't help solve problems.' But without concrete action, China will face increasing anger in Washington, said Thomas J. Donohue, president of the chamber, who attended the meeting with Mr. Wen. 'The Chinese are very aware we have a serious problem in Washington right now,' Mr. Donohue said. The American trade deficit with China soared to a record $162 billion in 2004, and was followed by a tide of Chinese textile exports that resulted in the announcement of new quotas last week. Any likely adjustment of China's exchange rate would be marginal and not rapidly reverse the United States' trade deficit with China, Mr. Donohue said. 'But I think it will change the relationship deficit,' he said, referring to the growing strains between the countries. In a country where memories of colonial economic subjugation run deep, however, the Treasury's demands may have the effect of making concessions on exchange rate policy politically risky, bankers in China said. 'Outside pressure is actually becoming a political obstacle,' said Chen Xingdong, the chief China economist of BNP Paribas Peregrine Securities. 'It's a political one, because China cannot be seen making a decision based on external pressure.' Kenneth Lieberthal, a China expert at the University of Michigan and former National Security Council official, said the pressure 'encourages them to both reform and also to dig in their heels.' Speaking at a news briefing here, he added that China's leaders 'really value an approach that makes it appear that bullying China doesn't work.' Recent indicators, which reflect some cooling in China's economy and a surge in currency speculation, make it even less likely China will opt for an early shift in exchange rate policy, Mr. Chen said. A recent spike in one-year nondeliverable forward contracts in Hong Kong - a financial instrument that allows investors to wager on the future value of China's currency - as well as China's swelling foreign currency coffers, suggest speculative pressures have recently grown, he said. And Chinese bankers said the government might not want to alter the exchange rate at a time when speculative pressure might overwhelm China's brittle financial defenses.

Subject: Up From the Holler: Two Worlds From: Emma To: All Date Posted: Thurs, May 19, 2005 at 10:58:44 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/19/national/class/DELLA-FINAL.html?hp=&pagewanted=all Up From the Holler: Living in Two Worlds, at Home in Neither By TAMAR LEWIN PIKEVILLE, Ky. - Della Mae Justice stands before the jury in the Pike County Courthouse, arguing that her client's land in Greasy Creek Hollow was illegally grabbed when the neighbors expanded their cemetery behind her home. With her soft Appalachian accent, Ms. Justice leaves no doubt that she is a local girl, steeped in the culture of the old family cemeteries that dot the mountains here in East Kentucky. 'I grew up in a holler, I surely did,' she tells jurors as she lays out the boundary conflict. Ms. Justice is, indeed, a product of the Appalachian coal-mining country where lush mountains flank rust-colored creeks, the hollows rising so steeply that there is barely room for a house on either side of the creeks. Her family was poor, living for several years in a house without indoor plumbing. Her father was absent; her older half-brother sometimes had to hunt squirrels for the family to eat. Her mother married again when Della was 9. But the stepfather, a truck driver, was frequently on the road, and her mother, who was mentally ill, often needed the young Della to care for her. Ms. Justice was always hungry for a taste of the world beyond the mountains. Right after high school, she left Pike County, making her way through college and law school, spending time in France, Scotland and Ireland, and beginning a high-powered legal career. In just a few years she moved up the ladder from rural poverty to the high-achieving circles of the middle class. Now, at 34, she is back home. But her journey has transformed her so thoroughly that she no longer fits in easily. Her change in status has left Ms. Justice a little off balance, seeing the world from two vantage points at the same time: the one she grew up in and the one she occupies now. Far more than people who remain in the social class they are born to, surrounded by others of the same background, Ms. Justice is sensitive to the cultural significance of the cars people drive, the food they serve at parties, where they go on vacation - all the little clues that indicate social status. By every conventional measure, Ms. Justice is now solidly middle class, but she is still trying to learn how to feel middle class. Almost every time she expresses an idea, or explains herself, she checks whether she is being understood, asking, 'Does that make sense?' 'I think class is everything, I really do,' she said recently. 'When you're poor and from a low socioeconomic group, you don't have a lot of choices in life. To me, being from an upper class is all about confidence. It's knowing you have choices, knowing you set the standards, knowing you have connections.' Broken Ties In Pikeville, the site of the Hatfield-McCoy feud (Ms. Justice is a Hatfield), memories are long and family roots mean a lot. Despite her success, Ms. Justice worries about what people might remember about her, especially about the time when she was 15 and her life with her mother and stepfather imploded in violence, sending her into foster care for a wretched nine months. 'I was always in the lowest socioeconomic group,' she said, 'but foster care ratcheted it down another notch. I hate that period of my life, when for nine months I was a child with no family.' While she was in foster care, Ms. Justice lived in one end of a double-wide trailer, with the foster family on the other end. She slept alongside another foster child, who wet the bed, and every morning she chose her clothes from a box of hand-me-downs. She was finally rescued when her father heard about her situation and called his nephew, Joe Justice. Joe Justice was 35 years older than Della, a successful lawyer who lived in the other Pikeville, one of the well-to-do neighborhoods on the mountain ridges. He and his wife, Virginia, had just built a four-bedroom contemporary home, complete with a swimming pool, on Cedar Gap Ridge. Joe Justice had never even met his cousin until he saw her in the trailer, but afterward he told his wife that it was 'abhorrent' for a close relative to be in foster care. While poverty is common around Pikeville, foster care is something much worse: a sundering of the family ties that count for so much. So Joe and Virginia Justice took Della Mae in. She changed schools, changed address - changed worlds, in effect - and moved into an octagonal bedroom downstairs from the Justices' 2 year-old son. 'The shock of going to live in wealth, with Joe and Virginia, it was like Little Orphan Annie going to live with the Rockefellers,' Ms. Justice said. 'It was not easy. I was shy and socially inept. For the first time, I could have had the right clothes, but I didn't have any idea what the right clothes were. I didn't know much about the world, and I was always afraid of making a wrong move. When we had a school trip for chorus, we went to a restaurant. I ordered a club sandwich, but when it came with those toothpicks on either end, I didn't know how to eat it, so I just sat there, staring at it and starving, and said I didn't feel well.' Joe and Virginia Justice worried about Della Mae's social unease and her failure to mingle with other young people in their church. But they quickly sensed her intelligence and encouraged her to attend Berea College, a small liberal arts institution in Kentucky that accepts students only from low-income families. Tuition is free and everybody works. For Ms. Justice, as for many other Berea students, the experience of being one among many poor people, all academically capable and encouraged to pursue big dreams, was life-altering. It was at Berea that Ms. Justice met the man who became her husband, Troy Price, the son of a tobacco farmer with a sixth-grade education. They married after graduation, and when Ms. Justice won a fellowship, the couple went to Europe for a year of independent travel and study. When Ms. Justice won a scholarship to the University of Kentucky law school in Lexington, Mr. Price went with her, to graduate school in family studies. After graduating fifth in her law school class, Ms. Justice clerked for a federal judge, then joined Lexington's largest law firm, where she put in long hours in hopes of making partner. She and her husband bought a townhouse, took trips, ate in restaurants almost every night and spent many Sunday afternoons at real estate open houses in Lexington's elegant older neighborhoods. By all appearances, they were on the fast track. But Ms. Justice still felt like an outsider. Her co-editors on the law review, her fellow clerks at the court and her colleagues at the law firm all seemed to have a universe of information that had passed her by. She saw it in matters big and small - the casual references, to Che Guevara or Mount Vesuvius, that meant nothing to her; the food at dinner parties that she would not eat because it looked raw in the middle. 'I couldn't play Trivial Pursuit, because I had no general knowledge of the world,' she said. 'And while I knew East Kentucky, they all knew a whole lot about Massachusetts and the Northeast. They all knew who was important, whose father was a federal judge. They never doubted that they had the right thing to say. They never worried about anything.' Most of all, they all had connections that fed into a huge web of people with power. 'Somehow, they all just knew each other,' she said. Knitting a New Family Ms. Justice's life took an abrupt turn in 1999, when her half-brother, back in Pike County, called out of the blue to say that his children, Will and Anna Ratliff, who had been living with their mother, were in foster care. Ms. Justice and her brother had not been close, and she had met the children only once or twice, but the call was impossible to ignore. As her cousin Joe had years earlier, she found it intolerable to think of her flesh and blood in foster care. So over the next year, Della Mae Justice and her husband got custody of both children and went back to Pikeville, only 150 miles away but far removed from their life in Lexington. The move made all kinds of sense. Will and Anna, now 13 and 12, could stay in touch with their mother and father. Mr. Price got a better job, as executive director of Pikeville's new support center for abused children. Ms. Justice went to work for her cousin at his law firm, where a flexible schedule allowed her to look after the two children. And yet for Ms. Justice the return to Pikeville has been almost as dislocating as moving out of foster care and into that octagonal bedroom all those years ago. On a rare visit recently to the hollows where she used to live, she was moved to tears when a neighbor came out, hugged her and told her how he used to pray and worry for her and how happy he was that she had done so well. But mostly, she winces when reminded of her past. 'Last week, I picked up the phone in my office,' she recalled, 'and the woman said who she was, and then said, 'You don't remember me, do you?' And I said, 'Were you in foster care with me?' That was crazy. Why would I do that? It's not something I advertise, that I was in care.' While most of her workweek is devoted to commercial law, Ms. Justice spends Mondays in family court, representing families with the kind of problems hers had. She bristles whenever she runs into any hint of class bias, or the presumption that poor people in homes heated by kerosene or without enough bedrooms cannot be good parents. 'The norm is, people that are born with money have money, and people who weren't don't,' she said recently. 'I know that. I know that just to climb the three inches I have, which I've not gone very far, took all of my effort. I have worked hard since I was a kid and I've done nothing but work to try and pull myself out.' The class a person is born into, she said, is the starting point on the continuum. 'If your goal is to become, on a national scale, a very important person, you can't start way back on the continuum, because you have too much to make up in one lifetime. You have to make up the distance you can in your lifetime so that your kids can then make up the distance in their lifetime.' Coming to Terms With Life Ms. Justice is still not fully at ease in the other, well-to-do Pikeville, and in many ways she and her husband had to start from scratch in finding a niche there. Church is where most people in town find friends and build their social life. But Ms. Justice and Mr. Price had trouble finding a church that was a comfortable fit; they went through five congregations, starting at the Baptist church she had attended as a child and ending up at the Disciples of Christ, an inclusive liberal church with many affluent members. The pastor and his wife, transplants to Kentucky, have become their closest friends. Others have come more slowly. 'Partly the problem is that we're young, for middle-class people, to have kids as old as Will and Anna,' Ms. Justice said. 'And the fact that we're raising a niece and nephew, that's kind of a flag that we weren't always middle class, just like saying you went to Berea College tells everyone you were poor.' And though in terms of her work Ms. Justice is now one of Pikeville's leading citizens, she is still troubled by the old doubts and insecurities. 'My stomach's always in knots getting ready to go to a party, wondering if I'm wearing the right thing, if I'll know what to do,' she said. 'I'm always thinking: How does everybody else know that? How do they know how to act? Why do they all seem so at ease?' A lot of her energy now goes into Will and Anna. She wants to bring them up to have the middle-class ease that still eludes her. 'Will and Anna know what it's like to be poor, and now we want them to be able to be just regular kids,' she said. 'When I was young, I always knew who were the kids at school with the involved parents that brought in the cookies, and those were the kids who got chosen for every special thing, not ones like me, who got free lunch and had to borrow clothes from their aunt if there was a chorus performance.' Because Ms. Justice is self-conscious about her teeth - 'the East Kentucky overbite,' she says ruefully - she made sure early on that Anna got braces. She worries about the children's clothes as much as her own. 'Everyone else seems to know when the khaki pants the boys need are on sale at J. C. Penney,' she said. 'I never know these things.' As a child, Ms. Justice never had the resources for her homework projects. So when Anna was assigned to build a Navajo hogan, they headed to Wal-Mart for supplies. 'We put in extra time, so she would appear like those kids with the involved parents,' Ms. Justice said. 'I know it's just a hogan, but making a project that looks like the other kids' projects is part of fitting in.' Ms. Justice encouraged Will to join the Boy Scouts, and when he was invited to join his school's Academic Team, which competes in quiz bowls, she insisted that he try it. When he asked her whether he might become a drug addict if he took the medicine prescribed for him, she told him it was an excellent question, and at the doctor's office prompted him to ask the doctor directly. She nudges both children to talk about what happens in school, to recount the plots of the books they read and to discuss current events. It is this kind of guidance that distinguishes middle-class children from children of working-class and poor families, according to sociologists who have studied how social class affects child-rearing. While working-class parents usually teach their children, early on, to do what they are told without argument and to manage their own free time, middle-class parents tend to play an active role in shaping their children's activities, seeking out extracurricular activities to build their talents, and encouraging them to speak up and even to negotiate with authority figures. Ms. Justice's efforts are making a difference. Will found that he enjoyed Academic Team. Anna now gets evening phone calls from several friends. Both have begun to have occasional sleepovers. And gradually, Ms. Justice is coming to terms with her own life. On New Year's Eve, after years in a modest rented townhouse, she and her husband moved into a new house that reminds her of the Brady Bunch home. It has four bedrooms and a swimming pool. In a few years, when her older cousin retires, Ms. Justice will most likely take over the practice, a solid prospect, though far less lucrative, and less glamorous, than a partnership at her Lexington law firm. 'I've worked very hard all my life - to have a life that's not so far from where I started out,' she said. 'It is different, but it's not the magical life I thought I'd get.'

Subject: Hong Kong Acts on Currency From: Emma To: All Date Posted: Thurs, May 19, 2005 at 10:24:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/19/business/worldbusiness/19peg.html Hong Kong Acts on Currency to Discourage Speculators By KEITH BRADSHER HONG KONG - Monetary authorities here changed the link between this territory's currency and the United States dollar on Wednesday, in an attempt to discourage speculators from using the local currency as a way to bet on a possible move by China to let its currency appreciate against the dollar. The action by the Hong Kong Monetary Authority underscored a problem being faced by central banks across East Asia. Currency traders are moving large sums around the region in the hope of profiting if China allows its currency, the yuan, to become worth more dollars. Since 1983, the Hong Kong Monetary Authority has maintained a floor for the Hong Kong dollar, initially at 7.75 to the United States dollar and at 7.80 to the dollar since 1998. It has intervened when necessary in currency markets to make sure the Hong Kong dollar does not weaken beyond that level. Until Wednesday, however, the authority, which has some of the functions of a central bank, never declared a ceiling for the currency's value, although it intervened occasionally to stop appreciation and kept the currency effectively pegged at 7.80 to the American dollar. A ceiling, on the other hand, would prevent the Hong Kong dollar from strengthening beyond a certain limit, which the authority set on Wednesday at 7.75 to the United States dollar. The absence of a ceiling has prompted currency traders and investors from around the world to pour money into Hong Kong in the hope that the Hong Kong dollar might also appreciate if China were to let the yuan rise. This inflow has kept interest rates here unusually low - close to zero - for bank deposits and has fed a wave of real estate speculation, as wealthy investors have borrowed heavily to buy luxury apartments with prices now approaching $4,000 a square foot. The monetary authority's action on Wednesday evening was intended to stop the speculation by eliminating the previous floor for the currency. Instead, the currency will be allowed to trade in a range from 7.75 to 7.85 to the dollar, setting a new limit on the currency's appreciation and also lowering the floor for the currency slightly. Joseph Yam, the monetary authority's chief executive, said that he did not know whether China would let the yuan rise someday, but added that Wednesday's change was intended to 'reduce the usage of the Hong Kong dollar as a vehicle for speculation on a revaluation.' James Malcolm, a currency strategist at Deutsche Bank in Singapore, said the new rules would make it harder for currency traders to use the Hong Kong dollar for bets on the value of the yuan. 'It makes it a lot less attractive,' he said. Mr. Yam said that he hoped that speculative money would be withdrawn from Hong Kong as soon as possible. The monetary authority also regulates the territory's banks, and Mr. Yam has worried publicly this spring that banks flush with overseas money might make ill-advised loans at very low interest rates as they struggled to find uses for the money flowing in. The Chinese government makes it hard to invest directly in the yuan, by severely limiting most money coming into the country except in connection with exports, imports and approved foreign investments. So speculators have taken to putting large sums of money into other Asian currencies in the hope that they will appreciate as well if the yuan rises. If the yuan rises, Chinese exports will tend to become more expensive and less competitive in overseas markets. Currency traders have been betting that if China lets the yuan appreciate, other central banks in the region will slow their intervention and let their currencies appreciate as well, because there would be less risk of losing foreign markets to Chinese exports.

Subject: China's Growth Ebbs From: Emma To: All Date Posted: Thurs, May 19, 2005 at 10:03:59 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/19/business/worldbusiness/19china.html?pagewanted=all China's Growth Ebbs, a Deterrent to Revaluation By KEITH BRADSHER HONG KONG - A string of economic indicators suggests that China has tempered recent growth and inflation, an achievement that could make it more reluctant to appease demands on Tuesday from the Bush administration to let its currency rise soon. The figures on softening domestic growth in China set the stage for continued tensions with the United States, which already said last week that it planned to impose quotas on imported Chinese trousers, underwear and cotton shirts. Already, Chinese officials have resisted calls from Washington to allow currency changes and have denounced preparations by the European Union to limit imports of Chinese clothing. According to Chinese figures released this week, inflation has slowed significantly - with consumer prices just 1.8 percent higher in April than a year earlier. Inventories of unsold goods are rising at steel mills and other businesses, and imports of iron ore and many other raw materials have slipped. While exports remain extremely strong, domestic economic activity has moderated. Beijing officials have imposed administrative measures that seem to have been surprisingly effective in controlling a potentially overheated economy and inflation. 'The government has been saying for some time that they would rein in the economy,' said Harry Banga, vice chairman of the Noble Group, a shipping and commodities business based in Hong Kong, 'and it would seem that they have succeeded.' Few foresee a serious risk that the Chinese economy might slow too much, especially as long as exports continue soaring at an annual pace of more than 30 percent. Chinese officials have said that their decisions on currency policy will be driven by long-term matters involving how they manage the country's economy, not short-term considerations about how to even out economic cycles. But one virtue of a stronger currency is that it tends to make imports cheaper and hold down inflation, and China, at least temporarily, now seems to have less need of this. The question debated by economists and business executives is how long the current pause in economic growth and inflation will last. Put another way, how much longer can the administrative controls, like limits on bank loans, remain effective in preventing another unsustainable burst of economic output. 'Compared with a few months ago, six months ago, from a policy maker's point of view,' said Qu Hongbin, an HSBC economist, 'there's less worry about economic problems, although it is too early to declare victory.' Some economists foresee a surge in inflation and economic growth after the spring, contending that year-over-year comparisons now can be misleading because the economy was starting to overheat in the spring of 2004. Others worry that credit-starved Chinese companies and public works managers are becoming more cautious about spending money as banks, warned by regulators to be more prudent, are more wary in making loans. At stake is not only the health of China's economy but also growth across Asia. Regional economies have come to depend on exports to China; Japanese machinery makers, for instance, are already struggling with weaker sales. Europe and especially the United States depend much less on exports to China. But officials there are likely to pay increased attention to whether policy makers in Beijing let the nation's currency, the yuan, rise in the markets. The value added in industrial production, which limits the effect of rising raw material prices, increased 16 percent in China in April, the government said Wednesday, a slight slowdown from a year-on-year increase of 16.2 percent in the first quarter. And the value added from industrial production could have declined further, were it not for a 29.9 percent increase in industrial exports in April. The government is scheduled to announce figures on Thursday or Friday for fixed-asset investment in apartment buildings and other large projects. Private economists expect an increase of 22 percent to 24 percent for the month of April from a year earlier, although the figure will be inflated by fast-rising prices for land purchases, which Chinese statisticians count as investments even as statisticians in many other countries do not. Economists concerned that China may soon show another surge in growth and inflation point out that producer prices are still rising more than 5 percent a year. They contend that year-over-year comparisons of economic statistics are a problem right now because the Chinese economy had acute problems with overheating in the spring of 2004, with clogged rail lines and arriving ships waiting in line for up to a month to discharge cargo, even as a poor harvest was driving up food prices. A better harvest last summer and autumn has reversed the rise in food prices while exports have boomed. 'The numbers are telling you this economy is poised for further momentum, and there has been no policy to restrain that,' said Liang Hong, an economist in the Hong Kong offices of Goldman Sachs. Some business executives in China, particularly those from companies selling to consumers, say their sales remain strong. 'The purchasing power of people is very high nowadays,' said Henry Zhang, general manager of the Shishi Hengyi Textile Product Trade Company, a maker of casual men's trousers in Fujian Province in southeastern China. 'People earn more and they keep buying clothes every day. Many are willing to pay more for fancy and quality clothes.' But other economists say that businesses are becoming much more cautious about making investments. This is reducing the demand for steel and other materials and making it likely that their production will have to fall soon. Annual growth in steel consumption has slowed sharply, while production has kept on rising steeply. Chinese steel makers have muscled foreign rivals out of their home market and begun exporting. But with imported steel now down to a small sliver of the market, specialists predict that it will be hard for Chinese steel makers to maintain growth. Mr. Banga, whose company ships large quantities of iron ore and coal to China, said that Chinese mills were selling steel as fast as they made it just two months ago, but now practically every mill had stockpiles available. China's volume of raw materials imports 'is coming down very fast,' he said, adding, 'It has come down drastically across the board.' Jonathan Anderson, an economist with UBS, said that Chinese industrial production had not slowed as much as demand, and predicted that production would slow at least temporarily before demand caught up again. Using a comparison from Road Runner cartoons, he warned, 'The coyote has run off the cliff, and he's hanging there.' It remains unclear how much the lull in domestic demand will affect the currency ruminations of Beijing policy makers. A more valuable yuan would make imports cheaper in China and Chinese goods more costly in foreign markets, a combination that would tend to slow growth. If the policy makers want another reason not to let the yuan rise in the currency markets, then slower growth at home could provide that reason. Less vigorous growth in the Chinese economy may also make the nation's central bank less likely to increase interest rates. 'It weakens the argument for a rate hike definitely,' said Ma Jun, an economist with Deutsche Bank.

Subject: When Richer Weds Poorer From: Emma To: All Date Posted: Thurs, May 19, 2005 at 09:53:40 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/19/national/class/MARRIAGE-FINAL.html?hp=&pagewanted=all When Richer Weds Poorer, Money Isn't the Only Difference By TAMAR LEWIN NORTHFIELD, Mass. - When Dan Croteau met Cate Woolner six years ago, he was selling cars at the Keene, N.H., Mitsubishi lot and she was pretending to be a customer, test driving a black Montero while she and her 11-year-old son, Jonah, waited for their car to be serviced. The test drive lasted an hour and a half. Jonah got to see how the vehicle performed in off-road mud puddles. And Mr. Croteau and Ms. Woolner hit it off so well that she later sent him a note, suggesting that if he was not involved with someone, not a Republican and not an alien life form, maybe they could meet for coffee. Mr. Croteau dithered about the propriety of dating a customer, but when he finally responded, they talked on the phone from 10 p.m. to 5 a.m. They had a lot in common. Each had two failed marriages and two children. Both love dancing, motorcycles, Bob Dylan, bad puns, liberal politics and National Public Radio. But when they began dating, they found differences, too. The religious difference - he is Roman Catholic, she is Jewish - posed no problem. The real gap between them, both say, is more subtle: Mr. Croteau comes from the working class, and Ms. Woolner from money. Mr. Croteau, who will be 50 in June, grew up in Keene, an old mill town in southern New Hampshire. His father was a factory worker whose education ended at the eighth grade; his mother had some factory jobs, too. Mr. Croteau had a difficult childhood and quit school at 16. He then left home, joined the Navy and drifted through a long series of jobs without finding any real calling. He married his pregnant 19-year-old girlfriend and had two daughters, Lael and Maggie, by the time he was 24. 'I was raised in a family where my grandma lived next door, my uncles lived on the next road over, my dad's two brothers lived next to each other, and I pretty much played with my cousins,' he said. 'The whole concept of life was that you should try to get a good job in the factory. My mother tried to encourage me. She'd say, 'Dan's bright; ask him a question.' But if I'd said I wanted to go to college, it would have been like saying I wanted to grow gills and breathe underwater.' He always felt that the rich people in town, 'the ones with their names on the buildings,' as he put it, lived in another world. Ms. Woolner, 54, comes from that other world. The daughter of a doctor and a dancer, she grew up in a comfortable home in Hartsdale, N.Y., with the summer camps, vacations and college education that wealthy Westchester County families can take for granted. She was always uncomfortable with her money; when she came into a modest inheritance at 21, she ignored the monthly bank statements for several years, until she learned to channel her unease into philanthropy benefiting social causes. She was in her mid-30's and married to a psychotherapist when Isaac and Jonah were born. 'My mother's father had a Rolls-Royce and a butler and a second home in Florida,' Ms. Woolner said, 'and from as far back as I can remember, I was always aware that I had more than other people, and I was uncomfortable about it because it didn't feel fair. When I was little, what I fixated on with my girlfriends was how I had more pajamas than they did. So when I'd go to birthday sleepovers, I'd always take them a pair of pajamas as a present.' Marriages that cross class boundaries may not present as obvious a set of challenges as those that cross the lines of race or nationality. But in a quiet way, people who marry across class lines are also moving outside their comfort zones, into the uncharted territory of partners with a different level of wealth and education, and often, a different set of assumptions about things like manners, food, child-rearing, gift-giving and how to spend vacations. In cross-class marriages, one partner will usually have more money, more options and, almost inevitably, more power in the relationship. It is not possible to say how many cross-class marriages there are. But to the extent that education serves as a proxy for class, they seem to be declining. Even as more people marry across racial and religious lines, often to partners who match them closely in other respects, fewer are choosing partners with a different level of education. While most of those marriages used to involve men marrying women with less education, studies have found, lately that pattern has flipped, so that by 2000, the majority involved women, like Ms. Woolner, marrying men with less schooling - the combination most likely to end in divorce. 'It's definitely more complicated, given the cultural scripts we've all grown up with,' said Ms. Woolner, who has a master's degree in counseling and radiates a thoughtful sincerity. 'We've all been taught it's supposed to be the man who has the money and the status and the power.' Bias on Both Sides When he met Ms. Woolner, Mr. Croteau had recently stopped drinking and was looking to change his life. But when she told him, soon after they began dating, that she had money, it did not land as good news. 'I wished she had waited a little,' Mr. Croteau said. 'When she told me, my first thought was, uh oh, this is a complication. From that moment I had to begin questioning my motivations. You don't want to feel like a gold digger. You have to tell yourself, here's this person that I love, and here's this quality that comes with the package. Cate's very generous, and she thinks a lot about what's fair and works very hard to level things out, but she also has a lot of baggage around that quality. She has all kinds of choices I don't have. And she does the lion's share of the decision-making.' Before introducing Ms. Woolner to his family, Mr. Croteau warned them about her background. 'I said, 'Mom, I want you to know Cate and her family are rich,' ' he recalled. 'And she said, 'Well, don't hold that against her; she's probably very nice anyway.' I thought that was amazing.' There were biases on the other side too. Just last summer, Mr. Croteau said, when they were at Ms. Woolner's mother's house on Martha's Vineyard, his mother-in-law confessed to him that she had initially been embarrassed that he was a car salesman and worried that her daughter was taking him on as a kind of do-good project. Still, the relationship moved quickly. Mr. Croteau met Ms. Woolner in the fall of 1998 and moved into her comfortable home in Northfield the next spring, after meeting her condition that he sell his gun. Even before Mr. Croteau moved in, Ms. Woolner gave him money to buy a new car and pay off some debts. 'I wanted to give him the money,' she said. 'I hadn't sweated it. I told him that this was money that had just come to me for being born into one class, while he was born into another class.' And when he lost his job not long after, Ms. Woolner began paying him a monthly stipend - he sometimes refers to it as an allowance - that continued, at a smaller level, until last November, when she quit her longstanding job at a local antipoverty agency. She also agreed to pay for a $10,000 computer course that helped prepare him for his current job as a software analyst at the Cheshire Medical Center in Keene. From the beginning, the balance of power in the relationship was a sufficiently touchy issue that at Ms. Woolner's urging, a few months before their wedding in August 2001, they joined a series of workshops on cross-class relationships. 'I had abject terror at the idea of the group,' said Mr. Croteau, who is blunt and intellectually engaging. 'It's certainly an upper-class luxury to pay to tell someone your troubles, and with all the problems in the world, it felt a little strange to sit around talking about your relationship. But it was useful. It was a relief to hear people talk about the same kinds of issues we were facing, about who had power in the relationship and how they used it. I think we would have made it anyway, but we would have had a rockier time without the group.' It is still accepted truth within the household that Ms. Woolner's status has given her the upper hand in the marriage. At dinner one night, when her son Isaac said baldly, 'I always think of my mom as having the power in the relationship,' Mr. Croteau did not flinch. He is fully aware that in this relationship he is the one whose life has been most changed. Confusing Differences The Woolner-Croteau household is just up the hill from the groomed fields of Northfield Mount Hermon prep school - a constant local reminder to Mr. Croteau of just how differently his wife's sons and his daughters have been educated. Jonah is now a senior there. Isaac, who also attended the school, is now back at Lewis & Clark College in Oregon after taking a couple of semesters away to study in India and to attend massage school while working in a deli near home. By contrast, Mr. Croteau's adult daughters - who have never lived with the couple - made their way through the Keene public schools. 'I sometimes think Jonah and Isaac need a dose of reality, that a couple years in public school would have shown them something different,' Mr. Croteau said. 'On the other hand I sometimes wish I'd been able to give Maggie and Lael what they had. My kids didn't have the same kind of privilege and the same kind of schools. They didn't have teachers concerned about their tender growing egos. It was catch-as-catch-can for them, and that still shows in their personalities.' Mr. Croteau had another experience of Northfield Mount Hermon as well. He briefly had a job as its communications manager, but could not adjust to its culture. 'There were all these Ivy Leaguers,' he said. 'I didn't understand their nuances, and I didn't make a single friend there. In working-class life, people tell you things directly, they're not subtle. At N.M.H., I didn't get how they did things. When a vendor didn't meet the deadline, I called and said, 'Where's the job?' When he said, 'We bumped you, we'll have it next week,' I said, 'What do you mean, next week? We have a deadline, you can't do business like that.' It got back to my supervisor, who came and said, 'We don't yell at vendors.' The idea seemed to be that there weren't deadlines in that world, just guidelines.' Mr. Croteau says he is far more comfortable at the hospital. 'I deal mostly with nurses and other computer nerds and they come from the same kind of world I do, so we know how to talk to each other,' he said. But in dealing with Ms. Woolner's family, especially during the annual visits to Martha's Vineyard, Mr. Croteau said, he sometimes finds himself back in class bewilderment, feeling again that he does not get the nuances. 'They're incredibly gracious to me, very well bred and very nice,' he said, 'so much so that it's hard to tell whether it's sincere, whether they really like you.' Mr. Croteau still seems impressed by his wife's family, and their being among 'the ones with their names on the buildings.' It is he who shows a visitor the framed print of the old Woolner Distillery in Peoria, Ill., and, describing the pictures on the wall, mentions that this in-law went to Yale, and that one knew Gerald Ford. Family Divisions Mr. Croteau and Ms Woolner are not the only ones aware of the class divide within the family; so are the two sets of children. Money is continually tight for Lael Croteau, 27, who is in graduate school in educational administration at the University of Vermont, and Maggie, 25, who is working three jobs while in her second year of law school at American University. At restaurants, they ask to have the leftovers wrapped to take home. Neither could imagine taking a semester off to try out massage school, as Isaac did. They are careful about their manners, their plans, their clothes. 'Who's got money, who doesn't, it's always going on in my head,' Maggie said. 'So I put on the armor. I have the bag. I have the shirt. I know people can't tell my background by looking.' The Croteau daughters are the only ones among 12 first cousins who made it to college. Most of the others married and had babies right after high school. 'They see us as different, and sometimes that can hurt,' Maggie said. The daughters walk a fine line. They are deeply attached to their mother, who did most of their rearing, but they are also attracted to the Woolner world and its possibilities. Through holidays and Vineyard vacations, they have come to feel close not only to their stepbrothers, but also to Ms. Woolner's sisters' children, whose pictures are on display in Lael's house in Vermont. And they see, up close, just how different their upbringing was. 'Jonah and Isaac don't have to worry about how they dress, or whether they'll have the money to finish college, or anything,' Lael said. 'That's a real luxury. And when one of the little kids asks, 'Why do people sneeze?' their mom will say, 'I don't know; that's a great question. Let's go to the museum, and check it out.' My mom is very smart and certainly engages us on many levels, but when we asked a difficult question, she'd say, 'Because I said so.' ' The daughters' lives have been changed not only by Ms. Woolner's warm, stable presence, but also by her gifts of money for snow tires or books, the family vacations she pays for and her connections. One of Ms. Woolner's cousins, a Washington lawyer, employs Maggie both at her office and as a housesitter. For Ms. Woolner's sons, Mr. Croteau's arrival did not make nearly as much difference. They are mostly oblivious of the extended Croteau family, and have barely met the Croteau cousins, who are close to their age and live nearby but lead quite different lives. Indeed, in early February, while Ms. Woolner's Isaac was re-adjusting to college life, Mr. Croteau's nephew, another 20-year-old Isaac who had enlisted in the Marines right after high school, was shot in the face in Falluja, Iraq, and shipped to Bethesda Medical Center in Maryland. Isaac and Jonah are easygoing young men, neither of whom has any clear idea what he wants to do in life. 'For a while I've been trying to find my passion,' Jonah said. 'But I haven't been passionately trying to find my passion.' Isaac fantasizes about opening a brewery-cum-performance-space, traveling through South America or operating a sunset massage cruise in the Caribbean. He knows he is on such solid ground that he can afford fantasy. 'I have the most amazing safety net a person could have,' he said, 'incredible, loving, involved and wealthy parents.' On the rare occasions when they are all together, the daughters get on easily with the sons, though there are occasional tensions. Maggie would love to have a summer internship with a human rights group, but she needs paid work and when she graduates, with more than $100,000 of debt, she will need a law firm job, not one with a nonprofit. So when Isaac one day teased her as being a sellout, she reminded him that it was a lot easier to live your ideals when you did not need to make money to pay for them. And there are moments when the inequalities within the family are painfully obvious. 'I do feel the awkwardness of helping Isaac buy a car, when I'm not helping them buy a car,' Ms. Woolner said of the daughters. 'We've talked about that. But I also have to be aware of overstepping. Their mother's house burned down, which was awful for them and for her and I really wanted to help. I took out my checkbook and I didn't know what was appropriate. In the end I wrote a $1,500 check. Emily Post doesn't deal with these situations.' She and Mr. Croteau remain conscious of the class differences between them, and the ways in which their lives have been shaped by different experiences. On one visit to New York City, where Ms. Woolner's mother lives in the winter, Ms. Woolner lost her debit card and felt anxious about being disconnected, even briefly, from her money. For Mr. Croteau, it was a strange moment. 'She had real discomfort, even though we were around the corner from her mother, and she had enough money to do anything we were likely to do, assuming she wasn't planning to buy a car or a diamond all of a sudden,' he said. 'So I didn't understand the problem. I know how to walk around without a safety net. I've done it all my life.' Both he and his wife express pride that their marriage has withstood its particular problems and stresses. 'I think we're always both amazed that we're working it out,' Ms. Woolner said. But almost from the beginning they agreed on an approach to their relationship, a motto now engraved inside their wedding rings: 'Press on regardless.'

Subject: Stocks and Bonds From: Terri To: All Date Posted: Thurs, May 19, 2005 at 07:18:00 (EDT) Email Address: Not Provided Message: Well, we are almost back to even for the stock market for the year to date. Long term bonds are fairly strong once again, with interest rates having actually fallen. The dollar is strong against the Euro and Yen. Several sectors from utilities to health care to energy are strong. Large caps are stronger than small caps, with mid caps strongest, and value is slightly stronger than growth. REITs are mildly positive again. A surprising year so far, with bonds seemingly controlling the market.

Subject: Alan Greenspan From: Terri To: All Date Posted: Wed, May 18, 2005 at 18:57:52 (EDT) Email Address: Not Provided Message: There seems to be a wish in the Administration for Alan Greenspan to remain at the Fed for some time longer. The guess is that Alan Greenspan is wanted at the Federal Reserve as long as possible. There is a flexible sense of monetary policy needs that is quite valuable, and enough support for Administration policy to make Greenspan a perfect Fed Chair. Will Ben Bernanke prefer to stay at the Fed if Greenspan stays on?

Subject: Thinking About Long Term Treasuries From: Terri To: All Date Posted: Wed, May 18, 2005 at 18:23:33 (EDT) Email Address: Not Provided Message: There is no question but that Asian central banks along with Brazil and South Africa and several oil producers buy enough American debt that the perception is there is a base for the debt. Also, there is relatively little supply of 10 year Treasuries. There may be 'carry trade' buying, so short term money is borrowed in Japan and used to buy the 10 year Treasury. But, the perception of little risk of inflation has to be an important element. Would I buy a 10 year Treasury? Nope.

Subject: Vanguard Returns From: Terri To: All Date Posted: Wed, May 18, 2005 at 18:07:25 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName Vanguard Returns 12/31/04 to 5/18/05 S&P Index is -1.5 Large Cap Growth Index is -2.2 Large Cap Value Index is -0.2 Mid Cap Index is -0.6 Small Cap Index is -4.0 Small Cap Value Index is -3.1 Europe Index is -1.4 Pacific Index is -5.7 Energy is 8.2 Health Care is 5.4 REIT Index is 1.3 High Yield Corporate Bond Fund is -3.0 Long Term Corporate Bond Fund is 4.5

Subject: Sector Stock Indexes From: Terri To: Terri Date Posted: Wed, May 18, 2005 at 19:27:27 (EDT) Email Address: Not Provided Message: http://flagship2.vanguard.com/VGApp/hnw/FundsVIPERByName Sector Indexes 12/31/04 - 5/18/05 Energy 7.2 Financials -3.7 Health Care 4.6 Info Tech -6.1 Materials -5.8 REITs 1.3 Telecoms -6.7 Utilities 6.7

Subject: America and China From: Terri To: All Date Posted: Wed, May 18, 2005 at 15:09:11 (EDT) Email Address: Not Provided Message: Allow me to toughen my currency stance. China must increase the value of the Yuan by 10% to 20% to ease the trade pressures we are experiencing. There really is no other way to ease the competitive pressure on our producers, but no one outside of the Chinese leadership can tell if there is consideration of such a change in policy.

Subject: Refining Oil From: Emma To: All Date Posted: Wed, May 18, 2005 at 12:55:41 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/18/business/18valero.html?pagewanted=all A Fast-Growing Independent Strikes Gold in Oil Refining By JAD MOUAWAD SAN ANTONIO - It is impossible not to notice the eight-foot bear in William E. Greehey's office. The story of how the stuffed grizzly ended up here says as much about Mr. Greehey's hunting trip in British Columbia in 1982 as it does about his attitude as chief executive of Valero Energy: aggressive, risk-prone and endowed with self-confidence - or, his critics say, an oversize ego. Those are the same traits that helped him turn Valero from an obscure gas pipeline business into the nation's top independent oil refiner. Valero, based in San Antonio, is leading a pack of refiners that are staking their future on the notion that tight refining capacity, growing demand for gasoline and high profit margins will last. On the other side of the argument are the major oil companies, which have been selling their refineries in the belief that profits and margins may soon reach a peak in a notably volatile and cyclical business. The debate is being played out as retail gasoline prices are near the highest level in recent years. 'Anybody who has been in this business for a long time knows it has been lousy and they haven't made as much money as in exploration,' said Malcolm M. Turner, president of Turner, Mason & Company, an industry consultant in Dallas. 'But Greehey has been a bull for five years on refining, and now he's turned into a raging bull.' Last month, Mr. Greehey - widely known as Bill - took his biggest gamble yet when he announced a $6.9 billion offer for Premcor, a smaller Connecticut-based rival, that would propel his company ahead of Exxon Mobil as the top refiner in the United States. For more than two decades, oil companies in the United States have been reluctant to pour money into refining, where they have had to contend with a surplus of capacity, relatively low profits and rising costs for producing cleaner fuels. Domestic refining capacity shrank about 10 percent from 1981 through 2004 even as demand soared 45 percent. But Valero has bucked the industry trend. The planned acquisition of Premcor is the latest in a series of leaps that have transformed the company since it sold its natural gas operation in 1997. Since then, it has spent $8 billion in acquisitions, growing from a single refinery in Corpus Christi, Tex., into a Fortune 500 company with plants in the United States, Canada and Aruba and control of 15 percent of America's refining capacity. Premcor would add 4 refineries to Valero's 15, lifting capacity by one-quarter, to 3.3 million barrels a day, or about 20 percent of domestic capacity. The purchase would also increase Valero's ability to process the more viscous, but cheaper, oil from South America and the Middle East. 'We're going through a perfect storm in refining,' Mr. Greehey said. 'But everybody continues to have such a negative perception of refining. To me, it's just unbelievable because the fundamentals have changed.' Not everyone sees the situation that way. The major oil companies - which have exploration and production as well as refining businesses - have been much more cautious about the long-term prospects for refining. Early this year, for example, the Royal Dutch/Shell Group sold a refinery in California. In February, Edward G. Galante, Exxon Mobil's senior vice president for refining, questioned that sector's prospects when he told a gathering of oil executives in Houston: 'Some say we have entered a 'golden age of refining.' Of those, I ask, how long is an age? And remember, those of us with upstream businesses tend to think in geological terms.' He added, 'With all due respect to the incurably upbeat among us, I don't know how long today's strong margins will persist.' At the moment, profit margins are at their highest. Last year, Valero's revenue rose to nearly $55 billion, up 44 percent from the previous year, with net income tripling to $1.8 billion - more than Exxon Mobil earned from its refining business in the United States. Still, Exxon remains a far bigger refiner than Valero when considering its plants around the world. Exxon Mobil last year had revenue of $298 billion and net profit of $25 billion. Valero's share price is up 38.5 percent since the beginning of the year, making it the best performer in the Standard & Poor's 500-stock index and giving the company a market value of more than $16 billion. That compares with a 5 percent increase in Exxon Mobil shares, and a 3.1 percent decline in the S.& P. 500 index. Valero benefits from its refineries' ability to convert dirty, heavy oil that has high sulfur content into lighter, cleaner and more profitable gasoline. The company has invested heavily in such conversion capacity because, it says, most of the world's remaining oil reserves, like those in Saudi Arabia, are medium to heavy grades while lighter oil, like that from the North Sea, is declining. Maya crude from Mexico, for example, sells for $16 to $18 a barrel less than West Texas intermediate, the light, sweet grade that is used as a benchmark on the New York Mercantile Exchange. Most of Valero's refining capacity can process the heavier grades, which are on average $1.50 a barrel more expensive to refine, the company said. At the same time, the refiner's margin, or the difference between crude oil and gasoline prices, is at its highest in decades. This year, it is $11 a barrel on the East Coast, twice the five-year historic average, according to John S. Herold Inc., an oil consultant. This means that Valero can both buy cheaper oil than some of its rivals and sell gasoline at high prices. Whether those advantages can continue may determine whether Valero can complete the Premcor acquisition smoothly and whether the company can continue to expand, either in the United States or in Europe. Hours after the Premcor announcement was made on April 25, Standard & Poor's downgraded Valero's credit by one rung to BBB-, the lowest investment grade. The ratings agency also placed Valero on negative watch, meaning that its bonds might be lowered further to junk status. That would increase Valero's financing costs and the price it pays for Premcor. John Thieroff, a credit analyst at S.& P. in New York, pointed to Valero's growing debt. The company expects to issue $1.4 billion in new debt for the acquisition, which comes on top of existing debt of $4.3 billion and the $1.8 billion it is assuming from Premcor. 'A lot of people accept the company's premise that wider margins are here to stay,' Mr. Thieroff said. 'We can't accept these assumptions blindly. Refining is a very volatile industry. What happens if the economy hits a soft patch? We don't look at how good can the upside be, but rather how bad can the downside be.' Few such doubts inhibit Mr. Greehey, a 68-year-old native of Fort Dodge, Iowa, who bears a resemblance to Karl Malden in 'The Streets of San Francisco' and enjoys standing behind the grill at company barbecues. 'We took advantage of getting in at the bottom and riding the crest,' he said. 'And I don't think we're there yet. It's going to get better next year. We're going to grow our business very aggressively.' Valero was a late starter in the refining business. Mr. Greehey joined it in 1974 as a court-appointed chief executive after the company, then known as LoVaca Gathering, stopped supplying natural gas to customers in Texas when energy prices spiked and it could no longer honor its contracts. After six years of litigation and a $1.6 billion settlement, the business was spun off from its parent, the Coastal States Gas Corporation, and established as a pipeline operator. Coastal States, founded by Oscar S. Wyatt Jr., a Texas oilman and entrepreneur, has recently been named in Iraqi documents as paying surcharges for oil to Saddam Hussein's government. The company has denied the accusations. Seeking to set some distance with the company's difficult past, Mr. Greehey, who majored in accounting at St. Mary's University in San Antonio, moved his new headquarters here from Houston and renamed the business Valero after the 18th-century San Antonio de Valero Franciscan mission, the original site of the Alamo. In 1997, the company decided to focus solely on refining and sold most of its other businesses. Starting from the one refinery in Corpus Christi, it snapped up underperforming plants around the nation and fit them to process heavy-grade oil. 'I started working for Exxon and I used to think of Exxon as a refining company,' Mr. Greehey said. 'I never thought anyone would ever be bigger than Exxon.' Then, returning to the bear-hunting experience, he said, 'If my gun had jammed, the bear would have eaten me up. But I think I could have outrun him.'

Subject: Low Interest Cushion the Economy From: Terri To: All Date Posted: Wed, May 18, 2005 at 12:26:59 (EDT) Email Address: Not Provided Message: The reason beyond all else for low long term bond yields is the perception of little prospect of long term inflation. I agree with the assessment, and have agreed for several years. These low rates cushion the stock markets, cushion real estate, and will keep the economy growing nicely.

Subject: Condo Fever and Apartments From: Emma To: All Date Posted: Wed, May 18, 2005 at 10:38:12 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/18/business/18condo.html?pagewanted=all Landlords Cashing Out as Condo Fever Spreads By TERRY PRISTIN Apartment building owners faced with dwindling returns are selling their properties to developers willing to pay ever larger premiums so that they can convert rental units into condominiums. The trend is driven by low mortgage interest rates that have encouraged renters to become homeowners, leaving landlords in many areas with falling occupancy rates and forcing them to lower rents and make other concessions to keep their buildings full. Instead, many landlords are deciding to sell, and in many cities, condo conversion sales have been increasing at an explosive rate. But some real estate specialists say the condo conversion market has become so overheated, especially in places like South Florida and Las Vegas, that many developers could find themselves unable to sell their condo units -and possibly in default - if interest rates rise and the pool of potential buyers dwindles. 'Condo converters are paying above market rates, above what the rental value of the building would be,' said Robert M. White Jr., the president of Real Capital Analytics, a New York research firm. If all the units do not sell, leaving the building with an undesirable mixture of tenants and condo owners, he added, 'the lenders will have a tough time getting their money back' and developers will have 'the headaches of having to manage renters and owners both.' Sales of apartment buildings to condo converters reached a record $13.3 billion last year, up from $3 billion in 2003, according to Real Capital Analytics, which tracks sales of at least $5 million. Since January 2004, 103,000 apartments have been sold to converters, the firm said. In metropolitan Washington, buildings intended for conversion sold for an average of 88 percent more than other apartment buildings, according to the research division of Marcus & Millichap, a national real estate investment brokerage company. In Northern New Jersey, condo converters paid about four times as much as buyers of buildings that will remain as rentals. In Northern Virginia, as in South Florida, there is little difference between what converters are paying for apartments and the market price for a condo, leaving little room for profit, Mr. White said. Many condo units are sold to investors looking for an alternative to the stock market. Real estate specialists estimate that speculators and other investors account for as much as 60 percent of condo sales in Florida, and one-quarter or more of the sales in places like Washington and Chicago. 'Investors are buying blocks of units, four or five at a time,' said John R. Jaeger, a vice president at Appraisal Research Counselors, which focuses on Chicago's housing market. 'We see that quite a bit.' He said that typically only 15 percent of the tenants in an apartment building wind up buying their units. Developers like the Related Group of Florida are taking steps to curb speculation by, for example, requiring a 20 percent deposit so that the investor will not be likely to walk away from his or her condo unit. 'No one can buy more than two units, and we carefully screen and cross-check with our other projects,' said Joyce M. Bronson, a senior vice president. Sometimes an apartment building changes hands even before or soon after construction is completed. Last month, Vornado Realty Trust, the New York-based real estate investment trust, agreed to sell a new 452-unit apartment building at 400 North LaSalle in downtown Chicago to a venerable local developer, Draper & Kramer, for $126 million, or about $278,000 a unit. Vornado said its gain would be $30 million. Jim Freko, a Draper & Kramer vice president, said his company planned to install hardwood floors but otherwise does not need to spend much to convert the building, which was completed last year. An average 900-square-foot unit will be priced at about $360,000, he said. These days, he said, condo converters have come to expect lower returns than they have been used to. 'You see a lot more converters stepping up to the plate, whether experienced or new, and they are getting more aggressive and pushing up the prices you need to pay,' he said. But, he said, as long as interest rates remain low, the conversion trend is likely to continue. Fueling the spurt in condo conversions is the widespread availability of financing, not just from banks but also from other lenders willing to make up the difference between the bank loan and the actual cost of purchase and construction. Competition among lenders is so feverish that some developers can get away with putting very little of their own money at risk, mortgage brokers say. 'There are promoters putting deals together who are taking out their own equity and replacing it with other people's equity so that they are getting a percentage of the transaction with no money in it,' said Robert Kaplan, a senior managing director for South Florida for Holliday Fenoglio Fowler, who helps arrange financing for such deals. Until now, Wall Street investment firms have issued their own condo conversion loans but have not sold them on the secondary market as mortgage-backed securities. But in what real estate specialists said was another sign of the expanding availability of debt financing for this type of property, Credit Suisse First Boston has just finished marketing a bond to institutional investors that was backed by $1.5 billion worth of mortgages for apartment buildings and other properties being transformed into condominiums. By taking many apartments off the market, condo conversions have actually helped raise apartment occupancy in some areas, said Lloyd Lynford, the president of Reis Inc., a New York research firm. The average vacancy rate in the top 64 metropolitan markets at the end of March was 6.6 percent, down from 7.1 percent the previous March. The average in the 1990's was 4.9 percent. Apartment companies, whose performance is correlated to job growth as well as interest rates, are the weakest of the REIT sectors. This has led Equity Residential Properties Trust, the nation's leading apartment landlord, and Post Properties, another apartment REIT, to enter the conversion business themselves. The success of these efforts has prompted other apartment REIT's to consider following suit, said Craig Leupold, an analyst for Green Street Advisors, a research company in Newport Beach, Calif. But many converters coming into the market are inexperienced developers in search of quick profits, said Kenneth T. Rosen, a real estate professor at the University of California, Berkeley. 'A lot of untested people are getting into this,' Mr. Rosen said. 'It's the place where people think they can make fast money today. That's the real problem.'

Subject: Beijing Brushes Off U.S. Warning From: Emma To: All Date Posted: Wed, May 18, 2005 at 10:33:45 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/18/international/asia/18cnd-china.html?pagewanted=all Beijing Brushes Off U.S. Warning on Currency By EDMUND L. ANDREWS WASHINGTON - The Bush administration warned China on Tuesday that its currency policies were distorting world trade, and it brandished the threat of retaliation against the country's exports if Chinese leaders did not change course in the next year. In language far harsher than it has used before, the Treasury Department declared that China's fixed exchange rate between its currency, the yuan, and the dollar posed a risk to its economy and the economies of much of the rest of the world. Today, Chinese officials brushed off the criticisms, which also came from the European Union, suggesting they were unreasonable and counterproductive. Wei Benhua, deputy director of the agency that manages Chinese currency reserves, said Washington should 'put its own house in order before blaming others' for its trade deficits, Bloomberg News reported from Singapore, where Mr. Wei is attending a conference. Commerce Minister Bo Xilai said a threat by the European Union to impose restrictions on Chinese-made textiles was a 'double standard,' since the United States and Europe espoused free trade. The Bush administration stopped short of accusing China of outright currency manipulation, a move demanded by American manufacturers who complain that the Chinese have artificially undervalued their currency to make exports cheaper in the United States. But the new language marked a change in relations, which the administration has until now handled with painstaking delicacy. 'Current Chinese policies,' the Treasury Department said in a report to Congress on Tuesday, 'are highly distortionary and pose a risk to China's economy, its trading partners and global economic growth.' Coming closer than before to setting a deadline, the Treasury report warned that China's policy would meet its definition for currency manipulation unless Beijing officials make a 'substantial alteration.' The administration's combative new stance was not enough to satisfy many members of Congress from both parties, who want to soon threaten China with steep tariffs on its exports if it fails to allow the yuan to rise significantly from a narrow band around 8.28 to the dollar. A stronger yuan would tend to make Chinese goods more expensive in foreign markets, diminishing the country's competitive advantage. Still, economists said even that was unlikely to make a dent quickly in the huge trade imbalance with the United States. The studied shift in the administration's stance reflected delicate issues that confront American officials, who want China to change its currency practices but are even more worried about pressure from Congress to restrict trade. In less than a decade, China has emerged as a manufacturing powerhouse and an indispensable source of low-price goods - toys, furniture and electronics, among others. The expiration on Jan. 1 of global textile quotas has flooded world markets with Chinese apparel. American manufacturers have been caught on both sides of this transformation in trade: often overwhelmed by Chinese competition yet benefiting as buyers of Chinese goods and investors in factories. Administration officials are also juggling political concerns. As a great power of Asia, China is crucial to Washington's efforts to restrain North Korean nuclear ambitions. The Chinese Embassy in Washington had no immediate comment. But even before the administration issued its report, Chinese leaders said on Monday that currency policy was a 'sovereign' matter and that they would not be pushed into decisions by other governments. The Treasury warning implicitly gave the Chinese until October, when the administration is required to make its next report to Congress on foreign currency practices. If it declares that a country is manipulating its currency to gain competitive advantage, it is required to begin negotiations over exchange rates that could lead to retaliation. The United States trade deficit with China reached $124.9 billion last year, larger than that with any other country or with the entire European Union. China has also become one of America's biggest foreign creditors, holding more than $600 billion in Treasury securities and other dollar-denominated instruments as it seeks to keep its currency from rising in line with the trade surpluses. The Treasury report criticized China's policy as dangerous to itself, its Asian neighbors and global growth. 'China's 10-year-long pegged currency may have contributed to stability in the past,' said Treasury Secretary John W. Snow, 'but that is no longer the case today as China has grown to be a more significant participant in global trade and financial flows.' The policy, he said, threatened the Chinese economy by sowing the seeds of inflation, distorting capital flows and preventing the nation's central bank from conducting normal monetary policy. Mr. Snow said that China must devise 'substantial' changes in its currency practices to make them more 'flexible.' He did not demand that Beijing move directly to a system of floating exchange rates, like those used by the United States and most of Europe. Most analysts say China is unlikely to do much more than let its currency appreciate by a limited amount, with some estimating an increase as high as 10 percent. But administration officials said Beijing would have to make changes of 'a manner and magnitude that is sufficiently reflective of underlying market conditions.' The direct American language marked at least a partial abandonment of the Bush administration's two-year attempt to cajole China, using 'financial diplomacy.' China has pegged the yuan at a fixed rate to the dollar since 1994, when it was beginning to emerge as a force in global trade. Left to free-market forces, specialists say that the value of the yuan would have climbed substantially against the dollar. But China and other Asian nations have kept the value constant by buying hundreds of billions of dollars in Treasury securities. The Chinese central bank bought more than $250 billion in dollar-denominated securities over the last year and now holds more than $600 billion, according to recent estimates. The Treasury's report Tuesday did not satisfy critics in Washington. 'The Bush administration is in serious denial with its claim today that China is not manipulating its currency,' said Representative Benjamin L. Cardin of Maryland, the ranking Democrat on the House subcommittee on trade. 'In denying currency manipulation by the Chinese, the administration has turned a blind eye to American workers and businesses that are being seriously hurt by China's policies.' The National Association of Manufacturers, which has lobbied for tougher action for two years, said that it was 'disappointed' and that Mr. Snow's warning shot was already 'long overdue.' But Senator Charles E. Schumer, Democrat of New York and an administration critic, said the tougher language was an improvement. 'They stepped right up to the door, but they didn't knock,' Mr. Schumer said. 'The good news now is that the federal government - the executive branch and the legislative branch - agree that what the Chinese government is doing is wrong. But we still await action, and that's the only thing that will satisfy Congress.' Mr. Schumer and Senator Lindsey O. Graham, Republican of South Carolina, stunned administration officials last month by winning bipartisan Senate support for a measure that would threaten China with tariffs up to 27.5 percent if it failed to change its currency policies. The Senate voted 67 to 33 against killing an amendment that would have attached the provision to a spending bill. Mr. Schumer withdrew the amendment, but Senate Republican s have agreed to allow a vote on the measure before the end of July. Administration officials oppose such penalties for China but also hope the Chinese recognize the risk of provoking political retaliation in Congress if they delay action much longer. 'There are very, very strong protectionist sentiments growing in the United States,' a senior official said, 'and they are directly against China. China could help that situation significantly by moving toward flexible exchange rates.'

Subject: Notice the Bond Market From: Terri To: All Date Posted: Wed, May 18, 2005 at 10:05:16 (EDT) Email Address: Not Provided Message: Wow. The long term Treasury yield is at 4.05% this morning. This bond market is exceptional. There has really been no comparable market, for remember the Federal Reserve has raised interest rates 8 times, yet long term bonds fall in yield.

Subject: Bond Market Adjustment From: Terri To: All Date Posted: Wed, May 18, 2005 at 07:21:18 (EDT) Email Address: Not Provided Message: The bond market adjustment to derivatives and high yield debt is unfolding, but unfolding smoothly. We may hope this set aside much risk in the derivative bond market. This does not effect high investment grade bonds other than to help the prices.

Subject: Impending heavyweight showdown From: Pete Weis To: All Date Posted: Tues, May 17, 2005 at 22:42:11 (EDT) Email Address: Not Provided Message: The US (the heavyweight spender) and China (the heavyweight producer) are closing on an epic showdown. The US administration was able to hold off a vote on the tariff legislation being threatened in the senate until July, by agreeing to take a stronger stand on the Chinese currency pegging issue. Treasury secretary Snow issued vague threats. The Chinese reacted angrily, insisting they would not yield to pressure. It should be pretty obvious, now, that the senate will end up going ahead with their legislation (27-28% across-the-board tariffs on all Chinese goods unless some very influential economists can pump some sanity into them) and it will likely pass. So it will come down to whether or not the Bush administration will veto and whether there are enough votes to override the veto if it is utilized. If this legislation finds its way into deployment and neither side blinks, then assured mutual economic destruction will ensue. China will clearly retaliate with everything at its disposal and it has a lot in its economic arsenal. These kinds of showdowns have a way of escalating with egos taking over and anger building on both sides. This one could be one for the history books - or it might defuse itself with a lot of posturing and little real action (let's hope so). But if this battle, which will likely come to a head by this late Summer/Fall, does not somehow diffuse itself, it will have giant implications for all of the world's economies. Of all the ways for Bretton Woods II to fall apart, perhaps this is the most likely way it will happen.

Subject: Re: Impending heavyweight showdown From: Terri To: Pete Weis Date Posted: Wed, May 18, 2005 at 05:48:19 (EDT) Email Address: Not Provided Message: There is a danger of a trade conflict, but I believe there will be compromise. We need China and China needs us. I am worried, but think there will be compromise. China is the causing economic problems for us, nor are we causing China economic problems.

Subject: Common sense vs ego From: Pete Weis To: Terri Date Posted: Wed, May 18, 2005 at 09:07:39 (EDT) Email Address: Not Provided Message: Terri. So now that China says it won't unpeg their currency in the near term and won't bow to pressure to do so, you think the tariff legislation will not be brought up for a vote in July when it is now scheduled? Has China called our bluff and this coalition of senators will now turn tail? If this legislation does come before Congress, will a majority vote for or against? What will happen to the political prospects of legislators who vote against these tariffs? Does the public understand the consequences of 27-28% across-the-board tariffs on Chinese goods? Would the Chinese fold under the weight of the tariffs or retaliate? If the Chinese retaliate will we fold under their retaliation? Will common sense triumph over egos?

Subject: Re: Common sense vs ego From: Terri To: Pete Weis Date Posted: Wed, May 18, 2005 at 09:56:20 (EDT) Email Address: Not Provided Message: China must compromise enough that the Administration can try to block the tariff bill in the Senate or the House. My hope is that China will either increase the value of the Yuan by 5% to 15%, or use a selected export tax to ease the growth of exports. This is a hope only. There is a growing anger in the country at China, and though I do not believe the anger at all justified there is the political reality. Also, the American tariff bill will have considerable business opposition which will help to temper the legislation if the push on passage continues.

Subject: Hope you are right Terri From: Pete Weis To: Terri Date Posted: Wed, May 18, 2005 at 14:48:18 (EDT) Email Address: Not Provided Message:

Subject: Re: Hope you are right Terri From: Terri To: Pete Weis Date Posted: Wed, May 18, 2005 at 15:13:31 (EDT) Email Address: Not Provided Message: The more I read, the more I wonder whether I am being arrogant in thinking a compromise will be so easily reached. But, my sense of the Chinese leadership shows them more flexible than many assume. The change must come from China to avoid trade conflicts.

Subject: Dispute Tears at Mumbai: India From: Emma To: All Date Posted: Tues, May 17, 2005 at 16:10:07 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/17/international/asia/17mumbai.html?8hpib=&pagewanted=all Dispute Tears at Mumbai: House the Rich, or the Poor? By SOMINI SENGUPTA MUMBAI, India - In the belly of this island city, the textile mills are overrun by weeds and their chimneys point at the sky like so many sooty elephant snouts. A glassy new high-rise glistens incongruously nearby. A construction crane peers over a giant crater where a mill has been demolished to make way for four luxury apartment towers. For over a century this neighborhood, known as the Mill Lands, drew migrants from the countryside, fostered a politically powerful trade union movement and turned what was once a cluster of fishing villages into India's buzzing commercial capital. Today the mills are dead, the lots on which they stand are among the few patches of property available in a bursting city, and the debate over what to do with the land goes to the heart of what kind of city Mumbai expects to become. City officials, citizens groups and, lately, the courts are fiercely wrangling over questions like how much land will be set aside for parks and affordable housing, what will happen to the mill workers, who are central to Mumbai's creation myth, and whether developers should be allowed to turn the old factories into nightclubs and luxury apartments. What is at stake is the future of the city's past. Already, a 29-story luxury hotel has sprung up in the Mill Lands, as well as several new office blocks and an exclusive shopping mall. Environmental groups have gone to court in an effort to set aside a chunk of the remaining 600 acres for public use. In April, a Mumbai court put a temporary halt on development. [In a reversal in early May, the Indian Supreme Court gave its blessings for construction to continue, initially on seven large parcels.] The wrangling comes at a time when Mumbai, or Bombay, as the name was spelled for centuries, a city that is as alluring as it is frustrating to the roughly 14 million residents, is engaged in a larger debate about identity. Will it remain a magnet for strivers from the countryside? Will it be able to draw foreign investment? Will it stand out as India's global city? 'Bombay is a city of the past,' declared Narendra Nayar, an industrialist and the chairman of a business lobby called Bombay First. 'It must be a city of the future.' Mr. Nayar's group is in large part responsible for setting off the spat over Mumbai's future. Armed with a report prepared by the consulting firm McKinsey & Company, it called over a year ago for a radical $40 billion makeover of the city: clearing slums, and building a new subway, public toilets and an airport tarmac without shanties on the margins. Titled Vision Mumbai, the report dangled the prospect of transforming the city into a Shanghai on the Arabian Sea. The dispute that Vision Mumbai unleashed served to demonstrate amply why Mumbai is not Shanghai now, and won't be anytime soon. 'Now, you can't straightaway say we want a world-class city and we don't want anything ugly,' said Neera Adarkar, an architect and a passionate foe of Bombay First's notion of the city. 'Just because you don't want to see them, they're not going to suddenly disappear.' The government's efforts to demolish slums earlier this year caused such a ruckus that it stopped after two months, and prompted the state's chief minister to be summoned to New Delhi for a talking-to. (The Congress Party-led coalition that governs India, after all, owes its victory largely to the poor.) Citizens groups have gone to court in an effort to save the Mill Lands for public space. Weekend tours of demolished slums have been organized to show solidarity with the displaced. Freedom-of-information requests have been filed to reveal which properties are actually publicly owned. Citizens have quarreled endlessly over Vision Mumbai. 'I hate that word,' complained Charles Correa, Mumbai's most acclaimed architect and urban planner. 'There's very little vision. No one really knows. They're more like hallucinations.' Vision or hallucination, the charged debate points as much to the city's vitality as to its desperation. More than half its citizens live in slums. Railroad tracks serve as toilets because there are none for those who do not have proper homes. The sardine-can nature of living means the rich simply cannot ignore the poor, as they can in many other cities. To commute every morning from the fancy northern suburbs is to drive past thousands of shanty dwellers, brushing their teeth in the streets. 'Bombay is where India meets the world,' declared Gerson D'Cunha, a retired advertising executive who founded an influential citizens lobby called Agni Mumbai. 'That's what has made people say, enough is enough, we've got to do something.' The paucity of land in Mumbai - what Mr. D'Cunha calls 'a famine for land' - makes the fate of the Mill Lands a highly charged debate. From his milk stand across the street, a former mill worker named Ganpath Shankar Gorgaonkar, 65, threw a rueful look at the up-market High Street Phoenix mall, where the famed Phoenix Mills once stood. In the fading light, the silhouettes of construction workers could be seen erecting another high-rise tower. 'When I see this, I feel very sad,' he said. 'No middle-class people can stay here.' In the back room behind his shop, his son, Sunil, a commercial photographer, edited digital photos on his desktop computer. Never, he said, had he considered following his father into the mills. Occasionally, he hung out with friends at the Barista Cafe inside the mall. He understood, nonetheless, why men like his father felt out of place here: 'He's from the old times.' He understood, too, he said, how times had changed for the working men of Mumbai. In his father's day, a mill worker could feed his entire family. Today, he said, entire families work to feed themselves. The textile factories flourished for 150 years before they were finally killed by industrial strikes in the 1980's. Over the next two decades, the mill owners converted their properties into lucrative ventures and managed, in 2001, to tweak an older municipal law that required them to set aside a third of the land for public use. In the end, the law stipulated that only a small fraction be set aside. [The latest Supreme Court ruling has given mill owners and developers a shot in the arm. 'It is a wonderful judgment,' said Niranjan Hiranandani, one of India's largest developers. 'This will add a lot of area for development, which is very much needed in Mumbai.'] Of the nearly 60 mills that once operated here, more than a dozen have been converted into office towers, shops and apartments. About 40 are left. For the city's developers, it is like manna from a real estate heaven. For urban planners, it is a bounty with which to resuscitate the cramped city center. For those who live there, it is a scary prospect of change. 'There's a great deal of money to be made, and everybody is struggling with their greasy fingers,' Mr. D'Cunha said. 'The question is, which political view will prevail?'

Subject: Bond Positions are Stabilizing From: Terri To: All Date Posted: Tues, May 17, 2005 at 12:34:50 (EDT) Email Address: Not Provided Message: We may well be seeing a quiet unwinding of derivative and high yield positions in the corporate bond market. I expect so, and if so, this will further stabilize the bond market. Speculators seem to be sshifting from risk instruments to Treasuries. Spreads on interest rate are growing between lower rate corporate and Treasury bonds. The long term Treasury is at 4.1%, astonishing.

Subject: Credit Risk Interest Rate Spreads From: Terri To: All Date Posted: Tues, May 17, 2005 at 11:56:29 (EDT) Email Address: Not Provided Message: Since Ford and General Motor were given lower credit rating, the high yield bond market has weakened and the Treasury market has strengthened. The high yield market, I notice again, continues to worsen. Interest rate spreads between investment-grade and high yield bonds have significantly widened since the year began.

Subject: Social Security in France? From: Emma To: All Date Posted: Tues, May 17, 2005 at 10:42:29 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/17/international/europe/17france.html French Lose a Holiday, but Many, Angry, Take One Anyway By ELAINE SCIOLINO PARIS - A well-meaning government initiative to sacrifice a paid holiday to raise money for the country's elderly threw France into confusion on Monday as employers and workers, government officials and teachers decided on their own whether to obey the call to work. Half the country, it seemed, stayed home, ignoring the first 'day of solidarity' on the traditional holiday here that has been observed the day after Pentecost Sunday, the Christian feast commemorating the descent of the Holy Spirit upon the Apostles on the 50th day after the Resurrection of Christ. France's main unions urged their workers to strike. Although almost all post offices were open, 35 percent of their employees were on strike. Many town halls throughout the country were closed. In Bordeaux, thousands of people marched behind a banner that declared, 'No to free work.' Dozens of cities and towns, including Lille, Strasbourg and Bordeaux, were without most public transportation; the Paris Métro, by contrast, ran on schedule. Schools operated according to the whimsy of their principals and teachers. The country's main federation of parents urged keeping children home, and the teachers' union reported that up to 90 percent of students from the ages of 11 to 18 did stay home. The Paris airports reported some cancellations and delays of flights because of striking air traffic controllers. France's national railway company, SNCF, ran 20 percent more trains than the usual number to help compensate for local transportation disruptions and to transport those who took a three-day weekend. But the railway is treating the day as a holiday for its employees, requiring its workers to make up the time by working 1 minute 52 seconds more each workday. Bernard Thibault, leader of the Communist-backed labor federation, the CGT, told France Info radio that the day after Pentecost Sunday should be considered not a 'day of solidarity' but a 'day of mobilization and protests,' calling on the government to find a more equitable way to care for the country's elderly. The French Confederation of Christian Workers called the day of solidarity 'forced labor.' Many officials and employers were flummoxed over whether to consider Monday a holiday, since many public employees were required to work, but the private sector and local administrations are allowed to choose any holiday of the year as the extra workday. Union officials said it was not clear whether self-employed workers like doctors, private nurses and taxi drivers could bill holiday fees, which are higher than fees on regular working days. The Prefecture of Police in Paris, which oversees taxis, admitted that the rules were so confusing that taxi drivers could decide to charge the higher holiday fare. Since parking meters in Paris are run by a computer program that had not been changed to eliminate the holiday, there was free holiday parking here. The failure of the center-right government to persuade French people to make a sacrifice in the name of the greater good added to its woes just 13 days before a national referendum on the European Union constitution. The outcome of the referendum is uncertain. In a May 14 poll by the research group Ifop, the no voters were in the lead, with 54 percent, against 46 percent planning to vote yes. Twenty-eight percent said they might change their mind one way or the other. In a TNS Sofres poll for the newspaper Le Monde conducted on May 9 and May 10, 52 percent said they would support the treaty, up from 47 percent at the beginning of April. The government challenged the assumption that the initiative had failed, noting that many workers were taking an 'RTT' day, meaning 'reduction of working time,' one of the compensatory days off that they earn if they work more than the legal 35-hour week. 'Polls show that only 14 percent of people are actually on strike,' said a government spokesman, Jean-François Cope, on Europe 1 radio. 'Most of those who are not working are just exercising their normal right to take a day off, and they'll give another one up later in the year. Everyone understands that we need this day of solidarity in order to secure the permanent financing of our care of the elderly.' The initiative originated with an offhand proposal in September 2003 by Prime Minister Jean-Pierre Raffarin to abolish the holiday - then one of 11 national holidays. The intention is to raise $2.6 billion to improve health care for the elderly after a heat wave in the summer of 2003 killed an estimated 15,000 people, most of them elderly and isolated. But Health Minister Philippe Douste-Blazy has estimated that about $7.5 billion per year is needed.

Subject: Jewel to Jewel From: Terri To: All Date Posted: Tues, May 17, 2005 at 10:30:29 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5347&u=17|4|... Yellow Warbler Taking Flight New York City--Central Park, Harlem Meer.

Subject: Forest's Colorful Jewels in Danger From: Emma To: All Date Posted: Tues, May 17, 2005 at 10:17:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/17/science/17flow.html?8hpib Forest's Colorful Jewels in a Fight for Their Lives By BARBARA WHITAKER Inside a 10-foot-high fence at the Meadowlark Botanical Gardens in suburban Washington, woodland wildflowers have been putting on a carefully choreographed show since mid-March. The bloodroots took the stage first, unfurling white petals around their yellow hearts, and were followed by delicate Virginia bluebells and dainty pink spring beauties. Over the last week, red, white and yellow trilliums joined blue dwarf-crested iris and a handful of pink lady's slippers on a simulated mountaintop. But outside such meticulously cultivated gardens, these jewels of the forest, which include cherished flowers known as spring ephemerals, are under siege. 'They're being devastated,' said Keith P. Tomlinson, manager of Meadowlark, in Vienna, Va. As an example he used the Mather Gorge trail in Great Falls National Park a few miles away on the Potomac River. There, bluebells, golden ragwort and trilliums are being crowded out by invasive plants and ravaged by deer. 'They're fighting for their lives,' he said. In deciduous forests from Maine through South Carolina and stretching to the Midwest, the story is much the same. Although in some areas, spring-blooming wildflowers have other enemies, including housing developments, changes in forest densities, pollution and even nonnative worms. 'I'm concerned about many of the spring wildflowers of our woodlands through the northeastern America, where their abundance is being significantly decreased,' said Dr. Robert K. Peet, a professor of biology and ecology at the University of North Carolina. The trend would be easy to miss. True spring ephemerals like Dutchman's breeches, Virginia bluebells, trout lilies and spring beauties flower and die in the few weeks after winter's freeze has broken and before the trees have fully leafed out and blocked the sun. The ephemerals live the rest of the year underground and are believed to have life spans of tens to hundreds of years like the trees around them. While often lumped in with those spring ephemerals, other woodland spring wildflowers like trillium lose their blooms but keep their foliage above ground throughout the summer. Determining long-term trends for wildflowers can be tricky because species can go several years without flowering, said Dr. Charles D. Canham, senior scientist and forest ecologist with the Institute of Ecosystem Studies in Millbrook, N.Y. In addition, forests change, and the understory plants change along with them. A large, and beloved, stand of yellow lady's slipper orchids disappeared on the 6,500-acre Mohonk Preserve in New Paltz, N.Y., over 100 years. The loss was related to a thickening of the forest canopy rather than outside influences. Few broad studies have been done on perils confronting woodland spring wildflowers. But limited surveys and anecdotes suggest that there is reason for concern. 'Our forests are becoming less interesting,' said Dr. Tom Rooney, a research scientist at the University of Wisconsin who has examined the problem. 'It's similar to going to an art museum, and each time you go, there are a few pieces of art missing. It's even more insidious because of connections between the species.' In Wisconsin, where historic data from several hundred forested sites are available, Dr. Rooney said, native species have declined 18 percent in richness over the last 50 years, including the spring ephemerals and other related wildflowers. 'In places that have had very limited or no deer hunting, native plant losses are four times greater than those open to deer hunting,' Dr. Rooney said. 'The deer population has been growing steadily since the 1960's. They are having a profound effect on the spring ephemerals and other wildflowers.' At the Daniel Smiley Research Center of the Mohonk Preserve, researchers have been studying a stand of red trillium for several years to determine the deer's effects. 'We can get the first flower out, but probably within a week almost all the plants are chewed off,' said Paul C. Huth, the preserve's director of research. Mr. Huth said the plants were about half their previous size and did not flower. Rivaling the deer for destructiveness are invasive plants like Japanese honeysuckle, garlic mustard and mile-a-minute weed. 'In another 20 years, if the progression of invasive plants continues as it is, we can only expect that the diversity of spring ephemerals is going to continue to be reduced in association with the overbrowsing by the deer,' Mr. Tomlinson said. Sally Anderson, president of the Virginia Native Plant Society and a resident of the western Shenandoah Valley, said invasive plants like garlic mustard and stilt weed constantly competed for space on her acre and a half, much of it wooded, while the process of clearing nearby lots to build houses has taken habitat once rich with trillium grandiflorum. The problems, Ms. Anderson said, go deeper than the loss of the flowers. 'The seeds of a lot of our spring ephemerals are transported by ants,' she noted. 'So if confined by roads and driveways and houses, the plants not going to move as easily, and they are going to lose the genetic intermixing that keeps them healthy.' Some botanists and ecologists say there is a much bigger story, beyond the threat to wildflowers, that involves the decline and diversity of understory plants. The loss of one species will probably not make a huge difference, but the loss of biodiversity in the groundcover will. In parts of the Eastern United States, forests are widely thought to be on the rebound as land cleared for agriculture and now abandoned reverts to its former state. But research is showing that much of the diversity in those forests is missing and that many spring woodland wildflowers have not reappeared. 'What we have back is a shadow of its former self,' said Dr. Canham of the Institute of Ecosystem Studies. 'There's very little rigorous documentation of plants like trillium or bloodroot. They could be much rarer now than they were 50 years ago, but it would be very hard to prove that.'

Subject: Gmail From: Terri To: All Date Posted: Tues, May 17, 2005 at 09:39:42 (EDT) Email Address: Not Provided Message: Gmail is a wonderful mail service with endless storage and Google search, so I save every valuable New York Times article to my Gmail. There may be no finer mail service. I also subscribe to the New York Times and always will.

Subject: Re: Gmail From: Terri To: Terri Date Posted: Tues, May 17, 2005 at 10:39:06 (EDT) Email Address: Not Provided Message: Gmail is Google's mail service. I know of no finer service, and we can store articles forever.

Subject: For All of Us a Gift From: Terri To: All Date Posted: Tues, May 17, 2005 at 05:56:59 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5400 Magnolia Warbler Feeding New York City--Central Park, The Pool.

Subject: Re: For All of Us a Gift From: Pete Weis To: Terri Date Posted: Tues, May 17, 2005 at 08:53:44 (EDT) Email Address: Not Provided Message: Great photo. It must take hours of stoic vigilence to get a shot of such small, very quickly moving birds like these. Thanks Terri.

Subject: Drastic change to this site? From: David E.. To: All Date Posted: Tues, May 17, 2005 at 03:51:26 (EDT) Email Address: Not Provided Message: 'As most of you probably already heard, the NY Times will put its op/ed pages behind a paid firewall, making such content available to exisiting print subscribers and those who shell out $50/year.' from the daily kos.

Subject: All Will Be Well From: Terri To: David E.. Date Posted: Wed, May 18, 2005 at 06:00:15 (EDT) Email Address: Not Provided Message: All will be well. The site will be here for us all.

Subject: Re: All Will Be Well From: Terri To: Terri Date Posted: Wed, May 18, 2005 at 07:23:20 (EDT) Email Address: Not Provided Message: Remember, only the columns will be charged for not the news. Bobby and Paul Krugman will tell us how to proceed. I am not at all concerned, and will always read the Times thoroughly.

Subject: Re: Drastic change to this site? From: Terri To: David E.. Date Posted: Tues, May 17, 2005 at 05:51:27 (EDT) Email Address: Not Provided Message: There will be no charge for those you get the New York Times print edition. I think this will be fair.

Subject: All Will Be Well From: Terri To: Terri Date Posted: Tues, May 17, 2005 at 07:12:04 (EDT) Email Address: Not Provided Message: This site is precious and will be here for us. I am happy to subscribe to the New York Times.

Subject: Over time.... From: Pete Weis To: Terri Date Posted: Tues, May 17, 2005 at 08:47:21 (EDT) Email Address: Not Provided Message: more and more of what is worthwhile on the internet will come with a price and we will be able to copy and paste less and less. Many links will require subscriptions to access. But the people who research and write for these publications and sites must be paid for their efforts.

Subject: Immediate effect From: David E.. To: Pete Weis Date Posted: Tues, May 17, 2005 at 12:55:55 (EDT) Email Address: Not Provided Message: Your subscription to the NYtimes Terri will not authorize posting a copy of Paul Krugman's column on the internet. The Wall Street Journal enforces this and I fully expect the Times to enforce this.

Subject: Re: Immediate effect From: Terri To: David E.. Date Posted: Tues, May 17, 2005 at 13:59:44 (EDT) Email Address: Not Provided Message: Hmmm. If I have a subscription to a Journal, I can post an article on my website. I hope and think there is no problem. Hmmm. I do not expect a problem.

Subject: Re: Immediate effect From: Terri To: Terri Date Posted: Tues, May 17, 2005 at 14:19:17 (EDT) Email Address: Not Provided Message: The New York Times archives can only be used for a fee, but only we pay the fee we can copy an article to our website. There should be no problem, and access will be open to subscribers or reasonably priced for those who just with to use the internet edition of the Times. All will be well with our site.

Subject: Re: Immediate effect From: Terri To: Terri Date Posted: Tues, May 17, 2005 at 17:42:57 (EDT) Email Address: Not Provided Message: My attorney sister tells me there should be no problem maintaining this site.

Subject: Re: Immediate effect From: David E.. To: Terri Date Posted: Wed, May 18, 2005 at 00:21:42 (EDT) Email Address: Not Provided Message: The Wall Street Journal does not let subscribers post its articles on the web. The NYTImes will do the same. How can they make money selling access to NY times editorials if Terri is publishing them for free. If you buy a record, or buy a book, you have a right to make copies for your personal use. Personal use does not include making copies for everyone. College professors get in trouble doing this, kids making copies of CD's get in trouble doing this, and very likely Terri will get in trouble publishing NYTimes material on the web.

Subject: Re: Immediate effect From: Terri To: David E.. Date Posted: Wed, May 18, 2005 at 21:37:58 (EDT) Email Address: Not Provided Message: Thank you for all your wonderful help. I will do only what is allowed, for that is always they way to do things.

Subject: Re: Immediate effect From: Terri To: David E.. Date Posted: Wed, May 18, 2005 at 05:56:39 (EDT) Email Address: Not Provided Message: I love the Times and subscribe and always will, and will always do just what is allowed. There will never be a problem.

Subject: Re: Immediate effect From: Terri To: Terri Date Posted: Wed, May 18, 2005 at 05:59:35 (EDT) Email Address: Not Provided Message: We will have this lovely site and this message board, and the discussion will happily go on as it goes on now.

Subject: Re: Immediate effect From: Ryan To: David E.. Date Posted: Wed, May 18, 2005 at 03:51:45 (EDT) Email Address: Not Provided Message: So you mean I must read the articles online the day the come out. New York Times offers a free online subscription. You just can't read any old articles. More incentive to stay up with the current news.

Subject: Re: Immediate effect From: Terri To: Ryan Date Posted: Wed, May 18, 2005 at 18:24:29 (EDT) Email Address: Not Provided Message: Yeah :)

Subject: Interest Rates and Bond Fund Returns From: Terri To: All Date Posted: Mon, May 16, 2005 at 11:48:19 (EDT) Email Address: Not Provided Message: Though I never worry about a loss in a bond fund, for the funds I buy use no derivatives that might cause significant price swings and so move slowly enough to easily react, I agree completely that there is likely no room remaining for capital gains to be made in the bond market. Interest rates seem too low to allow for significant bond fund returns, but Vanguard's long term bond funds have surely been glorious and intermediate or short term or GNMA bond funds can always be defensive.

Subject: Should we set a time table to... From: Pete Weis To: All Date Posted: Mon, May 16, 2005 at 11:37:02 (EDT) Email Address: Not Provided Message: get out?: 'So we need to get beyond the clichés - please, no more 'pottery barn principles' or 'staying the course.' I'm not advocating an immediate pullout, but we have to tell the Iraqi government that our stay is time-limited, and that it has to find a way to take care of itself. The point is that something has to give. We either need a much bigger army - which means a draft - or we need to find a way out of Iraq.' - Paul Krugman NYT

Subject: Re: Should we set a time table to... From: Pete Weis To: Pete Weis Date Posted: Mon, May 16, 2005 at 18:14:29 (EDT) Email Address: Not Provided Message: I think Paul Krugman is more or less agreeing with you. But by instituting a sheduled pullout and announcing it, a sense of urgency might light a fire under the new Iraqi government. They might become much more assertive with regard to seizing the reigns of power. But as long as they believe the US and Brits will remain indefinitely, they will not be able to give up the life jackets which will be taken from them in the end anyway. We would, in effect, be telling them that by a given date we are going to throw them into the water and they are going to have to learn to swim on their own to survive. As you point out - over time, the insurgents will grow stronger not weaker. I believe it's impossible, politically for any US or British leadership to suddenly pull up stakes and leave in only weeks or months. We have to wonder though, what are the ultimate goals of the Bush administration with regard to leaving a large contigent of troups in the Middle East.

Subject: Re: Should we set a time table to... From: Paul G. Brown To: Pete Weis Date Posted: Mon, May 16, 2005 at 21:16:11 (EDT) Email Address: Not Provided Message: 'We have to wonder though, what are the ultimate goals of the Bush administration with regard to leaving a large contigent of troups in the Middle East.' I believe what I've been told about their sincerity. They really believe that having a local 'Police Station' is a good thing, and that the prospect of a democratized Iraq will trigger a kind of domino effect throughout the region (Man - 'Domino Theory' was a crappy analogy for historical change when it was used as a whip to goad us into Vietnam. Now we're actually pushing it. How times have changed.)

Subject: Re: Should we set a time table to... From: Paul G. Brown To: Pete Weis Date Posted: Mon, May 16, 2005 at 17:10:57 (EDT) Email Address: Not Provided Message: Dudes, it's truly one gigantic mess. Figure out where a) what we want, and b) what we can hope for intersect, and we can possibly figure out what we ought to do. If the Jihadi's in Iraq follow the pattern of other insurgencies who have fought large standing armies, then they know that time is on their side. They can expect a US bug-out, sooner or later. They've probably read Nial Ferguson's _Colossus_ so they know that the US has a long history of sending in the Marines and then leaving too few of 'em there for not long enough to make a difference (in contrast to empires of the recent past like Britain and France who opted for long term occupation). So suppose I'm an angry young Iraqi Mullah of some talent and ambition. What do I do? Well, I can assume that the Americans will leave sooner or later, at which point the stage is set for a hum-dinger of a civil war to settle who gets the corner office next. Now if I can position my boys as liberators--throw a few stones now and then, blow up the odd tank, be especially hard on collaborators--without bringing down the B-52's on my neighborhood, ten I'm in good shape for the fight that really counts. People will respect me, or at least fear me. And what better way is there to build organization and espri-de-corps than fight small, ugly, running battles with the Marines. I mean, they're really good at what they do, these Americans. Disciplined. Well equipped. They're 10x the fighting force that any post-occupation government of Iraq can hope to put into the field. So much for what we can hope for: no battles with decisive outcomes (they won't risk that; not an important fight). Rather we should anticipate the endless, dailly grind of occupation. One dead per day. Locals getting increasingly pissed off over time as we demolish their homes in an effort to get the bad guy with the RPG who slipped out through the back door ten minutes ago. And when we do pull out we leave a number of small, tough armies, all well positioned to inflict deep hurt on whatever government we leave in place. On the other hand, we might go the British route. Mobilization. 'Would all citizens and permanent residents 18 through 35 please please file their draft board registrations. Those with 'special' skills--welding, automotive repair, computers--taken up to ages 40.' How to pay for it? Hey! I hear our credit's still good with the Chinese. And they do a fine line of cottons in khaki. Frankly this is a political non starter. So sadly, I'm going to conclude in disagreement with PK. The most politically pallatable and least awful of a set of really, really bad choices, right now, is to withdraw immediately, and to turn the place over to an imperfect Iraqi government *before* the various Mad Mahdi armies get comfortable with fighting insurgency style. By turning the whole mess into a civil war now we improve the chances that the ultimate winner won't be one of the groups we're at war with now. Heck! It might even be democratic. And I say this as someone who remains supportive of international intervention in 'troubled' nations. But it's clear that this whole episode was poisoned at conception.

Subject: Oops! From: Pete Weis To: Paul G. Brown Date Posted: Mon, May 16, 2005 at 18:17:05 (EDT) Email Address: Not Provided Message: Paul. Meant to reply to you here.

Subject: Re: Oops! From: Paul G. Brown To: Pete Weis Date Posted: Mon, May 16, 2005 at 21:18:41 (EDT) Email Address: Not Provided Message: No worries. I'll talk wherever I'm asked to.

Subject: Re: Oops! From: Terri To: Paul G. Brown Date Posted: Tues, May 17, 2005 at 05:54:24 (EDT) Email Address: Not Provided Message: Paul and Pete, you are always asked to talk. You always are teaching me. Thank you.

Subject: Beneath the surface From: Pete Weis To: All Date Posted: Mon, May 16, 2005 at 10:33:55 (EDT) Email Address: Not Provided Message: From the London Times: May 15, 2005 City hedge funds head for domino collapse Peter Koenig and Louise Armitstead BAD investments by some of the biggest hedge funds in London have triggered unprecedented losses, record demands for money back and talk of a death spiral weighing heavily on stocks and bonds. GLG, a hedge fund started in 1995 by a group of former Goldman Sachs bankers, has in recent weeks had demands for more than $500m (£270m) from investors wanting to pull out of its $4 billion market-neutral fund. The predicament of GLG, the biggest group in Europe, with $13 billion under management, highlights the stress being felt at many hedge funds in Europe and America after four months of deteriorating results. Prime brokers and the credit departments in investment banks have been calling clients to check their capital strengths as rumours of a big hedge-fund blow-out grip the industry. London-based Cheyne is thought to be down by at least 10% in its credit fund after the downgrading of debt at General Motors and Ford. Ferox, another of London’s most successful funds, is thought to be down nearly 20%. Bailey Coates, Polygon, Rubicon, Vega, Moore Capital and Brevan Howard are all nursing heavy losses of about 5% each in April. Bailey Coates, whose losses reported in The Sunday Times three weeks ago first alerted the wider market to the industry crisis, has had yet more redemption calls. “What you’re seeing is like a run on the bank,” said Narayan Naik, director of hedge-fund studies at the London Business School. “Selling forces more selling and there’s a cascade effect.” Although industry experts said there was no hedge-fund blow-out on the scale of Long Term Capital Management in 1998, many are concerned that the worst might not be over. “There’s not a panic like when LTCM nearly went bust,” said Naik, “but prices will keep dropping until excess money is squeezed out of the hedge-fund industry and a new floor is established.” After performing well in the fourth quarter last year, funds have run into increasing difficulty this year as a downturn in consumer spending has sparked fears of a broader slowdown. While GLG reported that one of its key funds was down 5.2%, a Man Group scheme suffered a 3.1% decline and Madrid-based Vega told investors one of its leading funds was down 6%. May has also started rockily. Some hedge funds were wrongfooted when Standard & Poor’s downgraded General Motors and Ford bonds to junk levels, and US investor Kirk Kerkorian used the opportunity to buy shares. Bond prices fell and share prices rose, the opposite of what fund managers thought would happen. Hedge funds that specialise in convertibles — bonds investors can exchange for shares — have also had a hard time. Funds had bought up nearly 80% of all convertibles, so when their prices fell it turned into a stampede.

Subject: Re: Beneath the surface From: Terri To: Pete Weis Date Posted: Mon, May 16, 2005 at 11:22:02 (EDT) Email Address: Not Provided Message: http://business.timesonline.co.uk/article/0,,8209-1612390,00.html Then here is the link to the hedge fund article.... Thanks.

Subject: Re: Beneath the surface From: Terri To: Terri Date Posted: Mon, May 16, 2005 at 12:58:24 (EDT) Email Address: Not Provided Message: What is the estimation of the Times of Britain? Should this hedge fund article be taken as credible?

Subject: Re: Beneath the surface From: Terri To: Terri Date Posted: Mon, May 16, 2005 at 14:56:55 (EDT) Email Address: Not Provided Message: Apparently the article is accurate. I have wondered why the convertible securities market was oddly weak recently. Not a market I uniderstand.

Subject: Life at the Top in America: Healthier From: Emma To: All Date Posted: Mon, May 16, 2005 at 09:47:42 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/16/national/class/HEALTH-FINAL.html?pagewanted=all Life at the Top in America Isn't Just Better, It's Longer By JANNY SCOTT Jean G. Miele's heart attack happened on a sidewalk in Midtown Manhattan last May. He was walking back to work along Third Avenue with two colleagues after a several-hundred-dollar sushi lunch. There was the distant rumble of heartburn, the ominous tingle of perspiration. Then Mr. Miele, an architect, collapsed onto a concrete planter in a cold sweat. Will L. Wilson's heart attack came four days earlier in the bedroom of his brownstone in Bedford-Stuyvesant in Brooklyn. He had been regaling his fiancée with the details of an all-you-can-eat dinner he was beginning to regret. Mr. Wilson, a Consolidated Edison office worker, was feeling a little bloated. He flopped onto the bed. Then came a searing sensation, like a hot iron deep inside his chest. Ewa Rynczak Gora's first signs of trouble came in her rented room in the noisy shadow of the Brooklyn-Queens Expressway. It was the Fourth of July. Ms. Gora, a Polish-born housekeeper, was playing bridge. Suddenly she was sweating, stifling an urge to vomit. She told her husband not to call an ambulance; it would cost too much. Instead, she tried a home remedy: salt water, a double dose of hypertension pills and a glass of vodka. Architect, utility worker, maid: heart attack is the great leveler, and in those first fearful moments, three New Yorkers with little in common faced a single, common threat. But in the months that followed, their experiences diverged. Social class - that elusive combination of income, education, occupation and wealth - played a powerful role in Mr. Miele's, Mr. Wilson's and Ms. Gora's struggles to recover. Class informed everything from the circumstances of their heart attacks to the emergency care each received, the households they returned to and the jobs they hoped to resume. It shaped their understanding of their illness, the support they got from their families, their relationships with their doctors. It helped define their ability to change their lives and shaped their odds of getting better. Class is a potent force in health and longevity in the United States. The more education and income people have, the less likely they are to have and die of heart disease, strokes, diabetes and many types of cancer. Upper-middle-class Americans live longer and in better health than middle-class Americans, who live longer and better than those at the bottom. And the gaps are widening, say people who have researched social factors in health. As advances in medicine and disease prevention have increased life expectancy in the United States, the benefits have disproportionately gone to people with education, money, good jobs and connections. They are almost invariably in the best position to learn new information early, modify their behavior, take advantage of the latest treatments and have the cost covered by insurance. Many risk factors for chronic diseases are now more common among the less educated than the better educated. Smoking has dropped sharply among the better educated, but not among the less. Physical inactivity is more than twice as common among high school dropouts as among college graduates. Lower-income women are more likely than other women to be overweight, though the pattern among men may be the opposite. There may also be subtler differences. Some researchers now believe that the stress involved in so-called high-demand, low-control jobs further down the occupational scale is more harmful than the stress of professional jobs that come with greater autonomy and control. Others are studying the health impact of job insecurity, lack of support on the job, and employment that makes it difficult to balance work and family obligations. Then there is the issue of social networks and support, the differences in the knowledge, time and attention that a person's family and friends are in a position to offer. What is the effect of social isolation? Neighborhood differences have also been studied: How stressful is a neighborhood? Are there safe places to exercise? What are the health effects of discrimination? Heart attack is a window on the effects of class on health. The risk factors - smoking, poor diet, inactivity, obesity, hypertension, high cholesterol and stress - are all more common among the less educated and less affluent, the same group that research has shown is less likely to receive cardiopulmonary resuscitation, to get emergency room care or to adhere to lifestyle changes after heart attacks. 'In the last 20 years, there have been enormous advances in rescuing patients with heart attack and in knowledge about how to prevent heart attack,' said Ichiro Kawachi, a professor of social epidemiology at the Harvard School of Public Health. 'It's like diffusion of innovation: whenever innovation comes along, the well-to-do are much quicker at adopting it. On the lower end, various disadvantages have piled onto the poor. Diet has gotten worse. There's a lot more work stress. People have less time, if they're poor, to devote to health maintenance behaviors when they are juggling two jobs. Mortality rates even among the poor are coming down, but the rate is not anywhere near as fast as for the well-to-do. So the gap has increased.' Bruce G. Link, a professor of epidemiology and sociomedical sciences at Columbia University, said of the double-edged consequences of progress: 'We're creating disparities. It's almost as if it's transforming health, which used to be like fate, into a commodity. Like the distribution of BMW's or goat cheese.' The Best of Care Mr. Miele's advantage began with the people he was with on May 6, when the lining of his right coronary artery ruptured, cutting off the flow of blood to his 66-year-old heart. His two colleagues were knowledgeable enough to dismiss his request for a taxi and call an ambulance instead. And because he was in Midtown Manhattan, there were major medical centers nearby, all licensed to do the latest in emergency cardiac care. The emergency medical technician in the ambulance offered Mr. Miele (pronounced MEE-lee) a choice. He picked Tisch Hospital, part of New York University Medical Center, an academic center with relatively affluent patients, and passed up Bellevue, a city-run hospital with one of the busiest emergency rooms in New York. Within minutes, Mr. Miele was on a table in the cardiac catheterization laboratory, awaiting an angioplasty to unclog his artery - a procedure that many cardiologists say has become the gold standard in heart attack treatment. When he developed ventricular fibrillation, a heart rhythm abnormality that can be fatal within minutes, the problem was quickly fixed. Then Dr. James N. Slater, a 54-year-old cardiologist with some 25,000 cardiac catheterizations under his belt, threaded a catheter through a small incision in the top of Mr. Miele's right thigh and steered it toward his heart. Mr. Miele lay on the table, thinking about dying. By 3:52 p.m., less than two hours after Mr. Miele's first symptoms, his artery was reopened and Dr. Slater implanted a stent to keep it that way. Time is muscle, as cardiologists say. The damage to Mr. Miele's heart was minimal. Mr. Miele spent just two days in the hospital. His brother-in-law, a surgeon, suggested a few specialists. Mr. Miele's brother, Joel, chairman of the board of another hospital, asked his hospital's president to call N.Y.U. 'Professional courtesy,' Joel Miele explained later. 'The bottom line is that someone from management would have called patient care and said, 'Look, would you make sure everything's O.K.?' ' Things went less flawlessly for Mr. Wilson, a 53-year-old transportation coordinator for Con Ed. He imagined fleetingly that he was having a bad case of indigestion, though he had had a heart attack before. His fiancée insisted on calling an ambulance. Again, the emergency medical technician offered a choice of two nearby hospitals - neither of which had state permission to do an angioplasty, the procedure Mr. Miele received. Mr. Wilson chose the Brooklyn Hospital Center over Woodhull Medical and Mental Health Center, the city-run hospital that serves three of Brooklyn's poorest neighborhoods. At Brooklyn Hospital, he was given a drug to break up the clot blocking an artery to his heart. It worked at first, said Narinder P. Bhalla, the hospital's chief of cardiology, but the clot re-formed. So Dr. Bhalla had Mr. Wilson taken to the Weill Cornell Center of NewYork-Presbyterian Hospital in Manhattan the next morning. There, Dr. Bhalla performed an angioplasty and implanted a stent. Asked later whether Mr. Wilson would have been better off if he had had his heart attack elsewhere, Dr. Bhalla said the most important issue in heart attack treatment was getting the patient to a hospital quickly. But he added, 'In his case, yes, he would have been better off had he been to a hospital that was doing angioplasty.' Mr. Wilson spent five days in the hospital before heading home on many of the same high-priced drugs that Mr. Miele would be taking and under similar instructions to change his diet and exercise regularly. After his first heart attack in 2000, he quit smoking; but once he was feeling better, he had stopped taking several medications, drifted back to red meat and fried foods, and let his exercise program slip. This time would be different, he vowed: 'I don't think I'll survive another one.' Ms. Gora's experience was the rockiest. First, she hesitated before allowing her husband to call an ambulance; she hoped her symptoms would go away. He finally insisted; but when the ambulance arrived, she resisted leaving. The emergency medical technician had to talk her into going. She was given no choice of hospitals; she was simply taken to Woodhull, the city hospital Mr. Wilson had rejected. Woodhull was busy when Ms. Gora arrived around 10:30 p.m. A triage nurse found her condition stable and classified her as 'high priority.' Two hours later, a physician assistant and an attending doctor examined her again and found her complaining of chest pain, shortness of breath and heart palpitations. Over the next few hours, tests confirmed she was having a heart attack. She was given drugs to stop her blood from clotting and to control her blood pressure, treatment that Woodhull officials say is standard for the type of heart attack she was having. The heart attack passed. The next day, Ms. Gora was transferred to Bellevue, the hospital Mr. Miele had turned down, for an angiogram to assess her risk of a second heart attack. But Ms. Gora, who was 59 at the time, came down with a fever at Bellevue, so the angiogram had to be canceled. She remained at Bellevue for two weeks, being treated for an infection. Finally, she was sent home. No angiogram was ever done. Comforts and Risks Mr. Miele is a member of New York City's upper middle class. The son of an architect and an artist, he worked his way through college, driving an ice cream truck and upholstering theater seats. He spent two years in the military and then joined his father's firm, where he built a practice as not only an architect but also an arbitrator and an expert witness, developing real estate on the side. Mr. Miele is the kind of person who makes things happen. He bought a $21,000 house in the Park Slope section of Brooklyn, sold it about 15 years later for $285,000 and used the money to build his current house next door, worth over $2 million. In Brookhaven, on Long Island, he took a derelict house on a single acre, annexed several adjoining lots and created what is now a four-acre, three-house compound with an undulating lawn and a 15,000-square-foot greenhouse he uses as a workshop for his collection of vintage Jaguars. Mr. Miele's architecture partners occasionally joked that he was not in the business for the money, which to some extent was true. He had figured out how to live like a millionaire, he liked to say, even before he became one. He had worked four-day weeks for the last 20 years, spending long weekends with his family, sailing or iceboating on Bellport Bay and rebuilding cars. Mr. Miele had never thought of himself as a candidate for a heart attack - even though both his parents had died of heart disease; even though his brother had had arteries unclogged; even though he himself was on hypertension medication, his cholesterol levels bordered on high and his doctor had been suggesting he lose weight. He was a passionate chef who put great store in the healthfulness of fresh ingredients from the Mieles' vegetable garden or the greengrocers in Park Slope. His breakfasts may have been a cardiologist's nightmare - eggs, sausage, bacon, pastina with a poached egg - but he considered his marinara sauce to be healthy perfection: just garlic, oil, tomatoes, salt and pepper. He figured he had something else working in his favor: he was happy. He adored his second wife, Lori, 23 years younger, and their 6-year-old daughter, Emma. He lived within blocks of his two sisters and two of his three grown children from his first marriage. The house regularly overflowed with guests, including Mr. Miele's former wife and her husband. He seemed to know half the people of Park Slope. 'I walk down the street and I feel good about it every day,' Mr. Miele, a gregarious figure with twinkling blue eyes and a taste for worn T-shirts and jeans, said of his neighborhood. 'And, yes, that gives me a feeling of well-being.' His approach to his health was utilitarian. When body parts broke, he got them fixed so he could keep doing what he liked to do. So he had had disc surgery, rotator cuff surgery, surgery for a carpal tunnel problem. But he was also not above an occasional bit of neglect. In March 2004, his doctor suggested a stress test after Mr. Miele complained of shortness of breath. On May 6, the prescription was still hanging on the kitchen cabinet door. An important link in the safety net that caught Mr. Miele was his wife, a former executive at a sweater manufacturing company who had stopped work to raise Emma but managed the Mieles' real estate as well. While Mr. Miele was still in the hospital, she was on the Internet, Googling stents. She scheduled his medical appointments. She got his prescriptions filled. Leaving him at home one afternoon, she taped his cardiologist's business card to the couch where he was sitting. 'Call Dr. Hayes and let him know you're coughing,' she said, her fingertips on his shoulder. Thirty minutes later, she called home to check. She prodded Mr. Miele, gently, to cut his weekly egg consumption to two, from seven. She found fresh whole wheat pasta and cooked it with turkey sausage and broccoli rabe. She knew her way around nutrition labels. Ms. Miele took on the burden of dealing with the hospital and insurance companies. She accompanied Mr. Miele to his doctor's appointments and retained pharmaceutical dosages in her head. 'I can just leave and she can give you all the answers to all the questions,' Mr. Miele said to his cardiologist, Dr. Richard M. Hayes, one day. 'O.K., why don't you just leave?' Dr. Hayes said back. 'Can she also examine you?' With his wife's support, Mr. Miele set out to lose 30 pounds. His pasta consumption plunged to a plate a week from two a day. It was not hard to eat healthfully from the Mieles' kitchens. Even the 'junk drawer' in Park Slope was stocked with things like banana chips and sugared almonds. Lunches in Brookhaven went straight from garden to table: tomatoes with basil, eggplant, corn, zucchini flower tempura. At Dr. Hayes's suggestion, Mr. Miele enrolled in a three-month monitored exercise program for heart disease patients, called cardiac rehab, which has been shown to reduce the mortality rate among heart patients by 20 percent. Mr. Miele's insurance covered the cost. He even managed to minimize the inconvenience, finding a class 10 minutes from his country house. He had the luxury of not having to rush back to work. By early June, he had decided he would take the summer off, and maybe cut back his work week when he returned to the firm. 'You know, the more I think about it, the less I like the idea of going back to work,' he said. 'I don't see any real advantage. I mean, there's money. But you've got to take the money out of the equation.' So he put a new top on his 1964 Corvair. He played host to a large family reunion, replaced the heat exchanger in his boat and transformed the ramshackle greenhouse into an elaborate workshop. His weight dropped to 189 pounds, from 211. He had doubled the intensity of his workouts. His blood pressure was lower than ever. Mr. Miele saw Dr. Hayes only twice in six months, for routine follow-ups. He had been known to walk out of doctors' offices if he was not seen within 20 minutes, but Dr. Hayes did not keep him waiting. The Mieles were swept into the examining room at the appointed hour. Buoyed by the evidence of Mr. Miele's recovery, they would head out to lunch in downtown Manhattan. Those afternoons had the feel of impromptu dates. 'My wife tells me that I'm doing 14-hour days,' Mr. Miele mused one afternoon, slicing cold chicken and piling it with fresh tomatoes on toast. 'She said, 'You're doing better now than you did 10 years ago.' And I said, 'I haven't had sex in a week.' And she said, 'Well?' ' Just one unpleasant thing happened. Mr. Miele's partners informed him in late July that they wanted him to retire. It caught him off guard, and it hurt. He countered by taking the position that he was officially disabled and therefore entitled to be paid through May 5, 2005. 'I mean, the guy has a heart attack,' he said later. 'So you get him while he's down?' Lukewarm Efforts to Reform Will Wilson fits squarely in the city's middle class. His parents had been sharecroppers who moved north and became a machinist and a nurse. He grew up in Bedford-Stuyvesant and had spent 34 years at Con Ed. He had an income of $73,000, five weeks' vacation, health benefits, a house worth $450,000 and plans to retire to North Carolina at 55. Mr. Wilson, too, had imagined becoming an architect. But there had been no money for college, so he found a job as a utility worker. By age 22, he had two children. He considered going back to school, with the company's support, to study engineering. But doing shift work, and with small children, he never found the time. For years he was a high-voltage cable splicer, a job he loved because it meant working outdoors with plenty of freedom and overtime pay. But on a snowy night in the early 1980's, a car skidded into a stanchion, which hit him in the back. A doctor suggested that Mr. Wilson learn to live with the pain instead of having disc surgery, as Mr. Miele had done. So Mr. Wilson became a laboratory technician, then a transportation coordinator, working in a cubicle in a low-slung building in Astoria, Queens, overseeing fuel deliveries for the company's fleet. Some people might think of the work as tedious, Mr. Wilson said, 'but it keeps you busy.' 'Sometimes you look back over your past life experiences and you realize that if you would have done something different, you would have been someplace else,' he said. 'I don't dwell on it too much because I'm not in a negative position. But you do say, 'Well, dag, man, I should have done this or that.' ' Mr. Wilson's health was not bad, but far from perfect. He had quit drinking and smoking, but had high cholesterol, hypertension and diabetes. He was slim, 5-foot-9 and just under 170 pounds. He traced his first heart attack to his smoking, his diet and the stress from a grueling divorce. His earlier efforts to reform his eating habits were half-hearted. Once he felt better, he stopped taking his cholesterol and hypertension drugs. When his cardiologist moved and referred Mr. Wilson to another doctor, he was annoyed by what he considered the rudeness of the office staff. Instead of demanding courtesy or finding another specialist, Mr. Wilson stopped going. By the time Dr. Bhalla encountered Mr. Wilson at Brooklyn Hospital, there was damage to all three main areas of his heart. Dr. Bhalla prescribed a half-dozen drugs to lower Mr. Wilson's cholesterol, prevent clotting and control his blood pressure. 'He has to behave himself,' Dr. Bhalla said. 'He needs to be more compliant with his medications. He has to really go on a diet, which is grains, no red meat, no fat. No fat at all.' Mr. Wilson had grown up eating his mother's fried chicken, pork chops and macaroni and cheese. He confronted those same foods at holiday parties and big events. There were doughnut shops and fried chicken places in his neighborhood; but Mr. Wilson's fiancée, Melvina Murrell Green, found it hard to find fresh produce and good fish. 'People in my circle, they don't look at food as, you know, too much fat in it,' Mr. Wilson said. 'I don't think it's going to change. It's custom.' At Red Lobster after his second heart attack, Ms. Green would order chicken and Mr. Wilson would have salmon - plus a side order of fried shrimp. 'He's still having a problem with the fried seafood,' Ms. Green reported sympathetically. Whole grains remained mysterious. 'That we've got to work on,' she said. 'Well, we recently bought a bag of grain something. I'm not used to that. We try to put it on the cereal. It's O.K.' In August, Ms. Green's blood pressure shot up. The culprit turned out to be a turkey chili recipe that she and Mr. Wilson had discovered: every ingredient except the turkey came from a can. She was shocked when her doctor pointed out the salt content. The Con Ed cafeteria, too, was problematic. So Mr. Wilson began driving to the Best Yet Market in Astoria at lunch to troll the salad bar. Dr. Bhalla had suggested that Mr. Wilson walk for exercise. There was little open space in the neighborhood, so Mr. Wilson and Ms. Green often drove just to go for a stroll. In mid-October he entered a cardiac rehab program like Mr. Miele's, only less convenient. He would drive into Manhattan after work, during the afternoon rush, three days a week. He would hunt for on-street parking or pay too much for a space in a lot. Then a stranger threatened to damage Mr. Wilson's car in a confrontation over a free spot, so Mr. Wilson switched to the subway. For a time, he considered applying for permanent disability. But Con Ed allowed him to return to work 'on restrictions,' so he decided to go back, with plans to retire in a year and a half. The week before he went back, he and Ms. Green took a seven-day cruise to Nassau. It was a revelation. 'Sort of like helped me to see there's a lot more things to do in life,' he said. 'I think a lot of people deny themselves certain things in life, in terms of putting things off, 'I'll do it later.' Later may never come.' Ignoring the Risks Ms. Gora is a member of the working class. A bus driver's daughter, she arrived in New York City from Krakow in the early 1990's, leaving behind a grown son. She worked as a housekeeper in a residence for the elderly in Manhattan, making beds and cleaning toilets. She said her annual income was $21,000 to $23,000 a year, with health insurance through her union. For $365 a month, she rented a room in a friend's Brooklyn apartment on a street lined with aluminum-sided row houses and American flags. She used the friend's bathroom and kitchen. She was in her seventh year on a waiting list for a subsidized one-bedroom apartment in the adjacent Williamsburg neighborhood. In the meantime, she had acquired a roommate: Edward Gora, an asbestos-removal worker newly arrived from Poland and 10 years her junior, whom she met and married in 2003. Like Mr. Miele, Ms. Gora had never imagined she was at risk of a heart attack, though she was overweight, hypertensive and a 30-year smoker, and heart attacks had killed her father and sister. She had numerous health problems, which she addressed selectively, getting treated for back pain, ulcers and so on until the treatment became too expensive or inconvenient, or her insurance declined to pay. 'My doctor said, 'Ewa, be careful with cholesterol,' ' recalled Ms. Gora, whose vestigial Old World sense of propriety had her dressed in heels and makeup for every visit to Bellevue. 'When she said that, I think nothing; I don't care. Because I don't believe this touch me. Or I think she have to say like that because she doctor. Like cigarettes: she doctor, she always told me to stop. And when I got out of the office, lights up.' Ms. Gora had a weakness for the peak of the food pyramid. She grew up on her mother's fried pork chops, spare ribs and meatballs - all cooked with lard - and had become a pizza, hamburger and French fry enthusiast in the United States. Fast food was not only tasty but also affordable. 'I eat terrible,' she reported cheerily from her bed at Bellevue. 'I like grease food and fast food. And cigarettes.' She loved the feeling of a cigarette between her fingers, the rhythmic rise and fall of it to her lips. Using her home computer, she had figured out how to buy Marlboros online for just $2.49 a pack. Her husband smoked, her friends all smoked. Everyone she knew seemed to love tobacco and steak. Her life was physically demanding. She would rise at 6 a.m. to catch a bus to the subway, change trains three times and arrive at work by 8 a.m. She would make 25 to 30 beds, vacuum, cart out trash. Yet she says she loved her life. 'I think America is El Dorado,' she said. 'Because in Poland now is terrible; very little bit money. Here, I don't have a lot of, but I live normal. I have enough, not for rich life but for normal life.' The precise nature of Ms. Gora's illness was far from clear to her even after two weeks in Bellevue. In her first weeks home, she remained unconvinced that she had had a heart attack. She arrived at the Bellevue cardiology clinic for her first follow-up appointment imagining that whatever procedure had earlier been canceled would then be done, that it would unblock whatever was blocked, and that she would be allowed to return to work. Jad Swingle, a doctor completing his specialty training in cardiology, led Ms. Gora through the crowded waiting room and into an examining room. She clutched a slip of paper with words she had translated from Polish using her pocket dictionary: 'dizzy,' 'groin,' 'perspiration.' Dr. Swingle asked her questions, speaking slowly. Do you ever get chest discomfort? Do you get short of breath when you walk? She finally interrupted: 'Doctor, I don't know what I have, why I was in hospital. What is this heart attack? I don't know why I have this. What I have to do to not repeat this?' No one had explained these things, Ms. Gora believed. Or, she wondered, had she not understood? She perched on the examining table, ankles crossed, reduced by the setting to an oversize, obedient child. Dr. Swingle examined her, then said he would answer her questions 'in a way you'll understand.' He set about explaining heart attacks: the narrowed artery, the blockage, the partial muscle death. Ms. Gora looked startled. 'My muscle is dead?' she asked. Dr. Swingle nodded. What about the procedure that was never done? 'I'm not sure an angiogram would help you,' he said. She needed to stop smoking, take her medications, walk for exercise, come back in a month. 'My muscle is still dead?' she asked again, incredulous. 'Once it's dead, it's dead,' Dr. Swingle said. 'There's no bringing it back to life.' Outside, Ms. Gora tottered toward the subway, 14 blocks away, on pink high-heeled sandals in 89-degree heat. 'My thinking is black,' she said, uncharacteristically glum. 'Now I worry. You know, you have hand? Now I have no finger.' If Mr. Miele's encounters with the health care profession in the first months after his heart attack were occasional and efficient, Ms. Gora's were the opposite. Whereas he saw his cardiologist just twice, Ms. Gora, burdened by complications, saw hers a half-dozen times. Meanwhile, her heart attack seemed to have shaken loose a host of other problems. A growth on her adrenal gland had turned up on a Bellevue CAT scan, prompting a visit to an endocrinologist. An old knee problem flared up; an orthopedist recommended surgery. An alarming purple rash on her leg led to a trip to a dermatologist. Because of the heart attack, she had been taken off hormone replacement therapy and was constantly sweating. She tore open a toe stepping into a pothole and needed stitches. Without money or connections, moderate tasks consumed entire days. One cardiology appointment coincided with a downpour that paralyzed the city. Ms. Gora was supposed to be at the hospital laboratory at 8 a.m. to have blood drawn and back at the clinic at 1 p.m. In between, she wanted to meet with her boss about her disability payments. She had a 4 p.m. appointment in Brooklyn for her knee. So at 7 a.m., she hobbled through the rain to the bus to the subway to another bus to Bellevue. She was waiting outside the laboratory when it opened. Then she took a bus uptown in jammed traffic, changed buses, descended into the subway at Grand Central Terminal, rode to Times Square, found service suspended because of flooding, climbed the stairs to 42nd Street, maneuvered through angry crowds hunting for buses and found another subway line. She reached her workplace an hour and a half after leaving Bellevue; if she had had the money she could have made the trip in 20 minutes by cab. Her boss was not there. So she returned to Bellevue and waited until 2:35 p.m. for her 1 o'clock appointment. As always, she asked Dr. Swingle to let her return to work. When he insisted she have a stress test first, a receptionist gave her the first available appointment - seven weeks away. Meanwhile, Ms. Gora was trying to stop smoking. She had quit in the hospital, then returned home to a husband and a neighbor who both smoked. To be helpful, Mr. Gora smoked in the shared kitchen next door. He was gone most of the day, working double shifts. Alone and bored, Ms. Gora started smoking again, then called Bellevue's free smoking cessation program and enrolled. For the next few months, she trekked regularly to 'the smoking department' at Bellevue. A counselor supplied her with nicotine patches and advice, not always easy for her to follow: stay out of the house; stay busy; avoid stress; satisfy oral cravings with, say, candy. The counselor suggested a support group, but Ms. Gora was too ashamed of her English to join. Even so, over time her tobacco craving waned. There was just one hitch: Ms. Gora was gaining weight. To avoid smoking, she was eating. Her work had been her exercise and now she could not work. Dr. Swingle suggested cardiac rehab, leaving it up to Ms. Gora to find a program and arrange it. Ms. Gora let it slide. As for her diet, she had vowed to stick to chicken, turkey, lettuce, tomatoes and low-fat cottage cheese. But she got tired of that. She began sneaking cookies when no one was looking - and no one was. She cooked separate meals for Mr. Gora, who was not inclined to change his eating habits. She made him meatballs with sauce, liver, soup from spare ribs. Then one day in mid-October, she helped herself to one of his fried pork chops, and was soon eating the same meals he was. As an alternative to eating cake while watching television, she turned to pistachios, and then ate a pound in a single sitting. Cruising the 99 Cent Wonder store in Williamsburg, where the freezers were filled with products like Budget Gourmet Rigatoni with Cream Sauce, she pulled down a small package of pistachios: two and a half servings, 13 grams of fat per serving. 'I can eat five of these,' she confessed, ignoring the nutrition label. Not servings. Bags. Heading home after a trying afternoon in the office of the apartment complex in Williamsburg, where the long-awaited apartment seemed perpetually just out of reach, Ms. Gora slipped into a bakery and emerged with a doughnut, her first since her heart attack. She found a park bench where she had once been accustomed to reading and smoking. Working her way through the doughnut, confectioners' sugar snowing onto her chest, she said ruefully, 'I miss my cigarette.' She wanted to return to work. She felt uncomfortable depending on Mr. Gora for money. She worried that she was becoming indolent and losing her English. Her disability payments, for which she needed a doctor's letter every month, came to just half her $331 weekly salary. Once, she spent hours searching for the right person at Bellevue to give her a letter, only to be told to come back in two days. The co-payments on her prescriptions came to about $80 each month. Unnerving computer printouts from the pharmacist began arriving: 'Maximum benefit reached.' She switched to her husband's health insurance plan. Twice, Bellevue sent bills for impossibly large amounts of money for services her insurance was supposed to cover. Both times she spent hours traveling into Manhattan to the hospital's business office to ask why she had been billed. Both times a clerk listened, made a phone call, said the bill was a mistake and told her to ignore it. When the stress test was finally done, Dr. Swingle said the results showed she was not well enough to return to full-time work. He gave her permission for part-time work, but her boss said it was out of the question. By November, her weight had climbed to 197 pounds from 185 in July. Her cholesterol levels were stubbornly high and her blood pressure was up, despite drugs for both. In desperation, Ms. Gora embarked upon a curious, heart-unhealthy diet clipped from a Polish-language newspaper. Day 1: two hardboiled eggs, one steak, one tomato, spinach, lettuce with lemon and olive oil. Another day: coffee, grated carrots, cottage cheese and three containers of yogurt. Yet another: just steak. Ms. Gora decided not to tell Dr. Swingle. 'I worry if he don't let me, I not lose the weight,' she said. Uneven Recoveries By spring, Mr. Miele's heart attack, remarkably, had left him better off. He had lost 34 pounds and was exercising five times a week and taking subway stairs two at a time. He had retired from his firm on the terms he wanted. He was working from home, billing $225 an hour. More money in less time, he said. His blood pressure and cholesterol were low. 'You're doing great,' Dr. Hayes had said. 'You're doing better than 99 percent of my patients.' Mr. Wilson's heart attack had been a setback. His heart function remained impaired, though improved somewhat since May. At one recent checkup, his blood pressure and his weight had been a little high. He still enjoyed fried shrimp on occasion but he took his medications diligently. He graduated from cardiac rehab with plans to join a health club with a pool. And he was looking forward to retirement. Ms. Gora's life and health were increasingly complex. With Dr. Swingle's reluctant approval, she returned to work in November. She had moved into the apartment in Williamsburg, which gave her a kitchen and a bathroom for the first time in seven years. But she began receiving menacing phone calls from a collection agency about an old bill her health insurance had not covered. Her husband, with double pneumonia, was out of work for weeks. She had her long-awaited knee surgery in January. But it left her temporarily unable to walk. Her weight hit 200 pounds. When the diet failed, she considered another consisting largely of fruit and vegetables sprinkled with an herbal powder. Her blood pressure and cholesterol remained ominously high. She had been warned that she was now a borderline diabetic. 'You're becoming a full-time patient, aren't you?' Dr. Swingle remarked.

Subject: Social Security From: Terri To: All Date Posted: Mon, May 16, 2005 at 06:16:17 (EDT) Email Address: Not Provided Message: The question of whether to support Social Security will be determined in Congress solely on the basis of whether voters will come to understand that the leaders in Congress hope to end the system entirely on grounds of ideology, and whether voters are willing to turn decisively away from those Representatives and Senators who wish to end Social Security. The matter will be decided politically, not economically.

Subject: The Dollar From: Terri To: All Date Posted: Mon, May 16, 2005 at 06:05:13 (EDT) Email Address: Not Provided Message: Remember that the dollar has risen against the Euro over the last 6 months, and given sluggish European growth the dollar may hold in value for months more. The dollar is stable against the Yen, and weakness in Japan will likely keep this stability. The question then increasingly comes to what will happen to the Chinese currency tie to the dollar?

Subject: Re: The Dollar From: Pete Weis To: Terri Date Posted: Mon, May 16, 2005 at 10:05:43 (EDT) Email Address: Not Provided Message: Terri. The real question for the dollar is how is doing with regard to purchasing the staples of life and, despite its recent strength, what is its future. Remember 2004 - 1st half of the year the dollar strengthened and the second half it weakened. Think about what is likely to be fiscal and monetary policy over the next 4 years and how that will impact the dollar. Wherever the dollar is headed it won't get there in a straight line.

Subject: Hedge Fund Returns From: Terri To: All Date Posted: Mon, May 16, 2005 at 06:00:10 (EDT) Email Address: Not Provided Message: Though the returns for hedge funds are more difficult to come by, there is evidence that hedge fund after cost returns as a whole have also trailed index fund returns these last 5 years. Hedge fund assets are well over a trillion dollars, and as the asset level has grown so markedly in recent years it has to be increasingly difficult for costly hedge funds to return more than market indexes.

Subject: Portfolio Balance Over time From: Terri To: All Date Posted: Mon, May 16, 2005 at 05:45:28 (EDT) Email Address: Not Provided Message: What is interesting to note is how much safety bond funds can give a portfolio of investments. Also, if the returns of stock and bond funds are extended over 10 years we find fine returns for both the S&P Stock Index and the Vanguard Long Term Bond Index. But looking to Vanguard index fund returns over extended periods should also remind us that the body of mutual funds trails the returns of low cost and efficient index funds, so mutual fund investors as a whole significantly lag Vanguard index fund returns.

Subject: Re: Portfolio Balance Over time From: Pete Weis To: Terri Date Posted: Mon, May 16, 2005 at 10:15:40 (EDT) Email Address: Not Provided Message: It's crucial to understand what conditions affect the performance of bond funds as well as stock funds. If you focus on these conditions and think about the risk/reward situation of the so called 'balanced portfolio' under present conditons, you can begin to understand why Buffet remains in a large 'cash' position.

Subject: Re: Portfolio Balance Over time From: Terri To: Pete Weis Date Posted: Mon, May 16, 2005 at 11:51:21 (EDT) Email Address: Not Provided Message: Thinking ahead, I do agree there are important constraints on bonds. Thinking back, I could not be happier with the way Vanguard's long term bond funds have preformed.

Subject: Value? From: Pete Weis To: Pete Weis Date Posted: Mon, May 16, 2005 at 10:55:48 (EDT) Email Address: Not Provided Message: Talking Value With Tweedy's Bob Wyckoff By Gregg Greenberg TheStreet.com Staff Reporter 5/3/2005 7:09 AM EDT URL: http://www.thestreet.com/funds/gregggreenberg/10221131.html The more money that flows into a mutual fund, the more fees the fund company gets. That's why it's surprising when firms close funds that are beating their benchmarks. In the case of deep value shop Tweedy Browne, this Wednesday the managers are shuttering their signature Tweedy Browne Global Value and Tweedy Browne American Value funds to new investors. They're doing this even though the $6.7 billion global fund is up 2.62% this year, 5.5 percentage points ahead of the MSCI EAFE index, and the $660 million American fund is down 4.61%, 41 basis points ahead of the S&P 500. Why close funds that are doing so well? In this case, Tweedy says it's making the move simply because stocks are 'fully valued.' Bob Wyckoff, one of Tweedy's five managing directors, discussed the firm's thinking with TheStreet.com. He also let us know what it would take to open the funds to the public again. What's behind the decision to close your funds? The reason is that it's getting tougher and tougher to find stocks that qualify with our rigorous valuation criteria. Since the bursting of the tech bubble, a lot of the money that was in tech and telecom has shifted into 'old economy,' or value, stocks. The result has been that the formerly high-priced stocks got cheaper and the previously low-priced stocks became more expensive. Today there is a compression of valuation in the marketplace, which means there is not a big difference between higher priced growth and the so-called value stocks. The compression has occurred at a valuation level that is not insane, just full from our point of view. What P/E levels are you talking about? What do you mean by full? Everybody has their own valuation levels. But back in 2000 when the bubble burst, the median P/E for the S&P was around 13. The median means that if you rank the 500 stocks and pick the one in the middle, it would have a P/E of 13 or 14. But while the median P/E was around 13, you also had some insane valuations in the tech sector -- like Cisco (CSCO:Nasdaq) at over 140 times earnings -- which were bringing up the overall P/E of the market to between 25 and 30. That meant that half the index was pretty cheap. With the resurgence in value stocks and with the collapse of tech and telecom, we now have a median P/E that is closer to 18 times earnings. That means the deep value segment of the market has risen. And if you are like us and require a 30% to 40% discount from a cautious level of real world valuation, you just can't find stocks to buy. So the idea flow has come to a crawl and we have become net sellers of securities. Cash is building in the funds, upwards of 20%, and we feel that in this environment it would be irresponsible to keep our funds open.

Subject: Re: Value? From: Terri To: Pete Weis Date Posted: Mon, May 16, 2005 at 11:28:29 (EDT) Email Address: Not Provided Message: Interesting and important article. I agree completely, and have been adjusting.

Subject: Comparing Stock and Bond From: Terri To: All Date Posted: Mon, May 16, 2005 at 05:43:56 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName A 5 year return for the S&P Stock Index that is -3.0% a year is difficult enough before inflation is counted. This return includes dividend payments and is for the period from April 30, 2000 to April 30, 2005. The 5 year return of 10.4% for the Vanguard Long Term Investment-Grade Bond Fund represents the largest such bond to stock difference for a 5 year period since 1950. I have not looked at periods before 1950.

Subject: The Evolution of Reluctant Capitalists From: Emma To: All Date Posted: Sun, May 15, 2005 at 21:37:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/15/realestate/15cov.html?pagewanted=all&position= The Evolution of Reluctant Capitalists By JOSH BARBANEL WEST VILLAGE HOUSES was once the ugly duckling of Greenwich Village, a huge postwar project of 42 brick walk-ups that look squat and plain among the imposing 19th-century warehouses and brownstones. The architecture is so unremarkable that the project was recently redlined out of a proposed West Village historic district. But now this subsidized housing development, put up at a time when much of the West Village was considered the haunt of criminals and prostitutes, is being transformed into a real estate swan, a co-op just down the street from some of the most expensive real estate in the city. In the next decade or so, it may turn many of its middle-income renters into millionaires. At a time when tenants of other middle-income projects worry about being forced out of their apartments by landlords looking to make a killing, the West Village Houses may be the ultimate tenant success story, in which tenant activism, political organizing and an unexpected stroke of luck - along with more than $40 million in city subsidies - saved the day. But as many of these lifelong Greenwich Village tenant-activists contemplate a future as bourgeois property owners, the unity that helped bond the tenants has begun to crack. Former friends pass each other on the street without making eye contact. Dissidents are bitterly angry about election rules that they say were stacked against them. Supporters of the plan are worried that the deal of their dreams could be derailed at any moment. It's a 'pot of gold at the end of the rainbow,' said one message on the tenants' Web discussion group. 'No Deal is Perfect, Get a Grip, Stop Bellyaching and Start dancing in the Streets.' Although the plan is likely to be approved, there is still dissension. Renters occupying three-bedroom apartments, most with private gardens or cathedral ceilings, have threatened to sue, saying their proposed allocation of co-op shares - and thus their (below-market) purchase price and maintenance - is too high. And a rump group of tenants, some of whom are uncomfortable joining the ranks of owners of luxury apartments, fret about the way negotiations were conducted, the details of the deal and whether the purchase price could have been lower, allowing more tenants to buy, as well as what will happen to those who can't buy. Matthew Horovitz, a television producer for the National Basketball Association, is so worried about the opposition that he is running for the tenant association board for the first time. 'People are extremely anxious that petty obstructionist concerns might screw up an opportunity of a lifetime,' he said. He is thrilled at the thought of buying. 'It would be an ecstatic, once in a lifetime experience to buy this apartment at this price,' he said. Mr. Horovitz may soon be able to buy his two-bedroom apartment on West Street facing the Hudson River for about $170,000, just down the street from Morton Square, a new riverfront development where the asking price on a two-bedroom apartment with a view is about $2.7 million. He moved into the project with his mother when he was 12, when the development opened in 1976. Harry Lewis, a psychologist and former downtown poet, said he was born 'a red diaper baby,' raised by socialist parents, and still yearns to keep the old sense of community that once permeated the West Village Houses. 'We started out trying to keep this viable, friendly middle- and working-class community intact,' he said. 'It has pretty much split around four or five different factions, mostly based on the money you can make owning your apartment.' He said that once the possibility arose of buying apartments that could later be sold at market rates, members of the tenants association who raised questions about the deal were shut out of negotiations- a point that is in dispute. Still, Mr. Lewis, who lives in a three-bedroom duplex apartment with his wife, Estelle Press, a nurse midwife who teaches at the Hunter-Bellevue School of Nursing of the City University of New York, and their 14-year-old daughter, is considering buying, as are many who have raised questions about the deal. 'I am not opposed to people making money, I have matured beyond that point,' he said. 'But you are seeing a bunch of people who have gotten a windfall, and people are tearing at each other.' The deal, which is still pending before the state attorney general's office, is complex. But essentially it would allow tenants to buy their apartments far below market prices - as little as $165,000 for a typical two-bedroom apartment, and $330,000 for three-bedroom duplex apartments with private gardens or cathedral ceilings. If sold at market prices, the apartments would be $800 to $1,200 a square foot, or about $1.5 million for a three-bedroom, brokers said. Owners would be able to resell at gradually higher prices. After 12 years, they could sell to anyone, at full-market prices. A large flip tax, between 15 and 25 percent of the gain, would help pay off a city mortgage. Tenants unable or unwilling to buy would be protected by below-market rent-stabilized rents for 12 years. They could buy later, but at higher prices. The changes in the complex are happening at a time when the western edge of the West Village, with the cachet of the new Richard Meier towers and the new Hudson River Park, is in huge demand. 'Everyone wants to be there,' said Jill Meilus, a broker for the Corcoran Group. Even walk-ups can command a high price. A small but fully renovated one-bedroom apartment on Charles Street, up five flights of stairs, recently went to contract near the asking price of $820,000, in two days. Those who buy during the initial offering period can resell them three months later for nearly 17 percent more, and then another 11 percent more each year. With the apartments selling far below their market value, getting bank loans should be easy, brokers say. 'At $165,000, you would have to have a pulse to get a mortgage,' said Darren Sukenik, a broker with Prudential Douglas Elliman. West Village Houses wasn't always such a sure thing. It was the troubled offspring of a protest movement against urban renewal in the West Village led by Jane Jacobs, the writer and critic on urban life. In the early 1960's, a plan to demolish a 14-square-block swath of the West Village and replace small stores and warehouses with high-rise buildings was stopped by community protests. And over the next decade, a community group, the West Village Committee, set out to design and build subsidized apartments imbued with Ms. Jacobs's ideas of urban life, on the site of a portion of the High Line elevated rail structure. The buildings were to be co-ops, 420 apartments built in five- or six-story walk-ups, where neighbors could get to know one another while walking up the stairs. Many of the buildings, on six separate sites between Morton Street and Bank Street near the river, had communal gardens in the rear. But the project was delayed, and by time it got started, costs had risen and there were cutbacks. A plan for floor-to-ceiling windows, and an exposed concrete frame, was replaced by plain flat brick fronts with small windows. When the project was completed in 1974 and put on the market, the economy was sluggish. Four-bedroom apartments were $10,000, and they didn't sell. The city foreclosed and turned the project over to a private sponsor as a rental development. The building was run under the state's Mitchell-Lama Housing Program, in which sponsors agreed to limit rents and their profit in exchange for low-cost financing and tax abatements for at least 20 years. Tenants had to meet strict income guidelines but were allowed to stay on after their incomes rose, if they paid a surcharge of up to 50 percent on their rents. In the last 20 years, scores of projects in other parts of the city have been moved out of the program, each creating a potential crisis for the subsidized tenants living there, as, in most cases, their legal rent protections came to an end. So in 2002, when the project's owner, a group headed by Andrew Farkas, a scion of the Alexander's department store family, who is the former chairman and chief operating officer of the Insignia Financial Group, sent the tenants a letter announcing a plan to take the housing out of Mitchell-Lama, the tenants were ready. Katie Bordonaro, a Latin teacher at the Village Community School who was president of the tenants association and went on to lead the co-op negotiations, said she and other tenant leaders spent years organizing, raising money and talking to city officials, because they knew that at some point their landlord would probably want to leave the Mitchell-Lama program. 'We figured we should be prepared and know who the politicians are,' she said. 'We had $50,000 in the bank from dues and contributions for legal fees.' She had even led the unsuccessful effort to block the construction of new luxury housing now known as Morton Square as a threat to affordable housing in the neighborhood. Many tenants feared the worst, a doubling or tripling of rents or even evictions, because the land would be worth so much with the buildings demolished. Mr. Farkas and his associates declined to comment about the negotiations, but in their first letter to tenants announcing their withdrawal from the subsidy program, they indicated that they were willing to negotiate. Eventually what appeared to be a firm, but difficult, deal was negotiated among the owner, the city and Ms. Bordonaro and the tenants' lead lawyer, Carole Ule, to sell the property to the tenants for co-op conversion. The cost was steep. The tenants agreed to pay $126 million for the project, which had two mortgages totaling $93 million on record, and the city agreed to forgive $19 million in interest that the owner eventually would have had to repay. To make it more affordable, the city agreed to provide a tax abatement worth about $1.5 million a year for 12 years and eliminate all interest on a $12 million city mortgage for up to 30 years. Those who didn't buy would see their rents rise immediately by 48 percent, while buyers would have to pay high maintenance costs, $2,400 a month for a three-bedroom. Some of the maintenance fees would go to a special fund to cover the rent increases due for low-income tenants. Then, everything changed. Last fall, while lawyers were working on the co-op conversion papers, they discovered that the project's owners had taken a city tax abatement, under a program known as J-51. But this program requires that rental units be protected by rent stabilization. When Ms. Ule and Ms. Bordonaro quietly raised the issue with the owners, the owners said they were unaware that their managers had filed for the J-51 benefit, and they disputed the validity. Frank Marino, a spokesman for Mr. Farkas, said that 'the owner did not become aware' of the tax abatement until last November, long after the first agreement. In a second round of negotiations, Mr. Farkas's group dropped the price by $10 million. The 48 percent rent increases were eliminated. Apartment prices were cut 5 percent and maintenance on three-bedrooms was cut 30 percent. Suddenly apartments that seemed painfully expensive to middle-income people became more and more affordable. Despite the lower cost, the city maintained the same level of subsidies. City officials said most of the benefits it will provide to the co-op would have been given to the project if it had remained in the Mitchell-Lama program, and will be paid over many years, rather than all at once. 'This really is a landmark,' said Shaun Donovan, the commissioner of the city's Department of Housing Preservation and Development. 'We have preserved affordable housing for at least the next decade, and that is a win for the administration, it is a win for the residents, and a win for the neighborhood.' To make the second deal possible, the tenants agreed to let Mr. Farkas's group buy the units that tenants do not buy, and resell up to 51 of them at market prices without flip taxes or limits on prices. This reduced the size of the co-op's mortgage and lowered maintenance but allowed the owner to make a significant potential profit on these units. Many tenants hail Ms. Bordonaro as the savior who through her dedication and persistence preserved their home. But throughout the negotiations, some members of the tenant board complained that talks were conducted in secret, and that neither board members nor tenants were kept informed about what was going on. Over the course of a few months, six members of the 13-member board resigned. 'Many of us believed we could have gotten a much better deal from the owners, but that is over now,' said Will Creed, an interior landscaper, who was vice president of the association and a member of the negotiating committee before he resigned in November. Mr. Creed and three other board members submitted a joint resignation letter, complaining that the first deal had sacrificed the interests of too many tenants who could not afford it. Later he learned that the tenant lawyer and board president had already discovered the J-51 and had begun making inquiries about it. His wife, Jessica Tomb, a business consultant on accounting software who was also a board member who resigned, said, 'We felt the board had morphed into being solely a sponsor organization and no longer represented all of the tenants.' Other tenants were mystified by how shares were allocated to different apartments. Residents of three-bedroom apartments complained that four-bedroom apartments, of roughly the same size but different configurations had much lower prices. Tenants in top-floor three-bedroom duplexes, who have cathedral ceilings but have to climb many stairs, complained that they were paying more than tenants of ground-floor duplexes that had private rear gardens. The allocations were made by Douglas Elliman, which was once owned by Mr. Farkas's company, and which managed the complex. But the methodology used was not disclosed in the co-op plan's preliminary filing, leading to continuing suspicion that politics were at play. 'I'm paying 2.3 times what a two-bedroom pays, and I have to walk up two more flights and I don't know why,' said Thomas Dercks, a former Wall Street executive. He noted that three board members, including Ms. Bordonaro, lived in three-bedroom apartments with gardens, while no board members lived on the upstairs three-bedrooms. But Ms. Bordonaro said that Douglas Elliman made the allocations without direction from the board and that board members who had resigned were upset because they had been consistently outvoted on the board. Negotiations over shares are continuing. New board elections are set for later this month, but only after lengthy and acrimonious debate over election procedures. Jules Demchick, the developer of Morton Square, the luxury high-rise fought by some residents of the West Village Houses, said the evolution of the militant tenants to owners is something to see. 'This is one to watch over time, it is a really a study in social science,' he said. 'People take a political position based on their current circumstance. As their circumstance changes, their position changes, along with the things they will be concerned about.'

Subject: Class in America From: Emma To: All Date Posted: Sun, May 15, 2005 at 11:48:49 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/15/national/class/OVERVIEW-FINAL.html?pagewanted=all Class in America: Shadowy Lines That Still Divide By JANNY SCOTT and DAVID LEONHARDT There was a time when Americans thought they understood class. The upper crust vacationed in Europe and worshiped an Episcopal God. The middle class drove Ford Fairlanes, settled the San Fernando Valley and enlisted as company men. The working class belonged to the A.F.L.-C.I.O., voted Democratic and did not take cruises to the Caribbean. Today, the country has gone a long way toward an appearance of classlessness. Americans of all sorts are awash in luxuries that would have dazzled their grandparents. Social diversity has erased many of the old markers. It has become harder to read people's status in the clothes they wear, the cars they drive, the votes they cast, the god they worship, the color of their skin. The contours of class have blurred; some say they have disappeared. But class is still a powerful force in American life. Over the past three decades, it has come to play a greater, not lesser, role in important ways. At a time when education matters more than ever, success in school remains linked tightly to class. At a time when the country is increasingly integrated racially, the rich are isolating themselves more and more. At a time of extraordinary advances in medicine, class differences in health and lifespan are wide and appear to be widening. And new research on mobility, the movement of families up and down the economic ladder, shows there is far less of it than economists once thought and less than most people believe. [Click here for more information on income mobility.] In fact, mobility, which once buoyed the working lives of Americans as it rose in the decades after World War II, has lately flattened out or possibly even declined, many researchers say. Mobility is the promise that lies at the heart of the American dream. It is supposed to take the sting out of the widening gulf between the have-mores and the have-nots. There are poor and rich in the United States, of course, the argument goes; but as long as one can become the other, as long as there is something close to equality of opportunity, the differences between them do not add up to class barriers. Over the next three weeks, The Times will publish a series of articles on class in America, a dimension of the national experience that tends to go unexamined, if acknowledged at all. With class now seeming more elusive than ever, the articles take stock of its influence in the lives of individuals: a lawyer who rose out of an impoverished Kentucky hollow; an unemployed metal worker in Spokane, Wash., regretting his decision to skip college; a multimillionaire in Nantucket, Mass., musing over the cachet of his 200-foot yacht. The series does not purport to be all-inclusive or the last word on class. It offers no nifty formulas for pigeonholing people or decoding folkways and manners. Instead, it represents an inquiry into class as Americans encounter it: indistinct, ambiguous, the half-seen hand that upon closer examination holds some Americans down while giving others a boost. The trends are broad and seemingly contradictory: the blurring of the landscape of class and the simultaneous hardening of certain class lines; the rise in standards of living while most people remain moored in their relative places. Even as mobility seems to have stagnated, the ranks of the elite are opening. Today, anyone may have a shot at becoming a United States Supreme Court justice or a C.E.O., and there are more and more self-made billionaires. Only 37 members of last year's Forbes 400, a list of the richest Americans, inherited their wealth, down from almost 200 in the mid-1980's. So it appears that while it is easier for a few high achievers to scale the summits of wealth, for many others it has become harder to move up from one economic class to another. Americans are arguably more likely than they were 30 years ago to end up in the class into which they were born. A paradox lies at the heart of this new American meritocracy. Merit has replaced the old system of inherited privilege, in which parents to the manner born handed down the manor to their children. But merit, it turns out, is at least partly class-based. Parents with money, education and connections cultivate in their children the habits that the meritocracy rewards. When their children then succeed, their success is seen as earned. The scramble to scoop up a house in the best school district, channel a child into the right preschool program or land the best medical specialist are all part of a quiet contest among social groups that the affluent and educated are winning in a rout. 'The old system of hereditary barriers and clubby barriers has pretty much vanished,' said Eric Wanner, president of the Russell Sage Foundation, a social science research group in New York City that recently published a series of studies on the social effects of economic inequality. In place of the old system, Dr. Wanner said, have arisen 'new ways of transmitting advantage that are beginning to assert themselves.' Faith in the System Most Americans remain upbeat about their prospects for getting ahead. A recent New York Times poll on class found that 40 percent of Americans believed that the chance of moving up from one class to another had risen over the last 30 years, a period in which the new research shows that it has not. Thirty-five percent said it had not changed, and only 23 percent said it had dropped. More Americans than 20 years ago believe it possible to start out poor, work hard and become rich. They say hard work and a good education are more important to getting ahead than connections or a wealthy background. 'I think the system is as fair as you can make it,' Ernie Frazier, a 65-year-old real estate investor in Houston, said in an interview after participating in the poll. 'I don't think life is necessarily fair. But if you persevere, you can overcome adversity. It has to do with a person's willingness to work hard, and I think it's always been that way.' Most say their standard of living is better than their parents' and imagine that their children will do better still. Even families making less than $30,000 a year subscribe to the American dream; more than half say they have achieved it or will do so. But most do not see a level playing field. They say the very rich have too much power, and they favor the idea of class-based affirmative action to help those at the bottom. Even so, most say they oppose the government's taxing the assets a person leaves at death. 'They call it the land of opportunity, and I don't think that's changed much,' said Diana Lackey, a 60-year-old homemaker and wife of a retired contractor in Fulton, N.Y., near Syracuse. 'Times are much, much harder with all the downsizing, but we're still a wonderful country.' The Attributes of Class One difficulty in talking about class is that the word means different things to different people. Class is rank, it is tribe, it is culture and taste. It is attitudes and assumptions, a source of identity, a system of exclusion. To some, it is just money. It is an accident of birth that can influence the outcome of a life. Some Americans barely notice it; others feel its weight in powerful ways. At its most basic, class is one way societies sort themselves out. Even societies built on the idea of eliminating class have had stark differences in rank. Classes are groups of people of similar economic and social position; people who, for that reason, may share political attitudes, lifestyles, consumption patterns, cultural interests and opportunities to get ahead. Put 10 people in a room and a pecking order soon emerges. When societies were simpler, the class landscape was easier to read. Marx divided 19th-century societies into just two classes; Max Weber added a few more. As societies grew increasingly complex, the old classes became more heterogeneous. As some sociologists and marketing consultants see it, the commonly accepted big three - the upper, middle and working classes - have broken down into dozens of microclasses, defined by occupations or lifestyles. A few sociologists go so far as to say that social complexity has made the concept of class meaningless. Conventional big classes have become so diverse - in income, lifestyle, political views - that they have ceased to be classes at all, said Paul W. Kingston, a professor of sociology at the University of Virginia. To him, American society is a 'ladder with lots and lots of rungs.' 'There is not one decisive break saying that the people below this all have this common experience,' Professor Kingston said. 'Each step is equal-sized. Sure, for the people higher up this ladder, their kids are more apt to get more education, better health insurance. But that doesn't mean there are classes.' Many other researchers disagree. 'Class awareness and the class language is receding at the very moment that class has reorganized American society,' said Michael Hout, a professor of sociology at the University of California, Berkeley. 'I find these 'end of class' discussions naïve and ironic, because we are at a time of booming inequality and this massive reorganization of where we live and how we feel, even in the dynamics of our politics. Yet people say, 'Well, the era of class is over.' ' One way to think of a person's position in society is to imagine a hand of cards. Everyone is dealt four cards, one from each suit: education, income, occupation and wealth, the four commonly used criteria for gauging class. [Click here to see where you fit in the American population.] Face cards in a few categories may land a player in the upper middle class. At first, a person's class is his parents' class. Later, he may pick up a new hand of his own; it is likely to resemble that of his parents, but not always. Bill Clinton traded in a hand of low cards with the help of a college education and a Rhodes scholarship and emerged decades later with four face cards. Bill Gates, who started off squarely in the upper middle class, made a fortune without finishing college, drawing three aces. Many Americans say that they too have moved up the nation's class ladder. In the Times poll, 45 percent of respondents said they were in a higher class than when they grew up, while just 16 percent said they were in a lower one. Over all, 1 percent described themselves as upper class, 15 percent as upper middle class, 42 percent as middle, 35 percent as working and 7 percent as lower. 'I grew up very poor and so did my husband,' said Wanda Brown, the 58-year-old wife of a retired planner for the Puget Sound Naval Shipyard who lives in Puyallup, Wash., near Tacoma. 'We're not rich but we are comfortable and we are middle class and our son is better off than we are.' The American Ideal The original exemplar of American social mobility was almost certainly Benjamin Franklin, one of 17 children of a candle maker. About 20 years ago, when researchers first began to study mobility in a rigorous way, Franklin seemed representative of a truly fluid society, in which the rags-to-riches trajectory was the readily achievable ideal, just as the nation's self-image promised. In a 1987 speech, Gary S. Becker, a University of Chicago economist who would later win a Nobel Prize, summed up the research by saying that mobility in the United States was so high that very little advantage was passed down from one generation to the next. In fact, researchers seemed to agree that the grandchildren of privilege and of poverty would be on nearly equal footing. If that had been the case, the rise in income inequality beginning in the mid-1970's should not have been all that worrisome. The wealthy might have looked as if they were pulling way ahead, but if families were moving in and out of poverty and prosperity all the time, how much did the gap between the top and bottom matter? But the initial mobility studies were flawed, economists now say. Some studies relied on children's fuzzy recollections of their parents' income. Others compared single years of income, which fluctuate considerably. Still others misread the normal progress people make as they advance in their careers, like from young lawyer to senior partner, as social mobility. The new studies of mobility, which methodically track peoples' earnings over decades, have found far less movement. The economic advantage once believed to last only two or three generations is now believed to last closer to five. Mobility happens, just not as rapidly as was once thought. 'We all know stories of poor families in which the next generation did much better,' said Gary Solon, a University of Michigan economist who is a leading mobility researcher. 'It isn't that poor families have no chance.' But in the past, Professor Solon added, 'people would say, 'Don't worry about inequality. The offspring of the poor have chances as good as the chances of the offspring of the rich.' Well, that's not true. It's not respectable in scholarly circles anymore to make that argument.' One study, by the Federal Reserve Bank of Boston, found that fewer families moved from one quintile, or fifth, of the income ladder to another during the 1980's than during the 1970's and that still fewer moved in the 90's than in the 80's. A study by the Bureau of Labor Statistics also found that mobility declined from the 80's to the 90's. The incomes of brothers born around 1960 have followed a more similar path than the incomes of brothers born in the late 1940's, researchers at the Chicago Federal Reserve and the University of California, Berkeley, have found. Whatever children inherit from their parents - habits, skills, genes, contacts, money - seems to matter more today. Studies on mobility over generations are notoriously difficult, because they require researchers to match the earnings records of parents with those of their children. Some economists consider the findings of the new studies murky; it cannot be definitively shown that mobility has fallen during the last generation, they say, only that it has not risen. The data will probably not be conclusive for years. Nor do people agree on the implications. Liberals say the findings are evidence of the need for better early-education and antipoverty programs to try to redress an imbalance in opportunities. Conservatives tend to assert that mobility remains quite high, even if it has tailed off a little. But there is broad consensus about what an optimal range of mobility is. It should be high enough for fluid movement between economic levels but not so high that success is barely tied to achievement and seemingly random, economists on both the right and left say. As Phillip Swagel, a resident scholar at the American Enterprise Institute, put it, 'We want to give people all the opportunities they want. We want to remove the barriers to upward mobility.' Yet there should remain an incentive for parents to cultivate their children. 'Most people are working very hard to transmit their advantages to their children,' said David I. Levine, a Berkeley economist and mobility researcher. 'And that's quite a good thing.' One surprising finding about mobility is that it is not higher in the United States than in Britain or France. It is lower here than in Canada and some Scandinavian countries but not as low as in developing countries like Brazil, where escape from poverty is so difficult that the lower class is all but frozen in place. Those comparisons may seem hard to believe. Britain and France had hereditary nobilities; Britain still has a queen. The founding document of the United States proclaims all men to be created equal. The American economy has also grown more quickly than Europe's in recent decades, leaving an impression of boundless opportunity. But the United States differs from Europe in ways that can gum up the mobility machine. Because income inequality is greater here, there is a wider disparity between what rich and poor parents can invest in their children. Perhaps as a result, a child's economic background is a better predictor of school performance in the United States than in Denmark, the Netherlands or France, one recent study found. 'Being born in the elite in the U.S. gives you a constellation of privileges that very few people in the world have ever experienced,' Professor Levine said. 'Being born poor in the U.S. gives you disadvantages unlike anything in Western Europe and Japan and Canada.' Blurring the Landscape Why does it appear that class is fading as a force in American life? For one thing, it is harder to read position in possessions. Factories in China and elsewhere churn out picture-taking cellphones and other luxuries that are now affordable to almost everyone. Federal deregulation has done the same for plane tickets and long-distance phone calls. Banks, more confident about measuring risk, now extend credit to low-income families, so that owning a home or driving a new car is no longer evidence that someone is middle class. The economic changes making material goods cheaper have forced businesses to seek out new opportunities so that they now market to groups they once ignored. Cruise ships, years ago a symbol of the high life, have become the ocean-going equivalent of the Jersey Shore. BMW produces a cheaper model with the same insignia. Martha Stewart sells chenille jacquard drapery and scallop-embossed ceramic dinnerware at Kmart. 'The level of material comfort in this country is numbing,' said Paul Bellew, executive director for market and industry analysis at General Motors. 'You can make a case that the upper half lives as well as the upper 5 percent did 50 years ago.' Like consumption patterns, class alignments in politics have become jumbled. In the 1950's, professionals were reliably Republican; today they lean Democratic. Meanwhile, skilled labor has gone from being heavily Democratic to almost evenly split. People in both parties have attributed the shift to the rise of social issues, like gun control and same-sex marriage, which have tilted many working-class voters rightward and upper income voters toward the left. But increasing affluence plays an important role, too. When there is not only a chicken, but an organic, free-range chicken, in every pot, the traditional economic appeal to the working class can sound off key. Religious affiliation, too, is no longer the reliable class marker it once was. The growing economic power of the South has helped lift evangelical Christians into the middle and upper middle classes, just as earlier generations of Roman Catholics moved up in the mid-20th century. It is no longer necessary to switch one's church membership to Episcopal or Presbyterian as proof that one has arrived. 'You go to Charlotte, N.C., and the Baptists are the establishment,' said Mark A. Chaves, a sociologist at the University of Arizona. 'To imagine that for reasons of respectability, if you lived in North Carolina, you would want to be a Presbyterian rather than a Baptist doesn't play anymore.' The once tight connection between race and class has weakened, too, as many African-Americans have moved into the middle and upper middle classes. Diversity of all sorts - racial, ethnic and gender - has complicated the class picture. And high rates of immigration and immigrant success stories seem to hammer home the point: The rules of advancement have changed. The American elite, too, is more diverse than it was. The number of corporate chief executives who went to Ivy League colleges has dropped over the past 15 years. There are many more Catholics, Jews and Mormons in the Senate than there were a generation or two ago. Because of the economic earthquakes of the last few decades, a small but growing number of people have shot to the top. 'Anything that creates turbulence creates the opportunity for people to get rich,' said Christopher S. Jencks, a professor of social policy at Harvard. 'But that isn't necessarily a big influence on the 99 percent of people who are not entrepreneurs.' These success stories reinforce perceptions of mobility, as does cultural myth-making in the form of television programs like 'American Idol' and 'The Apprentice.' But beneath all that murkiness and flux, some of the same forces have deepened the hidden divisions of class. Globalization and technological change have shuttered factories, killing jobs that were once stepping-stones to the middle class. Now that manual labor can be done in developing countries for $2 a day, skills and education have become more essential than ever. This has helped produce the extraordinary jump in income inequality. The after-tax income of the top 1 percent of American households jumped 139 percent, to more than $700,000, from 1979 to 2001, according to the Congressional Budget Office, which adjusted its numbers to account for inflation. The income of the middle fifth rose by just 17 percent, to $43,700, and the income of the poorest fifth rose only 9 percent. For most workers, the only time in the last three decades when the rise in hourly pay beat inflation was during the speculative bubble of the 90's. Reduced pensions have made retirement less secure. Clearly, a degree from a four-year college makes even more difference than it once did. More people are getting those degrees than did a generation ago, but class still plays a big role in determining who does or does not. At 250 of the most selective colleges in the country, the proportion of students from upper-income families has grown, not shrunk. Some colleges, worried about the trend, are adopting programs to enroll more lower-income students. One is Amherst, whose president, Anthony W. Marx, explained: 'If economic mobility continues to shut down, not only will we be losing the talent and leadership we need, but we will face a risk of a society of alienation and unhappiness. Even the most privileged among us will suffer the consequences of people not believing in the American dream.' Class differences in health, too, are widening, recent research shows. Life expectancy has increased over all; but upper-middle-class Americans live longer and in better health than middle-class Americans, who live longer and in better health than those at the bottom. Class plays an increased role, too, in determining where and with whom affluent Americans live. More than in the past, they tend to live apart from everyone else, cocooned in their exurban chateaus. Researchers who have studied data from the 1980, 1990 and 2000 censuses say the isolation of the affluent has increased. Family structure, too, differs increasingly along class lines. The educated and affluent are more likely than others to have their children while married. They have fewer children and have them later, when their earning power is high. On average, according to one study, college-educated women have their first child at 30, up from 25 in the early 1970's. The average age among women who have never gone to college has stayed at about 22. Those widening differences have left the educated and affluent in a superior position when it comes to investing in their children. 'There is no reason to doubt the old saw that the most important decision you make is choosing your parents,' said Professor Levine, the Berkeley economist and mobility researcher. 'While it's always been important, it's probably a little more important now.' The benefits of the new meritocracy do come at a price. It once seemed that people worked hard and got rich in order to relax, but a new class marker in upper-income families is having at least one parent who works extremely long hours (and often boasts about it). In 1973, one study found, the highest-paid tenth of the country worked fewer hours than the bottom tenth. Today, those at the top work more. In downtown Manhattan, black cars line up outside Goldman Sachs's headquarters every weeknight around 9. Employees who work that late get a free ride home, and there are plenty of them. Until 1976, a limousine waited at 4:30 p.m. to ferry partners to Grand Central Terminal. But a new management team eliminated the late-afternoon limo to send a message: 4:30 is the middle of the workday, not the end. A Rags-to-Riches Faith Will the trends that have reinforced class lines while papering over the distinctions persist? The economic forces that caused jobs to migrate to low-wage countries are still active. The gaps in pay, education and health have not become a major political issue. The slicing of society's pie is more unequal than it used to be, but most Americans have a bigger piece than they or their parents once did. They appear to accept the tradeoffs. Faith in mobility, after all, has been consciously woven into the national self-image. Horatio Alger's books have made his name synonymous with rags-to-riches success, but that was not his personal story. He was a second-generation Harvard man, who became a writer only after losing his Unitarian ministry because of allegations of sexual misconduct. Ben Franklin's autobiography was punched up after his death to underscore his rise from obscurity. The idea of fixed class positions, on the other hand, rubs many the wrong way. Americans have never been comfortable with the notion of a pecking order based on anything other than talent and hard work. Class contradicts their assumptions about the American dream, equal opportunity and the reasons for their own successes and even failures. Americans, constitutionally optimistic, are disinclined to see themselves as stuck. Blind optimism has its pitfalls. If opportunity is taken for granted, as something that will be there no matter what, then the country is less likely to do the hard work to make it happen. But defiant optimism has its strengths. Without confidence in the possibility of moving up, there would almost certainly be fewer success stories.

Subject: Sugar Sugar From: Emma To: All Date Posted: Sun, May 15, 2005 at 09:13:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/15/business/15sugar.html?pagewanted=all Low Carbs? Who Cares? Sugar Is Latest Supermarket Demon By MELANIE WARNER Last summer, as the low-carbohydrate dieting craze began to fade, executives at Stonyfield Farms decided they had to make a change to their Moove Over Carbs yogurt. What they came up with was simple and painless: In January, they pulled Moove Over Carbs from the shelves, and this month, Moove Over Sugar takes its place. Except for the name, the product remains exactly the same - sugars are, after all, also carbs. Both yogurts contain a sugar substitute and have at least 40 percent fewer calories than Stonyfield Farm's regular flavored varieties. Low-sugar has become the new low-carb. Food makers are rushing to meet demand from consumers concerned with their waistlines and healthier eating by providing an array of new products, some of them aimed at children. But scientists are divided over how positive this development is, questioning whether the change will help people lose weight, and how healthful the artificial sweeteners are. According to a survey done by the Grocery Manufacturers Association, a food industry trade group, almost 50 percent of all grocery shoppers said they were looking for products with reduced sugar. 'Carbs was a trend, but the concern about sugar is here to stay,' said Cathleen Toomey, vice president of communications at Stonyfield Farms, which is owned by Groupe Danone of France. Just about every major food company is thinking along these lines. Among the new products being offered are Pepperidge Farm Sugar Free Milano cookies, Arnold Smart & Healthy Sugar Free bread and General Mills 75% Less Sugar Cocoa Puffs. Propelled in part by the popularity of the sugar substitute sucralose, or Splenda, the food industry last year introduced 2,225 sugarless or sugar-reduced products in the United States, according to the research firm Productscan Online. This figure is more than double that of two years ago and represents 11 percent of all new products in 2004. By contrast, in 2004, the height of the low-carb boom, there were 3,375 products introduced, accounting for 19 percent of all new products that year, according to Productscan. This year, low-carb product introductions from January through April were down 25 percent from the same period last year. Last week, ACNielsen identified both organic and low or no sugar as the two 'good for you' food segments that will get products noticed by consumers and generate the strongest sales growth. Many of these new low-sugar products are not just the old standbys like diet sodas and sugarless gum, but foods and drinks like cereals, fruit juices, cookies, bread, ice cream, flavored milk, pasta sauce, maple syrup and even bottled water. A few of these products, like Kellogg's 1/3 Less Sugar Froot Loops and Frosted Flakes cereals, and Mott's Healthy Harvest apple sauce, simply have less added sugar and taste less sweet. But most are made with one or more of the half-dozen no-calorie artificial sweeteners on the market and are designed to taste much like the original. While many nutritionists champion artificial sweeteners as a way to cut calories and reduce sugar, others say these products are not the answer to America's weight and health problems. Some critics voice concern about the increased consumption of what are essentially chemical sweeteners, especially among children. New low-sugar products, like breakfast cereal and fruit juice sweetened with Splenda and vanilla milk with neotame, a new intensely sweet sugar replacement, are consumed heavily by children. Dr. Susan Schiffman, a sweetener specialist and professor of medical psychology at Duke University Medical Center, says she has safety concerns about sucralose, which is the nation's fastest-growing sugar replacement, according to the Freedonia Group, a research firm. She points to the Food and Drug Administration's 1998 report giving approval for sucralose, which said the compound is 'weakly mutagenic in a mouse lymphoma mutation assay,' meaning it caused minor genetic damages in mouse cells. The report also said one of the substances produced when sucralose is broken down in the body is 'weakly mutagenic in the Ames test.' An Ames test is the standard method used to detect possible carcinogens. 'The sucralose people keep saying 'It's just a little bit of a mutagen,' ' Dr. Schiffman said. 'Well, I don't want a little bit of a mutagen in my food supply. How do you know what happens in a long life span or to the next generation or to your eggs and sperm? I don't feel like the issues have been answered.' McNeil Nutritionals, a division of Johnson & Johnson that sells Splenda, says that the safety of sucralose has been confirmed in more than 100 studies done over the last 20 years, and that it has been approved for use by regulatory agencies around the world. Over the years, sweeteners like saccharin and aspartame have also prompted various safety concerns. Other critics of artificial sweeteners focus their concerns on whether these foods and beverages actually help people lose weight or improve their diets. According to a consumer survey done last year by the Calorie Control Council, a trade group representing the low-calorie and reduced-fat food and beverage industry, people use sugar-reduced products primarily to 'stay in overall better health' and 'reduce calories.' Dr. Stuart Fischer, who worked for nine years with the low-carb diet specialist Dr. Robert Atkins and now runs his own nutrition practice in Manhattan, contends that artificial sweeteners do nothing for a person's 'overall health' because they perpetuate cravings for sweet foods. 'They remind dieters about the taste of the forbidden fruit,' Dr. Fischer said. 'Does Alcoholics Anonymous recommend alcohol-free beer? Of course not.' Dr. Fischer said he counsels patients to cut out all sweet foods from their diet to eliminate sugar cravings, which he says can lay the groundwork for Type II diabetes. Dr. David Katz, a nutrition specialist and professor of public health at the Yale University School of Medicine, says that in his 15 years of treating patients he has observed that people who consume a lot of artificially sweetened foods also end up eating an excess of foods loaded with regular sugar, negating any savings in calories. 'If you're exposed to sweet foods and drinks often, the threshold for satisfaction goes up,' Dr. Katz said. As in many areas of science, research findings on the issue are mixed. While some studies, such as one done last year at Purdue University, support the ideas of people like Dr. Katz and Dr. Fischer, other, longer-term research has shown that people who consume artificially sweetened, no-calorie beverages do lose more weight than those drinking regular, full-calorie sodas. Yet almost all of these studies have looked at zero-calorie diet drinks, not low-sugar foods like Sugar Free Milano cookies and 50% Less Sugar Quaker Instant Oatmeal, which still have calories. Some of these products, in fact, have as many calories as the original, making things confusing for the consumer. According to information displayed on box labels, 1/3 Less Sugar Frosted Flakes and Froot Loops, 75% Less Sugar Cocoa Puffs and Trix, and 50% Less Sugar Fruity Pebbles cereals are not significantly lower in calories than the original versions. Neither are Sugar Free Milanos or Arnold Smart & Healthy Sugar Free bread. Christine M. Homsey, a senior research food scientist at Food Perspectives, a consulting firm in Plymouth, Minn., explained that because sugar provides bulk, manufacturers add more flour or other grains to make up for the loss, putting calories back in. In March, a woman in San Diego who said she thought the reduced-sugar cereals she bought for her children were lower in calories sued Kellogg, General Mills and Kraft Foods, saying that the companies used misleading marketing to sell the products. The confusion over calorie counts and whether sugar-free foods will really help individuals lose weight has not deterred consumers from buying $1 billion worth of low-sugar products in the last year. According to ACNielsen LabelTrends, sales of ready-to-eat, less-sugar cereal jumped 63 percent in the last 52 weeks, and revenue from the expanding universe of all low-sugar products is up 133 percent from a year ago. Eager to meet this growing demand, food companies are working furiously to devise even better ways of replicating the taste and function of sugar in food. All current sugar substitutes have aftertastes and other flaws that distinguish them from sugar, food scientists say. Many food specialists attribute Splenda's runaway success to its sugar-like taste, but they say that it, too, falls short. 'The holy grail remains elusive,' said Kantha Shelke, a food scientist who has worked for food manufacturers like Pillsbury and Interstate Bakeries. 'The perfect sweetener would be something that looks like sugar and acts like sugar in every way, except when you metabolize it.' Despite the concerns of some scientists and doctors about artificial sweeteners, the trend of low-sugar foods and beverages shows no signs of slowing. While stores like Whole Foods do not stock products that contain artificial sweeteners, a majority of consumers have welcomed these food additives into their diets. Katherine Tallmadge, a registered dietician in Washington, said she did not encourage her patients to use artificial sweeteners, but some do anyway. 'People are hooked on sweets and they want to eat sweet foods without the calories,' Ms. Tallmadge said. 'It's a classic case of wanting your cake and eating it too.'

Subject: Troubles at Mexico's Oil Monopoly From: Emma To: All Date Posted: Sun, May 15, 2005 at 09:02:07 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/15/international/americas/15pemex.html?pagewanted=all Accidents Reveal Troubles at Mexico's Oil Monopoly By JAMES C. McKINLEY Jr. and ELISABETH MALKIN MEXICO CITY - Juan González Durán, who like nearly everyone in Nanchital works for Pemex, the state-owned oil monopoly, had no doubt about who was responsible for his brother's death last month when a work crew cut into the wrong pipeline and six men died in a blast of ammonia gas. Mr. González blamed a Pemex engineer who had been overseeing the job but left just before the accident. 'I was a worker for Pemex for years, and I worked on deep-sea platforms, and there I could tell you many bad things that the engineers would do, that they would not pay attention to the work,' he said. 'It makes me sick.' Mr. González is not the only one fed up in this region, the heart of the oil and petrochemical industry. The blast that killed his brother and five other workers was the latest in more than 12 pipeline accidents to befall Pemex since October. The spills have focused Mexico's attention on what even company officials acknowledge is an old and poorly maintained network of pipelines. About a third of the network is more than 30 years old, and some pumping equipment is so antiquated that the company cannot find spare parts, Pemex officials say. But the recent spate of accidents also highlights the complicated symbiotic relationship between the company and the government that is supposed to regulate it. Pemex provides the government with 40 percent of its income, and the environmental agency charged with policing the oil company is woefully underfinanced. This year, Pemex's authorized budget for maintenance is almost $1 billion less than it needs, Luis Ramírez Corzo, who became Pemex's director general last December, has said. Lawmakers control Pemex's budget, and it pays some two-thirds of its revenue in taxes. Despite record high oil prices that increased revenues to $69 billion last year, Pemex, short for Petróleos Mexicanos, reported a loss of $1.3 billion. Pemex officials complain that the government mainly uses the oil industry to finance the rest of its spending and puts too little money into infrastructure and maintenance. Environmentalists say the company's sins, including padded payrolls and oil spills, go unpunished because its enormous importance to the nation's coffers gives it unparalleled political power. In particular, the federal environmental enforcement agency, known as Profepa, has proved toothless when policing Pemex facilities, they say. 'It's a fact that Profepa is very limited, it definitely follows the party line, they can't touch Pemex much,' said Francisco Villagrán Ballesteros, a lawyer who has sued Pemex officials over the recent spills. The Profepa chief, José Luis Luege, has been reduced to making threats he cannot carry out. On Thursday, he held a news conference to demand that Pemex repair 35 problem pipelines, but he acknowledged that it would cost $770 million. Pemex says it has money to repair just seven. Mr. Luege acknowledged that any decision to shut down a major pipeline - and halt a refinery - would probably have to be made by the president. To many Mexicans who can recall catastrophic Pemex accidents in the recent past, the company is synonymous with a callous disregard for safety and the environment. In 1986, a liquefied petroleum gas terminal blew up outside Mexico City, killing more than 500. Six years later, a pipeline explosion in Guadalajara killed more than 200 people. Since then, the company has worked to upgrade safety and maintenance, its officials say. It has opened its installations to government inspectors and Pemex executives now submit to public questions and rebukes in Congress. But the spills in Veracruz suggest that the company has a long way to go to repair decades of neglect along its 38,000 miles of pipelines. Mr. Ramírez Corzo said Pemex needed to spend $12.3 billion on maintenance through 2008, a third of that on upgrading pipelines. 'This is the crude reality,' Mr. Ramírez Corzo said in April at a Senate hearing on the Veracruz accidents. 'This is the company we have got, not the company we would like to have.' Last Dec. 22, the lack of maintenance that Mr. Ramírez Corzo has complained about led to a huge spill, one of the worst in years. At least 5,000 barrels of crude erupted from a ruptured pipe in Nanchital, flooded nearby fields, coated the Coatzacoalcos River and ended up on the beaches. The spill could have been foretold, officials acknowledge. That section of the pipeline was identified as weak in 1997, but the first contractor hired to repair it was incompetent and abandoned the job, Pemex officials said. The pipeline was later patched but never replaced. Then a turbine pump that should have been replaced a dozen years ago broke down, causing a leak and then a fire, Mr. Ramírez Corzo told lawmakers. Changes in pressure in the pipeline caused it to rupture where it emerges from the ground near the river. 'Our infrastructure has started to become old and tired,' said José Manuel Olivares Páez, a Pemex official in charge of the oil pipelines. 'There are always risks but the key is to evaluate periodically that your pipelines are secure. There are many points where they are not secure.' But Pemex says it cannot fix all those weak spots. While the government keeps tight control over Pemex's budget, its ability to watch over Pemex's compliance with environmental and safety regulations is hindered by a tiny budget and weak laws. Profepa, an acronym for the federal prosecutor's office for environmental protection, employs just 150 industrial inspectors nationally, and Pemex has 2000 installations to check, said José Ramón Ardavín Ituarte, the deputy prosecutor for industrial inspection. The pipeline from Nuevo Teapa to Poza Rica that burst last December had long been earmarked as a risk, but Pemex had promised to make improvements. 'We knew there was a risk there, but we could not do anything,' said Gerardo A. Alvarado Salinas, Profepa's director general for inspection of pollution sources. 'The law does not allow us to take preventive action. I cannot close this pipeline because tomorrow there might be a spill. I have to wait until there is a spill.' After an accident, environmental officials' tools are limited, because the law sets low fines. (Since 2001, Pemex has paid less than $5 million in penalties.) And prosecuting officials in connection with negligence is the responsibility of the attorney general's office, which has shown little appetite for taking on the company. In five years, the government has carried out one prosecution. The accident in Nanchital in April released a plume of ammonia gas, estimated at 60 liquid tons, killed six workers in the excavation, blackened trees and plants for hundreds of yards and forced the evacuation of at least 900 people. It took two days to retrieve the bodies. Just up the road from the site, family members waited grimly. The dead men left behind wives and children with little or no money. Most had been working for the subcontractor, Reparaciones Navales de Petroquímica, for only a few months. On May 4, Pemex gave $74,500 in all to the families of the six men, although it said it might be ordered to pay more in the future. Pemex officials have tried to divert blame, saying the subcontractor cut into the wrong pipe after a supervising engineer left to check on the location of the right one. But family members asked why the workers had no protective suits. 'They put him in there to work without any protection,' said Victor Armas Mayo, 56, whose 30-year-old son, Daniel Armas, was killed. 'I don't know how Pemex allowed this.' A half mile away, Angel Martínez, who also works for Pemex, was fishing in the Coatzacoalcos River just a hundred yards from the site of the spill last December. Over the last four months, Pemex hired crews of former fishermen and brought in heavy machinery to remove more than 10,000 tons of contaminated soil and pile it at four sites along the river. But Mr. Luege said on Thursday that Pemex had not finished and ordered the company to remove the soil before the rainy season begins next month. The fish are back, as are the pelicans and gulls. But worries that it will happen again remain. 'They are very deteriorated, the pipelines here, and the company hasn't done anything,' Mr. Martínez, 34, said, looking back at the pump station. 'People are worried. This is not the first time.'

Subject: Who's Preying on Your Grandparents? From: Emma To: All Date Posted: Sun, May 15, 2005 at 08:32:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/15/business/yourmoney/15vict.html?pagewanted=all Who's Preying on Your Grandparents? By GRETCHEN MORGENSON BACK in February, Jose and Gloria Aquino received a flier in the mail inviting them to a free seminar on one of their favorite topics: protecting their financial assets. As retirees, they were always on the lookout for safe investment strategies as well as tips on how to make sure they didn't outlive their savings. Besides, the flier promised a free lunch for anyone attending the workshop, so what did they have to lose? Potentially plenty, they would soon discover. On March 1, Mr. and Mrs. Aquino stepped into the Coral House restaurant, not far from their home in North Baldwin, N.Y., on Long Island. They found themselves surrounded by about 50 like-minded retirees, most in their 70's and 80's, they said. Over lunch, the crowd listened to a presentation by two investment executives from Diversified Concepts Inc. of Manhattan. Using charts and graphs, the men gave advice on how to invest wisely during retirement. Then they passed out forms and asked the retirees to list all their assets and financial holdings. The Aquinos filled out theirs and left. Two days later, they said, one of the executives came to their home and described an investment with the American Equity Investment Life Insurance Company that would provide 7 percent interest on their money - immediately. 'When somebody tells you he will give you a 7 percent upfront bonus on your money and that you'll get that 7 percent even if the market goes down, you get interested,' said Mr. Aquino. He said he signed the necessary documents and the executive left, handing a brochure to the couple. That evening, the Aquinos told their daughter, Caroline, about their investment. 'She said, 'Oh, don't invest like that before searching farther,' ' Mr. Aquino recalled. 'Then she went on the Internet and found these lawsuits going on in California against the company and we realized that we were not making a good decision.' The investment the Aquinos had chosen was an annuity, an insurance product that not only tends to carry high fees but also requires that most of the money stay locked up for years, making it especially inappropriate for many older investors, regulators say. In fact, the one they bought carried a staggering 17.5 percent surrender charge if it was cashed in during the first year, their daughter explained. Exit charges were not scheduled to disappear until 17 years after the purchase. This meant that Mr. Aquino, who is 65, and Mrs. Aquino, 63, could not cash in the annuity without paying a surrender fee until they were in their 80's. The executive had not told them about the lockup requirement, the Aquinos said, although the brochure he left with them described the fees in small print. Thanks to their daughter, they were able to phone the company in time to cancel their purchase. Others, however, have wound up stuck in an investment that they cannot liquidate without severe penalties. Meetings like the one attended by the Aquinos take place thousands of times a year in restaurants, American Legion halls and senior centers across the nation - and are a growing problem, securities regulators say. The seminars are usually described as a way for retirees to receive free advice on estate planning, asset protection and tax reduction. After a short presentation, the attendees are approached by a sales representative, who almost invariably encourages them to liquidate their stocks, bonds and 401(k)'s and to buy an annuity. 'We started getting all these complaints from children of seniors who found out that their stock portfolios or other investments had been transferred into these annuities,' said Joseph A. Ragazzo, deputy attorney general of California. 'We see this investment abuse as a real problem. These cases are metastasizing all over the country.' David J. Noble, chief executive of American Equity Investment Life Insurance, the company that wrote the Aquinos' policy, said: 'I deeply differ with anyone saying we have serious problems. We have over 200,000 annuity policy holders, and the percentage of complaints we have is 0.002. We are extremely market-conduct aware.' Mr. Noble also said that annuities' guaranteed rates of return and protection of principal make them attractive to people worried about how they are going to pay their bills. The president of Diversified Concepts did not return several phone calls. WHILE prosecutors in New York and Washington investigate questionable accounting practices in the insurance industry, regulators elsewhere say they are fielding more and more complaints about aggressive sales practices by insurance companies that design annuity products and by the people who sell them. Under the guise of estate planning, regulators say, retirees are being pushed into annuities that carry commissions of up to 12 percent and that require their holders to keep them for as long as 15 years, or to pay big penalties. It is easy to see why older people find such investments attractive. Annuities produce higher income than other investments and can provide payments for life. They are often sold as a way to allay retirees' fears of outliving their assets. There are several kinds of annuities. Fixed annuities guarantee that a set amount of money will be paid regularly, regardless of how the underlying investments perform. Variable annuities, by contrast, are based on a portfolio of stocks that rise and fall, so their payments can fluctuate. With interest rates near historical lows, the first-year rates of 7 percent to 9 percent on some annuities make them alluring to people on fixed incomes. And with the stock market going sideways, people are looking for investment alternatives, giving annuity sales representatives a ready audience. But because of the fees associated with these products and the restrictions on cashing them in, they are hardly ideal for investors who may need the money quickly, or who die before the investment matures. In many cases, if the holder dies during the annuity period, the beneficiaries cannot redeem the annuity without paying a surrender charge. Companies that sell annuities say that the higher rates they pay justify the surrender charges. Most investors, they add, are happy with their purchases. But last February, Bill Lockyer, the attorney general of California, and John Garamendi, the state's insurance commissioner, filed a lawsuit against a group of companies and individuals that state officials said had tricked retirees into using their retirement investments to buy annuities. The suit said that the companies employed up to 300 sales agents and 80 telemarketers and sold annuities worth 'hundreds of millions of dollars.' The defendants in the case included American Investors Life Insurance of Kansas, a unit of the AmerUs Group in Des Moines; and Family First Advanced Estate Planning and Family First Insurance Services, both of Woodland Hills, Calif. The complaint seeks $110 million in civil penalties, consumer restitution and damages. AmerUs said that it does not comment on pending litigation; however, the company said that it was taking the accusations very seriously and that it has strong sales and compliance practices. The Family First companies could not be reached. Increasingly aggressive marketing has made annuities one of the hottest investments around. Money invested in variable annuities totaled $994 billion at the end of 2003, up from $771 billion in 1998, according to the Insurance Information Institute. Although total annuity sales fell slightly in 2003, they have almost doubled since 1997. The growing ranks of the nation's retirees are a main focus of annuity sales agents. Next week, the Senior Market Expo opens at the San Diego Convention Center. 'Now in its fifth year, Senior Market Expo is the only place you'll find the powerful strategies and ideas you need to boost your sales of life insurance, annuities, long-term care insurance and more,' its Web site says. 'This sales-centric event focuses on giving you - the senior market adviser - sales and marketing skills to earn more money selling to seniors.' Annuity sales can be highly lucrative. Commissions can reach 12 percent of the money invested, far greater than fees typically generated on stocks and other investments. Mr. Ragazzo, the deputy attorney general of California, said his office had found that some companies selling annuities sponsored trips to Hawaii and Europe for top agents. 'Some of these guys are former used-car salesmen bringing in $600,000 a year,' he said. Ads for asset-preservation seminars often use scare tactics. 'Your family's assets are in danger!' reads one; 'Trust me! You need a living trust!' goes another. As sales of annuities have grown, so have investor complaints related to them. According to the N.A.S.D., annuities were at issue in about 600 arbitration cases in 2004, more than twice the number from three years earlier. Of the seven types of securities typically involved in arbitrations, annuities were the third most common last year, behind stocks and mutual funds. Sellers of annuities are also the subjects of civil lawsuits. The American International Group, the insurance company whose accounting practices are under investigation by regulators and federal prosecutors, has been sued recently in California by elderly investors who bought annuities the company issued. The investors are also suing Estate Preservation Inc. of El Segundo, Calif., which sold the annuities. One plaintiff is Beverly Buhs, 80, of Millbrae, Calif. In 1997, Ms. Buhs, then 73, and her husband Art, then 76, attended a seminar at an American Legion hall. Like the Aquinos, the Buhs filled out a form detailing their assets; it was supplied by the seminar leader, an agent from Estate Preservation. Mr. Buhs had previously invested in mutual funds, but he and his wife had never bought an annuity. With the agent's help, the Buhs set up a living trust, which they believed would help them avoid probate costs, according to the lawsuit. Shortly after setting up the trust, according to the lawsuit, the agent came to their home and persuaded them to sell their investments and to put them into a fixed annuity issued by SunAmerica, a financial services company bought by A.I.G. in 1999. In December 2002, Mr. Buhs died of complications from an aneurysm. Only then did Ms. Buhs learn that the living trust did not protect her from probate costs and that she could not cash in the annuity without significant penalties, she said. Ms. Buhs said she had to hire an estate lawyer to restructure the trust and wound up losing $20,000 of a $90,000 death benefit. Now she is still dealing with tax problems associated with the trust. 'I tried to talk to SunAmerica, but I get so stressed out,' Ms. Buhs said. 'I don't know how to talk the jargon and don't know where to go. It's sad to think the world is like this. How many other seniors are being taken and deceived?' Ms. Buhs's lawyer, Ingrid M. Evans of Renne Sloan Holtzman & Sakai in San Francisco, said: 'The majority of annuity policies are going to seniors because those are people who have the money and are scared of the stock market and most susceptible to fear. But over a certain age it's not acceptable to sell someone a deferred annuity because they are going to pass away before it annuitizes,' or matures. Ms. Evans said Ms. Buhs had sued A.I.G. because SunAmerica 'implicitly or explicitly ratifies the sales agents' unlawful and unfair schemes.' Chris Winans, an A.I.G. spokesman, said that the company would not comment on the litigation but said that the claims in the suits were unfounded. Ms. Buhs' annuity provided good returns - almost 20 percent from 1997 to 2002, after surrender charges, he said. Mr. Winans added that A.I.G. has suitability policies and procedures that it monitors and enforces and that it requires the same of the brokers who sell its products. Estate Preservation did not return a phone call seeking comment. A.I.G. is the nation's top seller of fixed annuities through banks and the fifth-largest seller of variable annuities, according to the Insurance Information Institute. The company sold $8.8 billion in fixed annuities in 2004 and sold $8 billion of new variable annuities in 2003, the most recent figures. In the first nine months of 2004, A.I.G.'s life insurance and retirement services group, which includes its SunAmerica unit, accounted for 45 percent of the company's total revenue. Sales at the group rose 24 percent from the corresponding period a year earlier and its operating income rose 23 percent, the fastest growth registered by any of A.I.G.'s four business segments. Premiums from annuities sold domestically rose 20 percent in the first nine months of 2004. TYPICALLY, the people pushing annuities are registered only as insurance agents and not with government securities regulators who have large staffs to root out dubious practices. As a result, many fall through the regulatory cracks. Last July, the California Department of Corporations filed a 'desist and refrain order' against the Gentry Group, a Dallas company that sells annuities. The company had induced an elderly woman in Oroville, Calif., to authorize the sale of $98,470 of securities without her knowledge and to buy two American Equity annuities with the money, according to the order. The Gentry Group, the American Equity Life Insurance Company and the saleswoman who sold the annuities were not authorized to conduct business as investment advisers in California, so the desist order was issued. The Gentry Group did not return a phone call seeking comment. American Equity said that it was resisting the order in court. Mary L. Schapiro, the vice chairwoman of N.A.S.D., said that her agency had proposed new rules related to the selling of annuities to the elderly; they await approval by the Securities and Exchange Commission. 'Some of the worst advertising we've seen has been in equity-linked annuities,' she said, 'very promotional, talking about growth without any risk, all the kinds of push-button expressions that really resonate with senior citizens.' But, she said, she oversees only a small percentage of the firms and people selling these annuities. Alas, not every retiree can rely, as the Aquinos did, on a daughter to help them steer clear of an investment they might later regret.

Subject: A Most Important Article From: Terri To: Emma Date Posted: Sun, May 15, 2005 at 09:05:12 (EDT) Email Address: Not Provided Message: We must not forget this article. There is a reason Vanguard is preferred by so many investors, for the ethics are entirely different.

Subject: Re: A Most Important Article From: Pete Weis To: Terri Date Posted: Sun, May 15, 2005 at 11:20:09 (EDT) Email Address: Not Provided Message: Unfortunately there are few if any governmental safeguards out there for small investors and financial rape is being visited upon many. My mother-in-law ended up having to surrender some 40% of what was invested in an inappropriate annuity and it took the hiring of attorneys to get back anything. The language in the original contract was vague and it was never explained that there would be surrender fees. The company was Fidelity.

Subject: Re: A Most Important Article From: Emma To: Pete Weis Date Posted: Sun, May 15, 2005 at 15:02:19 (EDT) Email Address: Not Provided Message: A 40% surrender charge for a fixed annuity is shocking. Talk about dangerous. This is why sharing investment experiences is so important. Remind me to avoid Fidelity, which I do in any event.

Subject: Re: A Most Important Article From: Terri To: Pete Weis Date Posted: Sun, May 15, 2005 at 13:10:58 (EDT) Email Address: Not Provided Message: The experience is common and terribly sad. Eliot Spitzer has been all but alone as a consumer advocate against financial industry distortions. My experience with Vanguard however has been absolutely different. We can be careful, and help others we know.

Subject: Saving Culture From: Terri To: All Date Posted: Sun, May 15, 2005 at 06:26:47 (EDT) Email Address: Not Provided Message: So then have we too developed a culture where saving is little valued? Why should this be so?

Subject: Re: Saving Culture From: Terri To: Terri Date Posted: Sun, May 15, 2005 at 08:42:27 (EDT) Email Address: Not Provided Message: Though there is much to crticize Alan Greenspan about in fiscal policy analysis and advice, I find Federal Reserve policy to have been most astute and helpful since Paul Volker became Chair. The gradual decline in interest rates since 1982 is a meausre of Fed effectiveness. However, I wonder if low interest rates deter saving. I do not think so, but I am not sure. Besides, low interest rates are to be preferred.

Subject: Growth and Debt From: Terri To: All Date Posted: Sat, May 14, 2005 at 22:12:25 (EDT) Email Address: Not Provided Message: The problem I would suggest is not so much or possibly at all the accumulation of debt, but the accumulation of debt faster than the economy is growing. Remember how quickly we were able to turn about not just from debt to surplus, but to the possibility we might pay off our debt in less than a decade. Good grief, is that ever gone.

Subject: Re: Growth and Debt From: Terri To: Terri Date Posted: Sat, May 14, 2005 at 22:17:40 (EDT) Email Address: Not Provided Message: The stability of REITs this year is considerable comfort. The Vanguard REIT Index is slightly negative, and leading the S&P.

Subject: Cellphone Taxes From: Emma To: All Date Posted: Sat, May 14, 2005 at 19:00:22 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/14/technology/14cell.html?pagewanted=all&position= In Cities Facing Budget Deficits, Cellphone Becomes a Taxpayer By KEN BELSON Last year, the City Council in Baltimore faced a budget shortfall so bad that it considered laying off 186 city police officers, reducing some fire department operations and scaling back trash collection. Then it found an untapped honey pot: cellphones. Starting in August, the city began collecting $3.50 a month from each of Baltimore's 238,000 mobile phone subscribers. The extra income has helped to strengthen the city's finances and is expected to help the city fix up schools and trim the property tax. 'I can't remember the last time we've had such an easy budget year,' said Sheila Dixon, the president of the City Council. 'The bulk of our taxes come from property tax, but when you can't diversify and the federal and state taxes are drying up, you need other income.' Baltimore is not alone. The city of Springfield, Ore., for example, recently enacted a 5 percent tax on cellphones and land lines, which would help finance a new jail. Residents and utilities opposed to the tax, which is yet to take effect, have forced a referendum to be held on Tuesday. Dozens of other cities and states have already passed cellphone taxes. Many other states and municipalities, including some in Louisiana and Missouri, are debating similar measures as they compile their budgets for the next fiscal year. Officials are particularly eager to tax cellphones because the amounts individuals pay each month are small enough to go virtually unnoticed, but in aggregate can be substantial. Cellphone subscribers nationwide paid an estimated $17.8 billion in federal, state and local taxes last year. But mounting taxes have led wireless companies like Verizon Wireless and Sprint to form unlikely alliances with consumer advocates and tax reformers to fight new city fees. They argue that consumers are taxed twice in states and cities that also impose sales taxes, and that the extra burden is particularly hard on retirees and low-income subscribers and also reduces overall demand for mobile service. The cellphone taxes, when added to existing federal excise and state sales taxes, as well as fees for 911 service, mean that $8.75, or 16.7 percent, of the average monthly cellphone bill of $52.50 now goes to government agencies - about twice as much as on many other services, according to CTIA-the Wireless Association, a wireless industry trade group. While cellphone subscribers in New York, Connecticut and New Jersey pay some of the highest tax rates in the country, the states do not levy a wireless-only sales tax. The carriers say they do not oppose collecting taxes on behalf of governments, but they object to being subject to special taxes as tobacco and alcohol are. 'We have no problem with the revenue needs of the localities,' said Steven Zipperstein, general counsel for Verizon Wireless. 'But we have a big problem that a certain class of customers or services should be singled out for excessive taxation.' Cingular Wireless, Verizon Wireless, Sprint and T-Mobile filed a lawsuit in February in Maryland Tax Court against Baltimore and Montgomery County, which has its own wireless tax. They contend the cellphone fee is effectively a sales tax, which only the state has the right to impose. They also say that cities have no authority to collect taxes on services consumed outside their borders, noting that many of the cellphone calls made in Baltimore go outside the city limits. 'Some portion of what they are taxing is outside their boundaries, so it's defective for that reason,' said Kenneth H. Silverberg, a lawyer at Nixon Peabody, the firm representing the carriers. Others have joined the move to repeal the fee. At least one Baltimore councilman wants to exempt senior citizens from the wireless tax. Progressive Maryland, a nonprofit group that promotes 'pro-working-family legislation,' said Maryland lawmakers should raise the corporate tax and scale back taxes on consumers. 'When you have a thriving corporate sector paying less and less tax, the taxes get foisted on working and middle-class families,' said Tom Hucker, executive director of the group. The National Black Caucus of State Legislators called on state and local governments last December to roll back taxes, including flat taxes, on wireless services because they 'disproportionately burden low-income, low-volume cellular telephone subscribers.' But a Baltimore municipal spokeswoman said the city felt it was on firm ground. The telecommunication tax was 'crafted and implemented with the expectation that it would stand up to a legal challenge,' said the spokeswoman, Raquel Guillory. The tussle over the right to levy taxes on wireless services comes as phone providers and federal regulators struggle with how technology is changing the meaning of a phone call. Some lawmakers argue that to encourage the spread of new technology, new services should not be taxed as heavily as traditional ones. Others, intent on cutting and streamlining local taxes, want to limit the power of states and cities to introduce their own special fees. Yet city councils and state lawmakers with budget holes to plug argue that 'a phone call is a phone call,' regardless of how it is placed. With consumers increasingly using cellphones instead of land lines, local governments are eager to start taxing wireless services just as they have taxed traditional phone lines for years. In Baltimore, the $3.50 tax on cellphones extends to land lines as well. Businesses operating multiple phone extensions also pay 35 cents a line. Under the previous tax structure, the city charged a 12 percent tax only on land lines. By moving to a flat fee for all phones, the city expects to raise $26.1 million in the fiscal year ending June 30, double what it received under the old formula. Of that total, $8.81 million, or 34 percent, will probably come from cellphone users, money the city did not receive before. To be sure, the expanded phone tax is only one reason the city's finances have improved. Baltimore also nearly doubled its tax to record deeds and it expanded fees on utilities. The property market has also been booming in the area. The income generated by Baltimore's broader phone tax has become a model for other cash-short cities. Council members in Portland, Ore., are debating whether to include cellphones for the first time in the city's utility license fee on phones. Cities in Missouri as well as the state legislature are considering similar measures. Wireless companies point to Pennsylvania as a state with lofty taxes on cellular services. In 2003, lawmakers there extended the 5 percent gross receipts tax on land lines to include mobile phones. That tax goes on top of a 6 percent statewide sales tax. Some cities in the state, like Philadelphia, have general sales taxes, too. Cellphone subscribers also pay into a fund for an emergency response system for wireless users. And then there is the federal excise tax of 3 percent. In all, taxes make up 19.05 percent of the average monthly wireless bill in Pennsylvania, one of the highest levels in the country. Some state and local lawmakers are already thinking beyond cellphones. One idea is to create a uniform use tax that covers all forms of telecommunications: land lines, mobile phones, Internet-based phones, high-speed data lines and programming provided by cable and satellite companies. By spreading the tax to services like satellite television, which are subject to very little city or county taxes, the fees on phone services could be lowered. 'We've had a tax system based on technology as a utility for almost 60 years,' said Steven J. Rauschenberger, a state senator from Illinois and the president-elect of the National Conference of State Legislators. 'But with the convergence of technology, we need to rethink the system.'

Subject: Soft or Hard Landing From: Terri To: All Date Posted: Sat, May 14, 2005 at 18:57:30 (EDT) Email Address: Not Provided Message: Suppose there is an imbalance in global markets that can only be resolved by an interest rate shock. Either the Federal Reserve will have to raise interest rates markedly to induce a recession and increase saving, or there will finally be a significant rise in the values of several Asian currencies with a corresponding rise in American interest rates. Well, the Fed will not induce a recession. That would be going against the Fed mandate. The Fed will raise short term interest rates quite slowly unless there is an unexpected inflation rise. This does not seem likely, so the key will be how long till central banks limit support of the dollar. Then, there may be a problem. Then, long term interest rates may rise along with falling stock prices and a weakening economy. But, that may be years from now.

Subject: housing market is key From: Pete Weis To: Terri Date Posted: Sat, May 14, 2005 at 21:59:48 (EDT) Email Address: Not Provided Message: If it wasn't for the housing market having doubled or nearly doubled in some important areas of the US in the last 5-7 years coupled with record personal debt, we probably could weather 2% or more increases in long term rates. But a hard landing is inevitable if any of a number of events take place, among them - a worsening labor market, tightening credit (caused by higher mortgage defaults, more trouble at Fannie-Mae, Freddi-Mac, etc), higher rates (either from a drop in foreign purchases of US treasuries or too steep a deterioration in the dollar, etc) and simply a bust (like the dotcom bust) in a speculative market with a large number of speculators attempting to exit all at once. It's amazing to think back to the late 90's with all the warnings from the likes of Robert Shiller, as well as Paul Krugman, and others that the market would go bust, and realize that most of us paid a no-never-mind and ended up taking a financial bath. Now Robert Shiller and many of the same folks who correctly called the last bust are telling us that the same thing will happen in the housing market. But, true to form, here we are, enmass, paying (once again) a no-never-mind. As damaging as the stock market bust was (which set off this massive liquidity pumping with the lowering of interest rates to prevent deflation), a housing market collapse would be far more damaging and would crush consumption wherever it were to take place. Take a look at Japan - they have a large trade surplus and not nearly the personal debt we have here and a housing meltdown has kept them in a very long term recession. If the US consumer begins to pack it in, you will see Japan sink much more deeply.

Subject: Re: housing market is key From: Terri To: Pete Weis Date Posted: Sat, May 14, 2005 at 22:15:25 (EDT) Email Address: Not Provided Message: Yes; the housing market and mortgage debt are keys. There is the worry, and there the reason I do not think we can stand too much more than a 5% long term Treasury yield.

Subject: Why Should Interest Rates Be Higher? From: Terri To: All Date Posted: Sat, May 14, 2005 at 16:53:45 (EDT) Email Address: Not Provided Message: Steve Roach appears to wish a significant rise in interest rates from here; I assume long term rates as well as short term. I however am pleased that long term rates are so low. Are we to sacrifice the domestic economy to the abstraction of balance? Why?

Subject: Re: Why Should Interest Rates Be Higher? From: Terri To: Terri Date Posted: Sat, May 14, 2005 at 17:00:26 (EDT) Email Address: Not Provided Message: Though there are complaints about prices being too high for the high yield bonds, I can assure you that high yield bonds have fallen substantially in price this year, while investment grade bonds have risen in price. Why does Steve Roach always seem to opt for a recession to solve abstract economic problems?

Subject: As the tide rolls out From: Pete Weis To: All Date Posted: Sat, May 14, 2005 at 16:33:42 (EDT) Email Address: Not Provided Message: Stephen Roach: 'Alas, there is an important catch to the carry trade in residential property — debt. In an income- and saving-short climate, the American consumer has monetized the proceeds of the carry trade to fund current consumption. Courtesy of a well-developed home mortgage refinancing technology, “equity extraction” from ever-rising property values has amounted to about $710 billion over the past four years, according to data from Freddie Mac on home equity cash-outs and second mortgages. That is hardly an inconsequential supplement to consumer purchasing power; in fact, this monetization of housing wealth was nearly 35% larger than the cumulative growth in earned wage income over this same four-year time frame. The problem, of course, is that this search for income — the consumer’s functional equivalent of the investor’s search for yield — has taken household sector debt loads up to a record of nearly 90% of GDP. Moreover, even at low market interest rates, the servicing costs of this gigantic debt load are in the upper decile of historical experience. Mainly for those reasons, I continue to believe that the American consumer will emerge as the weakest link in the macro chain in a normalized real interest rate climate. All this underscores the increasingly worrisome perils that lurk on the other side of the carry trade. A protracted period of abnormally low real interest rates has led to a number of distortions in US financial markets and in an asset-dependent US economy. To the extent unusual spread compression has been an outgrowth of excess liquidity rather than a by-product of powerful new fundamentals, a sharp tightening in financial conditions could arise as the Fed attempts to normalize real interest rates. That, of course, would have adverse implications for the US economy, as well for the US-centric global economy. Fearful of such an outcome, many actually believe that the US central bank will hold back on any tightening to limit the damage. If that is correct — and, unfortunately, I must confess to having some sympathy to this possibility — the Fed’s moral hazard dilemma will only deepen. Yet the longer the Fed maintains its extraordinary accommodation, the greater the distortions to asset prices and the higher the likelihood of a disruptive endgame in the markets and the real economy. As always, the real problem with excess leverage is that there is never good knowledge as to who is most vulnerable in the event of a reversal in market conditions. Painful as they are, market corrections serve the useful purpose of revealing misalignments in both asset pricing and asset allocation of the investor base. While attention has been focused in recent days on hedge funds and other institutional investors, I am more worried about the American consumer. The increased dispersion of risk among institutional investors would certainly tend to mitigate the possibility of single-name breakage as was the case back in 1998 with the demise of Long Term Capital Management. Usually, it’s the least-experienced borrower or lender that suffers the greatest damage in a market correction. In my mind, that puts the income-short, saving-short, overly indebted, asset-dependent American consumer at the top of the watch list. As always, we won’t know where the rocks are until the tide goes out.'

Subject: Re: As the tide rolls out From: Terri To: Pete Weis Date Posted: Sat, May 14, 2005 at 16:46:06 (EDT) Email Address: Not Provided Message: http://www.morganstanley.com/GEFdata/digests/latest-digest.html#anchor0 May 13, 2005 Low Tide Stephen Roach In a low-return world, zero real interest rates are what I have called the “candy” of the carry trade. They have fostered — and funded — artificial demand for higher-yielding assets. That’s the main reason why spreads on risky assets have plunged to extraordinary lows. But it’s not just traditional spread products and more exotic structured credit instruments that have benefited. The ever-frothy US property market, in my view, is being driven by the biggest carry trade of all. It is not a coincidence, in my view, that house-price inflation has hit a 25-year high in a climate of rock-bottom interest rates. Easy money and sharply elevated turnover of the housing stock go hand in hand — imparting an equally potent artificial demand for this asset class.

Subject: Therapies Cut Risk in Breast-Cancer From: Emma To: All Date Posted: Sat, May 14, 2005 at 15:12:27 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/13/health/13breast.html Therapies Cut Death Risk, Breast-Cancer Study Finds By DENISE GRADY A large new study is providing good news about long-term survival for women with breast cancer. Standard chemotherapy and hormone treatment work even better than researchers had expected, the study found. For middle-aged women with an early stage of the disease, combining the treatments can halve the risk of death from breast cancer for at least 15 years. For instance, a woman under 50 with a tumor big enough to feel, but not invading her lymph nodes, would have a 25 percent risk of dying of breast cancer in the next 15 years if she had surgery but no drug therapy. Adding both chemotherapy and hormone treatment would drop her risk to 11.6 percent. Among the most important findings was that a certain type of chemotherapy, already widely used, was most likely to save lives. It included six months of the drug Adriamycin, also called doxorubicin, or a related drug, epirubicin. Though the drugs cause hair loss and nausea, and in some cases heart problems, in the long run their benefits outweighed the risks, the studies found. The greatest gains in survival came when the treatment also included five years of tamoxifen, a drug that blocks the effects of the hormone estrogen, which can feed some tumors. But tamoxifen helps only women with estrogen-sensitive tumors, about 60 percent. 'I think women should feel very encouraged by the progress that has been made,' said Dr. Sarah Darby of Oxford University, an author of a 30-page report on the work that is being published today in The Lancet, the British medical journal. 'Mortality rates are falling in the U.S. and the U.K., and are starting to fall in some other countries.' The study proves that drug therapy deserves credit for the dropping death rates, Dr. Darby said. The findings come from an analysis of 194 studies involving 145,000 women in two dozen countries - the largest analysis ever of research results in cancer, and also one of the longest, with 15 years of follow-up in many cases. The analysis was paid for by the British government, not drug companies. The women in the studies all had relatively early cancers. Some were confined to the breast and some had spread to nearby lymph nodes, but none had reached other organs. All the women had surgery, and some had radiation. Some had no drug treatment, but others had chemotherapy or hormone treatment, or both. The use of chemotherapy varied because in the 1980's, when many of the studies began, there was not enough evidence to tell whether women with early breast cancers needed drug treatment after surgery, and some doctors argued vehemently that they should not be exposed to the risks of chemotherapy. All the studies included in the analysis were the type considered most reliable, known as randomized controlled trials, meaning that women were assigned at random to one treatment or another, and their outcomes compared. An astonishing finding, Dr. Darby said, is that the benefits of treatment actually increase over time, even after the treatment is done, so that the elevation in survival rates in women who took the drugs compared with those who did not is even greater after 10 to 15 years than it was after 5 years. 'Very few doctors would have guessed that beforehand,' Dr. Darby said. For example, the study found that women under 50 who received chemotherapy (not hormone treatment) had a 15.7 percent death rate after five years, compared with 20 percent in women without chemotherapy. But after 15 years, the difference was even greater, a full 10 percentage points - a 32.4 percent death rate in treated women, compared with 42.4 percent in the controls. Older women also benefited, though not as much. But not enough women 70 or over were included in the studies to determine the drugs' value for them. The study also helps allay fears that delayed side effects from tamoxifen or chemotherapy might prove so deadly that women would in essence just be trading breast cancer for another cause of death. That did not occur; the increased risk of death linked to the drugs was only 0.2 percent. Dr. Stephen Chia of the British Columbia Cancer Agency, an author of a commentary on the study, said he expected further declines in death rates from breast cancer because newer drugs, already in widespread use, worked even better than the ones used in the studies on which today's findings were based.

Subject: Health Care Stocks From: Terri To: All Date Posted: Sat, May 14, 2005 at 11:42:24 (EDT) Email Address: Not Provided Message: Notice how well health care stocks having been holding up in this market. Health care company earnings on the whole are remarkably stable, so when the stocks sell off, as drug company stocks did last year, there is reason to look to them for long term purchase. Earnings are stable for drug companies whether in America or Europe or Japan, when the companies are taken as a whole.

Subject: Biotech Drugs Are Producing Gains From: Emma To: All Date Posted: Sat, May 14, 2005 at 11:28:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/14/health/14cancer.html New Biotech Drugs Are Producing Gains Against Cancer By ANDREW POLLACK and LAWRENCE K. ALTMAN ORLANDO, Fla. - New drugs developed using the tools of biotechnology are helping prevent relapses among cancer patients and prolonging some lives, cancer specialists said Friday at the opening of the biggest annual conference devoted to treatment of the disease. Much of the attention at this year's meeting of the American Society of Clinical Oncology is directed at 'targeted therapies,' which take aim at the underlying molecular mechanisms that prompt tumor growth. Those drugs have been a focus at previous conferences, but the evidence for their effectiveness is mounting, and experts are predicting that many cancer patients, if not most, will eventually receive at least one such drug. 'Targeted therapy is really a clinical reality,' Dr. Roy S. Herbst of the University of Texas M. D. Anderson Cancer Center said at a news conference here. He called the drugs the 'smart bombs' of cancer treatment. A drug called Avastin, which works by choking off the blood supply to tumors, prolongs the lives of patients with lung cancer and also significantly delays the worsening of breast cancer, according to the results of clinical trials presented here. Another cancer drug, Herceptin, when used after surgery to remove breast tumors, cuts by about half the chance that breast cancer will recur. Although these results were announced in advance of the meeting, many of the details are being released here for the first time, providing doctors with the crucial clinical details they need to advise patients about the benefits and risks of treatment with the drugs. Of course, what oncologists at the meeting celebrate as major gains are still far from cures. Avastin, when added to chemotherapy, extended the median survival of people with advanced lung cancer by about two months. After two years, 22.1 percent of those who took Avastin were still alive, an improvement over the 16.9 percent who received only chemotherapy. While targeted therapies avoid some of side effects of more traditional chemotherapy, they can have complications of their own, and experts cautioned that doctors would have to be careful in using them. Avastin can cause fatal bleeding in the lungs. About one-third of people with nonsmall-cell lung cancer would not be eligible for the drug based on criteria used in the clinical trial. But even though the trial excluded those patients to minimize bleeding risk, eight patients who took Avastin died from complications of the treatment itself, five from bleeding in the lungs. This compared with two deaths from chemotherapy alone. Still, Dr. Alan B. Sandler of Vanderbilt University, the lead investigator, said the death rate from treatment, about 2 percent, was acceptable, given that the cancer was usually fatal. Herceptin can cause potentially fatal heart failure. In two trials, about 3 to 4 percent of women who had no history of heart disease and who received Herceptin along with traditional chemotherapy developed congestive heart failure, though doctors who conducted the studies said the problems often subsided after treatment stopped. In the trials, only 15 percent of women who received Herceptin plus chemotherapy after surgery had a relapse within four years, compared with 33 percent of those who got chemotherapy alone. But Herceptin can be used only for the 20 to 30 percent of patients with breast cancers that have a particular genetic characteristic. Both Avastin and Herceptin were developed by the biotechnology company Genentech, the corporate star of the meeting, which now attracts a large number of stock analysts and investors who pore over the 3,800 abstracts and presentations and mingle with roughly 25,000 oncologists, industry representatives and others. But other drugs from other companies are in the pipeline. Data are expected to be presented on three drugs here - two developed by Pfizer and one developed by the team of Bayer and Onyx Pharmaceuticals - that show some effectiveness against kidney cancer, which now is notoriously difficult to treat. Avastin, which is approved for treating colon cancer, works by blocking the action of vascular endothelial growth factor, or VEGF, a protein that spurs the formation of blood vessels that carry oxygen and nutrients to the growing tumor. Some newer but still unapproved drugs, however, seek to improve on Avastin. They are pills, while Avastin requires an intravenous infusion. And they try to block not only VEGF but another protein, platelet-derived growth factor, that also spurs the formation of blood vessels. Some also try to block other proteins that spur tumor growth, so these newer drugs might best be called multitargeted therapies.

Subject: 'Ford Has a Better Idea' ??? From: Emma To: All Date Posted: Sat, May 14, 2005 at 11:04:17 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/14/automobiles/14roof.html?pagewanted=all&position= Not the Top of the Safety Priorities By DANNY HAKIM DETROIT - Volvo has promoted the sturdiness of its cars' roofs since it ran advertisements in the 1970's showing seven Volvo sedans stacked up, asking, 'Are you in the market for a hardtop?' And Volvo, in introducing its first sport utility vehicle in 2002, the XC90, had a promotional video claiming the strength of the roof 'exceeds the legal requirements in the U.S.A. by more than 100 percent.' But by that time, Volvo was a subsidiary of Ford Motor, which soon told Volvo that its public emphasis on roof strength was out of step with Ford's position on the matter and had to change, according to documents that have emerged in recent court cases. In an e-mail message dated Nov. 23, 2002, Priya Prasad, a top Ford safety engineer, told a Volvo safety engineer, Ingrid Skogsmo, that it was 'absolutely necessary to close the technical differences' between the companies, adding that top Ford officials wanted to resolve the disagreement 'immediately.' The dispute between Volvo, the Swedish automaker with a reputation for promoting safety, and its new corporate parent centered on the role that crushed vehicle roofs play in the more than 10,000 deaths and 16,000 serious injuries from rollovers each year. The issue is gaining increased attention with the proliferation of rollover lawsuits. At the same time, the National Highway Traffic Safety Administration is about to issue the first changes to roof regulations since they were created in the 1970's. Regulators have found that roofs crumpled to varying degrees in more than a quarter of rollover accidents, or more than 7,000 of them. In the last two decades, regulators have toughened rules for the front, rear ends and sides of cars but not for the roof. There is a bitter debate over the extent to which crushed roofs actually cause injuries. For decades, American automakers have argued that many injuries or deaths from rollovers occur in the moments just before the roof crushes, when an occupant of a vehicle is thrown into the roof - not when roofs collapse on people's heads. 'There is no data out there to suggest people are injured by a roof collapsing,' said Susan Cischke, Ford's vice president for environmental and safety engineering. Consumer groups vigorously disagree and say the rule on roof strength looks especially lacking given the rise of S.U.V.'s and big pickup trucks, which are more prone to rollovers than passenger cars. The largest S.U.V.'s, like the Hummers from General Motors, are not subject to existing roof regulations. 'It's malarkey,' said Joan Claybrook, a former regulator and the president of the consumer group Public Citizen. 'When you tell people that the roof crushing in on your head is not the cause of injury, it's your head hitting the roof, it's laughable.' Volvo, acquired by Ford in 1999, has a history of making roof strength a priority, going back to 1967 when it began reinforcing the roof support pillars of its 140 Series sedan, though its reputation took a blow in 1990 when it admitted it rigged the roof of one of its cars in a commercial. Still, European automakers, and particularly Volvo, have long conducted more stringent rollover tests. The Volvo XC90 was sold as 'a different S.U.V.' with innovations to prevent and mitigate rollovers, including side-curtain airbags and improved seat belts that cinch up during accidents. A major feature is a roof reinforced with high-strength boron steel. Internal Volvo documents describe the reinforced roof as a crucial component of the company's rollover protection strategy. But Ford officials were concerned that Volvo was overemphasizing the issue of roof strength. The previously unknown skirmish inside Ford's global empire surfaced in Mr. Prasad's November 2002 e-mail message. 'U.S. does not currently believe in roof crush as the major contributor to head/neck injuries in rollovers,' he wrote, 'Does Volvo have any scientific study to show otherwise?' He went on, 'This issue has dragged on very long, is very litigation-oriented in U.S. (close to 110 cases pending) and the topmost management in the company is impatient.' He said that Ford's second-highest-ranking executive at the time, Nicholas V. Scheele, wanted an immediate resolution. The message, and one written three weeks later, in which Mr. Prasad laid out five talking points for Volvo and Ford's other subsidiaries, are under court seal. Three people on the plaintiff's side of separate cases read or copied parts of the messages and provided them to The New York Times. They spoke on condition of anonymity because of the court seal. Ford officials acknowledged the existence of the documents but would not confirm their contents. 'Ford and Volvo do share the same views regarding roof strength and we have not disagreed,' Ms. Cischke said. 'Where there has been some confusion is how we talk about things.' In pointing to similarities in the companies' views, Ford officials produced a 1999 Volvo study that said roof crumpling alone did not necessarily mean that injuries would occur. And in a 2001 filing with the government, Ford said that Volvo's 'revised roof structures' could have an effect when combined with the XC90's other safety systems. But in an e-mail message dated Dec. 13, 2002, that Mr. Prasad sent to senior Ford executives, he said that Ford studies showed 'no direct causal correlation between roof strength' and neck injuries when people were wearing seat belts. Mr. Prasad also raised concerns in the message about material on Volvo's Web site, suggesting it clashed with Ford's view. References to the XC90's reinforced roof are no longer on Volvo's American Web site. Ms. Cischke said Mr. Prasad's memorandum was a normal 'position paper' the company prepares on every significant safety issue. As Ford executives feared, plaintiffs' lawyers are increasingly pitting the views of the parent company and its subsidiary against each other. Warren Platt, a top outside counsel for Ford, said that 'if you put all of the auto companies on a continuum, Volvo has had more belief that stronger roofs were going to make some difference than other companies have had.' 'I don't know that there was really any data to support that, and I don't know that Volvo has any safety data that it prevented any one injury.' Ford officials said that Volvo executives would not be made available for comment. Thomas Broberg, a Volvo safety official, declined to comment. At the time the e-mail messages were written, Ford's chief executive, William Clay Ford Jr., was pulling the company founded by his great-grandfather out of a hole. Even as the company remains under intense pressure, with Standard & Poor's having recently cut Ford's debt rating to junk, Mr. Ford has pushed to develop both advanced environmental and safety technologies. Indeed, Ford is expanding a major XC90 feature, roll stability control, to its Ford brand S.U.V.'s. The technology applies brake pressure to individual wheels to help drivers regain control of their vehicles and is seen as particularly advanced compared with that of rivals. In tests for roof strength under current regulations, a flat steel plate is placed against one side of a vehicle's roof and pressed down with a force equivalent to one and a half times the vehicle's weight, up to a maximum of 5,000 pounds for passenger cars. The roof must prevent the plate from moving more than five inches. In 2002, the traffic agency said roof cave-ins of various degrees were a factor in nearly 7,000 deaths and serious injuries a year, with more than half of the cases, about 3,700, involving people wearing seat belts. 'How can we look these 3,700 people in the eye and say roof crush didn't matter?' Stephen R. Kratzke of the traffic agency said in a 2002 interview with The Wall Street Journal. He added that the agency was 'going to look very hard' at tougher regulations. But after objections from domestic automakers, the agency now says new research indicates the problem is not as great, with only 1,400 deaths and serious injuries among people wearing seat belts. The agency has said the modified roof regulation it is considering will save fewer than 50 lives a year. 'There are a lot of scenarios involving rollovers where anything short of a Nascar roll cage is not going to save the occupant,' said Rae Tyson, an agency spokesman. 'We think there will be some modest benefit from a strengthened roof, and we're attempting to expand the vehicles covered under the standard.' When the original regulation was developed, the traffic agency proposed a test where force was applied to two sides of the roof. But after G.M. found that five of six cars it tested could not pass the test, the company proposed a weaker test that the traffic agency agreed to use. 'I thought it was the lowest possible common denominator that everyone could meet, but I also thought it was a place to start,' said Ben Parr, who observed the process as an engineer in G.M.'s automotive safety group in the 1970's. He went on to become director of State Farm's automotive research group until retiring in 1997. 'There's nothing on that car that hasn't been improved since 1971 other than the roof,' added Mr. Parr, who was a paid consultant for plaintiffs in a recent rollover case. He called roof strength 'the primary safety issue left unsolved.' G.M. declined to comment on Mr. Parr's contention, but said in a statement that 'there is no meaningful relationship between roof strength and the likelihood of serious or fatal injury for either belted or unbelted drivers.' Mr. Parr argued that much of the crushing occurs on the second and third points of impact, because the roof of a rolling vehicle is substantially weakened after the first impact, in part because the windshield breaks. This can make rollovers deadly even for people wearing seat belts. 'You don't want to wear that roof down around your ears,' he said. 'That's all there is to it.'

Subject: Late Mutual Fund Trading From: Emma To: All Date Posted: Sat, May 14, 2005 at 11:02:17 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/14/business/14fund.html Broker's Trial Hears Testimony on Late Trading By RIVA D. ATLAS Edward J. Stern, whose $40 million settlement of an investigation into trades he made in mutual funds raised the curtain on a sweeping investigation of the fund industry, testified yesterday that he had considered his ability to trade after hours a 'nice insurance' against market losses. Mr. Stern, 40, is a major prosecution witness in the trial of Theodore C. Sihpol III, a former broker with Bank of America who has been accused of helping Mr. Stern's hedge fund firm, Canary Capital Partners, make improper trades in mutual funds. Those trades were made after the 4 p.m. close of the market, but processed at an earlier price, a practice known as late trading. If convicted on fraud and grand larceny charges, Mr. Sihpol could be sentenced to as much as 25 years in prison. In his settlement, Mr. Stern did not acknowledge wrongdoing. In New York State Supreme Court yesterday morning, much of the questioning of Mr. Stern focused on whether he had considered his trading improper. He testified that the ability to trade after hours had given him an advantage over other investors, but he also acknowledged that he had been aware of a legal opinion that the activity was not necessarily against the law. The New York attorney general, Eliot Spitzer, has said repeatedly since his office's settlement with Mr. Stern in September 2003 that late trading is illegal. He has noted that the 4 p.m. close of trading is generally specified in mutual fund filings. Mr. Sihpol's lawyers have maintained that the securities laws do not explicitly state that trading in mutual funds must be completed by 4 p.m., so he could not have known his behavior was wrong. This is the first significant case of Mr. Spitzer's to come to trial since he began a series of investigations into abuses in financial services, starting with conflicts of interest in Wall Street research, more than three years ago. An acquittal would be a setback to his office as it prepares other high-profile cases. His lawsuit against Richard A. Grasso, the former chairman of the New York Stock Exchange, over his compensation is expected to go to trial next year. And Mr. Spitzer's office, along with the Securities and Exchange Commission and the Justice Department, is deep into an investigation of the insurance giant American International Group and its former chief executive, Maurice R. Greenberg. The appearance of Mr. Stern had been much awaited since Mr. Sihpol's trial began this month. While Mr. Sihpol is hardly a household name, Mr. Stern is the scion of one of New York's wealthiest families, which has a fortune estimated at $3 billion. After managing the family's Hartz Mountain pet supply business, he went on to invest money on behalf of his family and others, eventually setting up the Canary hedge funds to trade rapidly into and out of mutual funds. Mr. Stern said yesterday that Mr. Sihpol first contacted him in an unsolicited call in early 2001. Mr. Sihpol hoped to help invest some of the Stern family fortune. The family had just made, Mr. Stern said yesterday, 'a significant amount of money' - about $100 million - on the sale of its pet supply business. Soon after that call, at a meeting at the Stern family offices on Madison Avenue, Mr. Stern told Mr. Sihpol and other bank executives that he was interested in trading mutual funds through Bank of America. Mr. Sihpol then set up a meeting with officials from the bank's clearing department, which would process any trades, Mr. Stern said. At that meeting, Mr. Stern said, he was told by Matt Augugliaro, then an official with the clearing department, that Bank of America could set up an electronic trading platform that would allow Mr. Stern to trade as late as 6:30 p.m. - two and a half hours after the market close. A lawyer for Mr. Augugliaro, now an executive at Lehman Brothers, declined to comment yesterday. In a follow-up letter to Mr. Sihpol after the meeting, Mr. Stern alluded to the cutoff time offered by Mr. Augugliaro but didn't explicitly state the 6:30 p.m. deadline. 'Late trading wasn't something I felt totally comfortable speaking about, putting in writing,' Mr. Stern said under questioning by Harold J. Wilson, the lead prosecutor. But under cross-examination by Paul Shechtman, a lawyer for Mr. Sihpol, Mr. Stern acknowledged that he had been aware of a legal opinion that late trading was not illegal that had been received by another brokerage firm - Brean Murray & Company - that handled after-hours mutual fund trades for Canary. Officials at Brean Murray, a New York broker-dealer, did not return calls yesterday. The firm reached a settlement with the Securities and Exchange Commission in February regarding its role in furthering after-hours trades for Canary and others. It did not acknowledge wrongdoing. Under further questioning by Mr. Wilson, Mr. Stern said his ability to late trade had given him 'an edge' over other investors. 'Certainly, in retrospect, it was unfair,' Mr. Stern said. When asked why he had made the trades, Mr. Stern said that as a hedge fund manager, 'my job was to take the least amount of risk to get the most amount of gain.' Mr. Stern said that over time, he grew more uncomfortable with the late trading, but added that he did not tell Mr. Sihpol of that growing discomfort. He also said he did not remember being more specific about his after-hours trading in conversations with Mr. Sihpol beyond referring to it as 'nice insurance.' Mr. Stern testified that he had invested as much as $500 million of his family's money through Bank of America. Mr. Stern testified that he had made a lot of money trading into and out of mutual funds, a practice known as market timing. The strategy helped funds he managed to outperform the market during a period - 2000-2 - when stocks fared poorly, he said. But he acknowledged that he had a very high return - more than 100 percent - in 1999, a year when he did not engage in late trading but relied on other strategies. Mr. Stern ended his trading with Bank of America in July 2003. The trial is expected to continue into next month.

Subject: Re: Late Mutual Fund Trading From: Terri To: Emma Date Posted: Sat, May 14, 2005 at 19:10:14 (EDT) Email Address: Not Provided Message: Imagine being able to trade through a bear market on tommorow's prices today. Of course, who would ever know it wrong especially if there was a legal opinion that it was right. Wow.

Subject: Please Read From: Terri To: Terri Date Posted: Sat, May 14, 2005 at 19:54:09 (EDT) Email Address: Not Provided Message: This article is astonishing, and I know the story well. Please do read: http://www.nytimes.com/2005/05/14/business/14fund.html Broker's Trial Hears Testimony on Late Trading By RIVA D. ATLAS Edward J. Stern, whose $40 million settlement of an investigation into trades he made in mutual funds raised the curtain on a sweeping investigation of the fund industry, testified yesterday that he had considered his ability to trade after hours a 'nice insurance' against market losses....

Subject: U.S. Moves to Limit Imports From China From: Emma To: All Date Posted: Sat, May 14, 2005 at 09:32:10 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/14/business/worldbusiness/14textiles.html U.S. Moves to Limit Imports From China By ELIZABETH BECKER WASHINGTON - The Bush administration, reacting to a flood of Chinese clothing imports since January, announced on Friday that it would impose new quotas on cotton shirts, trousers and underwear from that country. Carlos M. Gutierrez, the commerce secretary, said late Friday that the administration was invoking its right to impose quotas, or safeguards, because the imports were disrupting the American market. Mr. Gutierrez said in a statement that his action 'demonstrates this administration's commitment to leveling the playing field for U.S. industry by enforcing our trade agreements.' Retailers had gone to court to block new quotas, arguing that they would raise the prices of clothing for American consumers. Since Jan. 1, the prices of imported Chinese apparel have dropped as the volume has increased. The quotas will take effect when the administration notifies China of its decision and discussions are held about the size of the limits. China has already warned the United States and Europe that it will resist any attempt to limit its textile and apparel exports. Pressure was building on the administration to slow Chinese imports even before the global textile quota system ended on Jan. 1. Since then China's booming textile and apparel industry, unhampered by quotas, has grown significantly in some of the few areas where the American industry still produces mass-market clothing. Since Jan. 1, Chinese exports of cotton trousers to the United States have grown by 1,500 percent and by 1,350 percent for cotton knit shirts, according to trade figures. At the same time, the United States textile industry has lost 16,000 jobs and 18 factories have closed, according to government reports. The American textile industry petitioned the administration to slow the surge of the imports, asking Washington to invoke clauses in the agreement it signed with Beijing when China joined the World Trade Organization. With the action on Friday, the United States will limit any growth in Chinese imports of cotton shirts, trousers and underwear to 7.5 percent a year. 'The fast action to reimpose quotas by the Bush administration today has saved thousands of textile jobs in this country and we are extremely grateful,' said Cass Johnson, president of the National Council of Textile Organizations, a trade association. The announcement came one day after President Bush met with the leaders of five Central American countries and the Dominican Republic to promote a trade pact with these nations that has stalled in Congress. The textile industry has opposed the pact, the Central American Free Trade Agreement, as another threat to the American industry, but Mr. Johnson's organization broke with the other trade associations and endorsed the pact, known as Cafta, this week. Kimberly Elliott, a trade specialist at the Institute for International Economics, said that the administration undoubtedly reached a quick decision in favor of the American textile industry in part to win more support for Cafta. 'The administration has been working the link between the safeguards and Cafta for some time, but I think they would have done this eventually even if Cafta didn't exist,' Ms. Elliott said. 'If the administration is going to take a hit from China for this,' she said, 'it might as well get some benefit for Cafta.' The European Union has also begun investigations into the huge increases in imports of inexpensive Chinese textiles and apparel with an eye toward imposing quotas as well. Pascal Lamy, the former European trade commissioner who was picked on Friday to become the new head of the World Trade Organization, warned last week against imposing quotas. Mr. Lamy said that the global trade body had been easing out the quota system over the last decade and that all countries had been given ample opportunity to prepare for the changes. 'It is not the law of the jungle, and the W.T.O. rules were clearly set,' he said. 'Why are some politicians now not recognizing that fact?' But the lawmakers in Congress say that it is China that fails to follow the rules. Several bills are being debated that would impose penalties on China for currency manipulation, violating intellectual property rights and following other forbidden practices like giving producers overly lenient loans and export tax rebates.

Subject: The Difference in Bond and Stock Returns From: Jennifer To: All Date Posted: Sat, May 14, 2005 at 09:01:43 (EDT) Email Address: Not Provided Message: The difference in stock market and bond market returns from the beginning of 2000 to this month surprises every person to whom I mention it even acquaintences who hold much in bonds or bond funds. Friends who are fairly young, tend not even to believe the numbers. Older friends have told me a number of stories about having limited returns from bonds because they invested through brokers and owned bonds that were called before they could realize capital gains. Bond holders best stocks, but they would have gained much more from Vanguard bond funds since the managers understand how to protect against calls. The bull market in bonds continues no matter how many times I guess it is ending, but stocks are getting cheaper simply by drifting and there will come a change in return patterns. For now, for all the laughing about Vanguard bond funds, I could not be happier.

Subject: Diversity and Protection of Portfolios From: Terri To: All Date Posted: Sat, May 14, 2005 at 07:03:29 (EDT) Email Address: Not Provided Message: The investment difficulty for this highly uncertain time does not involve whether we are bullish or bearish, but whether we are saving enough, and know how to diversify and protect assets properly.

Subject: Protecting Portfolios From: Terri To: All Date Posted: Sat, May 14, 2005 at 06:47:34 (EDT) Email Address: Not Provided Message: Watching the price and interest rate movements of long term bonds is especially comforting. There are superb economists and analysts who worry deeply about the American economy, from increases in housing prices, to government and balance of trade deficits, to low household saving. We could experience an economic shock or recession, but watch the bond market. Bonds are acting as a read on the economic growth and a counter to the stock market. Weakness in the economy or stocks gives us strength in bonds, over anf over. I am comforted in finding bonds or bond funds such a portfolio protection.

Subject: Housing in Britain From: Terri To: All Date Posted: Fri, May 13, 2005 at 16:54:19 (EDT) Email Address: Not Provided Message: The British housing market has been even hotter than ours these last 5 years. Now, it looks as though prices have generally stopped increasingly and are mildly falling in some communities. Britain is slowing in economic growth, so we will have a good example to watch. We will see how effective monetary and fiscal policy can be if growth continues to slow. The guess is highly effective.

Subject: A Hot TV Soap in a Cool China From: Emma To: All Date Posted: Fri, May 13, 2005 at 16:10:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/13/books/13book.html She Landed in a Hot TV Soap in a Cool China By WILLIAM GRIMES FOREIGN BABES IN BEIJING Behind the Scenes of a New China By Rachel DeWoskin In 1994, fresh out of Columbia University, Rachel DeWoskin headed for Beijing and a promising job in public relations. Then fate intervened. Within a matter of months, she was moonlighting as Jiexi, the manipulative, home-wrecking American temptress on 'Foreign Babes in Beijing,' a wildly popular soap opera that turned her into a celebrity overnight. Ms. DeWoskin is still trying to figure out what happened. Why did the Chinese adore a barely competent nonactress whose voice was dubbed to make her Mandarin sound even worse that it was? Why did the producers dress her in a bright-red business suit and a fur coat when she was supposed to be an exchange student? And how could it possibly be that she earned only $80 an episode on a series watched by some 600 million viewers in China? These and other imponderables perplex Ms. DeWoskin as she recounts, in this deft, daffy comedy of errors, her improbable adventures as a soap opera queen and her fumbling journey through the new entrepreneurial China. Give her credit for pluck. Sizing up the landscape on her arrival in Beijing, Ms. DeWoskin decided that she could take on the town despite her wobbly command of the language and nearly total lack of qualifications as a public relations executive. 'This was just a city,' she concluded. 'It could be understood or cracked like any city - one just had to know the rhythms and the words.' Not so fast. Those rhythms and words would prove to be elusive. Real estate, for example, exhibited unusual features. Ms. DeWoskin got a break on her rent because her apartment was in Building 4 of a large complex, and the word for 4 is a homonym for 'death.' (Even worse is the combination of 1 and 4, which means 'imminent death' and explains why Chinese elevators do not show a 14th floor.) The elevators do not run late at night, Ms. DeWoskin found. Even the automatic ones came equipped with a human operator for whom the job is a lifetime sinecure, or 'iron rice bowl.' The operators went home at 11 p.m. and turned off the power, which meant that Ms. DeWoskin, after filming 'Foreign Babes,' had to climb 18 flights of unlighted stairs to reach her apartment. Fortunately, Ms. DeWoskin had advice. She quickly fell in with a crew of young, upwardly mobile Chinese who might be described as go-getter Bohemians, attuned to Western culture and newly liberated to pursue personal goals. They made up the modern face of Beijing, a city whose ferment intoxicated Ms. DeWoskin and a small army of young Westerners, like her friend Kate, who announced to a mystified Chinese woman, 'Everything in China is new and cool.' Perhaps her best teacher was 'Foreign Babes,' which, in its ineffably cheesy way, captured the contradictions and desires of modern China. Its tale of two handsome Chinese men, one true to his homeland, the other to his heart's desire, transfixed audiences. The show offered a little bit of everything: concerned parents, conflicts between tradition and modernity, unhappily married men, dutiful wives, R-rated sex, East-West misunderstandings and, best of all, good-looking Western women with big hair. 'Foreign Babes' had a fresh, go-for-it exuberance, and China went for it. The babes represented the illicit, alluring West. 'They're all in love with Chinese culture and green vegetable snacks,' the theme song ran. 'Their lives are carefree and fun.' Best of the bunch, though, was bad-girl Jiexi, whose torrid, self-sacrificing passion for the married Tianming captivated viewers of all ages. Old women approached Ms. DeWoskin in the street and, petting her hair, cooed, 'It was true love with Tianming, wasn't it?' Young women turned up at her apartment (the address happily provided by her producer) and offered to be her friend. Ms. DeWoskin, to her astonishment, became a role model and a consumer guide. 'Chinese women watched what products Jiexi bought and then followed suit with lipsticks, raw mushrooms, shoes, or tuna,' she writes. The exuberant thumbs-up sign that she gives her girlfriends after seeing Tianming for the first time became the show's signature image, and for years thereafter, she writes, 'policemen and strangers gave me double thumbs-up on the street.' Ms. DeWoskin has a good time laughing at herself. But she also makes shrewd points about the show's appeal. A scene in which Jiexi (pronounced jee-eh-SHEE) and Tianming are interrupted by a hotel maid just as they begin making passionate love resonated with viewers, she writes, because China is a country without privacy. 'In the world of 'Foreign Babes in Beijing,' people are forever spying, telling on each other and writing anonymous notes to reveal each other's secrets,' she writes. It's not hard to imagine the thrill for viewers when Jiexi turned to Tianming and said, as only an American could: 'I don't care who sees. It's got nothing to do with anyone else. It's our business. The business of two people.' When Ms. DeWoskin finishes taping 'Foreign Babes,' the narrative wanders. It becomes a Chinese version of 'Friends,' as the author, expertly playing the role of the bemused American, lurches from one cultural misunderstanding to another, then huddles with pals at cool restaurants to chew things over. In the late 1990's, she leaves. Beijing is not so cool anymore. It feels too much like Hong Kong. At the airport, a delighted customs official bids her a fond farewell. 'Jiexi,' he says, 'you are welcome to come back to China forever.'

Subject: Bond Market Lessons From: Terri To: All Date Posted: Fri, May 13, 2005 at 14:52:26 (EDT) Email Address: Not Provided Message: I am struck by the portion of portfolios friends have given to bond funds. After all, the last 5 years there has been a 10.4% annual return for the Vanguard Long Term Investment-Grade Bond Fund against a -3.0 return for the S&P Stock Index. Lessons are learned from this even if the lessons may need to be a little modified.

Subject: Growth From: Terri To: All Date Posted: Fri, May 13, 2005 at 14:24:44 (EDT) Email Address: Not Provided Message: The economic weakness in Europe and Japan make American consumption and growth that much more important. I do not envision a near term weakening of the dollar. The dollar has indeed strengthened since the beginning of the year. America and China are the world growth games for the time being. A continuing rise of Aerican short term interest rates, and stable to lower rates in Europe, should also add to dollar stability.

Subject: Bush’s Gambling Debts From: mikekr To: All Date Posted: Fri, May 13, 2005 at 13:25:47 (EDT) Email Address: easygoningerio@yahoo.com Message: George W. Bush’s economic policies have been based on an extraordinarily reckless gamble that reflects a political coalition of two major forces: the super-rich and evangelical Christians. As those policies fail, global financial markets are reacting negatively, adding uncertainty to the world economy, and there is little relief in sight, because America is entering a period of prolonged political infighting and stalemate. The super-rich had one over-riding objective in joining the Bush coalition: tax cuts that overwhelmingly benefited the wealthiest households. Evangelicals were brought in on the basis of so-called “family values,” meaning opposition to abortion and gay marriage, and promises of active government support for religious activities, including direct payments to religious groups for social services that they provide locally and internationally. The Bush team believed that they would eventually balance the tax cuts for the rich with reductions in government spending, but they never explained this to the public. Instead, for four years they pretended that budget deficits were of little concern. Only after being re-elected did they begin to explain that large budget deficits, caused mainly by lower tax revenues, would require sharp cuts in social security, health care spending, and other areas. But the majority of Americans, having supported the tax cuts in Bush’s first term because it gave them a little extra cash, do not support the attack on basic government services that has followed. This opposition extends to Christian evangelicals voters, who tend to live in working-class and middle-class households that depend on many kinds of government social services. Despite the avowedly “free-market” beliefs of many Christian fundamentalists, as voters they support government-financed pensions, health care, and other public services. Bush’s tax cutting was irresponsible from the start, but became much more so after September 11, 2001. The Bush administration raised military spending sharply as it went to war in Afghanistan and Iraq, and as it increased spending on national security at home, without ever explaining to the American people how this would be financed. The military-plus-security budget soared by more than 2% of GNP, while tax revenues fell by much more. At the same time, Bush supported expenditure increases for popular items like education and prescription drug benefits, but paid for these services by borrowing the money rather than ensuring sufficient tax revenues. No sooner did this strategy pay off with a narrow re-election victory – one that strengthened Republican control of Congress – than the dark realities of Bush’s fiscal recklessness started to be recognized. The annual US budget deficit reached 5% of GNP, with an enormous part of the gap financed each year by Asian central banks, which now hold about $2 trillion in claims against America. The problem is that Bush’s reckless gamble has now built up considerable political momentum. As soon as he was re-elected, Bush started to propose cuts in popular government programs, but his own party is rejecting those cuts. With the Republican-controlled Congress seeking to make the tax cuts for the rich permanent, the world is beginning to realize that America’s budget deficits are now entrenched, with no end in sight. Because America’s economy is so large, and the dollar so central to global finance, chronic US budget deficits mean huge global repercussions. The dollar is weakening, as financial markets understand that the US will need to borrow huge sums from abroad for years to come. More ominously, the willingness of foreign central banks to lend to the US also looks likely to end. After all, why should the central banks of China, Japan, South Korea, and other Asian countries accumulate vast holdings of US Treasury bills if the dollar is likely to lose value in the years ahead? In a bizarre, but not unexpected way, America is lashing out at others for its problems. Huge tax cuts and rising military spending have fueled an enormous rise in imports, and therefore a yawning trade deficit now accompanies America’s weak fiscal position. But US politicians are blaming China and other countries for “unfair trade,” even threatening them with sanctions. This response to homegrown problems plays well with voters, but it is ridiculous and ignorant, especially since the US has been depending on China to help finance the fiscal deficits. In essence, the US is lashing out at its own banker, even as it asks the banker for yet more loans! When Bush asked for spending cuts at the beginning of the year – including a social security reform that includes cuts in future benefits – world financiers expected that Bush would get his way, or most of it. Little did they appreciate that American voters, having never actually supported spending cuts, would resist. As that reality sinks in, economic prospects darken. Foreigners will become less enthusiastic about continued lending to the US, weakening the dollar further, forcing up US interest rates, and threatening to undermine America’s stock market and consumer spending. But as the storm clouds gather in the coming year, the political coalition that put Bush in power will stifle progress in undoing the fiscal mess. Bush’s gamble was a loser from the start, generating costly results – mainly for the US, but for the rest of the world, too – for years to come.

Subject: Re: Bush’s Gambling Debts From: Pete Weis To: mikekr Date Posted: Fri, May 13, 2005 at 15:03:41 (EDT) Email Address: Not Provided Message: mikekr. Your post says it all. It will be interesting to see how the Bush administration will attempt to spin this situation in future elections. Personally I think the Republican party is facing political armegedon during the next four years - but then again I really thought they would lose this last election. But if the problems with our economy, made much worse by the Bush administration, weren't flashing a huge neon sign for the electorate in the last election, they will be slamming them in the head by the next one. But that's small consolation for the heavy damage for which we all will end up paying.

Subject: Re: I forgot From: mikekr To: mikekr Date Posted: Fri, May 13, 2005 at 13:34:58 (EDT) Email Address: easygoningerio@yahoo.com Message: it's from http://www.project-syndicate.org/commentaries/commentary_text.php4?id=1939&m=series

Subject: Attention: Deficit Disorder From: Emma To: All Date Posted: Fri, May 13, 2005 at 10:56:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/13/opinion/12rubin.html?pagewanted=all Attention: Deficit Disorder By ROBERT E. RUBIN THE United States has tremendous economic strengths but it also faces great challenges: the need to ensure national security; a newly competitive China and India; serious shortcomings in public education, basic research, infrastructure and other requisites for meeting that competition; and much else. An immediate and critical imperative is to redress fiscal imbalances. Most pressing is the 10-year federal deficit, which most independent analysts project at $4.5 trillion to $5 trillion, assuming that the tax cuts passed in 2001 and 2003 are made permanent and that the alternative minimum tax is adjusted to avoid unintended effects on middle-income taxpayers. And while 10-year numbers can be highly unreliable, deficits are as likely to be higher as to be lower. Over the longer term, Social Security has a 75-year estimated deficit of $4 trillion, while the different components of Medicare, including its new prescription drug benefit, represent a fiscal problem of roughly $20 trillion. Virtually all mainstream economists agree that, over time, sustained deficits crowd out private investment, increase interest rates, and reduce productivity and economic growth. But, far more dangerously, if markets here and abroad begin to fear long-term fiscal disarray and our related trade imbalances, those markets could then demand sharply higher interest rates for providing long-term debt capital and could put abrupt and sharp downward pressure on the dollar. These market effects, plus the adverse impact of continuing fiscal imbalances on business and consumer confidence, could seriously undermine our economy. We have managed to avoid these market effects so far because private demand for capital has been relatively limited, and because the central banks of Japan, China and other countries have provided large inflows of foreign capital. A change in either of those circumstances, or simply a change of market psychology for whatever reason, could, however, turn these interest rate and currency risks into a reality. The tough decisions needed on both spending and revenues will probably require some process whereby the president and leaders of the Senate and the House of Representatives and both parties assume joint responsibility for painful political choices. Tax revenues are approximately 16.5 percent of gross domestic product, the lowest level since 1960, and spending is roughly 20 percent. We must have serious spending discipline and entitlement reform - though any entitlement reforms likely to be proposed would have little immediate effect. But, as BusinessWeek, not an advocate of activist government, said in a recent editorial, 'the deficit morass is due as much to a revenue shortfall as to excessive spending.' (The 2001 and 2003 tax cuts, for example, are estimated to have a 75-year cost of $11 trillion, almost three times the entire Social Security deficit.) And that shortfall is especially pressing given the rapid increases in entitlement costs and the need to finance national security, investments in education and infrastructure and other critical programs. At the same time, revenue-increasing measures must reverse the recent trend of disproportionately favoring upper-income taxpayers. The first priority should be to tackle the 10-year fiscal imbalances, which would also be the best way to promote economic growth and minimize the risks I have outlined. Using structural measures to address the 10-year deficits would address our long-term imbalances as well. For example, if the tax cuts for those earning above $200,000 were repealed and the inheritance tax as reformed were continued rather than eliminated, the 10-year projected deficit would be reduced by roughly $1.1 trillion, or almost 25 percent, and the 75-year fiscal reduction would be roughly $3.9 trillion, or approximately equal to the Social Security shortfall. This course of action would be similar to the income tax increases that were combined with spending cuts in the 1993 deficit reduction program, which some predicted would lead to recession but which, instead, was followed by the longest economic expansion in our nation's history. We should also begin a serious bipartisan process on Medicare to identify possible solutions and create public support for action, because doing so is absolutely key to our long-run fiscal health. Despite the focus in Washington today on Social Security, it is a smaller and less pressing problem, and our political system can bear only so much traffic at one time. If we were to address Social Security now, whatever we do must not increase federal deficits and borrowing but instead must improve fiscal conditions and increase national savings in both the short and long terms. The proposal that the administration has embraced - private accounts plus progressive price indexing of benefits - would result in additional deficits and borrowing of more than $1 trillion in the first 10 years, more than $3 trillion in the second 10 years, and so on for roughly 50 years. That's because this approach - which would eliminate only about one-third of the projected 75-year Social Security deficit - calls for private accounts that would involve immediate and large continuing costs while the savings begin only in the second decade and would grow slowly. While some estimate that after 50-plus years those savings will exceed costs on a cumulative basis, projected savings 50 years out will do nothing to offset the impact of increased deficits on interest rates. After all, if markets took into account 50-year projections of fiscal conditions, interest rates would already be through the roof. Of course, we can continue to close our eyes and hope for the best. There's no way to predict whether that will work for another few months or for many more years. But the odds are extremely low that our fiscal imbalances will solve themselves, and we place ourselves at great peril by not facing these realities. Conversely, if we do address these challenges, then with our flexible labor and capital markets, and our historic embrace of change and willingness to take risks, our prospects over time should be very favorable.

Subject: American Interest Rates and China? From: Emma To: All Date Posted: Fri, May 13, 2005 at 10:21:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/13/business/worldbusiness/13norris.html Who's in Charge of Determining U.S. Interest Rates? It May Be Beijing By FLOYD NORRIS IN Washington these days, complaining about China has become standard operating procedure. The Bush administration calls on China to allow its currency to rise and Congress talks of punishment if China does not do so. Be careful what you wish for. As speeches of low-level Chinese bureaucrats are read with care for hints as to just when China will allow its currency to rise, perhaps it would be better for Americans to ponder the impact of China's current policies. Some might wonder just why the American politicians are upset. The way things work now, China sells to the world most everything the world wants and then buys United States Treasury securities. That helps hold down interest rates and stimulates consumer spending. You can understand why China might not like to keep doing that forever. Those Treasury securities do not pay much interest, and they are sure to decline in value, measured in Chinese yuan, when that currency rises. But the largest vendor financing program ever has stimulated both the Chinese and American economies. In Washington, the theory is that China's keeping the yuan low increases America's trade deficit. But the benefits to United States exporters from a modest rise in the Chinese currency would most likely be small, while the effect of higher interest rates could be larger if China cut back on its purchases, particularly if other Asian central banks decided that they, too, wanted to sell dollars. If that were to happen, the impact could be acute in the housing market. Investors in housing stocks have been nervous for some time, happy to see ever-higher profits but worried that the good times must end someday and fearful that they could be left holding the bag when that happens. One stock where those conflicting emotions have played out is Pulte Homes, a home builder active in 27 states. Last fall, its share price fell when it reported problems in Las Vegas, which was perhaps the most overheated market in America. But price cuts there got homes selling again, and the stock has resumed its ascent. Pulte filed its quarterly report with the Securities and Exchange Commission last week, disclosing that its inventory of land continues to grow. Some of that land is owned, while the rest is controlled via purchase options that give Pulte the right to walk away - forfeiting what it paid for the option - if home sales soften. Kathleen Shanley, a bond analyst at Gimme Credit, points out that Pulte's inventory of land is concentrated in areas where home prices have been rising rapidly and that the company's cash flow is negative, even as profits soar, because of all the land it is buying. Pulte has been borrowing money even as it buys back stock at high prices. When things were at their worst in Las Vegas, Pulte was seeing cancellations of home purchases that amounted to 75 percent of new sales. 'The risk of similar, and perhaps more prolonged, regional downturns should not be ignored,' Ms. Shanley wrote in a note to clients. Rising interest rates could be a cause of such downturns. Homeowners with fixed-rate mortgages would be relatively immune, although they could find it harder to sell if they needed to, and the flow of cash from mortgage refinancings would dry up. But many buyers, particularly in some of the hottest markets, have resorted to floating-rate mortgages, some of them paying only interest. Alan Greenspan, the Federal Reserve chairman, has less power over interest rates than he once did. Perhaps the real decision maker will be Hu Jintao, the Chinese president, as he weighs the pressures to free his currency and stop accumulating Treasury securities. In the words of Robert J. Barbera, the chief economist of ITG/Hoenig, 'Hu's in charge here.'

Subject: A Chinese Deal Gone Awry From: Emma To: All Date Posted: Fri, May 13, 2005 at 10:19:12 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/13/business/worldbusiness/13scam.html?pagewanted=all A Chinese Deal Gone Awry By LOWELL BERGMAN Jianping Qu was 35 years old when he arrived in the United States a decade ago, a veteran of the rough and tumble of China's marketplace. He has said he left after allegations of fraud in a real estate deal led to a 90-day 'detention' by the authorities in Shanghai. By 2004, Mr. Qu (pronounced Chu) was a wealthy man. He had accumulated at least $100 million in cash in his personal accounts and another $300 million in the accounts of his Silicon Valley companies, in which he is both the dominant shareholder and chief executive. In a court filing in his divorce in 2003, Mr. Qu gave his annual salary as $40.1 million, making him one of the highest-paid chief executives in America. But his only major partner and customer, New World Development, a multibillion-dollar conglomerate based in Hong Kong, now accuses Mr. Qu and his company of defrauding it of $700 million for a system that never worked. Mr. Qu counters that New World never held up its end of the deal to gain the full approval of the Chinese authorities for his technology. The first of a series of court cases is set to go to trial next month in California. It will be the first time, experts say, that allegations on this scale of fraud and misappropriation of funds involving China's exploding economy will be presented in a United States courtroom. The bitter dispute also raises the issue of whether the scramble to cash in on the vast economy in China has blinded some companies to the business risks. New World, whose stock fell sharply after it announced last year that its $700 million investment was worthless, says it paid Mr. Qu and his company, PrediWave of Fremont, Calif., to deliver a system that would provide interactive video services, like video on demand, to 100 million cable subscribers in China. What made PrediWave's system so attractive to New World was that it did not require a two-way cable system. Rewiring in the United States cost more than $100 billion. PrediWave said it could provide the same service over the basic one-way cable prevalent in China and most of the developing world. From the beginning of the partnership, said Dennis Ellis of the Los Angeles law firm of Paul, Hastings, Janofsky & Walker, New World's spokesman and lead counsel in the United States, Mr. Qu was engaged in 'looting' New World's investment, duping the company into believing he would provide it with a commercially viable system. 'We were defrauded,' Mr. Ellis said. Mr. Qu, who is known as Tony, declined repeated requests for an interview made through his lawyer and PrediWave's general counsel, Vincent Lin. Mr. Lin said that Mr. Qu had been 'traveling in Asia' for much of the last year 'trying to recoup his reputation in the business community.' Mr. Lin, who works out of PrediWave's mostly abandoned headquarters, insisted that the company and Mr. Qu were victims of a ruthless decision by New World to cut them out of 'the billions that can be made in China' in favor of a more politically acceptable partner. A crucial element in the case is the role of the managing director of New World's technology subsidiary, Douglas Chan Wing-tak, who made the deal with PrediWave and appears to have approved all the spending on the company and Mr. Qu. In e-mail messages obtained by The New York Times, Mr. Chan urges Mr. Qu to accept cash bonuses of up to $38 million. Just before the deal unraveled in April of last year, Mr. Chan called on Mr. Qu to accept another $25 million bonus, writing: 'I feel very strongly on this. As the captain of our 'ship,' you are worth every penny of it.' Mr. Chan was forced to resign last summer. He did not return phone calls or messages left with his lawyers in Hong Kong. Even Mr. Ellis conceded that the technology had the 'promise' of revolutionizing the cable industry in developing countries like China. In a traditional two-way system, using what is known as 'true video on demand,' or V.O.D., the customer, through a set-top box, signals the supplier to deliver a movie or other programming, using one path to order and another to receive. Even with a two-way system, the delivery can be bogged down when many customers order the same programming at the same time. PrediWave, relying on its own technology, claims to have solved both the problem of having one pathway and the potential for jamming of the pipeline. This is accomplished, the company says, through continuously broadcasting bursts of electronic data in a compressed format. To market a technology like the PrediWave system in China requires approvals from regional governments as well as the central authorities in Beijing. New World was equipped to gain the required approvals. After the government put down pro-democracy protests at Tiananmen Square in 1989, New World rushed in to invest in the country, passing other companies on their way out. That led to a valuable network of high-level political connections. Today, New World operates everything from bridges to electric power plants in China. In Hong Kong, its hometown, the company moves hundreds of thousands of Hong Kong commuters every day on its bus lines and ferries to office towers, including some it owns. The founder and chairman of New World, Cheng Yu-tung, 79, is a school dropout who turned a jewelry store and a few smart investments in real estate and gold into a fortune now worth an estimated $2.7 billion. Mr. Cheng's son, Henry Cheng Kar-shun, is New World's chief executive. He, in turn, chose his college friend, Mr. Chan, to run New World TMT, the technology and telecommunications subsidiary. Mr. Chan had already made hundreds of millions of dollars for New World in a major Internet investment before he discovered Mr. Qu. Impressed with the demonstrations of the PrediWave system by Mr. Qu and his engineers, Mr. Chan signed an agreement with the company in April 2000 and committed over $100 million the first year. In an e-mail message sent after that initial investment, Mr. Chan told Mr. Qu that China was the first step in a plan to 'secure a beachhead in the fight to dominate the global V.O.D. market.' And Mr. Chan assured PrediWave that all the approvals in China would be forthcoming through 'good friends at the appropriate levels in the Chinese government, based on friendship over the years.' As late as January 2004, Mr. Cheng, the New World chairman, accompanied by Mr. Chan, visited Mr. Qu at his headquarters. Mr. Cheng and his son declined to be interviewed. Mr. Lin points to that 2004 visit and a sheaf of documents as proof that the bonuses and perks given Mr. Qu were approved by New World executives. Mr. Ellis maintains that Mr. Chan approved the bonuses without 'the knowledge or authorization of New World.' Asked why bonuses were paid when the PrediWave system had not produced any revenue, Mr. Ellis theorized that Mr. Qu 'somehow corrupted and somehow compromised officials of New World' while scheming to create board resolutions and documents because 'he knew the day this started' that litigation would come. But, Mr. Ellis added, there was no evidence that Mr. Chan profited personally. Mr. Ellis described Mr. Chan as a 'gambler' who 'got in over his head,' adding, 'If you are a gambler, you keep doubling your bet because it's the only way out of it.' As to a business plan, Mr. Ellis said that it was 'in many ways a handshake deal.' While an American judge has ordered Mr. Chan to give a deposition, his lawyers in Hong Kong say this is 'new legal territory' and are not sure whether he will testify. Mr. Ellis said that it was only after the deal collapsed that investigators working for the company learned that Mr. Qu had not only been detained in Shanghai in 1994, but that there was also an outstanding detention order on file as well as a judgment for about $90,000. Mr. Lin scoffs at the charges and then notes that documents that look official can be bought in China. To bolster his case, he points to documents Mr. Qu has filed in court from what appears to be a Chinese government agency that states that he has no criminal record. The documents were also submitted to the United States government, according to Mr. Lin, before Mr. Qu was granted citizenship last August. Mr. Lin insisted that New World would 'look foolish' in the forthcoming trials because the PrediWave system was demonstrated successfully in China. He cited tests in Fujian as well as other provinces, and pointed to a Web site for Fujian Cable TVNet Service Company, which currently advertises the PrediWave system and service. An operator for Fujian said the PrediWave system complete with set-top box was available for about $9 a month, providing six V.O.D. channels with movies and sports as well as 14 digital channels. The service has been offered since October 2002, the representative said. But pirated DVD's of first-run movies are readily available in China for a dollar a copy, making a video-on-demand system that would cost several times that a month less attractive. The chief technical supervisor of the Fujian cable system, Hu Bufa, said the PrediWave system worked well in demonstrations. 'I think PrediWave's technology is a breakthrough,' he said. But, in practice, he said, the quality of the set-top boxes and other gear was poor. In addition, he said, the failure of the central government to adopt a format that works best with the PrediWave technology limits its commercial viability, although he acknowledged that a thousand boxes are in use. While Mr. Ellis acknowledged that the PrediWave system appeared to work well in trials, he insisted that it was Mr. Qu's responsibility to make the system work in the marketplace. As to Mr. Lin's fear that his former partner would find a new politically connected partner, Mr. Ellis confirmed that New World had an active partnership with the government-owned China Aerospace to provide 'interactive satellite services.' But Mr. Ellis said that deal would not include the PrediWave technology. Mr. Lin defends the $100 million or more in bonuses and perks for Mr. Qu as justified because of Mr. Qu's dedication to his work, the sacrifice to his health and family and a desire by New World to retain his services. Mr. Qu is to return to the United States and testify in a pretrial deposition in San Francisco on Monday.

Subject: A Reinvented Irish Bourse From: Emma To: All Date Posted: Fri, May 13, 2005 at 10:16:40 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/iht/2005/05/11/business/IHT-11minvest07.html Investing: A Reinvented Irish Bourse By BRIAN LAVERY With low trading volumes and fewer than 80 listed stocks, the Irish Stock Exchange has to fight an underdog's battle for respect. Irish companies often choose higher-profile listings in London instead, and local commentators often mock the Irish bourse as sleepy and sluggish - or, worse, quaint and irrelevant. Until recently, that impression was reinforced by idiosyncrasies like the enormous chalkboard that exchange officials used to track prices until an electronic trading system was implemented in 2001. But the exchange, which operates from stately headquarters in Dublin's hip Temple Bar district, benefits from the strength of the Irish economy. Its benchmark ISEQ index was up 26 percent last year, compared with 3 percent for the Dow Jones industrial average and a 6.5 percent drop for the FTSE 100. That advantage slipped in the first four months of this year, when the ISEQ fell 6 percent even as the exchange tried to breathe life into Dublin trading. In April, it introduced an exchange-traded fund, which allows investors to buy shares of the top 20 publicly traded Irish companies. And it replaced two ineffectual markets, one devoted to small-cap stocks and the other to companies exploring for natural resources, with a single one that is a copy of London's Alternative Investments Market. Such initiatives will help to determine whether the regional bourses among the 23 European stock exchanges can survive in the shadow of larger neighbors and internationally consolidated markets. In 1999 the bourses of Paris, Amsterdam and Brussels merged as Euronext, and in 2003 OMX linked six Nordic and Baltic exchanges. Other small exchanges, like the Nouveau Marché of France and the Neuer Markt of Germany, have vanished, leading to skepticism about the new Irish Enterprise Exchange, which lists just eight stocks and has yet to excite Dublin's trading community. 'We're a small exchange on the periphery of Europe, as we're constantly reminded,' said Deirdre Somers, the Irish bourse's director of listing. She said the Enterprise Exchange was designed to compete with other funding sources for new companies, like debt and venture capital, adding, 'There's a lot of money washing around in Ireland.' Rather than challenge AIM - which lists 1,300 companies with a combined market capitalization of £11 billion, or $20.8 billion - Dublin hopes to piggyback on its success by encouraging Irish companies to go public on both exchanges simultaneously. The listing requirements for the new Irish bourse are virtually identical to those of AIM, so the same admission documents and corporate advisers can be used. (The only difference is that Dublin requires companies to have a starting market capitalization of at least €5 million, or $6.4 million. AIM has no minimum.) But so far just one company, the mining concern Lapp Plats, is said to be seeking a listing on both exchanges this spring. While the Irish Stock Exchange was founded in 1793, it operated as a regional branch of the main London market until 1995. In its decade of independence, it has established several key niche businesses that overshadow its headline equities market. Dublin recently surpassed Luxembourg as the listing site of choice for international investment funds. 'Dublin stole a lead on Luxembourg by focusing on the alternative investments market' and tailoring its services to meet the needs of hedge funds, said Louise Murray, director of listing at the Dublin-based Davy Stockbrokers. Now, a Dublin listing 'is seen as an extra seal of approval,' she said. That is because offshore funds rely on a public listing to establish their credibility. The Irish exchange, with more than 4,000 funds, has strict rules that appeal to cautious institutional investors. In 2000 the Irish exchange began listing structured debt products, which are bonds tailored to an individual buyer's requirements. Today, funds and debt products now generate a 'vast majority' of the exchange's revenue and occupy half of its employees, Somers said. Those activities would make the Dublin bourse an attractive target for an acquisitive Continental exchange. But executives at the bourse say technological advances have made the question moot by linking the Irish market into other European trading systems. The Irish exchange uses Xetra, the German trading platform, allowing easy access for any broker who can trade in Frankfurt. 'We would consider ourselves to be consolidated with Deutsche Börse at an infrastructural level, without being consolidated at a business level,' Somers said.

Subject: China Acts on Property Speculation From: Emma To: All Date Posted: Fri, May 13, 2005 at 10:13:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/13/business/worldbusiness/13yuan.html China Acts to Curtail Property Speculation By DAVID BARBOZA TOKYO - The Chinese government moved on Thursday to impose new taxes and restrictions on property transactions in what appears to be its most determined attempt yet to prevent a huge real estate bubble from developing in its biggest cities. The announcement, first disclosed by the official Xinhua News Agency, comes as Beijing officials are growing increasingly worried that soaring prices could help overheat the nation's already fast-growing economy and possibly even lead to unrest. Rising real estate prices are already fueling a nationwide building boom that has helped drive up global commodity prices and is now radically transforming the look and feel of most of China's large and medium-size cities. Although China is rapidly urbanizing and modernizing, the government is concerned that housing prices are steadily moving beyond the reach of ordinary citizens, particularly in sizzling real estate markets like Shanghai, where prices have jumped nearly 70 percent in the last two years. The government is also worried that the boom has lured hordes of speculators into the housing market, some of whom are buying and flipping properties for a quick profit and others who are, in effect, placing large bets that in the coming year China will revalue and appreciate its currency, the yuan or renminbi. Hoping to cool off such speculation, the government announced Thursday that beginning June 1 it would impose a nationwide tax on all properties sold within two years of being purchased and occupied. The tax rate, however, was not specified. The government also said that it would impose a tax on land that is not developed within a year of being acquired and that it would even revoke land rights if nothing is built on a parcel of land more than two years after those rights are acquired. 'It looks like the government is serious about cooling off the property market,' said Andy Xie, the chief economist in Asia at Morgan Stanley who has long warned about the development of a real estate bubble in China. 'It's also becoming a political problem. The Chinese people feel that no matter how hard they work, they can't upgrade or find decent housing.' The announcement also suggested that Beijing officials were growing impatient with earlier, more modest and localized efforts to cool off the real estate market. Shanghai, which is perhaps the epicenter of the real estate boom, has imposed a 5.5 percent capital gains tax on properties sold more than once in a year. And many state-owned banks had already been told to tighten lending requirements on home buyers and real estate developers. Earlier this year, Beijing officials also called upon local and provincial governments to crack down on land speculation and rein in soaring housing prices, which climbed 14 percent last year and another 12 percent in the first quarter of this year. But developers, banks and even local governments, which are all seeing big financial gains from development, continue to start huge real estate projects all over the country, even in second- and third-tier cities. So in recent years, in nearly every large and medium-size city new villas, luxury apartments, giant shopping malls and new central business districts have been built. Some experts say earlier government policies were too weak and perhaps created competition or conflicts between various regional governmental bodies that were trying to cool housing prices. 'Everyone was guessing before May that the central government would gain further control of the property market,' said Tao Qi, manager of property research at Centaline, a real estate consulting firm. 'The new policy of the central government is much tougher.' Of course, much of the residential building now under construction is necessary in a country that is rapidly modernizing and finally moving ahead with homeownership, something that was banned or tightly restricted after the Communists took power in 1949, economists say. In the 1980's and 1990's, many restrictions were lifted and Chinese citizens are now allowed to own homes. In recent years, with the economy growing and incomes soaring, the pace of building has been so aggressive that news media reports here are full of stories about the fortunes and misfortunes that surround real estate development. There are land scandals and corrupt developers, but also a booming luxury market and an emerging new class of real estate titans. In all the frenzy, some government officials and experts say they are beginning to see the classic signs of a real estate bubble developing: unoccupied apartments, tales of speculators who bought three, four and five or even six apartments, and reports that modest-looking apartments are selling for over $1 million apiece. While Shanghai is one of the nation's most prosperous cities, with an average annual income of about $2,000, apartments in its downtown sell for over $300,000 - far beyond the reach of the average citizen. One underlying fear about a possible bursting of the property bubble is that it could lead to tremendous social and political unrest. And some experts believe that is a growing concern of the government, which is trying to keep the economy humming and its political future intact. [Adding to concerns about the economy are fears of inflation. On Friday in Beijing, the National Bureau of Statistics reported that China's producer prices rose 5.8 percent in April from the period a year ago, after a 5.6 percent increase in March. The jump increased the likelihood that the government would tighten investment restrictions to control inflation.] A real estate collapse, experts say, would deal a blow to the struggling banking sector, which got into trouble in the 1980's and 1990's by lending to poorly managed state-owned companies and is now making big loans to home buyers and developers.

Subject: Italy From: Terri To: All Date Posted: Fri, May 13, 2005 at 07:16:10 (EDT) Email Address: Not Provided Message: The recession problem developing in Italy is quite disturbing, for I see no rapid resolution as Italy is but a region of the Euro region. Monetary policy is for all the Euro countries, so fiscal policy will have to be carefully used in Italy.

Subject: Re: Italy From: Setanta To: Terri Date Posted: Fri, May 13, 2005 at 08:54:27 (EDT) Email Address: Not Provided Message: you are correct. monetary policy is set at a europe wide basis. the woes in the italian region will not effect the ecb interest rate or the valuation of the euro. however, there is a european and US economic cycle. italy happens to be firmly in the european cycle (along with france, germany and the benelux). therefore the ECB policies are aimed at those countries. ireland and the uk tend to follow the US economic cycle (hence the 'Berlin or Boston' dichotomous position of ireland!). since the UK is not part of Euroland, ECB policy tends to forget my rain drenched isle. to prevent augmentation of the cycle (say when the ECB cuts the base rate to stimulate growth in the sluggish economies t a time when Ireland needs a rate rise in order to cut demand) ireland has myriad of economic automatic stabilisers (tax policy to the average punter!). however, the stability and growth pact, as signed by all members of euroland and only complied with by Ireland, Luxembourg and Spain, sets limits on the amount of government borrowing (as a percentage of GNP). therefore unless you have very very sharp tax economists, the fiscal policy tool is restricted. is this a good thing? well, paradoxically, european monetary policy have greatly benefited our little economy in the past 5 years. maybe its because our country is so small on a global scale that we can have the best of both worlds. i cannot say the same for the rest of the EU economies however. and if gordon browne becomes prime minister of the uk within this term of government then the chance of the uk joining in the Great European Experiment grows remote.

Subject: Re: Italy From: Emma To: Setanta Date Posted: Fri, May 13, 2005 at 10:03:34 (EDT) Email Address: Not Provided Message: Italy may be in serious trouble, for much of the Italian economy is based on small stylish specialized manufacture and such producers will come under increasing pressures from Eastern European and Asian producers. There is need for Italy to become more service oriented, and to look to advanced technology as Ireland has been doing.

Subject: Europe From: Terri To: All Date Posted: Fri, May 13, 2005 at 07:11:28 (EDT) Email Address: Not Provided Message: Italy is in a recession that appears to be deep, France has slowed and Germany is slow as has been the case for a decade. England has slowed significantly. So, it looks like interest rates will have to go lower again through Europe. The strength of the dollar simply appears to point up European weakness.

Subject: Stock Market Valuations From: Terri To: All Date Posted: Fri, May 13, 2005 at 05:46:15 (EDT) Email Address: Not Provided Message: Notice that the price earning ratio of the S&P Index is finally below 18. This is the lowest valuation since the bear market began and gives us a cushion against further dramatic declines. Dividends are still too low, but even these are slowly gaining. Valuations are finally becoming more secure.

Subject: Stockular Momentum From: Pete Weis To: Terri Date Posted: Fri, May 13, 2005 at 08:52:55 (EDT) Email Address: Not Provided Message:

Subject: Sector Stock Indexes From: Terri To: All Date Posted: Thurs, May 12, 2005 at 18:11:52 (EDT) Email Address: Not Provided Message: http://flagship2.vanguard.com/VGApp/hnw/FundsVIPERByName Sector Indexes 12/31/04 - 4/22/05 Energy 7.6 Financials -6.3 Health Care 3.8 Info Tech -10.1 Materials -7.9 REITs -0.7 Telecoms -8.6 Utilities 6.1

Subject: US Real Wages Fall From: Terri To: All Date Posted: Thurs, May 12, 2005 at 14:20:09 (EDT) Email Address: Not Provided Message: http://news.ft.com/cms/s/f269a8f4-c173-11d9-943f-00000e2511c8.html May 10, 2005 US real wages fall at fastest rate in 14 years By Christopher Swann Real wages in the US are falling at their fastest rate in 14 years, according to data surveyed by the Financial Times. Inflation rose 3.1 per cent in the year to March but salaries climbed just 2.4 per cent, according to the Employment Cost Index. In the final three months of 2004, real wages fell by 0.9 per cent. The last time salaries fell this steeply was at the start of 1991, when real wages declined by 1.1 per cent. Stingy pay rises mean many Americans will have to work longer hours to keep up with the cost of living, and they could ultimately undermine consumer spending and economic growth. Many economists believe that in spite of the unexpectedly large rise in job creation of 274,000 in April, the uneven revival in the labour market since the 2001 recession has made it hard for workers to negotiate real improvements in living standards. Even after last month's bumper gain in employment, there are 22,000 fewer private sector jobs than when the recession began in March 2001, a 0.02 per cent fall. At the same point in the recovery from the recession of the early 1990s, private sector employment was up 4.7 per cent. A surfeit of workers and the threat of off-shoring are allowing companies to call the shots on wages. 'There is still little evidence that workers are gaining much traction in their negotiations,” said Paul Ashworth, US analyst at Capital Economics, the consultancy. “If this does not pick up, it raises the prospect of a sharper slowdown in consumer spending than we have been expecting.” Economists are divided over the best source for measuring pay increases in the US, since the government releases three main measures. A gauge of average hourly earnings is released with the employment report. This rose by 0.3 per cent in both March and April and 0.1 per cent in February. Even with a slight rise in the hours employees are working, from 33.7 to 33.9, this suggests wages are struggling to keep pace with inflation. The gauge covers non-supervisory workers, about 80 per cent of the workforce. The Bureau of Economic Analysis figures for personal income showed wages rising at close to 6 per cent in 2004 but slowing down since. This measure also showed wages rising by just 0.3 per cent in each of the past 2 months. This is a broader gauge and includes small businesses and professional partnerships, but it measures total corporate wage bill rather than wages per person. The Employment Cost Index, seen by some as the most reliable measure, excludes overtime and professional partnerships.

Subject: The Young and the Jobless From: Emma To: All Date Posted: Thurs, May 12, 2005 at 10:55:58 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/12/opinion/12herbert.html The Young and the Jobless By BOB HERBERT There were high fives at the White House last week when the latest monthly employment report showed that 274,000 jobs had been created in April, substantially more than experts had predicted. The employment bar has been set so low for the Bush administration that even a modest gain is cause for celebration. But we shouldn't be blinded by the flash of last Saturday's headlines. American workers, especially younger workers, remain stuck in a gloomy employment landscape. For example, a recent report from the Center for Labor Market Studies at Northeastern University in Boston tells us that the employment rate for the nation's teenagers in the first 11 months of 2004 - just 36.3 percent - was the lowest it has ever been since the federal government began tracking teenage employment in 1948. Those 20 to 24 years old are also faring poorly. In 2000, 72.2 percent were employed during a typical month. By last year that percentage had dropped to 67.9 percent. Even the recent modest surge in jobs has essentially bypassed young American workers. Gains among recently arrived immigrants seem to have accounted for the entire net increase in jobs from 2000 through 2004. Over all, only workers 55 and up have done reasonably well over the past few years. 'Younger workers,' said Andrew Sum, the center's director, 'have just been crushed.' Whatever the politicians and the business-booster types may be saying, the simple truth is that there are not nearly enough jobs available for the many millions of out-of-work or underworked men and women who need them. The wages of those who are employed are not even keeping up with inflation. Workers have been so cowed by an environment in which they are so obviously dispensable that they have been afraid to ask for the raises they deserve, or for their share of the money derived from the remarkable increases in worker productivity over the past few years. And from one coast to the other, workers have swallowed draconian cuts in benefits with scarcely a whimper. Some segments of the population have been all but completely frozen out. In Chicago, only one of every 10 black teenagers found employment in 2004. In Illinois, fewer than one in every three teenage high school dropouts are working. Last month's increase of 274,000 jobs was barely enough to keep up with the increase in the nation's working-age population. 'The economy is growing and real output is up,' said Mr. Sum, who is also a professor at Northeastern. 'But the distribution of income, in terms of how much is going to workers - well, the answer is very little has gone to the typical worker.' The squeeze on the younger generation of workers is so tight that in many cases the young men and women of today are faring less well than their parents' generation did at a similar age. Professor Sum has been comparing the standard of living of contemporary families with that of comparable families three decades ago. 'Two-thirds of this generation are not living up to their parents' standard of living,' he said. College graduates today are doing better in real economic terms than college graduates in the 1970's. But everyone else is doing less well. 'If you look at families headed by someone without a college degree,' said Professor Sum, 'their income last year in real terms was below that of a comparable family in 1973. For dropouts it's like 25 percent below where it was. And for high school grads, about 15 to 20 percent below.' It shouldn't be surprising that the standard of living of large segments of the population is sinking when employers have all the clout, including the powerful and unwavering support of the federal government. Workers can't even get a modest increase in the national minimum wage. Globalization was supposed to be great for everyone. Nafta was supposed to be a boon. Increased productivity was supposed to be the ultimate tool - the sine qua non - for raising the standard of living for all. Instead, wealth and power in the United States has become ever more dangerously concentrated, leaving an entire generation of essentially powerless workers largely at the mercy of employers. A remark by Louis Brandeis comes to mind: 'We can have democracy in this country, or we can have great wealth concentrated in the hands of a few. But we can't have both.'

Subject: Chinese Learn Value of Perks From: Emma To: All Date Posted: Thurs, May 12, 2005 at 10:46:35 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/iht/2005/05/11/business/IHT-11workcol11.html The Workplace: Chinese Learn Value of Perks By THOMAS FULLER The entrance to the Carsan textile factory here looks like a California art gallery, with oil paintings hanging in a cavernous, light-filled lobby furnished with Japanese-style tables and tropical plants. Located in an industrial part of China that is more grime than glamour, the Carsan factory stands out. Workers live in a dormitory that from the outside resembles a Singapore condominium. Each room has a balcony; the canteen has a corner where movies are projected onto a wall in the evenings and a library where workers can browse books and magazines. There is a basketball court, badminton net and well-maintained shrubs and lawn. The corollary to all this is a retention rate that would make some factory owners in the area green with envy: After the Chinese New Year holiday in February, when workers often change jobs, 97 percent of the 1,200 workers returned to Carsan, according to Loretta Lee, the owner. 'It wasn't a business calculation to say that we have to have a better facility because we have to keep our people,' Lee said in a recent interview. 'We did it because we believe in humanity. 'At the same time, if you treat them better, they will stay with your factory.' Make no mistake: the Carsan garment factory is not summer camp. The work is hard and tedious. Employees spend 8 to 10 hours hunched over sewing machines or patching together toys with glue guns. Workers live in spotless but spartan dormitory rooms, each with eight bunk beds. But the factory has a very different feel from others in the industrialized Pearl River Delta, which is across from Hong Kong and is filled with buildings that could be mistaken for prisons. With a labor shortage of two million people in southern China, workers these days can be more picky about where they work - and under what conditions. If this situation persists, factories will be forced to emulate Carsan as workers shun sweatshops and seek out perks. A few factories have already reportedly installed swimming pools and gymnasiums. Others have increased bonuses. Workers at Carsan are typically paid anywhere from 800 to 1,500 yuan a month, about $95 to $180, well above the minimum wage of 547 yuan, according to John Lee, a manager at the factory who is not related to Loretta. The driving philosophy behind the perks at the factory, according to Loretta Lee, is that productivity will rise with retention rates. To the outside world, China is seen these days, especially in Europe and the United States, as a place that floods the world with cheap textiles, especially after the sharp increases in exports this year caused by the abolition of quota restrictions. But at the same time, factory owners here have been battling shrinking margins and heightened competition from new factories in China. 'My thinking is that the only way we can make it work is efficiency,' Loretta Lee said. 'We know that wages will eventually go higher and higher,' she said. 'From Japan the factories moved to Korea; from Korea they moved to Taiwan and then to China.' Countries like Bangladesh or India could be next. For now the work on the factory floor here is still labor-intensive. The factory specializes in American holiday decorations. These days, it is Halloween and Thanksgiving season. One woman spends her days gluing straw hairpieces onto a witch doll. Other workers stuff and weigh hundreds of orange and black pillows decorated with ghosts. Zhong Peng Yun, a 27-year-old native of Jiangxi Province, sits on a stool stitching large pieces of cloth together all day. He sometimes works until 10 p.m. because he is paid by the piece and wants to save money for his family. He says he is happy with his salary and the working conditions but misses his wife and 1-year-old son, who live five hours away by bus. A conversation with Zhong reveals that even having a decent job in southern China does not ease the separation from families. 'I call my wife at least three or four times a week,' he said. 'I'm homesick.'

Subject: Cambodia's Garment Makers From: Emma To: All Date Posted: Thurs, May 12, 2005 at 10:37:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/12/business/worldbusiness/12cambodia.html?hp=&pagewanted=all Cambodia's Garment Makers Hold Off a Vast Chinese Challenge By ELIZABETH BECKER PHNOM PENH, Cambodia - At the close of a long, hot day sewing men's shirts, hundreds of young Cambodian women waited anxiously as their British boss jumped onto a cutting table with a bullhorn, worried that he would tell them they had lost their jobs. But instead of delivering bad news, the manager, Adrian Ross, said he would be the host at a company picnic to celebrate the Cambodian New Year on April 15 at the advanced new factory his company had built down the road. 'It's been hard work this year,' Mr. Ross said. 'Now it's time to have fun.' Thanks to an unorthodox labor program backed by the United States and intended to improve working conditions, much of Cambodia's garment industry has been holding its own since the end of the global quota system that parceled out shares of the apparel and textile business country by country. A majority of Cambodia's factories have retained the loyalty of major retailers around the world by appealing not just to their need for low-cost production but also to their desire to avoid the stigma of exploiting poor laborers in distant sweatshops. For 30 years the global quotas - which were abolished on Jan. 1 - did not just slow the loss of clothing jobs in advanced industrial nations; they also helped some destitute countries by giving them guaranteed entry into the $400 billion global trade in apparel and textiles. But now, many poor countries are searching for ways to keep their nascent apparel industries functioning in a world of unfettered competition - one where China has been unleashed and is trying to grab as much of the business as it can. Cambodia, while still a very cheap place to produce apparel, has chosen to rely on outside inspectors and to foster unusually strong garment unions that have become an independent political force in a country otherwise awash in corruption and cronyism. The efforts at improvement here may point the way for other nations seeking to avoid a race to the bottom as they struggle to establish or sustain footholds in the global economy. Despite the loss of special access to the American market with the end of quotas, the Cambodian government, many garment-factory owners and the unions here are sticking to their higher standards. All agree that these factors have helped Cambodia escape much of the convulsion that is sweeping through the global apparel industry. Cham Prasith, the Cambodian minister of commerce who reached the deal with Washington in 1999, said the benefits had gone beyond anyone's expectations. 'We are extending our labor standards beyond the end of the quotas because we know that is why we continue to have buyers,' he said in an interview. 'If we didn't respect the unions and the labor standards, we would be killing the goose that lays the golden eggs.' And despite the still-unexplained killings last year of the charismatic leader of the garment workers' union and, later, one of his lieutenants, Cambodia's gamble on labor rights appears to be succeeding in keeping a $1.5 billion apparel industry afloat. Sixteen large plants are scheduled to begin production this year, more than replacing about a dozen factories that have failed. The surge in China's clothing exports has taken business from rich and poor nations alike. In the United States and Europe, the domestic lobbies for the textile and apparel industries are powerful enough that they have prodded their governments into considering temporary limits on Chinese products. But smaller developing countries like Cambodia are without such defenses in the face of the Chinese steamroller. So in addition to taking steps at home, Cambodia, Bangladesh and 11 other poor countries are asking Congress to enact a law that would remove all duty on their apparel exports to the United States and give them a slight edge in competing against China and greater hope of staying in business. Muhammad Yunus, the Bangladeshi banker who invented microcredit loans, has personally appealed to lawmakers in Washington to approve the bill - saying that for many young Asian women, the choice in today's world is either a job in a garment factory or a life on the streets as a prostitute. Neb Vicheka, a 31-year-old union shop steward at the Sportex factory here, knows the truth of Mr. Yunus's warning. She is one of the 250,000 garment factory workers in this country, most of them female, and she has seen young women laid off from factory jobs end up as hostesses in Phnom Penh's karaoke bars or beer gardens, a variant of prostitution. A veteran of Cambodia's young labor movement, Ms. Neb represents a modern alternative. She has worked in the garment industry since the first factories opened in 1998 and now earns $90 a month in a country where $45 is considered a living wage. She and her sister own their own wooden house on stilts, complete with a small garden. She rides to work on her motorbike and indulges in little luxuries like diamond stud earrings. 'It is rare for two women to own their own home in Cambodia,' she said, sitting on her front porch after a day at the factory. 'But I want more. I want to own my own business and move back to the countryside.' Only in the garment industry could Ms. Neb entertain such dreams. In every other sector of the country's economy, the poor are losing ground. Since an international peace agreement signed in Paris in 1991 formally ended Cambodia's two-decade plague of violence - as a battle zone in the Indochina war, followed by the nightmare of the Khmer Rouge revolution and, with the Vietnamese invasion of 1979, another round of civil strife - foreign nations and international organizations have spent more than $7 billion to help put Cambodia back on its feet. But all that money has failed to stop the deterioration of literacy rates and health care. Except for the garment industry, the epidemic of official corruption here has mitigated nearly all the efforts at improvement, according to new studies by the World Bank, the International Monetary Fund and the United States Agency for International Development. 'The labor program in the textile industry is more important to Cambodia than any other development program because we know the wages go directly to Cambodian workers and raise their standard of living,' said Roland Eng, Cambodian ambassador at large in charge of development issues. Charles Ray, the American ambassador to Cambodia, said the unintended consequences of the labor activism in Cambodia's garment industry were political as well as economic. The union movement, which now includes teachers and workers in the tourism industries, is fast becoming the most democratic and independent group in the country. 'The labor unions for the textile workers are some of the best institutions this country has ever had,' Mr. Ray said. 'The exploitation of workers cannot be a path to development - on the contrary, workers have to be treated with respect for development to work.' But the price for creating these unions has been steep. Chea Vichea, the leader of the garment workers' union, was shot to death in January 2004. Four months later, one of his top assistants was killed. Chea Mony, the fallen leader's brother, now heads the union. Mr. Chea said that the workers were still frightened and that without the involvement of the United States, which helps underwrite the program, and the International Labor Organization, which monitors the factories, his union would have trouble remaining independent. 'Our successes are unheard-of in countries like El Salvador or Guatemala,' he said, 'but we could lose it all if the I.L.O. doesn't stay to protect us.' For all the self-congratulation in this country over the labor situation, there are critics who say that the typical $45-a-month wage is inadequate, given the value generated by Cambodia's garment exports. 'Those wages are so low,' said Kate Frieson, a foreign expert working at the Ministry of Women's Affairs, 'that all these girls can afford after sending home half their paychecks to their family is to crowd into a single room without electricity with four other girls.' One of every 13 Cambodians depends on these women's wages to survive. With the end of quotas, the Garment Manufacturers Association of Cambodia said that one of its great fears was that the unions would demand higher wages just when the industry had to keep costs under control. The factory owners also complain that the unions are overstepping their bounds with wildcat strikes and need to be reined in. According to Van Sou Ieng, president of the association, higher labor standards have increased the quality of workmanship and won the attention of international retailers and clothing makers like the Gap, Levi Strauss and Abercrombie & Fitch. Marks & Spencer, the British retailer, buys all the shirts produced by one plant, the New Island factory, in an outlying district of Phnom Penh. Gap is by far the biggest buyer of Cambodian garments. Dan Henkle, a vice president of Gap Inc., attended an economic and trade meeting under World Bank auspices here earlier in February and assured Cambodians that his company would remain. Gap officials made it clear, though, that they would continue buying garments from Cambodia only as long as it continued to follow the special labor program. 'The presence of the I.L.O.,' said Kris Marubio, a spokeswoman for Gap, 'was an important factor in our decision to remain in Cambodia.' But the biggest problem for the industry today may be all the palms demanding to be greased. With the apparel industry providing nearly 90 percent of the country's export earnings, the factory owners are starting to wield their considerable political influence to push the government into tackling the corruption that has been driving up costs. In the last six months, the government has eliminated bureaucratic rules that fed corruption, reducing production costs to $1.10 for each dozen T-shirts, from $2, according to industry officials. 'With the high labor standards here,' Mr. Van, of the manufacturers' association, said, 'you can't be a slave driver so we're limited on cutting labor costs. So why should we have to pay for more corrupt bureaucracy and less reliability?'

Subject: Monetary and Fiscal Policy From: Terri To: All Date Posted: Thurs, May 12, 2005 at 10:33:32 (EDT) Email Address: Not Provided Message: The Federal Reserve is supposed to protect against inflation and against rising unemployment. Also, the Fed is to protect the integrity of the banking system. That does not mean the Fed should regulate prices or asset values, and Fed policy does not insure equity in income or wealth. But, mainly by changing short term interest rates the Fed has dealt effectively with repeated economic problem for 25 years with what appears to be ever growing success. I have trouble criticizing Fed policy, but no trouble criticizing fiscal policy. There is where the smaller effects on the economy are shaped.

Subject: Monetary Policy Works From: Terri To: All Date Posted: Thurs, May 12, 2005 at 05:49:41 (EDT) Email Address: Not Provided Message: The Federal Reserve not only did not try to limit rank speculation in the stock market in 1928 and 1929, though the speculation was evident and needed only a limit on margin to have been tempered, but the Fed did not react to a slowing of economic growth or to recession or to the stock market crash. Rather than act decisively as the Fed has done these 25 years, monetary loosening was only begun in moderate terms after the market crash and a recession had grown severe. Keynes taught the economy must be protected, the Fed in 1929 and 1930 and beyond was protecting the money supply as the economy became a disaster. This would not happen now. Even though the central bank in Japan acted slowly, the action taken was in time dramatic. Our Fed acts more dramatically.

Subject: Fiscal Policy Works From: Terri To: All Date Posted: Thurs, May 12, 2005 at 05:38:56 (EDT) Email Address: Not Provided Message: This is not 1929. Herbert Hoover and wealthy advisers were convinced that the American economy needed only to be allowed to function 'freely' to be forever healthy. As the economy faltered from early 1929, there was no government fiscal policy compensation nor was there compensation when a recession became evident or when the stock market crashed. As recession deepened, Herbert Hoover went fishing in 1930. John Maynard Keynes had written, but Keynes was ignored by Republicans through Herbert Hoover's presidency and Roosevelt was fought bitterly when New Deal fiscal policy began to be passed by Congress.

Subject: If they knew what we know now From: Pete Weis To: All Date Posted: Wed, May 11, 2005 at 22:54:01 (EDT) Email Address: Not Provided Message: If they knew in the early thirties what we know now, could the Great Depression have been avoided? Post WWII economic theory places the blame predominately on government policies after 1929 - not providing liquidity, tariff wars, etc. There is no arguing that tariff wars made things much worse. Correct me if I'm wrong, but Pre WWII economic theory seems to place the blame predominately on the redistribution of wealth from the broad base of consumers to the tiny (less than 1%) group at the top. Much of the broad buildup of debt by the masses ended up as a great deal of wealth redistributed to the top. The economy of the 20's, according to this explanation for the Great depression, was supported mostly by heavy borrowing more than it was by strongly increasing aggragate wages. When the sponge of borrowing became saturated, the boom went bust. During the years after WWII, prosperity returned to America and the West. America, by the late 50's produced more than half of the world's oil, steel, automobiles, wheat, etc. America, the one undamaged major industrial power, produced much of what the rest of the world needed to rebuild itself. And for some reason this idea of wealth redistribution which was thought to have been the main villian in the Great Depression was no longer a popular notion. Bad governmental policies became the new, major reason for the economic trials of the 30's. Maybe the cold war and paranoia over the 'communist threat' made folks paranoid about wealth distribution and debt buildup being the main culprit for the 30's. So something had to replace it. So along comes Milton Friedman and his money supply theories. Deflation and inflation can be controlled by controlling the money supply. The Great Depression regardless of the debt buildup, stock market crash, high risk banking, corruption, etc. was mostly a result of bad governmental policies and a lack of adequate money supply to fight deflation. There are certainly differences between now and then - but are they helpful differences or hurtfull differences? A lot of folks on this site have made vague references regarding how policies today will prevent economic disasters such as we suffered through during the 30's. So, specifically, what are those policies which are in existance today and would they have truely prevented the Great Depression?

Subject: Re: If they knew what we know now From: Terri To: Pete Weis Date Posted: Thurs, May 12, 2005 at 01:48:15 (EDT) Email Address: Not Provided Message: These are excellent questions. Monetary and fiscal policy would absolutely have prevented the Depression. That was the whole point of John Maynard Keynes. The Depression was caused by allowing a recession to worsen as the Federal Reserve did not act and Herbert Hoover refused to act. We needed monetary and fiscal stimulus plans in 1929 and 1930. I will explain when I am rested. This is not 1929.

Subject: Re: If they knew what we know now From: Pete Weis To: Terri Date Posted: Thurs, May 12, 2005 at 09:12:03 (EDT) Email Address: Not Provided Message: Monetary policy so far has not seemed to do much for aggregate wages but has served to greatly increase personal debt, a hallmark of the 20's through early 30's where total debt to GDP reached record levels. Recent years has seen that debt to GDP ratio surpass that previous record. Growing debt seems to be the support for our present economy - whether it's ballooning mortgages or growing credit card debt. How much longer can this go on? Robert Shiller and others warn of a housing bust. But just as his warnings regarding a stock market bust in the late 90's fell on mostly deaf ears, so now is his warnings regarding the housing market.

Subject: Thank You All For This Wonderful Board From: Terri To: All Date Posted: Wed, May 11, 2005 at 22:31:45 (EDT) Email Address: Not Provided Message: Thank you for this wonderful message board.

Subject: 'No Comment.' From: Pancho Villa To: All Date Posted: Wed, May 11, 2005 at 18:53:23 (EDT) Email Address: nma@hotmail.com Message: STEPHEN CECCHETTI Central bankers have to practise silence Recent remarks by Alan Greenspan, Federal Reserve chairman, about the need to reform Social Security and return the US government budget to a sustainable long-term path reminded me of an apocryphal story involving a more cautious Mr Greenspan. He speaks regularly with financial journalists. His comments are strictly off the record and not for attribution. One day, a journalist asked about the foreign exchange value of the dollar. After being assured more than once that the session was indeed off the record, Mr Greenspan responded: 'No comment.' Recently, central bankers have been loosening their lips on topics that are not directly related to their briefs. European central bankers have voiced support for the enforcement of the European Union's stability and growth pact; Russian and Chinese central bankers have talked about the value of their currencies; and South Korean central bankers have suggested they might diversify some foreign currency reserves away from the US dollar. When central bankers talk, people listen. When the Korean bankers talked, the dollar fell. This brings up an important question: what should they say and when? Should the chairman of the Fed comment on Social Security and tax policy? How about the value of the dollar? No central bank governor can speak publicly in a personal capacity. They speak for their institutions, always. All central banks take care to speak with one voice when discussing policy. So no one inside the Fed, for example, would publicly contradict Mr Greenspan on any subject. As a rule, central bankers restrict their comments to areas of direct responsibility - monetary policy. But there are many opportunities when they choose not to speak, even though they are very knowledgeable. Before becoming chairman of the Federal Reserve Board, Mr Greenspan both served as White House economist for Gerald Ford, the former president, and headed a committee to review the Social Security system. He knows quite a bit about the foreign exchange value of the dollar and does speak about it in private with his colleagues at the Fed. In public, he defers to the US Treasury secretary. Central bankers in countries where customs are different do regularly comment on exchange rate policy. After all, a country with open capital markets cannot control both its exchange rate and its domestic interest rate. Financial markets force that difference in interest rates in two countries to equal the expected movement in the exchange rate between their currencies. So, where interest rate policy is made by an independent central bank, exchange rate policy is, too. What about fiscal policy? Profligate government spending can lead to inflation. Large public debts and deficits put pressure on monetary authorities to inflate. The comments of Jean-Claude Trichet, president of the European Central Bank, about the need for enforcement of the agreement that eurozone governments restrain their deficits are clearly justified on this basis. Central bankers have an obligation to speak out when faced with a fiscal policy decision as obviously at odds with monetary policy objectives as this one. The recent experience in Argentina proves the point. During 2001, the governments of the Argentinian states exhausted their ability to raise revenue through either taxation or borrowing in financial markets. To meet their obligations, they printed low-denomination bonds that looked just like cash. By issuing their own money, regional fiscal authorities subverted the central bank's authority and made it impossible for monetary policymakers to control domestic inflation. Again, this is such bad fiscal governance that central bankers have a duty to say so. But questions about how big the government should be, what it should do and how it should be financed are for elected officials to answer. In order to insulate them from political pressure, which almost always leads to inflation, central bankers are appointed and not elected. They are given the very narrow and powerful job of running monetary policy. And with this comes the responsibility not to comment in public on policies outside their authority. On matters of tax and expenditure policy, central bankers, including Mr Greenspan, should tread carefully. When politicians' actions threaten price stability, then central bankers have an obligation to speak. Otherwise, and regardless of how knowledgeable they may be on the topic, they should remain silent. The writer is professor of international economics and finance at the International Business School, Brandeis University. FT Wednesday May 11 2005

Subject: Re: 'No Comment.' From: Terri To: Pancho Villa Date Posted: Wed, May 11, 2005 at 21:56:26 (EDT) Email Address: Not Provided Message: Interesting essay, but I think we should have as much of a sense of how our central bankers view the economy as possible even when I do not agree with the view.

Subject: Better Economic Growth From: Terri To: All Date Posted: Wed, May 11, 2005 at 14:11:46 (EDT) Email Address: Not Provided Message: The strong trade numbers for March, suggest that economic growth is significantly higher than the 3.1% at initial estimate. We are still growing nicely apparently, and the bond market keep telling us long term inflation is contained. Add to this strong job creation so far this year, and there is more reason for optimism.

Subject: United Air Wins On Pension Default From: Emma To: All Date Posted: Wed, May 11, 2005 at 13:35:51 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/11/business/11air.html?pagewanted=all United Air Wins Right to Default on Its Employee Pension Plans By MICHELINE MAYNARD United Airlines, which is operating in bankruptcy protection, received court permission yesterday to terminate its four employee pension plans, setting off the largest pension default in the three decades that the government has guaranteed pensions. The ruling by Judge Eugene R. Wedoff of Federal Bankruptcy Court came after a lengthy hearing in a crowded Chicago courtroom, near where United is based. Despite pleas by union lawyers, Judge Wedoff sided with United, which had insisted that it could not emerge from bankruptcy protection with its pension plans in place. The ruling releases United, a unit of the UAL Corporation, from $3.2 billion in pension obligations over the next five years. The federal agency that guarantees pensions, the Pension Benefit Guaranty Corporation, will assume responsibility for the plans, which cover about 134,000 people. Some retirees could see sharply lower pension payments as a result; others will see little change in benefits, depending on a variety of factors. Some retirees at US Airways, which has terminated its plans, have seen benefits drop by as much as 50 percent. The airline, which has been in bankruptcy protection since December 2002, has been pushing to end its pensions since losing its bid for a federal loan package last year. But unions representing United's employees fought the action, threatening to strike if the pensions were set aside. Along with raising that prospect, the action has significant implications for the airline industry, which has lost more than $30 billion since 2000, and perhaps for other industries like automobiles, with similarly heavy legacy costs. Analysts have predicted that if United won its case, there could be a domino effect as other airlines are forced to seek bankruptcy protection to bring their pension costs down to United's levels. That move would probably swamp the pension agency, which was created in 1974. 'It's a scale, and this is another weight on the side of the scale that puts pressure on the other airlines to follow in United's footsteps,' said Gary M. Ford, a lawyer specializing in pension and bankruptcy issues at the Groom Law Group who is representing some of the other large airlines. 'The question is, Do you want to just watch this movie again, or is Congress going to act in a way that would make these plans affordable for the remaining carriers?' Legislation has been introduced in Congress that would allow major airlines to stretch out $20 billion in unpaid pension liabilities over 25 years, but the measure's future is uncertain. US Airways, which is under court protection for the second time since 2002, terminated the last of its pension plans earlier this year. As a result, the federal government has taken over the responsibility to pay US Airways' current and future retirees $3 billion worth of benefits. And Delta Air Lines disclosed yesterday that it might have to seek bankruptcy protection if it is not able to renegotiate terms of more than $600 million in loans, or if its cash reserves dwindle. It also said it expected a significant loss for 2005. The disclosure, made in a securities filing, caused a 10 percent decline in Delta stock. Although the ruling freed United from $3.2 billion in pension contributions over five years, even that amount would not fully finance the plan. If United had been able to pay it, the amount would have simply brought it into compliance. The government measures United's pension shortfall at close to $9.8 billion. United plans to switch its current employees from traditional retirement programs, which are called defined-benefit plans, to defined-contribution plans like 401(k) programs. The federal pension agency will assume responsibility for United's plans, which cover about 134,000 workers. 'It's a hammer blow to thousands of retirees who will have to somehow make do with lower pension checks,' said Joseph Tiberi, a spokesman for the International Association of Machinists and Aerospace Workers. 'The promises United made to them are worthless,' Mr. Tiberi said his union would appeal the judge's decision. But Judge Wedoff, speaking to a courtroom packed with United employees and retirees, said the move was unavoidable. 'The least bad of the available choices here,' the judge said, 'has got to be the one that keeps an airline functioning, that keeps employees being paid.' United, meanwhile, called the action an important step in its bid to restructure. The termination at United is nearly three times the size of the 2002 default by Bethlehem Steel. Last month, United reached agreement with the agency on a $1.5 billion plan that would give the agency a stake in United, along with other debt, when the airline emerges from bankruptcy protection. In return, the agency would assume the pension plans. The agency had already moved to take control of two of the four pension plans after United stopped making its legally required contributions last summer. United said that it needed to terminate the plans to attract the financing it needs to leave bankruptcy protection, but it had been trying to time the terminations to get the maximum possible insurance coverage from the agency. That prompted the agency to intervene. But sending the plans to the federal government could be difficult if labor strife erupts. Flight attendants have threatened to start unannounced strikes against United, while the Aircraft Mechanics Fraternal Association also warned it might stage walkouts. Members of the machinists union are completing a vote on whether to support a strike, with results expected today. The company contends any strikes would be illegal because the rest of the workers' labor agreements remain in effect. Airline workers are covered by the federal Railway Labor Act, which forbids them to strike as long as labor agreements are in place. Wages and benefits for workers at United have been cut twice while United has been in reorganization. 'Today's decision is an enormous disappointment and it very well may have triggered the collapse of the defined benefit pension system nationwide,' said Greg Davidowitch, president of the Association of Flight Attendants at United. United had pinned its restructuring plans on its application for $1.6 billion in federally backed loans under a program intended to help airlines after the September 2001 attacks. But the Air Transportation Stabilization Board turned down its application last June, saying it believed that United could find financing elsewhere. The pension terminations now will put pressure on United's chief executive, Glenn F. Tilton, to find the $2 billion in financing the airline needs to emerge from bankruptcy, said Robert W. Mann Jr., an industry analyst based in Port Washington, N.Y. United has said several of its lenders had expressed interest in providing loans, if it could put together a workable business plan. Delta's shares dropped 10 percent, to $2.97, on its latest bankruptcy warning. Delta barely avoided filing for Chapter 11 last October by persuading its pilots to grant nearly $1.1 billion in wage and benefit cuts. Delta, the nation's third-largest airline behind American and United, lost $5.2 billion last year, including one-time charges, its worst performance in its 70-year history. Delta lost another $1.1 billion in the first quarter of 2005. In all, Delta has lost nearly $10 billion this decade and it has been on an aggressive push to cut $5 billion in costs through the end of next year. But in the securities filing, Delta warned of further losses in 2005. It said it was meeting with lenders to renegotiate the terms of $630 million in financing that it arranged last year with General Electric and American Express in its effort to avoid a Chapter 11 filing. The terms set cash and earnings requirements before expenses like interest, rent, aircraft payments and depreciation. But since reaching the loan agreements, the airline industry has been hit hard by high prices for jet fuel. In addition, Delta cut fares as much as 50 percent in January, and set limits on what it can charge for coach and first-class tickets. Delta said that if it could not renegotiate the terms, the loans could become due immediately. It also said it feared that its cash, which stood at $1.8 billion at the end of the first quarter, could dwindle to as little as $1.4 billion, where it stood last fall before it reached the deal with the pilots' union. Delta's assets are pledged to secure the financing from G.E. and American Express, as well as other loans. Delta has over $20 billion in outstanding debt. All that could lead to a bankruptcy filing, the airline said. But Delta has raised that prospect a number of times in the past, particularly when talks with the pilots were under way. Yesterday, a Delta spokesman, John Kennedy, said he was surprised at the market's reaction to the latest disclosure, given Delta's candor about its challenges. But, he said Delta was not playing down its problems. 'There's still the elephant in the room' - meaning bankruptcy, Mr. Kennedy said.

Subject: Re: United Air Wins On Pension Default From: Pete Weis To: Emma Date Posted: Wed, May 11, 2005 at 15:21:32 (EDT) Email Address: Not Provided Message: 'Today's decision is an enormous disappointment and it very well may have triggered the collapse of the defined benefit pension system nationwide,' said Greg Davidowitch, president of the Association of Flight Attendants at United'. Can't say I disagree with this statement. How do competitors compete with companies who have shed major obligations such as pensions. This is a glimpse into the future and I would expect United is merely among the first of many US corporations which will follow suite. How much further down the road is it before GM and Ford do the same? I'm truely amazed at those who believe our economy is 'recovering' with the levels of debt out their, the deficits, aggregate wages falling against inflation, rising energy costs, poor stock market performance and pension plans and retirement plans collapsing. One would really have to go to extremes to say our economy is 'recovering' and is becoming 'stronger'. If this is 'recovering' I would hate to see another 'soft spot'.

Subject: Re: United Air Wins On Pension Default From: Terri To: Pete Weis Date Posted: Wed, May 11, 2005 at 22:28:36 (EDT) Email Address: Not Provided Message: So saddening, Pete. I understand.

Subject: Morgan Stanley Says Earnings May Falter From: Emma To: All Date Posted: Wed, May 11, 2005 at 09:28:20 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/11/business/11wall.html Morgan Stanley Says Earnings May Falter By LANDON THOMAS Jr. Philip J. Purcell defended his strategy for integrating the retail and institutional divisions of Morgan Stanley yesterday, but warned that his firm faced deteriorating market conditions that could put a dent in future earnings. For a chief executive who has been labeled imperious by his harshest critics, Mr. Purcell was candid and self-effacing in his remarks yesterday at an analyst conference. He acknowledged the primary complaint of dissident retired Morgan Stanley executives: that the firm is undervalued and has trailed its peers in recent years. 'We have taken that criticism to heart,' he said at a packed conference that included some of Morgan Stanley's largest investors. 'We have always had a premium return on equity.' And he addressed head-on the issue of his lack of popularity within parts of the firm, saying morale problems still existed in the investment banking and equity divisions. 'We worry about equity quite a bit because we lost some key leadership,' he said. While warning of future departures - on average 100 managing directors leave the firm each year, Mr. Purcell said - morale in the rest of the firm is good, he said. The firm has taken measures to build bridges to its investment banking division, including naming as vice chairman David W. Heleniak, a mergers and acquisition expert with the law firm of Sherman & Sterling. Yesterday, the firm disclosed that Mr. Heleniak would be paid at least $20 million for the rest of the year in salary, stock and bonus. (Last year, Mr. Purcell was paid $22 million in compensation.) Institutional investors have been some of Mr. Purcell's toughest critics, so his blunt recognition of the firm's problem areas - and his ideas for fixing them - should come as no surprise. But, in so doing, he has also put increased pressure on the dissident executives to either present a detailed plan of their own or to cease their bruising campaign for his resignation. A spokesman for the retired executives would not comment on their future plans. While offering a series of prescriptions for integrating the firm's retail and institutional businesses, Mr. Purcell gave no hint of any move he might take to improve the stock's performance, nor did he offer any quick fixes, like a stock purchase plan. 'I think the lack of a buyback is puzzling,' said David Trone, a securities analyst with Fox-Pitt Kelton. Mr. Purcell said that many of the firm's core businesses were seeing double-digit declines this quarter. He also cautioned investors that the planned spinoff of the Discover credit card unit would have an impact on earnings. How the stock performs in the months leading up to next year's proxy season will be a crucial gauge of the strength of Mr. Purcell's position and his ability to withstand a renewed assault from the dissident executives. For Mr. Purcell and his new co-presidents, Stephen S. Crawford and Zoe Cruz, it was their first public appearance since the battle over his leadership burst into the open six weeks ago. While Mr. Crawford focused more on the firm's retail business and Ms. Cruz spent her time on institutional matters, they said in response to an investor question that they would not have separate divisions reporting to them. While co-president arrangements are to be found on Wall Street, such dual positions without defined divisions of responsibility are rare. Although the three executives talked up the firm's achievements, they did not sugarcoat areas of underperformance - like retail brokerage - that have been the focus of the dissident executives. Indeed, Ms. Cruz, in her presentation, argued that performance could be improved across the board, especially in trading and banking operations, which were the core of Morgan Stanley before its 1997 merger with Dean Witter. Mr. Purcell's critics have said this business, the institutional securities group, should be separated from the retail-oriented Dean Witter divisions. 'I don't buy the concept that I.S.G. is the crown jewel,' Ms. Cruz said in a thinly veiled jab at the dissidents. 'We are punching below our weight in all businesses.' Ms. Cruz, who used to run the fixed-income division, said that to close the gap with its more aggressive trading peers, the firm needed to adopt a less risk-averse approach to trading, and she presented a chart showing how the firm's risk profile had increased over the last years. In a separate internal announcement yesterday, Mr. Crawford and Ms. Cruz said that the retail mortgage division of Discover - Morgan Stanley Dean Witter Corp - would be merged into the firm's fixed-income mortgage securitization unit. The business developed more than $4.5 billion in mortgages last year. The move serves two purposes: it gives retail brokers a new capacity to sell securitized mortgages and other risk-management products to high net worth clients and it gives the fixed-income unit an ability to originate its own mortgages. 'This business combination is an excellent example of leveraging the full potential of our franchise,' said Ms. Cruz and Mr. Crawford in a memo to employees. On the topic of corporate governance, Mr. Purcell said that the board's search for two new independent directors was under way and that the seats would be filled by September, if not sooner. Mr. Purcell admitted that the uproar over the firm's future had been a distraction but said that he felt confident that that his new team would succeed - though he recognized that it would be his actions more than his pronouncements that would remain the focus of attention. 'The proof is in the doing,' he said. 'We are the first to admit that media frenzy has been disruptive. The sooner we can move on, the better.'

Subject: Bond Values From: Terri To: All Date Posted: Wed, May 11, 2005 at 07:30:25 (EDT) Email Address: Not Provided Message: What continues to surprise the most is the low interest rate on long term bonds. This is the hope for a solution to weakness in the economy. I am encouraged by this bond market.

Subject: REITs From: Terri To: All Date Posted: Wed, May 11, 2005 at 06:01:07 (EDT) Email Address: Not Provided Message: Notice that the Vanguard REIT Index has recovered to be about even for the year to date return, and leading the S&P Stock Index. Is it long term interest rates? I do not know, but REITs continue an amazingly stable performance coming from an amazing bull market.

Subject: Re: REITs From: David E.. To: Terri Date Posted: Sat, May 14, 2005 at 15:58:14 (EDT) Email Address: Not Provided Message: REITS are a new asset class. If an S&P stock fumbles and has to be liquidated much of the value is 'the value of a going concern'. And the liquidation costs will be very high. For REITS - 'the going concern' value is proportionately smaller. The liquidation costs of a REIT will be less, and possibly, the liquidation costs could even be negative. This is the case with my favorite REIT, ASN, which is making good money by converting surplus property into condos. The REIT asset class is differentiated by its greater 'hard value'. If I am right this 'hard value' will also protect portfolio's in a rapidly inflatiing economy. Even if the CPI is not going up, REITs will protect when asset prices are the place where inflation shows up.

Subject: The return of Robert 'Bonaparte' From: Pancho Villa To: All Date Posted: Tues, May 10, 2005 at 15:52:45 (EDT) Email Address: nma@hotmail.com Message: Shy experts rewrite rules of investment The founders of Integrated Finance aim to make an intellectual pedigree pay, says Gillian Tett From the outside, suite 2750 in Manhattan's Rockefeller Centre does not look striking: discreet and bland, the office could house any small New York financial firm. However, behind the doors an intriguing Wall Street experiment is taking place. About 18 months ago, Robert Merton, a Nobel-prize winning economist and former co-founder of the Long Term Capital Management (LTCM) hedge fund that collapsed spectacularly in 1998, joined forces with Roberto Mendoza and Peter Hancock, two former JPMorgan bankers, to create an asset management and advisory firm called Integrated Finance Ltd (IFL). The trio has strenuously avoided publicity. 'We don't believe in labels but if you must put a label on what we are, the easiest way to describe it is a specialised investment bank,' says Mr Mendoza, who helped create JPMorgan's investment banking group. IFL has quietly amassed 70-odd staff, spread between New York, Tokyo, London and San Francisco. It has a group of investors - BNP Paribas, NIB Capital and Ace reinsurance - and also claims to have clients, although it refuses to reveal names. 'By its nature most of the work we do is private,' says Mr Mendoza. Its only publicly-acknowledged mandate has been a role advising Yellow, a US trucking group, to make a $1.47bn cash and stock agreement to purchase rival USF Corp in March. More striking still, the group also claims to be challenging the way investment banking is done. One of IFL's defining features is that it strenuously avoids the conflicts that dog so many investment banks. 'We don't lend, underwrite, sell research or take proprietary risks,' says Mr Mendoza, who adds that the group has no intention of supplying capital since 'it is better to use capital from the markets, not financial intermediaries'. Meanwhile, IFL says it is offering an integrated approach to advice and asset-management, that is client-focused, not product-driven - and draws heavily on finance theories. 'Our group employs [financial science] that has been developed in the last 30 years, and market-proven financial technologies,' says Mr Merton. 'These technologies have already been widely used in financial markets, but we want to bring them to bear in other areas like corporate finance or sovereign finance and risk management.' A cynic might suggest that all this is just a loftier version of the sales pitch many advisory firms use. 'There is certainly enormous brainpower in the group - the question is whether they can do anything with it,' says a former Wall Street colleague of Mendoza and Hancock. However, what has attracted attention on Wall Street is the pedigree of the founding fathers. Mr Mendoza and Mr Hancock were previously luminaries in JPMorgan before it merged with Chase Manhattan. The re-emergence on Wall Street of Mr Merton comes at a time when other former LTCM figures are also returning to the financial world. John Meriwether, the former leader of LTCM, for example, is now running a US hedge fund. 'We are bringing our life experiences to this [IFL] project,' says Mr Merton, who argues that the collapse of LTCM 'has shown me how quickly things can go up and down; all that is useful for building a new company'. Mr Merton, who continues to hold a professorship at Harvard University, helped create the world of modern financial theory, based on the concept of rational markets. Critics claim that this highly academic approach towards finance, and excessive emphasis on market efficiency, was one factor that contributed to the demise of the LTCM fund. However, as the IFL founders point out, their group is radically different from LTCM: although IFL also plans to create a hedge fund this year, this will only be part of its business. Meanwhile, they make no apology for transplanting an intellectual approach to their own group. Mr Merton, for example, calls himself 'chief science officer' in order 'to show that financial science is an integral part of what we are doing'. One of his research passions that he hopes to use in a commercial sense, for example, is the potential for countries to engage in massive asset swaps, to diversify their risks. 'I think there is a huge evolving need in countries now to deal with this [type of risk],' he says. Another key area of interest is pensions: IFL hopes to help companies manage these liabilities, based on holistic analyses of companies' risks. 'We believe that the existing binary choice between defined contribution or defined benefit schemes is a false dichotomy,' says Mr Hancock. The founders claim that this 'holistic' approach is already delivering plenty of client mandates. But the real test of whether the ideas will fly - and men such as Mr Merton get a second chance to make their mark on Wall Street - is yet to come. 'We have done no marketing, which means the people who call us are the ones who are already convinced - we do not know what the reaction will be when it comes to marketing our services to people who are not necessarily convinced,' says Mr Mendoza. 'This is a non-typical approach... it remains to be seen whether we can monetise its value ' FT Tuesday May 10 2005

Subject: Re: The return of Robert 'Bonaparte' From: Pete Weis To: Pancho Villa Date Posted: Tues, May 10, 2005 at 22:02:20 (EDT) Email Address: Not Provided Message: When one first returns from Elba, best to keep low profile.

Subject: Duke Energy Will Acquire Cinergy From: Emma To: All Date Posted: Tues, May 10, 2005 at 12:26:42 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/10/business/10utility.html Duke Energy Will Acquire Cinergy for $9 Billion in Stock By JAD MOUAWAD Duke Energy, one of the nation's largest utilities, said yesterday that it had agreed to buy Cinergy in an all-stock deal valued at $9 billion to expand its businesses in power and gas into the Midwest. The acquisition would create a company with 5.4 million customers, 54,000 megawatts of electricity generation and operations in two-thirds of the United States, as well as Canada and most of South America. The deal adds momentum to the industry's consolidation at a time of rising costs for supplies like natural gas. The energy industry came under scrutiny after the fall of Enron four years ago. After several quarters of streamlining their businesses in response, utility companies are now trying to grow through acquisition. Last December, for instance, the Exelon Corporation agreed to buy the Public Service Enterprise Group, the parent of New Jersey's largest utility, P.S.E.G., for about $13 billion to create a power giant in the Northeast. Duke and Exelon would be about equal in size. 'You're going to grow in this business by virtue of saving money rather than growth,' said James R. Halloran, an equity research analyst at National City Private Client Group, a money management firm that owns two million Duke shares and 55,000 shares of Cinergy. 'And if you have to buy it rather than build it, that's what you do.' The purchase of Cinergy would enable Duke, based in Charlotte, N.C., to extend its reach into Ohio, Indiana and Kentucky. The companies had $27 billion in combined revenue and $1.9 billion in net income last year, with assets totaling $70 billion. The deal is expected to revive the fortunes of Duke Energy North America, the company's unprofitable merchant power business. In the first quarter, the unit had an operating loss of $35 million. 'This improves the weakest aspect in our portfolio, the Midwest,' Paul M. Anderson, chairman of Duke, said during an analyst meeting that was broadcast via a conference call. 'Duke's gas position in the Northwest complements Cinergy's coal positions in that region.' Among the main benefits of the transaction are cost savings that are expected to reach $400 million a year, according to executives from both companies who were meeting with analysts in New York yesterday. Another is to help Duke offset its reliance on gas-powered electrical plants with cheaper-to-operate coal-fired assets owned by Cinergy. At the most efficient gas-fueled plants, producing electricity costs $48.43 a megawatt-hour, compared with $19.07 from coal, Bloomberg News said, citing figures by Energy Velocity in 2003, the last year for which such statistics were available. Duke adds 1.5 million of Cinergy's electric customers to its own 2.2 million and 500,000 of Cinergy's gas customers to its 1.2 million. It also more than doubles the territory it services, to 47,000 square miles. 'The company achieves much more scale, geographic diversity and fuel diversity,' analysts at Merrill Lynch wrote in a note to investors. They noted that Cinergy's electricity generation was mainly fueled by coal while Duke used mainly gas. Duke said it would offer 1.56 of its shares for each share of Cinergy, valuing the transaction at $45.80 a share, or 13 percent more than Cinergy's closing price on Friday. Shareholders of Cinergy will own about 24 percent of Duke after the deal is completed. Shares of Cinergy, which is based in Cincinnati, rose $1.94, to $42.32. They have gained 18 percent in the last year. Shares of Duke fell 54 cents, to $28.82. They have gained 48 percent in the last 12 months, outperforming the 8 percent gain of Standard & Poor's. Mr. Anderson, chairman and chief executive of Duke, will become chairman of the board, and James E. Rogers, chairman and chief executive of Cinergy, will become president and chief executive. 'Jim Rogers has been one of the most vocal executives that the industry must be more proactive, that environmental laws will get tougher, and that the industry should lead the parade in antipollution norms,' said Charles Fishman, an analyst at A. G. Edwards & Sons in St. Louis. 'He probably didn't make a lot of friends and he now has a bigger base to talk from. You might find him visiting Washington more to set energy policy.' In an interview, Mr. Anderson said Duke would speak up about issues like taxes on carbon emissions as well as climate change. 'If we don't speak, regulators will make rules and we will have to live with them,' he said. 'It's better to be part of the process. A carbon tax, for example, makes a lot of sense. It's a no-regrets approach to global warming.' To help reduce costs, Duke and Cinergy expect to cut about 1,500 employees, or 5 percent of their combined staff of 29,350. The cuts will be 'primarily through attrition, early retirements and other severance programs,' the statement said. Duke also said it would increase its dividend by 12.7 percent, or 14 cents, to $1.24, effective in September. The acquisition was endorsed by the boards of both companies. It is still subject to approval by the shareholders of both companies as well as state and federal regulators in North Carolina, South Carolina, Ohio, Kentucky and Indiana; the Federal Energy Regulatory Commission; the Nuclear Regulatory Commission; the Securities and Exchange Commission and the Justice Department. The deal is expected to close in July 2006. Duke was advised by UBS Investment Bank and Lazard and Cinergy was advised by Merrill Lynch. The firm of Skadden, Arps, Slate, Meagher and Flom was Duke's legal adviser and Wachtell, Lipton, Rosen & Katz advised Cinergy.

Subject: The Oh-So-French Bistro: Chinese? From: Emma To: All Date Posted: Tues, May 10, 2005 at 11:24:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/10/international/europe/10bistro.html The Oh-So-French Bistro Is Acquiring a New Accent By CRAIG S. SMITH PARIS - Brasserie Eiffel-Kennedy is a typical French bar-tabac and restaurant. Lunchtime regulars belly up to the brass-topped bar, sipping tall glasses of beer or squat stems of dark red wine. A large chalkboard looms over the red-and-white checked tablecloths, listing the standard 'specials' of the day: steak tartare, pavé au poivre and sole meunière. Its owner, too, is increasingly typical these days, even if he is not typically French. His name is Hingkeung Kwan. 'We are still new in this line of work, but Asians are taking over,' said Mr. Kwan, sitting in his brasserie named for the boulevard it faces and for the famous tower across the Seine that can be glimpsed from some of its tables. Ethnic Chinese, hailing from China, Cambodia or Vietnam, are fast replacing the French as proprietors of one of the capital's quintessential establishments, the neighborhood bistro. While their presence is growing in the familiar cafes and brasseries of the genre, it is particularly strong in so-called bar-tabacs, establishments licensed to sell alcohol and tobacco, which also frequently serve food. Gérard Bohelay, president of the Tobacconists Union in the Paris region, says Chinese now own a quarter of the capital's bar-tabacs and represent nearly half of the buyers of such businesses these days. The percentage owned by Auvergnats, French with roots in France's central mountainous Auvergne region, who have been the traditional proprietors for more than a century, has shrunk to 50 from 80 in the past two decades. One reason is that a dwindling number of young people want to spend their life working behind a cash register or a bar, particularly as proprietors of a place that sells cigarettes. Under France's strict rules, a person licensed to sell tobacco must remain on the premises while it is open for business, typically from dawn to well after dusk. But immigrants like Mr. Kwan are willing to work the long hours. 'Working is in our spirit,' he said. Something is inevitably lost in the translation from old-style French proprietor to new-style immigrant entrepreneur. Such establishments, for example, are less likely to be the shrines of hearty home cooking that they once were. Mr. Kwan's chef is a French citizen, yet he has hired Sri Lankans to cook 'not because they are good cooks, but because they are good workers.' Though some customers may grumble at ceding a French trade to cultural outsiders, people in the business regard the newcomers as saviors, or at least reinforcements, against the slow attrition that is threatening the neighborhood bistro with extinction. 'Immigrants are willing to work hard to make a place for themselves as the Auvergnats did in their time,' said Marc Tardieu, author of a book on the subject. Without them, he said, the family-run bistro might eventually disappear. Cafes, bar-tabacs and brasseries all started out separately, differentiated by the drinks that they were once allowed to sell. Cafes sold coffee, lemonade and liqueurs. Bars sold wine. Brasseries sold beer. Those distinctions mostly disappeared after the French Revolution. People from Auvergne have been associated with the trade since the mid-19th century, when their small coal shops doubled as wine bars. Over time, they replaced Alsatians running the brasseries, where beer, served fresh, was brewed on the premises. After a tariff cut on imported coffee beans, they started serving coffee, too. Many also bought licenses to sell tobacco, earning the right to hang a red stylized 'carrot' emblem outside their establishments to draw customers (the emblem represents a carrot, which tobacconists once put in their bins to keep their tobacco from drying out). France's Chinese community, meanwhile, got its start during World War I, when the country imported Chinese workers to man its depopulated factories and provide logistical labor on the battlefield, handling, among other things, the recovery of cadavers. More ethnic Chinese arrived in the 1960's and 70's, fleeing wars in the former French colonies of Vietnam and Cambodia. Many went to work in the country's auto plants and later invested their savings in Chinese restaurants. Mr. Kwan, born in Guangzhou, came to France to study when he was 22 and became a French citizen in 1989. He started out washing dishes at a friend's Chinese restaurant and, because he spoke French, was quickly promoted to headwaiter. When his boss later opened a brasserie, Mr. Kwan became a minor partner. Mr. Kwan eventually sold his share and started a Chinese restaurant on his own. But that business has been hit by competition from a new wave of Chinese immigrants. That prompted Mr. Kwan and other ethnic Chinese who, like him, hold French passports to move into the bistro business, which requires licenses available only to European citizens. He bought Brasserie Eiffel-Kennedy a year ago. 'This isn't a door that is open to everyone,' said Mr. Kwan, dressed in a black-and-white plaid shirt with all of its buttons done. 'It gives us some exclusivity.' He holds licenses to sell alcohol, tobacco and periodicals - he offers more than 200 kinds of cigarettes and nearly 300 magazines - and a dozen scratch-card lottery games. Either he or his wife is in the brasserie from the first croissant at 6:30 a.m. until the last Cognac at 8:30 p.m. They take off only one day a week and work most holidays. But he doubts his children will follow in his footsteps. 'My kids are too French,' he said of his sons, 19 and 15, both raised in Paris. 'They want to work 35 hours a week and enjoy long weekends.'

Subject: More Bad Faith on Social Security From: Emma To: All Date Posted: Tues, May 10, 2005 at 10:37:05 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/10/opinion/l10social.html More Bad Faith on Social Security To the Editor: Re 'Calling Democrats' Bluff' (column, May 8): David Brooks tries to spin President Bush's attempt to means-test Social Security as a progressive move. If the president wants to talk about sacrifice, he might try asking those making more than $90,000 to forgo their exemption and continue contributing to the system. There's a reason large numbers of Americans distrust President Bush to reform Social Security. It's because, understanding that he wants to dismantle the system, we can recognize a bad-faith argument when we see one. Steve Schindler New York, May 8, 2005 • To the Editor: Does David Brooks really think that President Bush and his advisers have made a U-turn and become progressives? One might think so from reading his May 8 column, in which he takes the Democrats to task for not jumping on the bandwagon to support Mr. Bush's latest twist in the Social Security battle, to means-test benefits. The situation is rather simple. The Democrats know that the leopard hasn't changed his stripes, and they smell a rat. Charles R. Cowley Ann Arbor, Mich., May 8, 2005 • To the Editor: David Brooks writes that President Bush has called the Democrats' bluff by 'embracing the progressive indexing of Social Security benefits.' In 1935, when Social Security was created, President Franklin D. Roosevelt very consciously and deliberately decided that Social Security would not be a poor person's program. The thinking was that programs for poor people are always inferior to universal programs, which are meant to help all income levels. Veterans' programs, for instance, are based entirely on one's service to our country, not upon one's income. By threatening to index Social Security, President Bush threatens the very existence of Social Security by seeking to turn it into a poor person's program, another 'separate but equal'-type program. This is not 'calling a bluff.' Rich Gardner Horsham, Pa., May 8, 2005 • To the Editor: I am a senior citizen who recently left Manhattan to live in the Bronx because housing costs in Manhattan have gone through the roof. Social Security accounts for 40 percent of my income. Without it, I would be poor, but I'm not poor - yet. Social Security is not welfare. We paid into it so that when we were old, we could remain in the middle class. There should be no 'means test' for Social Security. Paula Kopelman Bronx, May 8, 2005 • To the Editor: It doesn't matter whether, as John Tierney claims, his Social Security contribution would have tripled in value if he had invested it in a Chilean-style account ('Place Your Bets,' column, May 7). That's because Social Security is not a retirement plan. It is insurance. Rachel Dresbeck Portland, Ore., May 7, 2005 • To the Editor: As set up and later modified, the Social Security System had been working quite well. There was even some savings for a rainy day. Then, as John Tierney says, Congress spent the reserve in our trust fund, thus leading to the financial woes that the program now faces. Mr. Tierney repeats the Republican charge that the Democrats have not offered a solution. I seem to remember otherwise. In the campaign John Kerry said that if we rolled back those generous tax cuts that President Bush gave to corporations and the upper-income folks, we would have sufficient funds to put Social Security back on track. For the record, this Democrat is making a proposal: Roll back those tax cuts and do not institute others until we have our Social Security program back on track. And set up Al Gore's 'lockbox' to keep sticky fingers out of my retirement funds. Peggy Backman New York, May 7, 2005

Subject: More Bad Faith on Social Security - 1 From: Emma To: Emma Date Posted: Tues, May 10, 2005 at 10:38:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/08/opinion/08brooks.html Calling Democrats' Bluff By DAVID BROOKS Don't take people at their word. Don't listen to them when they tell you how to be virtuous. They're faking it. They don't care about virtue, or you or the common good. They're just taking opportunistic potshots under the guise of sermonizing. They're just a bunch of hypocrites. This little bit of moral philosophy is drawn from the political events of the past few years.... http://www.nytimes.com/2005/05/07/opinion/07tierney.html Place Your Bets By JOHN TIERNEY After a recent column comparing Social Security with the Chilean system of private accounts, I was deluged with letters from readers eager to explain why I am a superficial nitwit. In this case, they're at least half right. The column was superficial because I simply looked at how much more money I'd have if I had invested my Social Security contributions in the private account of a Chilean friend and economist, Pablo Serra....

Subject: Nature at Bay From: Emma To: All Date Posted: Mon, May 09, 2005 at 19:01:34 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/09/opinion/09mon1.html Nature at Bay The Bush administration's efforts to capitalize on the recent discovery of the ivory-billed woodpecker were bizarre. Gale Norton, the interior secretary, announced a $10 million program to enlarge the bird's habitat, proclaiming that 'second chances to save wildlife once thought to be extinct are rare.' But what about first chances? The woodpecker, if it indeed has returned, is as much warning as gift. President Bush's policies suggest that he not only has failed to learn from past mistakes, but is determined to repeat them on a more destructive scale. The obvious example is his fixation on opening the Arctic National Wildlife Refuge to oil drilling. This bespeaks an intellectually bankrupt energy policy and would certainly cause trouble for wildlife. Yet the Arctic is hardly the only illustration of the administration's insensitivity to wilderness values. Here are three more of recent vintage: Roadless Rollback On Thursday, the administration repealed one of President Bill Clinton's proudest and most popular environmental initiatives, a rule that placed nearly 60 million acres, or roughly one-third, of the national forests off limits to new road building and development. The Clinton rule gave protection to some of the last truly wild places in America and the fish and wildlife that live there. By the Forest Service's own estimates, these roadless areas shelter at least 200 rare species, which under the administration's less protective regime will now be more vulnerable to commercial development. The rollback also completes the administration's demolition job on the web of forest protections it inherited from Mr. Clinton. Drill, Drill, Drill Meanwhile, the Interior Department continues to move at warp speed to lease ever-larger chunks of the Rocky Mountains to oil and gas companies. At least one governor has had enough. Last month, Bill Richardson of New Mexico filed a suit against a Bureau of Land Management leasing plan that he says would leave 95 percent of the 1.8 million-acre Otero Mesa open to drilling. At risk are some of the most important and fragile grasslands left in America, the wildlife they sustain and - of special concern to Mr. Richardson - an aquifer that contains the state's largest untapped source of fresh water. The lawsuit is being closely watched by other Western governors, in particular Wyoming's Dave Freudenthal, who is appalled by the pace and volume of the drilling activity in Wyoming's Upper Green River Valley. It is not as if the oil and gas companies have no place else to go. Fully 85 percent of the petroleum resources on federal lands in the five Rocky Mountain states are already leased or available for leasing. Moreover, by its own admission, the industry has neither the equipment nor the manpower to exploit the leases it already owns - yet another reason to ask why the administration finds it necessary to accelerate drilling in places where moderation is required and to invite new drilling in places where there should be none at all. Shortchanging Nature Mr. Bush's environmental agenda in the 2000 campaign consisted of three promises, none realized. One was to regulate global warming emissions. Another was to eliminate the maintenance backlog in the national parks. And the third was to fully fund the Land and Water Conservation Fund, the government's main program for creating and preserving parks and wildlife refuges. The program's authorized level is $900 million, half for federal open space purchases, half for state acquisitions. Mr. Bush hasn't come close. This year he asked for $130 million for federal purchases, nothing for the states. Last week a House subcommittee axed the federal funds altogether. The irony that Mr. Bush may be presiding over the death of precisely the kind of program that the ivory-billed woodpeckers of this world depend on seemed lost on Mr. Bush's senior officials, who uttered nary a peep of protest.

Subject: China Syndrome From: Setanta To: All Date Posted: Mon, May 09, 2005 at 14:05:31 (EDT) Email Address: Not Provided Message: Seismic shift has started 09/05/2005 A deafening sucking sound can be heard all around the globe. It is the sound of the world's manufacturing jobs being sucked into China. Over the course of the next 20 years, millions of jobs from Dungarvan to Denver will evaporate and re-emerge in either China or India. This will change our world profoundly, and it is far from clear whether we are ready for this change. If you want to make sense of what happened in Dungarvan this week, you need to see it in the context of a seismic global change that will leave very few manufacturing jobs in Ireland - or anywhere else in Europe - in 20 years' time. This is not as dramatic as it seems, because our recent history books reveal that every 100 years or so, the global economy experiences a shift in its centre of gravity from one country or continent to another. It is often said that the 19th century was Britain's and the 20th century was America's, while the 21st century will belong to China. Well, into this mix I would put India. This century is likely to be shared between India and China. To examine how this will happen and what it will do to us, it helps to look at what happened when the US emerged out of its protectionist torpor just after the Napoleonic Wars. The US did for agriculture in the 19th century what China is doing for manufacturing in the 21st. China is having a remarkable dampening effect on the price of manufactured goods worldwide. This effect is similar to the impact the US had on agricultural goods in the late 19th century. In the first half of the 19th century, huge volumes of cheap US agricultural produce began to put pressure on European farmers. By the 1850s, the mechanisation of US agriculture had made this worse. US-bashing was as typical of governmental rhetoric in London and Lisbon as it is today. (Only this week, US treasury secretary John Snow was at it again, blaming China for the US current account deficit.) Things went from bad to worse for European farmers after 1860.The period from 1870 to 1890 saw a sustained fall in the price of agricultural commodities in Europe as produce from the huge wheat farms of the US prairies and mid-west began to flood the market. European food had always been a reflection of the price of land, the productivity of the land and the cost of local labour. When an entire continent came up for grabs in North America, the land was almost free. The huge tracts without any peasant holdings made intensive farming possible, raising the productivity of US land above that of Europe. The railways in the US meant that they could get produce out of Ohio, Illinois and New York state and onto the world market quickly. This caused a sustained agricultural recession in Europe. People's livelihoods collapsed, prompting two important political developments. The agricultural recession caused mass emigration from Ireland, Britain, Germany, Sweden and many parts of central Europe to the US, rendering the US even more productive. This reinforced the original deflationary impetus from the mid-west, and accelerated the urbanisation of Europe, leading to mass city-based labour movements in the 1890s and early 1900s, culminating in the rise of socialism and communism in Europe. Those farmers who remained on the land became more militant, resulting in the loss of power by the old rural upper orders, from East Prussian junkers to the Boycotts of north Mayo. Such an enormous transfer of wealth to the US set the scene for the Americanisation of the 20th century. Today, China is exerting the same influence through its increasing dominance in manufacturing, and it is arguable that the global political ramifications will be just as monumental. The first reaction will be political, with calls to protect ourselves from China in manufacturing and India in high-tech and upmarket services. This is now a daily occurrence in the US, with politicians of every hue expressing doubts about China. The second reaction will be financial. Stock markets and investors will begin to doubt that high-cost manufacturers can survive. Indeed, it is fair to ask how any western company or country can compete with 50-cent-an-hour factory workers? Whether you are in direct competition with a Chinese counterpart or not, China is now showing the world what can be produced at a very low cost. For example, this week we have seen the giants of American manufacturing being slated because the markets believe that they are on a hiding to nothing. General Motors (GM) and Ford, two icons of corporate America, have seen their bonds downgraded to junk status, implying that the market believes they have a reasonably high chance of defaulting on their debts. A few years ago, pre-China, they would have been given the benefit of the doubt, but not anymore. The proximate reason for the travails of Ford and GM is the price of oil, which also has a Chinese angle. Standard & Poor's, the rating agency that downgraded the Ford and GM companies, said its biggest concern was the slip in demand for the biggest SUVs as petrol prices rose. Both Ford and GM are “heavily reliant'' on large SUVs for their profits, the agency said. Sales of the biggest SUVs fell by a fifth in the first three months of the year in the face of soaring petrol prices. But who is driving up the price of petrol? One part of the problem is China, whose voracious demand for oil to keep its manufacturing factories at full production will keep oil prices high for many years to come. As we can see, in an age of globalisation all these factors are interlinked. Job cuts in Dungarvan are part of an ongoing process that links the high-cost workers of Waterford with workmen with similar skills in Detroit and Munich. All of them are endangered species as China vacuums up the jobs, starting at 50 cent an hour. It is not that the jobs will go there tomorrow; rather, the crucial issue is that when transnational corporations like Waterford Wedgwood make global investment decisions, they will be tailoring the cost in China into their calculations. The problem for us is that this is a ridiculous race to the bottom. What is the point of high-wage Ireland if low-wage China is our benchmark? Why bother? The aim of the Irish economy should be to make Irish society the most comfortable, affluent, high-wage, wealth-generating society in the world. So what's the point of getting into a cost-cutting frenzy with the likes of China, other than to impoverish our people? This is the crucial political question for the years ahead. Remember that, although from 1880 to 1914, the world experienced a golden age of free trade and the US became the world's largest economy, the rest of the world reacted with war, mayhem and protectionism that lasted from 1914 to 1954. Would you bet against some similar upheaval happening again? Would you bet that millions of manufacturing workers worldwide will just lie down in the face of redundancy and accept peacefully the ascendancy of China? Would you? Remember, Dungarvan is only the start.

Subject: Re: China Syndrome From: Terri To: Setanta Date Posted: Mon, May 09, 2005 at 20:52:43 (EDT) Email Address: Not Provided Message: Rough and tough thoughts.

Subject: Why the 30yr bond? From: Pete Weis To: All Date Posted: Mon, May 09, 2005 at 13:38:10 (EDT) Email Address: Not Provided Message: Jubak's Journal Washington’s plan to stick us with high inflation The government wants to reintroduce the 30-year Treasury bond. That opens the door to inflation and higher interest rates that will help it -- and hurt the rest of us. By Jim Jubak Mark Wednesday, May 4, 2005, on your calendar with a big red circle. That way, 10 years from now, when you want to know exactly when the slide toward high inflation and high interest rates gained irresistible momentum, you'll know the exact date. The big interest rate and inflation news didn't come out of the May 3 meeting of the Federal Reserve. This week the Fed had to take a back seat to the usually irrelevant U.S. Treasury Department, headed by John Snow. On May 4, Assistant Treasury Secretary Timothy Bitsberger announced that it is weighing reintroducing the 30-year Treasury bond that was last issued in October 2001. Within minutes, the price of the pre-2001 30-year Treasury bonds still on the market had dropped by more than 4%. Why the big reaction? The Clinton administration's decision to stop issuing the 30-year Treasury bond was a convincing commitment by the federal government to holding the line on inflation and interest rates. Funding the government with short-term bills and notes put the U.S. Treasury on the same side as consumers who owed money on their houses, cars and credit cards. Any increase in inflation and interest rates would immediately cost the government money and add to the deficit. The fear of bigger deficits, of course, clearly doesn't stop most politicians from spending tax dollars. But by 'going short,' Clinton administration Treasury Secretary Robert Rubin had made certain that if the government decided to use inflation to reduce the real burden of the public debt, it would pay an immediately visible cost right now. Suspending the issuance of the 30-year bond and funding the government's deficit with shorter-maturity Treasurys was a commitment that the government would try to keep future inflation and interest rates relatively low. A jump to the other side Reintroducing the 30-year bond now breaks that commitment and puts the U.S. government on the other side of the inflation and interest-rate divide from the rest of us. (Or at least from those of us who don't owe trillions and don't print our own money.) If the U.S. Treasury starts to reissue 30-year bonds -- and the soonest it could resume the twice-yearly auctions for the bonds would be February 2006 -- then the government can lock in currently low interest rates on the 30-year bond (just 4.7% or so, even after the bond market sell off on May 4) for 30 years. It wouldn't cost the government an extra penny in interest on a 30-year bond sold to investors in 2006 if inflation spiked to 5% or interest rates climbed to 8%. Consumers who owed money on their credit cards or held adjustable-rate home mortgages, however, would pay higher interest rates immediately. Here's how the chief economist at New York investment bank Bear Stearns put it in an interview with the Bloomberg News Service on April 27: 'It does not make sense for the government to be putting the interest-rate risk onto the household sector. By the government having shorter maturity for its debt, it takes the interest-rate risk on itself.' Maybe not for much longer.

Subject: It makes sense- From: David E.. To: Pete Weis Date Posted: Wed, May 11, 2005 at 23:45:27 (EDT) Email Address: Not Provided Message: If you really want the chinese to revalue the best thing to do is sell them 30 year bonds first. I am encouraged, before this I thought Secretary Snow was all by himself, without anybody to think through the consequences.

Subject: Re: Why the 30yr bond? From: Emma To: Pete Weis Date Posted: Tues, May 10, 2005 at 05:47:53 (EDT) Email Address: Not Provided Message: As always, fine posts, Pete. These are worrisome times, and I do worry.

Subject: Re: Why the 30yr bond? From: Terri To: Pete Weis Date Posted: Mon, May 09, 2005 at 20:53:22 (EDT) Email Address: Not Provided Message: Fine set of posts, Pete. Thanks.

Subject: Japan vs US From: Pete Weis To: All Date Posted: Mon, May 09, 2005 at 13:30:29 (EDT) Email Address: Not Provided Message: From MSN MONEY: Lessons from Japan's bubble -- for ours A real-estate bust could cause problems throughout our financial system. Just ask Japan, where the economy is still struggling to get over a 1990 crash. By Bill Fleckenstein As regular readers know, I have spilled much ink about the housing ATM and the reckless behavior it has spawned. I thought that this week, it might be useful to delve into a related subject I've been thinking about but have not written about: the difference, thus far, between what Japan has experienced in the 15 years since its bubble popped in 1990 and our own post-equity-bubble experience. New dawning of an old bubble A key point I've been aware of -- but embarrassingly slow to really comprehend -- has been the fact that the big bubble in Japan occurred in the real-estate market. Lots of folks, including myself, have talked about the Nikkei at 40,000 and how absurd it was. It was absurd, but the Nikkei was only dragged higher because of the complete madness in real estate, which was far more absurd. Banks and insurers check your credit. So should you. When Japanese real estate (and stocks) started to sink, it infected the country's financial system. Bad loans throughout the financial system, together with the collapse in real-estate values, fed on themselves. That combination helped to precipitate the environment that Japan has experienced, in which it has seen real-estate values decline for 14 years. It's been unable to extract itself from the consequences of its dual bubbles. It's my belief that Japan's experience of dual bubbles has been underemphasized. Fed meddling feeds a mania Here in America, we had a wild stock bubble. But when it burst, there were not a lot of bad debts and defaults to impair the financial system. Yes, we had a couple of sizable implosions like WorldCom and Enron, but they were more isolated events. However, in the real-estate mania that Fed Chairman Al Greenspan has fomented -- in an attempt to bail out his equity bubble -- he has succeeded in creating a Japanese syndrome, if you will, here in America, where we see the complete abdication of responsibility in real-estate lending standards. Wrought by a day of reckoning As everyone is now aware, anyone capable of fogging a mirror can essentially get a 100%-financed home. Scores of people have more than one real-estate 'investment.' Powering this mania has been not just low rates but the ubiquity of financing and easy credit. This has been the major factor in driving prices to wild levels, and in allowing people to live beyond their means via the housing ATM. Throughout, it has all seemed nearly magical. However, when our real-estate bubble bursts -- and it will burst, though we don't know when -- we will be left with a financial system riddled with bad loans, as well as consumers who've not only lost their housing ATM, but also owe more on their homes than they're worth. All of that will greatly exacerbate the next-time-down scenario. When we have to deal with the consequence of both those bubbles unwinding, we are more likely to endure a period like Japan has been experiencing or like we went through in the 1930s. I think a lot of people have dropped their guards and no longer worry about how nasty the financial environment could get. Why? Simply because the fallout from the equity bubble has seemed so manageable. Folks no longer worry that we might be forced to contend with a Japanese-like experience because, so far, we haven't. But that doesn't mean we won't. In fact, given our lack of savings and massive deficits, we could experience a recession much deeper, though probably shorter, than Japan's.

Subject: Re: An old joke From: Pancho Villa To: Pete Weis Date Posted: Tues, May 10, 2005 at 06:48:04 (EDT) Email Address: nma@hotmail.com Message: A driver runs over a pedestrian, who is left lying in the road behind his car. He looks back and says 'I am soo sorry - let me undo the damage' - and proceeds to back up his car, running over the pedestrian a second time.

Subject: Re: An old joke From: Pete Weis To: Pancho Villa Date Posted: Tues, May 10, 2005 at 09:15:36 (EDT) Email Address: Not Provided Message: I would add that the pedestrian was first run over by a Lincoln and then the Lincoln was traded in on a Hummer before the 'backing up'.

Subject: Re: Japan vs US From: Emma To: Pete Weis Date Posted: Tues, May 10, 2005 at 06:08:28 (EDT) Email Address: Not Provided Message: The Federal Reserve had to protect the economy, and has limited tools to do so. I too think the problem was not the Fed, but fiscal policy. The needless tax cuts for the wealthiest were the cause of the deficit.

Subject: Your interest vs their interest From: Pete Weis To: All Date Posted: Mon, May 09, 2005 at 12:48:58 (EDT) Email Address: Not Provided Message: If you are having any of the following outfits manage your investments you should be aware that their main focus is investment banking. Their investment services (to small investors) is used to promote their investment banking services to their investment banking clients. So they steer the life savings of their small investor clients into the stock of of their finacial services clients. Almost all, if not all, of these financial/investment services banks have been caught multiple times for helping public companies fake earnings or giving false investment analysis for their investment banking clients. They are caught, usually, only after one of their clients ends up in bankruptcy or severe financial trouble and the truth can no longer be concealed. They have payed numerous fines levied by the SEC, but the amount of the fines are small relative to their investment banking business and no criminal prosecution, to my knowledge, has been carried out against any of the banking execs who have assisted in fraudulent earnings reports. So they go on doing what they are doing because it is very profitable and the penalties are small to non-existent. They will continue to get away with what they are doing until the public becomes painfully and broadly aware of what they are doing. From Bloomberg: Merrill Passes Goldman as Top Banker to World's Banks (Update1) May 9 (Bloomberg) -- Merrill Lynch & Co., for the first time in at least three years, is leading Goldman Sachs Group Inc., Citigroup Inc. and Morgan Stanley as the top investment bank to financial-services firms, Wall Street's biggest source of fees. Merrill, the third-largest securities firm by market value, has earned as much as $564 million so far this year arranging mergers and underwriting stock and bond sales for clients including Japan's UFJ Holdings Inc. and Royal Bank of Scotland Group Plc, according to estimates based on company reports and regulatory filings. At the current rate, Merrill will more than double the revenue it collected last year from banks, insurers and money managers, when it ranked fourth among securities firms. ``The financial-services industry has become a huge profit center for investment banks,'' said Alan Fishman, chief executive officer of Independence Community Bank Corp., a Brooklyn-based lender that hired Merrill last year to help advise on its $1.45 billion purchase of Staten Island Bancorp Inc. ``You're always talking to these guys about something.'' Merrill's ascent occurred as short-term interest rates climbed in the U.S., fueling demand for corporate advice on ways to refinance debt and make acquisitions to boost earnings. The Federal Reserve tripled the overnight lending rate between banks to 3 percent since June. Financial-services companies agreed to pay the 10 biggest investment banks more than $3.2 billion in underwriting and advisory fees as of May 6, compared with about $5.7 billion in all of 2004, according to disclosed fees and estimates based on regulatory filings compiled by Bloomberg. Mergers and financings arranged for corporate parents or subsidiaries were excluded. The industry accounted for about one-fifth of all fees paid to investment banks last year. Cohen's Forecast Bank mergers will pick up later this year as rising rates squeeze earnings by narrowing the difference between what banks pay depositors and charge borrowers, said Rodgin Cohen, chairman of New York-based law firm Sullivan & Cromwell LLP, the top legal adviser on mergers. Lower profits probably will reduce share prices, making banks more attractive to buyers, he said. ``One of the best ways to improve earnings is a merger,'' said Cohen, 61, who has advised on takeovers in the financial-services industry since the 1970s. ``There is nothing else available in this environment.'' Barclays Plc, the U.K.'s third-largest bank, agreed to buy Absa Group Ltd. for 32.8 billion rand ($5.4 billion) to gain control of South Africa's biggest consumer lender. Merrill and Goldman advised Absa. JPMorgan Chase & Co. worked with Barclays. Today's Takeovers Financial companies have agreed to more than $170 billion of acquisitions so far this year, the busiest year since 2000 when a record $546 billion of financial-services deals were announced, data compiled by Bloomberg show. In addition to today's Absa takeover, UniCredito Italiano SpA, Italy's second-biggest bank, and Turkish partner Koc Holding AS announced an agreement to buy control of Yapi & Kredi Bankasi AS, Turkey's fourth-largest publicly traded bank, for 1.15 billion euros ($1.5 billion). Merrill, led by 53-year-old Chief Executive Officer E. Stanley O'Neal, generated 53 percent of its $6.2 billion of first-quarter revenue from its global markets and investment banking unit. More than 10 percent of the subsidiary's revenue came from mergers and securities underwriting for financial-services companies, up from 4.1 percent in the first quarter of 2004, Bloomberg data show. Merrill had record net income last year of $4.4 billion. Royal Bank of Scotland Merrill derived more than half of its 2005 financial-services client fees from stock offerings. The firm's investment-banking unit, led by Gregory J. Fleming, 42, and Dow Kim, 42, helped manage stock sales by Royal Bank of Scotland, Austria's Raiffeisen International Bank-Holding AG and Genworth Financial Inc., the Richmond, Virginia-based insurance unit of General Electric Co. They were three of Merrill's five biggest equity deals. Royal Bank of Scotland raised $2.7 billion, Raiffeisen sold $728 million of stock, and Genworth's offering totaled $711 million. Goldman ranks second in global equity offerings for financial- services firms this year, followed by Citigroup and Morgan Stanley, according to Bloomberg data. Merrill first advised Royal Bank of Scotland during 2000 in the 22.5 billion-pound ($43 billion) takeover of National Westminster Bank Plc, which turned the Edinburgh-based bank into the U.K.'s biggest corporate lender. Matthew Greenburgh, 44, global head of Merrill's financial institutions group, who joined the firm in London from ING Barings in 1998, built the relationship with the Scottish bank. Since then, Merrill advised Royal Bank of Scotland on at least 10 takeovers, including last year's $10 billion acquisition of U.S. lender Charter One Financial Corp. Fleming's Pay Merrill also helped Royal Bank of Scotland sell $7.4 billion of stock in three separate transactions since the start of 2004. Merrill is a passive, minority owner of Bloomberg LP, parent of Bloomberg News. Fleming, who declined to be interviewed, was paid $8.5 million in salary and bonus in 2004, up 42 percent from a year earlier, according to a regulatory filing from the company. Kim, who also declined to comment, got $11 million, up 29 percent. Merrill, Morgan Stanley and Goldman, all based in New York, have had the most success so far this year in winning business from financial-services companies. Merrill's $564 million in estimated 2005 fees is based on $50 billion in merger transactions, $9 billion in stock sales and $19 billion in debt offerings for financial companies. Wall Street fees are calculated as a percentage of the value of a deal, and companies often pay a lower rate as the size of a transaction increases. Morgan Stanley Morgan Stanley has reaped as much as $503 million of fees this year and Goldman charged up to $494 million. They're followed by Citigroup, with $389 million, and JPMorgan, at $321 million. UBS AG, Deutsche Bank AG, Nomura Holdings Inc., Lehman Brothers Holdings Inc. and Credit Suisse First Boston round out the rankings. Last year, Goldman led with $976 million in fees, trailed by Citigroup, Morgan Stanley and Merrill, Bloomberg data show. Morgan Stanley spokesman Andrew Walton, Goldman's Andrea Rachman and Lehman's Kerrie Cohen declined to comment, as did Credit Suisse First Boston spokeswoman Victoria Harmon, Citigroup's Andrea Hurst and JPMorgan's Adam Castellani. Olivier Sarkozy, global head of banks at UBS AG, also declined to comment. Deutsche Bank spokeswoman Rohini Pragasam didn't respond to a request for comment. MetLife to UFJ This year's biggest financial-services transactions include the agreement by MetLife Inc., the largest U.S. life insurer, to buy Citigroup's Travelers Life & Annuity unit for $11.5 billion. Goldman and Bank of America Corp. advised MetLife, while Citigroup's own investment bankers advised the parent. In Japan, Mitsubishi Tokyo Financial Group Inc. -- advised by itself along with Lazard, Morgan Stanley and Nomura Holdings -- is acquiring UFJ Holdings, which hired JPMorgan and Merrill for the $29.8 billion transaction. When interest rates fluctuate, companies turn to investment bankers for advice on how to lower borrowing costs. The Fed's Open Market Committee has raised its target for overnight loans between banks eight times since June. It last increased the benchmark 25 basis points to 3 percent on May 3. Rate Fluctuations The European Central Bank kept interest rates at 2 percent on May 4, a six-decade low, on concern the continent's economic growth will slow as oil prices rise. The Bank of England increased the U.K. benchmark rate to 4.75 percent, the highest in three years, in August. Japan's overnight rate has held at 0.15 percent since March 2001. ``In this interest rate environment, the issue of asset liability mismatch is coming up more frequently among clients,'' said John Hopkins, 58, a senior managing director of the financial institutions group at Bear Stearns Cos. in New York. Bear Stearns and JPMorgan advised New Orleans-based commercial bank Hibernia Corp. in its $5.2 billion sale to credit-card issuer Capital One Financial Corp. of McLean, Virginia, which was advised by Credit Suisse First Boston, the securities unit of Zurich-based Credit Suisse Group AG. Many banks have bought longer-term bonds with money borrowed at shorter durations to boost earnings. As short-term rates rise, companies' costs increase, hurting profits. ``It causes problems as people try to raise money,'' said William Ryan, the 61-year-old CEO of TD Banknorth Inc., a Portland, Maine-based bank majority-owned by Canada's Toronto-Dominion Bank. ``You've got to protect your earnings.'' Trio of Advisers Ryan hired a trio of advisers in the first quarter to help him reduce TD Banknorth's borrowing expenses: senior Lehman banker Mark Burton, 46; Keefe Bruyette & Woods Inc. President Andrew Senchak, 58; and Sandler O'Neill Partners LP Senior Managing Partner James Dunne, 48. All three bankers work in New York. TD Banknorth sold $3 billion of mortgages and government bonds to pay back short-term loans from the Federal Home Loan Bank. While TD Banknorth recorded a first-quarter loss of $38 million from the transactions, the trades will help ensure that future earnings won't be hurt as much by rising rates, the company said. Banks, mortgage lenders and other financial companies usually buy and sell fixed-income securities when interest rates rise or fall. Either way, Wall Street profits, Ryan said. ``When you talk to the capital markets people, the worst thing they see is when rates aren't changing,'' he said. ``As long as rates are moving one way or another, that's when they're able to make their money.'' Hiring Bankers While Merrill leads in fees from stock sales, Citigroup is the top debt underwriter and Morgan Stanley is the top merger adviser, Bloomberg data show. Securities firms have recruited top bankers from one another to handle the pickup in demand. Lazard Ltd. named Morgan Stanley's former head of financial banking, Gary Parr, 49, as deputy chairman in April 2003. Credit Suisse First Boston last month hired one of Parr's replacements, Vikram Gandhi, as its top financial- institutions banker. Gandhi, 42, in turn replaced Richard Barrett, 56, who became a consultant to CSFB in April. HSBC Holdings Plc, Europe's biggest bank, recruited CSFB's Alan Ginsberg, 43, and Tod Perkins, 41, in June to advise U.S. financial clients. Wachovia Corp., the fifth-biggest U.S. bank by market value, recruited the head of its financial-institutions group from Charlotte, North Carolina-based Bank of America Corp. Bank of America, the No. 2 U.S. lender, added five people to its team last month after firing two bankers in March. Mergers Advice Morgan Stanley is the financial-services industry's top merger adviser this year, collecting $331 million in fees, Bloomberg data show. The firm represented Mistubishi Tokyo in the UFJ Holdings deal, Spain's Banco Bilboa Vizcaya Argentaria SA in its bid for Italian lender Banca Nazionale del Lavoro SpA, and Italy's Banca Antonveneta SpA in the contested sale to ABN Amro Holding NV, the largest Dutch bank. Merrill places second in merger fees; Goldman is third. Citigroup, the world's biggest financial-services company, leads in fees from debt sales. The New York-based bank has earned $174 million this year on offerings by lenders and insurers such as Wells Fargo & Co., Bank of Nova Scotia and Liberty Mutual. ``Everybody targets this sector because there are a lot of things constantly happening,'' said Richard Bove, an analyst at Punk Ziegel & Co. in Pinellas Park, Florida. ``They're constantly raising money, securitizing loans, buying securities, hedging their balance sheets, and usually doing a lot of mergers. This is where the greatest amount of business is.'' North Fork North Fork Bancorp CEO John Kanas has hired everyone from stalwarts Morgan Stanley and UBS to boutiques such as Sandler O'Neill to advise on acquisitions or help his company buy and sell securities. ``We have probably used just about everybody,'' said Kanas, 58, whose bank is the biggest on New York's Long Island. ``It depends upon the activity and what the needs are at the time.'' Some financial-services companies have spread assignments among numerous firms on concern the expected pickup in acquisitions has led investment bankers to solicit business from clients' rivals or would-be acquirers, Independence Community Bank's Fishman said. ``You don't know, in a consolidating industry, where their conflicts are,'' he said. ``You need to talk to a lot of them. You need to be frank with all of them, but you need to hold your cards somewhat close to your vest with all of them. It's a tricky situation. Everybody's talking to everybody.'' Fee Table The table below of investment banking fees excludes deals involving real-estate companies and investment trusts. Deals in which the firms advised themselves also are excluded. M&A fees were estimated by first dividing a firm's reported overall advisory fee total in the first quarter by the total dollar amount of completed deals, as compiled by Bloomberg. The average fee rate was then multiplied by the dollar value of all announced financial-services mergers so far this year. All advisers were credited with the full value of the deal. The fees for debt and equity sales were based on published underwriting data tracked by Bloomberg. Fees from Financial-Services Clients (in millions of dollars): Rank Firm Debt M&A Equity Total `04 Rank 1 Merrill 70 152 342 564 4 2 Morgan 61 331 111 503 3 3 Goldman 133 151 210 494 1 4 Citigroup 178 36 174 389 2 5 JPMorgan 135 119 66 321 5 6 UBS 160 34 46 240 6 7 Deutsche 125 67 27 219 8 8 Nomura* 17 125 46 188 10 9 Lehman** 71 70 38 179 9 10 CSFB 95 22 13 130 7 Total 1,045 1,107 1,073 3,22

Subject: States Propose Changes to Trim Medicaid From: Emma To: All Date Posted: Mon, May 09, 2005 at 12:26:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/09/national/09medicaid.html?pagewanted=all States Propose Sweeping Changes to Trim Medicaid by Billions By ROBERT PEAR WASHINGTON - Governors and state legislators have devised proposals for sweeping changes in Medicaid to curb its rapid growth and save billions of dollars. Under the proposals, some beneficiaries would have to pay more for care, and states would have more latitude to limit the scope of services. The proposals, drafted by separate working groups of governors and state legislators, provide guidance to Congress, which 10 days ago endorsed a budget blueprint that would cut projected Medicaid spending by $10 billion over the next five years. Many of the proposals resemble ideas advanced by President Bush as part of his 2006 budget. In some cases, the governors embrace Mr. Bush's proposals but go further. At the same time, they also reject some of the president's recommendations that they believe would shift costs to the states. John Adams Hurson, a member of the Maryland House of Delegates who is president of the National Conference of State Legislatures, said: 'I am a Democrat, a liberal Democrat, but we can't sustain the current Medicaid program. It's fiscal madness. It doesn't guarantee good care, and it's a budget buster. We need to instill a greater sense of personal responsibility so people understand that this care is not free.' A coalition of beneficiary advocates, labor unions and health care providers is already gearing up to fight any significant cutbacks in Medicaid. The coalition includes AARP, Families USA, pediatricians, hospitals and nursing homes. State officials say their goal is not just to save money, but also to avoid wholesale cuts in coverage like those in Tennessee, which is dropping more than 300,000 people from its Medicaid rolls, and in Missouri, which is dropping 90,000. Medicaid, the nation's largest health insurance program, covers more than 50 million low-income people. Though originally intended for the poor, it now covers people with incomes well above the poverty level in some states. The National Governors Association and the National Conference of State Legislatures are still refining their proposals, with the aim of getting their recommendations to Congress for action this year. States, they say, should be allowed to impose higher co-payments and deductibles on Medicaid recipients with higher incomes. Moreover, they say, states should not have to offer the same comprehensive set of benefits to all Medicaid recipients, but should be allowed to provide some people with more limited benefits, like those offered by commercial insurers and the Children's Health Insurance Program. States should be able to establish 'different benefit packages for different populations, or in different parts of the state,' the governors say in a draft of their new policy. The proposals developed over the last month by governors and state legislators have a substantial chance of becoming law. Congressional leaders have expressed a desire to rein in Medicaid costs, appear ready to act and are just waiting for advice from state officials. 'We want to invite the governors to the table,' said Representative Jim Nussle, Republican of Iowa, who is chairman of the House Budget Committee and a potential candidate for governor next year. With Medicaid, as with welfare, states have an influential voice because they help finance the program. Federal and state spending on Medicaid has grown an average of 10 percent a year over the last five years - much faster than federal or state revenues - and now totals more than $300 billion annually. Drug prices and hospital costs have risen at a brisk pace, but the increase in enrollment is a more important factor. From 2000 to 2004, according to the Congressional Budget Office, the number of Medicaid recipients grew by one-third. This growth coincides with the erosion of employer-sponsored health benefits. As employers have cut back coverage and raised premiums, private insurance has become less available and less affordable to low-wage workers. In recent months, the governors have drafted at least three versions of a paper titled 'Medicaid Reform: A Comprehensive Approach.' The documents, obtained by The New York Times, offer a vision of 'Medicaid plus health care reform,' including 'incentives and penalties for individuals to take more responsibility for their health care.' The governors endorse the idea of tax credits to help individuals and small businesses buy insurance. Such credits, they say, could slow the increase in the number of people becoming eligible for Medicaid. In their draft proposal, marked 'for comment only - not for distribution,' the governors say they believe that 'Medicaid overpays for prescription drugs.' Mr. Bush wants to reduce Medicaid payments to pharmacies, but the governors say Medicaid must also extract savings from drug manufacturers. To achieve this goal, the governors say, Congress should increase the discounts and rebates that drug companies are required to provide state Medicaid programs - a change opposed by drug makers. In addition, the governors say, Congress should encourage the formation of multistate purchasing pools to buy drugs at lower prices for Medicaid recipients, state employees and others in public programs. State officials generally support Mr. Bush's proposal to limit the ability of elderly people to qualify for Medicaid coverage of nursing home care by transferring assets to their children. The governors say such restrictions 'should be encouraged,' because 'Medicaid can no longer be the financing mechanism for the nation's long-term-care costs.' Medicaid now pays for about two-thirds of nursing home residents. Mr. Hurson, the president of the conference of state legislatures, who is also chairman of the health committee in the Maryland House, said, 'Medicaid was never intended to be a middle-class entitlement program for nursing home care.' State legislators have discussed a proposal to give states a fixed amount of federal money for long-term care, a sort of block grant that would automatically be increased each year to keep pace with medical costs and demographic changes. State officials would have broad discretion to use the money for nursing homes and home health care, but individuals would not have an entitlement to such services. State legislators are still weighing this proposal, which they know would be contentious because the legal entitlement to benefits is a bedrock of the Medicaid program. Under current law, Medicaid officials cannot charge co-payments to pregnant women and cannot charge for specific services like family planning and emergency care. For other services, the maximum co-payment is generally $3. 'These rules, which have not been updated since 1982, prevent Medicaid from utilizing market forces and personal responsibility to improve health care delivery,' the governors say in the latest version of their policy statement. Governors seek 'broad discretion' to set premiums, co-payments and deductibles, subject to certain limits. Congress, they say, could establish 'financial protections to ensure that beneficiaries would not be required to pay more than 5 percent of total family income.' A more modest proposal, the governors say, is to charge higher co-payments to families with incomes above certain levels, say $22,000 a year for a family of three. Or, they say, states could charge co-payments to deter the overuse of specific services, including inappropriate use of hospital emergency rooms. Advocates for Medicaid beneficiaries said such charges would discourage people from seeking care, so their ailments would worsen and treatment would cost more. State officials also want to change what they see as one of the most onerous requirements of the Medicaid law. Under this provision, states must treat any health problems discovered in periodic examinations of children under the age of 21. About half of the states have been successfully sued under this provision. The National Conference of State Legislatures says Congress should 'provide more flexibility for states' to limit this benefit. Jane Perkins, who has represented Medicaid recipients as a lawyer at the National Health Law Program, said 'it would be a tragedy' if such changes were made. 'These children need the full range of services because they are likely to have greater needs, more chronic illnesses and disabling conditions,' she said. Governors also want Congress to make it easier for them to persuade federal courts to set aside orders relating to their Medicaid programs.

Subject: No New Refineries in 29 Years? From: Emma To: All Date Posted: Mon, May 09, 2005 at 11:40:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/09/business/09refinery.html?pagewanted=all No New Refineries in 29 Years? There Might Well Be a Reason By JAD MOUAWAD About 100 miles southwest of Phoenix, in a remote patch off Interstate 8, Glenn McGinnis is seeking to do something that has not been done for 29 years in the United States. He is trying to build an oil refinery. Part of his job is to persuade local officials and residents to allow a 150,000-barrel-a-day refinery in their backyard - no small task. Another is to find investors ready to risk $2.5 billion in a volatile industry. So far, the effort has consumed six years and $30 million, with precious little to show for it. Oil industry analysts and trade organizations like the American Petroleum Institute say they know of no one else doing the same thing. Even so, Mr. McGinnis - an industry veteran who joined Arizona Clean Fuels last year as chief executive to give the project more heft against long odds - cleared a significant hurdle recently when Arizona awarded him a crucial emissions permit. Still ahead are countless rounds of negotiations with local, state and federal agencies to secure dozens more permits. Meanwhile, the 1,400-acre site picked for the refinery, an old citrus grove near the Mexican border, remains empty, a sign of why the United States is now grappling with an acute shortage of plants that can refine the more than 20 million of barrels of crude oil that the country consumes every day. The last refinery to be completed in the United States was in 1976, and Mr. McGinnis knows all too well that community and political opposition squashed earlier projects. His proposed refinery in Arizona has already been forced away from its original site near Phoenix, in 2003, after the state considered expanding the city's clean-air limits. But times may be changing, said Mr. McGinnis, an oil business veteran of 33 years who has run refineries in the United States and Aruba. 'The moon and the stars have aligned for us,' he said, speaking on his cellphone between discussing crude oil supplies with Mexico's state oil company. 'We're halfway through, and we still have a lot of work.' Long considered the ugly duckling of the oil industry, the refining business is now in the spotlight as Americans complain about sticker shock at the gasoline pumps and higher energy prices over all. President Bush has taken notice. Last month, Crown Prince Abdullah of Saudi Arabia, visiting the president at his Texas ranch on April 25, chided him with the message that his country could send more oil, but the United States would not have the ability to refine it. Soon afterward, Mr. Bush offered to provide closed military bases for new refineries. Over the last quarter-century, the number of refineries in the United States dropped to 149, less than half the number in 1981. Because companies have upgraded and expanded their aging operations, refining capacity during that time period shrank only 10 percent from its peak of 18.6 million barrels a day. At the same time, gasoline consumption has risen by 45 percent. But in the last two years, the refining business has experienced a revival of sorts, leading some refiners to predict they have entered an age of higher margins and better returns. Not everyone agrees, but for the first time in a long time the industry is more confident about itself. Even with better economics, however, it is still tough to build a refinery from scratch. Mr. McGinnis says he is not afraid of the challenge. He and his staff work in a small office in Phoenix, mostly consumed these days with securing permits and looking for financial backing. The next step is to complete an environmental impact statement for the federal Bureau of Land Management. That will include an assessment of the refinery's impact on underground water sources and endangered species, as well as its effect on any Native American burial grounds. After that, the project needs to get the site's zoning changed by Yuma County from agricultural to heavy industrial; Arizona's preservation office needs to be convinced that the refinery does not trample on any ancient historic site or trail; and finally, the project must apply for a presidential permit, which is issued by the State Department, to allow the crossing of a 200-mile pipeline into Mexico. The business of turning crude oil into gasoline, jet fuel or heating oil has rarely been a lucrative proposition. It has dismal profit margins compared with its more glamorous cousin, exploration. It is highly cyclical and fairly unpredictable, because demand for gasoline swings sharply by season. And because of low oil prices over the past decades, refiners have been forced into cutthroat competition that has driven many of the smaller refiners out of business. More refining capacity will almost certainly be needed. Gasoline demand is forecast to rise 39 percent by 2025, to 12.9 million barrels a day, up from today's 9.3 million barrels, according to a long-term outlook by the Energy Information Administration. By then, gasoline alone will account for nearly half the crude oil consumed in the United States. By contrast, domestic refining capacity is expected to grow only by 0.8 percent from 2005 to 2007, slightly less than the 0.9 percent increase registered between 1998 and 2004, according to Jacques Rousseau, an oil analyst with the investment banker Friedman, Billings, Ramsey. Jay Saunders, who follows oil companies for Deutsche Bank, said that the increase in refining margins would lead to increased capacity. 'The industry is definitely going to overbuild,' he said, 'they have in the past and they will in the future.' Others caution that the industry should be wary of recreating a glut of capacity that would cause profit margins to sink again. 'Refining has been a cyclical business for a long time,' said Bill Hauschildt, the vice president for global refining with ChevronTexaco. 'In the past few years, there's been much more discipline in the market for not overbuilding capacity.' Part of the issue, according to refiners, is that substantial investments were made over the last decade to lower carbon emissions and meet low-sulfur fuels regulations. The American Petroleum Institute estimates the industry invested $47 billion on such investments. More investments will be needed through 2007 to clean up gasoline and diesel. 'This is going to cost you money and the only thing you will get is cleaner air and less emissions - which are good - but no new capacity,' said Edward H. Murphy, the industry group's general downstream sector manager. 'What refiners need are clear guidance on what's permissible and what is not if they want to expand,' Mr. Murphy said. 'So far, that has not been very clear.' To make up for the domestic shortfall, gasoline imports from Europe and South America have been rising in recent years. Gasoline imports now account for nearly 10 percent of domestic consumption and have exceeded a million barrels a day on average throughout April. But even as the United States grows more reliant on foreign gasoline, it will face mounting competition from other buyers where demand is similarly growing, like China and India. 'More competition means imports might become more expensive,' said Joanne Shore, an analyst with the government's Energy Information Administration. For Bob Slaughter, the president of the National Petrochemical and Refiners Association, the industry's main trade group, 'The question now is to keep the growth in imports at a reasonable level.' He expects additional capacity will come from expansion of existing projects and not from the construction of new refineries like the one in Arizona. Even if all goes to plan and investors are found, Mr. McGinnis's envisioned refinery will not be ready before late 2009. The prospect of a new employer, 3,000 construction jobs and 600 permanent posts has done a lot to outweigh concerns over the project, said John Nussbaumer, the mayor of Wellton, a city of 1,900 people about 20 miles from the refinery site. 'Of course I am concerned about the effects on the environment,' he said. 'Would I rather see it somewhere else? Yes. Would I oppose it at this time? No. It's been too long since a new refinery was built in the United States. Anything we can do to reduce our dependency on the Middle East is a good thing.'

Subject: Progressive From: Emma To: All Date Posted: Mon, May 09, 2005 at 08:17:54 (EDT) Email Address: Not Provided Message: Remember the term 'progressive?' Where are we progressive? What are we doing to low income families? What is to be done with no Medicaid for many in need, with a mad choice of drugs or food stamps for others?

Subject: Pressing the Reset Button on Stocks From: Emma To: All Date Posted: Sun, May 08, 2005 at 17:16:59 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/08/business/yourmoney/08fund.html The Stock Market Is Still Pressing the Reset Button By PAUL J. LIM DEPENDING on whom you ask, the recent stock market sell-off can be attributed either to inflationary fears or to the slowing economy. But some people say it's also tied to a longer-term problem facing investors: the fact that five years after the stock market bubble burst in 2000, unleashing one of the grisliest bears in history, there are still signs of froth. 'You might think that with the stock market significantly lower after all this time, investors would be chastened,' said Ben Inker, director of asset allocation at GMO, an investment management firm in Boston. But it often takes six or seven years for returns to revert to their historical norms, he said. Despite the recent bear market - from its peak in March 2000 to its trough in October 2002, the Standard & Poor's 500-stock index lost nearly half its value - blue-chip stocks have still posted average annual gains of 13.2 percent over the last 20 years, according to Ibbotson Associates, the investment consulting firm. That's well above the 10.4 percent average annual return that stocks have delivered since 1926. Given that equities are coming off of one of the biggest bubbles in recent history, it may take much longer this time for stocks to reset to their norms. That may mean a prolonged period of below-average returns. How much below average? Mr. Inker has very low expectations for stocks. Over the next seven years, he predicts, domestic equities will deliver average annual returns of only around 1 percent. Assuming inflation of around 2.5 percent, that means a real return of minus 1.5 percent a year. But haven't stocks already lost more than 2 percent a year, on average, over the last five years? That's true, but sometimes it takes more than a decade for stocks to get going after a big meltdown. After stocks peaked in the mid- to late 1960's, for instance, the Dow Jones industrial average was virtually flat until 1982. David Chalupnik, head of equities at the First American Funds, isn't so pessimistic. He says he thinks stocks may gain 7 percent a year, annualized, over the next 25 years. But that is still around three and a half percentage points below stocks' long-term average. While he acknowledges that stocks have already suffered tremendous losses, he notes that many of the underlying economic attributes that led to above-average returns in the 1980's and 90's are likely to deteriorate. 'From a productivity point of view, an earnings point of view, and a growth point of view, we're starting from such a high point,' he said. To be sure, a good deal of the market's excesses have been wrung out. For example, the price-to-earnings ratio for the S.& P. 500, based on trailing four-quarter earnings, is around 19. That is down considerably from the 2001 peak of more than 46. But Clifford S. Asness, managing principal at AQR Capital Management in Greenwich, Conn., relies on a different P/E ratio, one made famous by the Yale economics professor Robert J. Shiller, and finds that stocks are still historically expensive. Mr. Asness has taken the current price of the S.& P. 500 and divided it by the 10-year average of trailing corporate earnings. By that measure, the S.& P. trades at a P/E of around 26. With the exception of the late 1990's, the last time the market was this expensive was in the years leading up to the Great Depression. Many investors may not want to hear that. 'People have an almost moralistic view,' he said, 'that they've endured such heck in recent years that things must be cheap in the stock market.' He said stocks were likely to gain around 7 percent annually - or 4 percent in real returns - in the coming years. In some ways, that's a relatively optimistic forecast. Mr. Asness has studied the market's performance back to 1927, based on valuations. When stocks trade at 19.9 to 31.7 times their 10-year average real earnings - as they do now - they've typically lost 0.1 percent a year, in real returns, in the subsequent decade. What does it all mean for investors? For starters, there's a strong chance of another major bear market, or of more frequent corrections in coming years than we're accustomed to facing. The fact is, investors who cut their teeth in the 1980's and 90's were spoiled by unusually long bull markets. But since 1900, bull markets have lasted only 718 days - or roughly two years - on average, based on the gains in the Dow Jones industrials, according to Ned Davis Research in Venice, Fla. The rally in the equity markets that started in October 2002 is already two and a half years old. IF stock returns are lower in coming years, low-cost, tax-efficient investing strategies will gain popularity, says Harold Evensky, a financial planner in Coral Gables, Fla. Mr. Evensky says he believes stocks will return around 8 percent a year, on average, in the coming decade, with inflation averaging around 3 percent. In such an environment, Mr. Evensky said, 'if you can shave half a percentage point in taxes and half a percentage point in fees, you just saved 20 percent of your real returns.' Ultimately, the best strategy for investors in a low-return environment is simply to save more money, says Rande Spiegelman, vice president for financial planning at the Schwab Center for Investment Research. 'We've gotten used to the market doing our savings for us,' Mr. Spiegelman said. 'Hopefully those days aren't over just yet.' But if they are, investors will have to pick up the slack.

Subject: What's wrong with the reset? From: Pete Weis To: Emma Date Posted: Mon, May 09, 2005 at 11:44:50 (EDT) Email Address: Not Provided Message: 'Ultimately, the best strategy for investors in a low-return environment is simply to save more money, says Rande Spiegelman, vice president for financial planning at the Schwab Center for Investment Research.' Wouldn't this mean less spending which would reduce consumption which would reduce corporate profits which would punish stock prices even more? Certainly it is good for anyone to spend less and save more and eventually it would be healthier for the economy down the road. But if everyone where to take this advice, stocks could and would fall much further? Does this mean present stock levels are, at least, partially based on spending beyond one's means and borrowing heavily to do it? There are a number of ways we can get to spending less and saving more - (1) investors/consumers do it voluntarily as suggested by this statement (unlikely); (2) higher interest rates force it on consumers; (3) consumers reach a point where, even with artificially low rates and loose lending, they can not service anymore debt; (4) consumers suddenly begin to get higher wages and they save the increases (also unlikely). So what really is the fundamental problem with the economy and by extension, the stock market? Certainly higher energy prices have hurt in the last couple of years, but problems with the economy started well before we started suffering from higher oil prices. Certainly the stock market boom/bust had a negative effect, but if we had a healthy economy we would have been able to recover like we did after 1987. So what is really eating away at our economy? And is it likely to get any better? Where did all that wealth from the hightech boom go - was it just a mirage?

Subject: Savings From: Emma To: Pete Weis Date Posted: Tues, May 10, 2005 at 05:49:31 (EDT) Email Address: Not Provided Message: The problem is with savings, and we each had better be saving.

Subject: Why? From: Pete Weis To: Emma Date Posted: Tues, May 10, 2005 at 09:07:09 (EDT) Email Address: Not Provided Message: Why do we save less? Are we different beings than that of the past? What drives our lack of savings?

Subject: Re: Why? From: Emma To: Pete Weis Date Posted: Tues, May 10, 2005 at 21:34:38 (EDT) Email Address: Not Provided Message: I know of no convincing answer to 'why we save less' among economists.

Subject: Re: Why? From: Pete Weis To: Emma Date Posted: Wed, May 11, 2005 at 09:06:03 (EDT) Email Address: Not Provided Message: From Encarta Online comes an old idea of why we save less at times - does it sound familiar?: 'Modern industry had the capacity to produce vast quantities of consumer goods, but this created a fundamental problem: Prosperity could continue only if demand was made to grow as rapidly as supply. Accordingly, people had to be persuaded to abandon such traditional values as saving, postponing pleasures and purchases, and buying only what they needed. “The key to economic prosperity,” a General Motors executive declared in 1929, “is the organized creation of dissatisfaction.” Advertising methods that had been developed to build support for World War I were used to persuade people to buy such relatively new products as automobiles and such completely new ones as radios and household appliances. The resulting mass consumption kept the economy going through most of the 1920s. But there was an underlying economic problem. Income was distributed very unevenly, and the portion going to the wealthiest Americans grew larger as the decade proceeded. This was due largely to two factors: While businesses showed remarkable gains in productivity during the 1920s, workers got a relatively small share of the wealth this produced. At the same time, huge cuts were made in the top income-tax rates. Between 1923 and 1929, manufacturing output per person-hour increased by 32 percent, but workers’ wages grew by only 8 percent. Corporate profits shot up by 65 percent in the same period, and the government let the wealthy keep more of those profits. The Revenue Act of 1926 cut the taxes of those making $1 million or more by more than two-thirds. As a result of these trends, in 1929 the top 0.1 percent of American families had a total income equal to that of the bottom 42 percent. This meant that many people who were willing to listen to the advertisers and purchase new products did not have enough money to do so. To get around this difficulty, the 1920s produced another innovation—”credit,” an attractive name for consumer debt. People were allowed to “buy now, pay later.” But this only put off the day when consumers accumulated so much debt that they could not keep buying up all the products coming off assembly lines. That day came in 1929.'

Subject: Re: Why? From: Emma To: Pete Weis Date Posted: Wed, May 11, 2005 at 16:16:40 (EDT) Email Address: Not Provided Message: Interesting passage, but the vulnerability to similar poor policy in a down-turn is not there now. There are parallel problems though.

Subject: Re: Why? From: Pete Weis To: Emma Date Posted: Wed, May 11, 2005 at 21:47:50 (EDT) Email Address: Not Provided Message: 'People were allowed to buy now, pay later. But this only put off the day when consumers accumulated so much debt that they could not keep buying up all the products coming off assembly lines. That day came in 1929.' Emma. The equity which has been extracted out of a booming housing market over the last few years has 'put off the day'. But in the absence of consumers from countries with trade surpluses picking up the slack (in a very significant way) for fading US and other Western consumers, the 'day' will come. Isn't it too late for any 'policy', which would be acceptable to all who would have to buy into it, to reverse the build-up and continuing build-up of debt which will begin to bite deeply into consumption?

Subject: Re: Why? From: Terri To: Pete Weis Date Posted: Wed, May 11, 2005 at 22:30:22 (EDT) Email Address: Not Provided Message: I wish I could answer your question. Please keep asking, for I may in time be able to.

Subject: Re: Why? From: Pete Weis To: Terri Date Posted: Thurs, May 12, 2005 at 01:00:35 (EDT) Email Address: Not Provided Message: Terri. I hope you can.

Subject: Medicine or Food? From: Emma To: All Date Posted: Sun, May 08, 2005 at 16:46:33 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/08/politics/08drugs.html?ex=1115697600&en=b62262be31f6be71&ei=5070 Under New Medicare Prescription Drug Plan, Food Stamps May Be Reduced By ROBERT PEAR WASHINGTON - Elderly people with low incomes may lose some of their food stamps if they sign up for the new Medicare prescription drug benefit, the Bush administration said Saturday. When Medicare begins covering drugs in January, older Americans will spend less of their own money on drugs and will therefore have more to spend on food, reducing their need for food stamps, officials said. The new reading of the Medicare law, set forth in a document sent to Congressional offices this week, comes just as federal officials begin a nationwide campaign to persuade low-income people to apply for the drug benefit. The document, addressed to elderly and disabled people who receive food stamps, says, 'You may qualify for extra help paying for your Medicare prescription drug costs.' But it adds, 'If you qualify for extra help, your food stamp benefits may decline.' Dr. Mark B. McClellan, administrator of the Centers for Medicare and Medicaid Services, defended the policy. 'Medicare beneficiaries will get comprehensive help with their drug costs and will have significantly more resources for all their other basic necessities, including food,' he said. The savings on prescription drugs will more than offset any loss of food stamps, so 'low-income seniors will be better off,' he said. In debate on the prescription drug bill in 2003, members of Congress said the high cost of drugs was forcing many older Americans to choose between food and medicine. The document, prepared by the Health and Human Services Department, tells Medicare beneficiaries: 'With the Medicare prescription drug coverage, you may see your food stamp benefits go down as you spend less on drugs. Using the new Medicare benefit means you will have more cash to spend on food that you used to spend on prescription drugs. If you get the $10 minimum food stamp benefit, your benefits may end. However, the extra cash you will have to spend on food makes up for not getting as much in food stamps.' The drug benefit will be available to individuals with monthly income of $1,197 or less and married couples with income of $1,604 or less. The guide gives this example of how the new law would affect a hypothetical Medicare beneficiary, Mrs. Smith, who receives $798 a month in Social Security. She does not receive Medicaid. She now pays $147 a month for medical expenses, including $51 for three prescription drugs. Her monthly rent is $421. Under the Medicare drug plan, Mrs. Smith will not have to pay a monthly premium or a deductible. She will have a $3 co-payment on each drug, for $9 a month. Her medical spending will decline to $105 a month, from $147, for a saving of $42. But Mrs. Smith's monthly food stamp allotment, $27, will be reduced to $10 a month, because her 'out-of-pocket medical costs have gone down.' The administration says she will come out ahead because 'she still has $25 more cash in her pocket - $42 medical savings, less the $17 decrease in food stamps.'

Subject: Food or Medicine? From: Emma To: Emma Date Posted: Mon, May 09, 2005 at 06:15:01 (EDT) Email Address: Not Provided Message: We really must ask what we are about.

Subject: Re: Food or Medicine? From: Emma To: Emma Date Posted: Mon, May 09, 2005 at 06:22:42 (EDT) Email Address: Not Provided Message: Who are we?

Subject: Re: Medicine or Food? From: Terri To: Emma Date Posted: Sun, May 08, 2005 at 20:31:19 (EDT) Email Address: Not Provided Message: Good grief!

Subject: Re: Medicine and Food? From: Pancho Villa To: Terri Date Posted: Mon, May 09, 2005 at 18:53:44 (EDT) Email Address: nma@hotmail.com Message:

Subject: The Perfect Economic Storm From: Emma To: All Date Posted: Sun, May 08, 2005 at 10:18:41 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/08/weekinreview/08gross.html?pagewanted=all The Perfect Storm That Could Drown the Economy By DANIEL GROSS WE seem to be living in apocalyptic times. On NBC's 'Revelations,' Bill Pullman and Natascha McElhone seek signs of the End of Days. In the Senate, gray-haired eminences speak of the 'nuclear option.' The doomsday theme is seeping into the normally circumspect world of economics. In April, Arjun Murti, a veteran analyst at the investment bank Goldman Sachs, warned that oil could 'super-spike' to $105 a barrel. And increasingly, economists are prophesying that the American economy as a whole may be sailing into choppy waters. Just look at the many obvious and worrisome portents. The government each year spends much more than it brings in, and so the nation has a large budget deficit ($412 billion in fiscal 2004, and growing). Americans also import far more goods than they export, and so the nation has record trade and current account deficits. As consumers, Americans personally spend significantly more than they earn. Worse, some imbalances are eerily reminiscent of conditions that helped touch off recent economic crises: Mexico in 1994, Asia in 1997, Russia in 1998 and Argentina in 2002. Throw in rising interest rates, warnings of a housing bubble and the potential for higher inflation and slower growth (a k a stagflation) - and you can understand why some economic analysts may be plumbing the New Testament for inspiration. The forces propelling and buffeting the economy are like a series of interrelated and interconnected weather systems. Could they be setting the conditions for a perfect storm - a swift series of disturbances that causes lasting damage? If so, what would it look like? 'There's a pattern that is familiar from so many other countries that have gotten into debt problems,' said Jeffrey A. Frankel, an economist at Harvard's Kennedy School of Government. 'A simultaneous rise in interest rates, fall in securities prices and depreciation of the currency.' Of course, economists, always armed with bandoliers of caveats, are quick to warn that the economy is relatively healthy. Job growth numbers released on Friday were strong, with 274,00 new jobs created in April. And they warn against drawing parallels too sharply between the mighty United States and emerging markets. The dollar remains the world's reserve currency, and the United States is a global military and political hegemon. And the nation has been able to borrow huge amounts for years without suffering a crisis. That said, how might a perfect storm be created? It would likely gather overseas, and wouldn't necessarily take the form of a terrorist strike or oil shock. The United States finances its spendthrift ways by selling dollars and dollar-denominated securities (like Treasury bills) to foreign creditors, mostly to central banks in Asia. To sustain growth, the United States needs foreign creditors to continue to add to their piles every day. Any signs to the contrary are worrisome. In February, when the Korean government suggested that the Bank of Korea might diversify its foreign exchange holdings, 'this seemingly innocuous statement set off a small panic in our stocks and bond markets,' said James Grant, editor of Grant's Interest Rate Observer. If the Bank of China, which has been accumulating dollars at the rate of $200 billion a year, decides to cut back on new purchases, either to diversify or to let its currency appreciate, the United States would quickly have to offer sharply higher interest rates to retain existing investors and entice new ones. Nouriel Roubini, an economics professor at New York University's Stern School of Business, estimates that if China cut its rate of accumulation by half, long-term interest rates in the United States could rise by 200 basis points over a few months and the value of the dollar would fall. Such a rising tide - the yield on the 10-year bond shooting from 4.25 to 6.25, the average 30-year mortgage rising from 6 percent to 8 percent - would mean instantly higher borrowing costs for the government, businesses and consumers. It would drench Wall Street, soaking the stocks of giant interest-rate-sensitive blue chips like Citigroup and making life difficult for speculative, debt-ridden companies. Some highly leveraged hedge funds or investment banks caught on the wrong side of trades would incur significant losses. The United States weathered a sharp decline in the stock market just a few years ago, in large part because of the housing market's strength. But a sharp rise in interest rates would literally hit home. For new home buyers, or for people with adjustable rate mortgages, 200 extra basis points of interest on a $400,000 mortgage would represent $8,000 a year in extra payments. If mortgage rates were to rise sharply, housing prices would level off and perhaps do the unthinkable: fall. Suddenly, the mechanisms that have allowed consumers to keep the economy afloat - the ability to realize profits from selling homes, to refinance mortgages at lower rates and to borrow cheaply against home equity - would be broken. In the absence of sharply rising wages, that $8,000 in extra interest would be $8,000 less to spend at Home Depot, or at the Cheesecake Factory, or at Disney World. 'Personal expenditures in the past 15 months have been largely financed by borrowing,' said Wynne Godley, a Cambridge University economist who is affiliated with the Levy Institute at Bard College. 'And even a reduction in the pace of debt creation will force people to start spending less, on a big scale.' If the dollar weakens and consumption falls, the trade and current account deficits would start to narrow. But the United States economy would slow and, perhaps, even shrink. 'The result would not be a full-blown financial crisis most likely, but it would still be a major recession,' said Barry Eichengreen, a professor of economics and political science at the University of California at Berkeley. What would create the full-blown crisis? When the slowdown starts to radiate across the globe, said Catherine L. Mann, senior fellow at the Washington-based Institute for International Economics. For years, the American consumer has been the engine of global growth, by gobbling up the output of oil wells in Saudi Arabia and factories from Mexico to China. 'The slowdown in consumer spending is going to have a negative influence on the global economy through reduced international trade,' Ms. Mann said. What's more, a recovery would be comparatively slow in coming. When the global economy came to a screeching, synchronous halt in 2001, the United States led much of the world back to growth because the federal government went on a stimulus binge for several years: Congress significantly increased government spending while cutting taxes, and the Federal Reserve slashed interest rates to historic lows, and held them there. But in the perfect economic storm, none of these three powerful levers would be readily available. Today's deep budget deficits make both significant tax cuts and spending increases unlikely. And rising interest rates would make it difficult, if not impossible, for the Federal Reserve to reduce the cost of borrowing. It sure sounds alarming. But as the clouds gather and the wind stiffens, we sail onward, with no apparent adjustment in course, full steam ahead. Why aren't we rushing to take evasive action? Why is Congress adding new spending while it passes new tax cuts? Why aren't financial institutions encouraging Americans to pay down their debt rather take on more? A lot of it has to do with timing. While many economists are willing to imagine in detail what a perfect storm would look like, virtually none will forecast precisely when - or if - it will start. And so it remains a vague and distant possibility. Besides, adds Jeffrey Frankel, 'some of us have been warning of this hard-landing scenario for more than 20 years.'

Subject: Re: The Perfect Economic Storm From: Pete Weis To: Emma Date Posted: Sun, May 08, 2005 at 10:42:58 (EDT) Email Address: Not Provided Message: 'Why aren't we rushing to take evasive action? Why is Congress adding new spending while it passes new tax cuts? Why aren't financial institutions encouraging Americans to pay down their debt rather take on more?' To find the answer we need to think about what most concerns a politician or a banking executive or any corporate executive these days.

Subject: Cigars? From: johnny5 To: Pete Weis Date Posted: Mon, May 09, 2005 at 00:00:31 (EDT) Email Address: johnny5@yahoo.com Message: I heard the boeing guy couldn't get cigars for his lady :( Why would politicians and CEOs risk such fine careers for a fling with a lady?

Subject: Drug Makers Reap Benefits of Tax Break From: Emma To: All Date Posted: Sun, May 08, 2005 at 09:33:44 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/08/business/08taxes.html?pagewanted=all Drug Makers Reap Benefits of Tax Break By ALEX BERENSON A new tax break for corporations is allowing the biggest American drug makers to return as much as $75 billion in profits from international havens to the United States while paying a fraction of the normal tax rate. The break is part of the American Jobs Creation Act, signed into law by President Bush in October, which allows companies a one-year window to return foreign profits to the United States at a 5.25 percent tax rate, compared with the standard 35 percent rate. Any company with profits in other countries can take advantage of the law, but drug makers have been the biggest beneficiaries because they can move profits overseas relatively easily, independent analysts say. The money the companies are bringing home has come from many years of using legal loopholes in the tax law to aggressively shelter their profits from United States taxes, tax lawyers say. While the companies' tax returns are private, fragmentary information about their tax payments is buried inside their annual financial statements. Those figures show that the drug makers have told the Internal Revenue Service for years that their profits come mainly from international sales, even though the prices of medicines are far higher in the United States and almost 60 percent of their sales take place in America. Representatives of most of the big drug companies declined to com-ment beyond their annual reports, but in a statement Eli Lilly noted that several factors depressed its United States profits. Pfizer said it was following the intent of the law. Though the companies stand behind their accounting, financial analysts and tax lawyers say that the drug makers' claim defies reality and that their profits come mostly from sales in the United States. But the I.R.S. lacks the resources to challenge the companies effectively, the analysts and lawyers say. As a result, the six major companies - Pfizer, Johnson & Johnson, Merck, Bristol-Myers Squibb, Wyeth and Lilly - collectively pay a federal tax rate of less than 15 percent on their worldwide profits, with some companies paying much less. Already, four of the six drug makers have collectively announced plans to return $56 billion in profits to the United States. Two others say they are still considering but could repatriate an additional $18 billion. Had the six companies faced standard federal taxes on those profits, they would have paid $26 billion to the United States. Instead, they will pay less than $4 billion. Chris Senyek, an accounting analyst at Bear Stearns, said drug companies would probably make up about half of all the money repatriated by publicly traded companies. During this window, returning money to the United States is to the advantage of the companies because they can spend the cash here rather than having to use it overseas as tax laws generally require. Lawmakers have said their main intention for the law was to encourage American companies to build new operations and hire workers. Congress passed the law in response to pressure from the European Union to resolve a long-running trade dispute. Although the act is intended to create jobs, Pfizer said last month that it would cut its annual costs by $4 billion over the next three years. Pfizer, which will repatriate at least $28 billion under the act, did not say how many jobs it planned to eliminate, but analysts expect the company to shrink its work force by thousands of people. Mr. Senyek said the law would create an insignificant number of jobs because companies can easily work around provisions in the law meant to stop them from using the money for dividends to shareholders rather than new hiring. After the break expires, companies will probably go back to stockpiling profits overseas as they wait for another tax holiday in a few years, tax lawyers say. The major drug makers use a variety of complex but legal tactics to move profits from the United States to low-tax countries like Ireland and Singapore where they have large manufacturing operations, said H. David Rosenbloom, director for the international tax program at New York University Law School. 'The law is complicated, but what's going on is perhaps less complicated,' he said. 'They're doing everything they can to maximize their profit in Ireland and minimize the profit in the countries where the sales occur.' The government can challenge the way the companies allocate their profits internally. But the companies have usually been able to defeat the I.R.S., Mr. Rosenbloom said. 'There's a limit to what they can do, because these cases are huge. They're very expensive,' Mr. Rosenbloom said of the I.R.S. The companies declined to discuss the specific strategies they use to minimize taxes. But the result of their efforts can be seen in a remarkable set of figures inside their annual financial reports. Pfizer, the world's largest drug company, said that in 2004 it had only $4.4 billion in pretax profits in the United States, compared with $9.6 billion internationally, though most of its sales came in the United States. The company says that its profit margins on international sales were almost three times as high as on American sales. Other companies reported similar trends. The biggest imbalance occurred at Eli Lilly, which reported that it had about $200 million in profits from United States sales in 2004, compared with $2.8 billion in profits from sales everywhere else. Because they report relatively low United States profits, the companies pay little in American taxes compared to their profits. Pfizer reported paying only $1.2 billion in state and federal income taxes in 2004, 9 percent of its worldwide pretax profit. Excluding a one-time payment related to its plans to repatriate money it has sheltered overseas, Lilly reported paying just $37 million in state and federal taxes last year, only 1 percent of its worldwide pretax profit. In its statement, Lilly said product liability suits, one-time charges related to business restructurings, increased pension expenses and research and development costs all cut into profits here, the company said. 'The intent of this legislation is to encourage companies to invest income earned outside the U.S. in their U.S. operations,' Pfizer said in a statement. 'That is what Pfizer and more than 300 other U.S.-based companies are doing.' Collectively, the six drug makers paid about $6 billion in federal and state taxes, a fraction of their pretax worldwide profits of $43 billion. Johnson & Johnson accounted for about half the American taxes paid. It garners more than half of its sales from consumer products and medical devices, whose profits are harder to transfer overseas. The companies' assertions that they are more profitable overseas than in the United States is hard to believe, said Dr. Alan Sager, director of the health reform program at the Boston University School of Health. Prescription drug prices are far higher in the United States than in other industrialized countries, where prices are generally government-controlled. In one typical example, a three-month supply of 40-milligram tablets Lipitor, a cholesterol-lowering medicine from Pfizer, costs $305 at Walgreens.com, the Internet site for the largest United States pharmacy. An Internet pharmacy in Canada lists the same medicine for $174. 'I'm really at a loss to find a reasonable explanation for the phenomenon, a real-world explanation,' Dr. Sager said. Outside the United States, 'there just doesn't seem to be any place on earth for the high profits to be generated, which leaves us with the extraterrestrial options.' Wall Street analysts who follow the pharmaceutical industry also say most of the drug makers' profits come from the United States. David Moskowitz, an analyst at Friedman, Billings, Ramsey, estimated that at least 60 percent of the drug industry's worldwide profits come from the United States. Higher American drug prices more than make up for higher marketing costs here, he said. Other analysts estimate that as much as 75 percent of the industry's worldwide profits are generated in the United States. But companies can hide those profits from the I.R.S. by moving their drug manufacturing overseas, said Martin A. Sullivan, contributing editor of Tax Notes, a nonprofit journal that examines tax issues. Companies transfer drug patents to their own foreign subsidiaries, he said. The subsidiary then helps pay for research on the drug. If the medicine is approved for sale in the United States, the subsidiary manufactures the drug for a few cents a pill. The pills are then shipped to the United States, where they are sold to a pharmacy or a wholesale company for several dollars each. But the parent company claims that almost all the profit should go to the subsidiary, not to the parent in the United States. 'Then the name of the game is to have that foreign subsidiary pay as little as possible back to the United States for the rights to all that income,' Mr. Sullivan said. The law will encourage drug makers to become even more aggressive about shifting American profits overseas because the companies will assume that they can lobby Congress for another tax holiday in a few years, said Sheldon Cohen, senior counsel at Morgan, Lewis & Bockius. 'I've always been against tax holidays or amnesties on the basis that if we do this, it tells companies or individuals that we'll do it again,' Mr. Cohen said.

Subject: Genentech and Susan Desmond-Hellmann From: Emma To: All Date Posted: Sat, May 07, 2005 at 20:07:59 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/07/business/07genentech.html?pagewanted=all She's Winning Her Drug War By ANDREW POLLACK A bookworm since childhood, Susan Desmond-Hellmann says that she coped with job anxiety earlier this year by reading. She pored over the results of old clinical trials of her company's drugs, trying to reassure herself that three important new trials would turn out all right. 'I just kept going back and rereading them,' said Dr. Desmond-Hellmann, the president for product development at Genentech, the big biotechnology company. 'It's important to be data-driven and not too optimistic.' Her attention to data has paid off. In the last two months, Genentech has reported remarkable success in all three trials, involving two of its cancer drugs. The successes follow a 17-month period ended late last year in which the company had four new drugs approved by the Food and Drug Administration, a notable hot streak in the drug industry. At a time when many pharmaceutical companies are flailing in their efforts to develop drugs - a major factor in the abrupt resignation on Thursday of Merck's chief executive, Raymond V. Gilmartin - Genentech has become a model of innovation and a leading supplier of cancer drugs. And Genentech executives and outside analysts say much of the credit goes to Dr. Desmond-Hellmann, who runs the company's clinical trials. A cancer specialist by training who is invariably described as smart, friendly, level-headed and attuned to the feelings of patients, she is one of the few women in the uppermost echelons of the pharmaceutical business and on Fortune magazine's list of the 50 most powerful women in business. 'Not many people can say, 'I've made my mark saving people's lives, growing the world's biggest biotechnology company and people still like me,' ' said Kurt von Emster, a partner at MPM Capital, a biotechnology investment company. With the company's recent successes in clinical trials, the 66 percent increase in Genentech's stock price since mid-March has made it the most highly valued biotechnology company. It still trails Amgen in revenue - $4.6 billion last year, compared with Amgen's $10.6 billion. But Genentech's $77.2 billion market capitalization is now slightly higher than that of Merck, a conventional drug company with five times the revenue that was once the paragon of pharmaceutical innovation. Dr. Desmond-Hellmann, 47, deflected any praise and credited her whole company. 'I have to say I'm humbled by all the success,' she said earlier this week in an interview at Genentech's sprawling and expanding campus overlooking San Francisco Bay. 'It makes me more anxious.' But she is not so humble about Genentech's ambitions. 'One of our goals is to rewrite the medical textbooks,' she said, by producing drugs 'so revolutionary, so different, that you have to get your eraser out.' So far the company has done that in treating cancer. Rituxan, for non-Hodgkin's lymphoma, developed with Biogen-Idec, approved in 1997, was the first cancer drug using a technology called monoclonal antibodies. It has become the world's best-selling cancer medicine. Herceptin, for breast cancer, is the exemplar of so-called personalized therapy - aimed at 25 percent of patients whose tumors have a particular genetic characteristic. And Avastin, approved for colon cancer, is the first approved cancer drug that works by choking off the blood supply to tumors. Two of the recent successful trials showed it also worked against lung and breast cancer. The third recent trial, actually two trials combined, showed that Herceptin, now used for advanced breast cancer, also works at an earlier stage of the disease. Dr. Desmond-Hellmann said inside Genentech, little attention is paid to her gender. She and another female executive, Myrtle S. Potter, the president of commercial operations, are on the six-person executive committee. And they are co-chairwomen of the company's powerful portfolio review committee. The review panel meets for an entire day once a month to make decisions on which drugs to pursue and how to develop them. The committee has members from all parts of Genentech - research, development, marketing, finance and legal - and each drug candidate is given numerical values based on its chance of success in clinical trials, its potential sales and so on. Opinions are sought from those who know best. 'It's not people telling you what to do; they ask you what you think,' said Dr. Desmond-Hellmann. She recalled that as a newcomer and junior researcher at Genentech in 1995, she was shocked when Arthur D. Levinson, then the head of research and now chief executive, asked for her opinion. 'That was so different from what I had experienced before,' she said. It was attention to data that led Dr. Levinson and Dr. Desmond-Hellmann to stick with Avastin three years ago, even after it failed in its first big trial and many people on Wall Street were giving up on the drug. Dr. Desmond-Hellmann said careful analysis of the trial, and of earlier ones, showed the drug had some effect. As a relatively small company of 8,000 employees, Genentech can specialize in one or two areas of medicine and focus on the American market. Most sales of its drugs overseas are handled by the Swiss drug maker Roche, which is the company's majority owner. As it happens, Roche also employs her husband, Nick Hellmann, an infectious disease specialist, at its operation in Pleasanton, Calif. Dr. Desmond-Hellmann, who grew up in Reno, the second of seven children of a pharmacy owner, said she always wanted to be a doctor. She needed only three years to graduate from the University of Nevada, with straight A's, then stayed there for medical school so she could save money by living at home. When she went on to become a resident at the University of California, San Francisco, she recalls being intimidated at first by all the Ivy Leaguers there. After she become a junior faculty member at the university, Dr. Desmond-Hellmann and her husband uprooted themselves to spend two years studying transmission of AIDS in Uganda and treating patients there. 'It completely changed both of us,' she recalled. 'It just made us feel like there's something about having all this education and training, that we'd better do something with it.' After returning from Africa in the early 1990's, she opened a private oncology practice in Kentucky, her husband's native state. But she missed doing research and was frustrated by the dearth of cancer treatments. 'I hated telling a patient I couldn't think of something else to do,' she said. (Her mother and older sister are breast cancer survivors, having the disease before Genentech's drugs were available.) So when Nick Hellmann was offered a job at Bristol-Myers Squibb, Dr. Desmond-Hellmann went, too, working on regulatory applications for Taxol, the company's big cancer drug. After two years she was recruited by Genentech to work on a platelet-boosting drug. That drug did not succeed, but her timing was auspicious. Dr. Levinson, who became chief executive a few months after her arrival, wanted to move Genentech into cancer drugs. And Dr. Desmond-Hellmann was one of the few oncologists on staff. Within a year she was promoted and put in charge of all clinical trials. 'I promoted her very, very quickly, many times over,' said Dr. Levinson, who is a research scientist, not a physician. He cited her willingness to work 70 to 80 hours a week and to accept responsibility for success or failure, as well as her good rapport with people. Dr. Desmond-Hellmann conceded her career path might have been more difficult if she had children. But she said she and her husband chose not to have children for lifestyle reasons, not because she wanted to climb the corporate ladder. She runs three miles a day, and she and her husband are avid bicycle riders, skiers and hikers. Whether Genentech can continue its winning streak with new drugs is unclear. The company's next thrust focuses on immunological diseases. 'Immunology feels to a lot of us like oncology did,' she said, as new findings on how the immune system works are opening opportunities for drug development. So far, though, the company's track record in this area is less impressive than in cancer. Xolair, an asthma drug, is innovative but has been a modest seller. Raptiva, a psoriasis drug, is being beaten in the market by Amgen's Enbrel. Genentech's new hope is Rituxan, its lymphoma drug, which has shown promise in trials as a treatment for rheumatoid arthritis. Dr. Desmond-Hellmann seems an obvious candidate to eventually succeed Dr. Levinson, who is 55. But Dr. Levinson said he had 'not even thought' about retiring, and Dr. Desmond-Hellmann said she did not necessarily aspire to the top job. 'It's not on my top 50 list,' she said. And she says that when she has been approached to run other biotech companies, she has turned the offers down. 'If someone told me, 'We're going to cure cancer and we have a better chance than Genentech' - first of all I'd be really surprised,' she said, adding, 'My tank's being filled at Genentech.'

Subject: Feeling Shortchanged, Genteelly From: Emma To: All Date Posted: Sat, May 07, 2005 at 11:53:36 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/07/business/07museum.html?pagewanted=all Feeling Shortchanged, Genteelly By MARY WILLIAMS WALSH The 90-odd curators, security guards, horticulturists and other employees of the Hillwood Museum and Gardens have what might seem perfect jobs. They spend their workdays at the sumptuous Washington estate of the late cereal heiress and arts patron Marjorie Merriweather Post. They care for her treasures, said to include the largest collection of Russian imperial art outside Russia. Heads of state, ambassadors and first ladies grace the visitors' list. But there is trouble in paradise. The museum failed to make all of its promised contributions to its employees' retirement plan in recent years, though it did deduct and forward the employees' own amounts. Nor did the museum explain its failure to the employees' satisfaction. In April, the missing money arrived in their accounts, but even then nothing was done to make up for the investment income the employees had lost. In the wave of anger and suspicion that now taints this genteel workplace lies a cautionary tale for America's coming ownership society. Retirement plans that offer workers individual accounts, like 401(k) plans, have spread rapidly in recent years, eclipsing traditional pension plans. Most operate without incident. But federal regulators report a sharp increase in reports of missing money over the last 10 years. Some cases appear to involve innocent errors, although others, according to Labor Department records, do involve fraud. Most of the problems occur at smaller, financially troubled companies. The popularity of the newer benefits, known as defined-contribution plans, is often attributed to their simplicity. They are easier and less expensive for employers than pension plans, which require employers to bear the investment risk. They are also, ostensibly, easier for employees to understand, because each worker's benefit is shown as an account balance, rather than a formula. But the simplicity can be deceptive. Employers fail to make the right contributions surprisingly often. The Labor Department found 2,293 such cases in fiscal 2004, including 1,269 in which the employers deducted the money from the workers' pay but did not put it into the retirement accounts. Experts suspect that even more cases went undetected. The Labor Department is now conducting a study to determine how widespread the problem really is. The discrepancies are not that easy for employees to catch. And when a defined-contribution plan ends up short, employees have less protection than in a traditional pension plan, which comes with a government guarantee. It was a sharp-eyed Hillwood Museum employee, with the well-ingrained habits of an archivist, who noticed in 2003 that the amounts on her retirement account statements seemed low. The employees have a 403(b) plan, which is like a 401(k) plan but found at nonprofit groups. The employee's own contributions - money deducted from her paychecks and sent to the plan - seemed to be in order. But some of the contributions the museum was supposed to have made were missing. And the money that did arrive came on an erratic schedule. She mentioned this to colleagues, who reviewed their own statements and found the same thing. For many, the missing money added up to several thousand dollars for 2003. The same thing happened in 2004. Employees began to ask questions but were given answers they considered vague, brusque or inconsistent. 'At one point, they said it was a problem with our attorneys, but they didn't say which attorneys,' one said. 'And then we were told the actuary was changing.' Employees provided copies of their account statements to The New York Times to verify their version of events, but asked not to be identified, saying they feared punishment for speaking out. 'People are terrified,' one of them said. 'When you request information, it's definitely treated as some kind of insubordination.' The Hillwood's executive director, Frederick J. Fisher, confirmed in a telephone interview that some contributions due in 2003 and 2004 were not made until April of this year. He said the missing money was an unintended result of some mathematical errors made several years ago, when the retirement accounts were moved from one financial services company to another. Once the museum realized mistakes had been made, he said, it decided to stop the contributions until the errors could be reversed, so as not to compound them. The museum is still grappling with the question of how to compensate the employees for the investment earnings they missed. Figuring out the correct amounts is complicated because employees have eight investment options and can shift money from one to the other on different dates and in different proportions. 'We're working very hard to put it straight,' Mr. Fisher said, adding that the museum is now working with the Internal Revenue Service. 'We're not an institution that would want to do anything but the right thing for our employees.' The Hillwood employees might never have noticed something was amiss if not for their habits of preserving and reviewing documents. 'I watch it really carefully,' one employee said of her quarterly statement. 'This is my only stab at retirement unless I win the lottery.' Even so, she said, the statements are complicated enough that most of employees failed to notice the erratic arrivals of the contributions. The plan has three sources of new money: employee contributions, the museum's matching contributions, and another, uncommon type of employer contribution called 'base' contributions. Mr. Fisher said the base contributions were the only ones halted. But because the two types of employer contributions were made on different schedules, it was hard for the employees to see exactly what was going on. Ready or not, Americans may find themselves increasingly thrust into the role of watchdog, as more kinds of employee benefits take the form of individual accounts. In addition to retirement accounts, there are tax-exempt health savings accounts, which Congress greatly expanded at the end of 2003. And individual investment accounts are often cited as part of a remedy to the financial imbalance in Social Security. The Labor Department's Employee Benefit Security Administration currently has about 480 investigators for more than 700,000 retirement plans of all types, and an even larger number of health care plans. The department acknowledges that these people cannot possibly review every plan, and urges participants to be their own auditors. But experts in the field say plan participants are unlikely to detect subtle errors. 'Some errors are easier to spot, like contributions,' said Edward A. H. Siedle, president of Benchmark Financial Services, a firm in Ocean Ridge, Fla., that audits pension funds. 'That's maybe a line item on your statement. But as to whether your statement accurately shows the investment performance of the funds you're in is impossible to calculate. You'd have to know the exact date your money goes into each fund, and then you'd have to chart performance as of that date. And you'd have to do that every month. Maybe a team of accountants could, but there's no way an individual can deal with that.' Retirement plan problems tend to occur most often at smaller companies, said Norman Stein, a law professor at the University of Alabama who ran a pension clinic for years. When the owners of a tottering business start looking for cash, he said, they may turn in desperation to the retirement plan. One tactic is to withhold promised contributions with the idea of catching up again someday. Or cash-short employers may withhold employees' contributions from their paychecks, but divert the money to business purposes instead of sending it to the retirement plan. Federal law requires independent audits for retirement plans that cover more than 100 employees. But the vast majority of America's defined-contribution plans - 627,905 out of nearly 700,000 - are at businesses with fewer than 100 employees. Mr. Fisher said that at the Hillwood Museum, the difficulties with the retirement plan were not a sign of any broader financial problem. He said the museum's endowment was adequate to cover its costs. Rather, he said, the break in contributions was a sign of the plan's complexity. 'It's a complicated plan, which is one of the reasons the lawyer was holding out' on making the contributions, he said. Employees say they do not understand how mere complexity could have caused a two-year delay. Surrounded by beautiful objects, they say they now feel their superiors value the porcelain teacups and Fabergé Easter eggs more than the workers who tend them. In April, they sent an unsigned letter to the president of the museum's board, Ellen MacNeille Charles, Mrs. Post's granddaughter. They told her they were 'outraged at the improper management' of the retirement plan, and demanded an independent audit of the plan, an overview of the plan's financial standing and an explanation of how they would be made whole. They also asked for a face-to-face meeting. Ms. Charles did come to the Hillwood Museum about a week later, but held talks just with the senior officials. The only word the employees have received on their missing investment income was a memo from Mr. Fisher about a week later, saying a lawyer was 'assessing the mechanics' for making up their losses, but warning, 'This will most likely take some time to accomplish.'

Subject: Re: Feeling Shortchanged, Genteelly From: Setanta To: Emma Date Posted: Mon, May 09, 2005 at 14:41:04 (EDT) Email Address: Not Provided Message: i agree terri. i have an advanced degree in economics, hold a professional accounting qualification and specialise in Financial Services. Yet i know that the work involved in checking my pension's performance (thankfully i am part of a defined benefit and so am talking hypothetically) would involve a lot of time and effort as well as spending a lot of time at research. to expect the average employee is stupid and reckless. would the government want me to operate on my dodgy knee or rewire my own house? i think its sinister that the government is dumbing down education and yet cutting free its people financially. feeding them to the sharks while taking away their protection. god...i'd hate to have the uncertainty that growing old in the US brings about. you're fine if you are a texan oil baron or ex-president of the US but if you are just another joe bloggs then you worry about living your retirement years in poverty. i thought the grey vote was one of the most powerful blocs. considering that a good, low cost healthcare system and well supported social security system is in their interest why is it that the GOP seems to win their votes effortlessly?

Subject: Re: Feeling Shortchanged, Genteelly From: Terri To: Setanta Date Posted: Mon, May 09, 2005 at 20:52:06 (EDT) Email Address: Not Provided Message: Do you ever make fine points and ask the proper questions. I am thinking of any reasonable answer...

Subject: An Important Article From: Terri To: Emma Date Posted: Sat, May 07, 2005 at 19:32:59 (EDT) Email Address: Not Provided Message: An important article!

Subject: Ford and General Motors From: Emma To: All Date Posted: Sat, May 07, 2005 at 10:56:52 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/07/business/07place.html Blue Chips Reel After a Week of Painful News By FLOYD NORRIS On Thursday, General Motors and Ford found out that Standard & Poor's, one of the major bond rating services, had downgraded their debt to junk status. G.M. suffered the additional indignity of not even being deemed the highest quality junk.... The downgrading of Ford was a somewhat greater surprise than that of G.M., but bonds of both companies had already fallen in price, with yields rising, as their prospects deteriorated this year. To take one example, a G.M. bond maturing in 2025, paying 7.4 percent interest, fell on Thursday to $69 for each $100 of par value, to yield more than 11 percent. That was a loss of $4 in a day. But that bond's price had climbed earlier in the week, on the news that Kirk Kerkorian, a financier known for having done well buying Chrysler stock when it was depressed, was buying G.M. shares. Thursday's price for the bond was barely below where it was a week ago. The big losses were suffered well before this week. That bond had traded for more then $100 as recently as early February....

Subject: Should We Be Surprised? From: Terri To: Emma Date Posted: Sat, May 07, 2005 at 11:03:50 (EDT) Email Address: Not Provided Message: When we think of General Motors bonds falling from above 100 to 69 over some 2.5 months, what seems puzzling is why the bonds should have traded so well so recently. Why should bond buyers have been at all surprised that General Motors was weakening financially? Where were the credit analysts 2.5 months agao?

Subject: Creation of Jobs Surges From: Emma To: All Date Posted: Sat, May 07, 2005 at 10:49:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/07/business/07econ.html Creation of Jobs Surged in April, and Income Rose By LOUIS UCHITELLE Overriding earlier evidence that suggested the economy was slowing significantly, job creation and income growth appear to be holding up their end of the recovery. The government reported yesterday that the nation's employers generated an unexpectedly large number of jobs in April - 274,000 - even as they gave their existing employees additional hours of work. The employment report was the most positive news about the economy in weeks. It dented the gloom that had accumulated after a number of recent measures provided evidence that last year's robust growth might be fading. 'The main thing I think these employment numbers tell you is that all this worry about the economy experiencing a significant soft patch has been exaggerated,' said Richard D. Rippe, chief economist at the Prudential Equity Group. Employment rose across all sectors except manufacturing. The Bureau of Labor Statistics also revised its estimates for February and March, adding 93,000 jobs - enough to erase the impression that job growth had faltered, particularly in March. The unemployment rate last month was 5.2 percent, unchanged from March but well below the 6.3 percent rate of nearly two years ago. The Bush administration greeted the April jobs report as a sign of better times ahead. Treasury Secretary John W. Snow said in a statement that the surge in job creation showed that 'President Bush's jobs and growth agenda has again produced results for Americans.' For the broad group of workers below management ranks, hourly wages were up 5 cents, to $16 an hour, and up 2.7 percent over the last year. That was not enough to keep up with a 3.1 percent annual inflation rate, but the average number of hours worked in a week rose for the first time this year, and the increase in pay that resulted brought average weekly pay to $542, a rise of 3.3 percent in the last 12 months. 'Unless the April numbers are a blip,' said Jared Bernstein, an economist at the liberal Economic Policy Institute, 'they tell you that employers are feeling more optimistic about where the economy is headed than some of us who have been looking at the economy from 30,000 feet up.' Still, for all the good news, even optimistic forecasters were reluctant to declare that the recovery, which entered its soft patch in the first quarter, was firmly back on track. 'We still have the spike in oil prices to contend with,' said Ian Shepherdson, chief domestic economist for High Frequency Economics. 'It is entirely possible that by June many employers will say: 'Oh, my God. We hired all these people and the demand is not there to support them.' That is not my view, but it is certainly possible.' Whatever the uncertainties, the new jobs report killed incipient speculation that the Federal Reserve's policy makers would ease up on their regular quarter-point interest rate increases, perhaps letting the June meeting pass without one. Reflecting this sentiment, yields rose yesterday for the benchmark 10-year Treasury bond, which influences mortgage and car loan rates. Stock prices finished the day almost unchanged. A slowdown in the growth of labor productivity contributed to the surge in hiring, economists said, as employers moved to keep up with demand for their goods and services by adding workers and hours. Partly as a result, the pace of job creation has accelerated recently; it has averaged 240,000 a month since February and 181,000 over the last year. These averages are rising quickly enough to generate jobs for those entering the labor force and seeking work. For all the surge in hiring, however, there was evidence in the April report that the number of people hunting for jobs was greater than the demand for their services. The average time that the unemployed spent in their search ticked up to 19.6 weeks from 19.5 in March. 'You would like to see even faster job growth,' Mr. Bernstein said, 'so that the labor market would tighten up more quickly.' That is not likely to happen, says James Glassman, an economist at J. P. Morgan Chase, because the great majority of the unemployed are people under the age of 45. They dropped out of the labor force when job rolls were shrinking in the early years of the recovery, Mr. Glassman said, and now are returning. 'They have to come back because they are young and must work,' he said, 'but we have a couple of years ahead of us of strong hiring before we are likely to be back at full employment and tight labor markets.' Like most of the nation's forecasters, Mr. Glassman was reluctant to raise his estimate of economic growth in response to the new evidence of strength in the labor market. Uncertainty about oil prices feeds that reluctance and explains his firm's recent decision to lower its forecast for economic growth to 3 percent in 2005 from 4 percent. That shift roughly parallels the actual drop in economic growth since last year's fourth quarter. 'If you are optimistic about the second half of the year, you have to assume that oil prices will ease off,' Mr. Glassman said. 'It seems like that should happen because inventories are quite substantial, which means that suppliers are getting enough oil into the marketplace. But what should happen might not happen.' Job creation last month was particularly strong among construction companies, which added 47,000 workers; at restaurants, bars and coffee shops, which increased their payrolls by 35,000; in health care, up 25,000; at telephone companies, which added 9,000 employees; and in movie and television production, up 7,000. Manufacturing, where employment has fallen almost every month for seven years, was down another 6,000 workers in April. The employment report was not the only news this week suggesting that the recent dip in the economy may be temporary. While Ford and General Motors continued to lose ground to their competitors, overall auto sales rose in April despite high gasoline prices. 'Oil prices are up, and that is the biggest short-term risk,' Mr. Rippe, the Prudential economist, said. 'But job growth is brisk and that will feed into consumer spending.'

Subject: Re: Creation of Jobs Surges From: Pete Weis To: Emma Date Posted: Sun, May 08, 2005 at 00:36:22 (EDT) Email Address: Not Provided Message: 'Of the 243,000 private payroll jobs that California has added over the past two years, 122,000 are directly related to the housing market – either in construction, real estate or home financing, Thornberg said.' - San Diego Tribune

Subject: Re: Creation of Jobs Surges From: Terri To: Pete Weis Date Posted: Sun, May 08, 2005 at 06:23:43 (EDT) Email Address: Not Provided Message: There have been many fine construction jobs created through the country. But, it is not for the Federal Reserve to direct where employment takes place. The Fed just tries to limit inflation and provide for economic growth up to our productivity and labor force growth potential.

Subject: Re: Creation of Jobs Surges From: Emma To: Terri Date Posted: Sun, May 08, 2005 at 09:08:09 (EDT) Email Address: Not Provided Message: Pete, you are right but that does not negate what monetary policy has accomplished. Protect the economy is the mandate, and that is what the Fed has accomplished. The difficulty sadly is fiscal policy. There is where we are terribly vulnerable.

Subject: Re: Creation of Jobs Surges From: Pete Weis To: Emma Date Posted: Sun, May 08, 2005 at 10:24:19 (EDT) Email Address: Not Provided Message: My point is and has been that money supply theories were meant to provide stimulus to the economy on a broad basis. Increasing the money supply was supposed to increase capital expenditure throughout the economy - not concentrate capital expenditure in one industry like housing. On a global basis we have seen the largest housing run-up in history. What happens when the housing well runs dry? It's ironic now, that to 'protect' the economy we must now protect housing. So as vulnerable as we are to bad fiscal policy (an important point) we are even more vulnerable to a housing pullback, because little else is holding our economy together. The scary part for the Fed is that they must now defend the housing market - believe me they understand that and must be talking about it behind closed doors. This limits monetary policy - more and more it is becoming a hostage of the housing market. Long term rates including mortgage rates seem to have a mind of their own. So the question becomes, if the 10 year bond begins to rise steeply because of a change in attitude by bond investors or overseas central banks - what can the Fed do about it?

Subject: Re: Creation of Jobs Surges From: Emma To: Pete Weis Date Posted: Sun, May 08, 2005 at 10:41:16 (EDT) Email Address: Not Provided Message: 'So the question becomes, if the 10 year bond begins to rise steeply because of a change in attitude by bond investors or overseas central banks - what can the Fed do about it?' There is the perfect question, and there is my worry, but I do not have an answer. Not having a clear answer make me anxious; makes many economists anxious. I would like to have Paul Krugman discuss the question.

Subject: Re: Creation of Jobs Surges From: Poyetas To: Emma Date Posted: Mon, May 09, 2005 at 07:22:26 (EDT) Email Address: Not Provided Message: According to the IMF, the fed-rates have been very low this year so far. This has added to the housing problem, cheap mortgage = high housing prices. Furthermore, we have a government running huge deficits that are being financed evermore by external investors. I think that foreign investors are buying US debt, despite low yields in order to keep the US dollar high and stimulate exports. The current account deficit is almost 6% of GDP. What is scary is that everything hinges on the attitude of the Chinese central bank. If they ever have to change their current rate of US debt intake, we may have another Argentina. And what is going to happen if the Chinese economy and incomes continue to grow. Demand will slowly shift to within China and the need for the US market will diminish.

Subject: Re: Creation of Jobs Surges From: Ryan To: Poyetas Date Posted: Wed, May 11, 2005 at 03:01:02 (EDT) Email Address: Not Provided Message: I am somewhat confused. How can you compare the United States current account deficit to that of Argentina. First off it would require that the U.S. must default on a loan payment, highly unlikely. For those concerned about the current account deficit need to hope for even more devaluation (see Blanchard's NBER working paper for possible situations). The Chinese will not change their attitude. They current hold around 600 billion dollars in foreign reserves (most are denominated in US dollars). The last thing they will do try to motivate a negative shock to the US economy. Their economy depends as much on ours as ours does on them.

Subject: Re: Creation of Jobs Surges From: Pete Weis To: Poyetas Date Posted: Mon, May 09, 2005 at 11:57:15 (EDT) Email Address: Not Provided Message: 'And what is going to happen if the Chinese economy and incomes continue to grow. Demand will slowly shift to within China and the need for the US market will diminish.' Also, what if a heated Chinese economy were to suffer a slowdown from reduced worldwide consumption caused by a global housing decline? Wouldn't they have fewer surplus trade dollars with which to purchase US treasuries which might push US rates higher which, in turn, causes a further decline in US housing....and so on.

Subject: China Braces for a More Valuable Yuan From: Emma To: All Date Posted: Sat, May 07, 2005 at 09:02:05 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/07/business/worldbusiness/07yuan.html?pagewanted=all China Braces for a More Valuable Yuan By KEITH BRADSHER GUANGZHOU, China - As speculators across Asia place ever larger bets on a revaluation of China's currency soon, investors and corporate executives alike are trying to prepare for what a more valuable yuan will mean for stocks and companies. For Romeo Dator, the portfolio manager of the U.S. Global China Region Opportunity Fund, a no-load mutual fund in San Antonio, a 20-minute departure by the yuan from its usual trading range on April 29 was a signal to sell part of the fund's holdings of PetroChina, China's biggest oil producer. 'Who would be impacted negatively?' Mr. Dator asked. 'Definitely the petrochemical companies,' reasoning that they sell oil and chemicals priced in dollars but incur costs in increasingly valuable yuan. For Leon Liu, a manager of the Xingan Quanyi Bamboo and Wooden Products Company, a manufacturer of wooden coat hangers for hotels and expensive retailers, a more valuable yuan will mean that bamboo grown near the company's factory in Rong Jiang Village in southernmost China will become too expensive. He is considering wood imports from Indonesia, and possibly even opening a hanger factory there. And for Chen Kuang-ping, the president of the Shunde Growth Corporation, a Taiwanese-owned company here in southeastern China that assembles steel bookcases and other furniture from imported Taiwanese steel, a higher yuan could force a decision to close the local factory and move to India in search of cheaper labor. 'It would affect us a lot,' Mr. Chen said. 'We prefer the yuan to stay where it is.' But while a strengthened yuan might cause hardships for some companies and industries, others - both Chinese and foreign - are likely to come out ahead. Most economists who follow the pronouncements of Chinese officials closely say that managers and investors are paying far too much attention to the Chinese currency, which has been pegged to the dollar for years - that even if China does act soon, the value of the yuan is likely to change so little that it will have a very modest effect on international trade and corporate profits. The April 29 shift was, after all, just six-thousandths of a yuan. Jonathan Anderson, an economist at UBS, predicts there is an 85 percent chance that China will simply tweak its current peg of 8.277 yuan to the dollar. He forecasts that Beijing will instead link the yuan to a basket of other currencies and then let the yuan rise gradually, by perhaps 1 to 4 percent over the course of the next year. Mr. Anderson says there is a 14 percent chance that the yuan, also known as the renminbi, will be revalued by 5 to 7 percent, and just a 1 percent probability of a big revaluation of 15 to 25 percent. 'From a macro point of view the 'renminbi question' has to be one of the most - nay, perhaps the most - overly hyped themes in the market today,' he wrote in a research report. 'Any reasonable adjustment scenario would have very little near-term impact at home, equally little near-term impact on China's neighbors' and essentially no effect on the United States. But the possibility that China might revalue the yuan by even 5 percent - a move the euro or yen has sometimes managed in days or weeks against the dollar - has prompted a deluge of analysis. Some of the analysis remains valid, experts say, even if China lets the yuan move by only a percentage point or two at first but permits larger fluctuations later. For China, a small move of a few percentage points now runs the risk of a further surge in the flood of speculative investment already pouring into the country, as foreigners buy up apartments and other property in the hope that it will be worth more in their home currencies after further revaluation. But a big revaluation soon would create the risk of social instability if factory presidents like Mr. Chen shut operations, if Chinese food companies stop buying from peasants and import instead, and if Chinese companies find themselves on the wrong end of too many speculative bets on the currency. The most obvious effects of a revaluation would be to make imports cheaper in China and make Chinese goods more costly in foreign markets. The Bush administration has led efforts, increasingly supported by European nations and Japan as well, to persuade China to let the yuan rise. The picture is blurred, however, because more than half of China's imports are materials and parts that are assembled for re-export by Chinese workers earning as little as 50 cents an hour. A company running such an operation saves only on the portion of costs incurred in China, which may be less than a tenth of the retail price overseas for products like DVD players and other consumer electronics. Jun Ma, Deutsche Bank's chief economist for greater China, has estimated the immediate effects on earnings in various industries of a quick 5 percent revaluation in the yuan, though he said Chinese authorities were more likely to link the yuan to a group of other currencies and then let it rise 2 to 5 percent a year for many years. According to his estimate, the biggest winners by far from revaluation would be China's airlines, with some of them perhaps doubling their modest earnings. That is largely because airlines are among the few businesses in China that have been allowed to borrow large sums of dollars, for the purchase of planes, and they would be able to repay these loans with the proceeds of mostly domestic tickets sold for increasingly valuable yuan. Jet fuel would become cheaper as well in yuan terms, because it is priced on international markets in dollars, Mr. Ma said. Three possible American beneficiaries of a rising yuan, he said, are Boeing, with its aircraft exports to China; Cisco, with its sales of telecommunications equipment; and Motorola, with its large operations within China earning profits in yuan. Many analysts say the other winners would be automakers, notably market leaders in China like General Motors, Volkswagen and Shanghai Automotive. Auto assemblers in China export few cars yet, and remain heavily dependent on imports for everything from the high-finish galvanized steel for exterior body panels to safety-related systems like brakes. Jim Padilla, the chief operating officer of the Ford Motor Company, and other executives said at the Shanghai Auto Show in late April that they were trying to find local parts suppliers as quickly as possible. Some importers may even become exporters. Dr. Rüdiger Grube, a DaimlerChrysler executive president, said that the company was negotiating to build and ship small cars from China to the United States. He added that China's edge in lower wages was so large that a revaluation of the yuan or wage inflation in China would have little effect. Most multinationals doing business in China have stopped commenting on the potential value of the yuan, partly because they see it as futile to guess what will happen but also because they wish to avoid offending leaders in Beijing, who have repeatedly objected in recent months to international pressure to let the yuan rise. But the thousands of small and midsize businesses in China that have thrived on exports are clearly worried that their profit margins, already razor-thin, will disappear with a rising yuan. China's state-controlled media has been full of warnings of a possible rise in the yuan for the last couple of years, and equally full of advice on how to stay competitive overseas. Mr. Liu, the coat hangar manufacturer, has followed those lessons and readily repeats them as his company's plan. 'We have to raise the quality of the product and improve the styling,' he said, describing a strategy that could someday put even more Chinese companies in competition with American rivals producing high-quality goods. 'Until now,' he added, 'we've only paid attention to exports, but now we'll have to focus on the domestic market, too.'

Subject: More lies in Appraisals From: johnny5 To: All Date Posted: Sat, May 07, 2005 at 07:49:50 (EDT) Email Address: johnny5@yahoo.com Message: 8,353 licensed appraisers sign Web fraud petition Petition to Appraisal Subcommittee of the Federal Financial Institutions Examination Council The number of appraiserspetition.com petition signers surpasses 10% of the total 80,000 licensed appraisers in the U.S. 'The ASC's (Appraisal Subcommittee) mission is to ensure that real estate appraisers, who perform appraisals in real estate transactions that could expose the United States government to financial loss, are sufficiently trained and tested to assure competency and independent judgment according to uniform high professional standards and ethics.' - From the ASC website. The concern of this petition has to do with our 'independent judgment' in performing real estate appraisals. We, the undersigned, represent a large number of licensed and certified real estate appraisers in the United States, who seek your assistance in solving a problem facing us on a daily basis. Lenders (meaning any and all of the following: banks, savings and loans, mortgage brokers, credit unions and loan officers in general; not to mention real estate agents) have individuals within their ranks, who, as a normal course of business, apply pressure on appraisers to hit or exceed a predetermined value. This pressure comes in many forms and includes the following: the withholding of business if we refuse to inflate values, the withholding of business if we refuse to guarantee a predetermined value, the withholding of business if we refuse to ignore deficiencies in the property, refusing to pay for an appraisal that does not give them what they want, black listing honest appraisers in order to use 'rubber stamp' appraisers, etc. We request that action be taken to hold the lenders responsible for this type of violation and provide for a penalty on any person or business who engages in the practice of pressuring appraisers to do dishonest appraisals that do not provide for independent judgment. We believe that this practice has adverse effects on our local and national economies and that the potential for great financial loss exists. We also believe that many individuals have been adversely affected by the purchase of homes which have been over-valued. We thank you for your cooperation and assistance. -- That means that more than 10% of appraisers who know about this petition were willing to put their livelihood at risk by putting their name and address on a Web site to complain about pressure they are getting from lenders to commit felonies. Was your home legally appraised for your recent purchase or refi? Only your lender knows for sure. http://www.alwayson-network.com/comments.php?id=10147_0_3_0_C

Subject: China Price From: Bill Gilwood To: All Date Posted: Fri, May 06, 2005 at 23:11:01 (EDT) Email Address: wgilwood@unisin.com Message: In conversations with our suppliers over the past couple of months they have infomrmed us of the following: 1. Ideal Industries-Sycamore, IL - mfr of data connectors: they can get their connectors made in China for 3 cents ea; their cost for making the same product in the US is 37 cent each for materials and 89 cents total internal cost each. 2. Trane Corporation-Piscataway, NJ-Refrigeration and HVAC equipment: They can get fully manufactured aluminum refrigeration coils out of China for cheaper than they can buy Aluminum in the US. 3. Kaiser Pipe and Casing-Fontana, CA-Steel Products including Pipe: They can get steel pipe out of China for less than the cost of raw steel from Brazil. 4. Connexit - Modem chips that cost them $2 to make in the US can be bought from China for 40 cents. Engineers can be hired in China for $1-2/hr. How long can this situation continue? How far will the US manufacturing base fall before this situation stops (is stopped?). Why would anybody manufacture in the US under these conditions? This seems not to be a free market but instead a rigged market. The pundits and CEO's talk about the lack of engineers, but who with a half a brain would choose to invest in an engineering career under these conditions? How can the US continue to be a leading power in the world (economically and militarily) without a manufacturing base? How will it maintain its technical/scientific/R&D capability. The way I see it China will first accumulate a full manufacturing base (low-tech thru hi-tech) and then develop an R&D base which will have access to all of the field data and technical know-how available from this manufacturing base, from which the US R&D base will have at best only limited access, and most likely none.

Subject: Re: Ipsa Scientia Potestas Est From: Pancho Villa To: Bill Gilwood Date Posted: Sat, May 07, 2005 at 08:01:20 (EDT) Email Address: nma@hotmail.com Message: http://www.quotationspage.com/quote/28976.html http://www.china-embassy.org/eng/gyzg/t143580.htm http://www.travelchinaguide.com/picture/beijing/tiananmen/

Subject: Re: China Price From: Jennifer To: Bill Gilwood Date Posted: Sat, May 07, 2005 at 07:01:42 (EDT) Email Address: Not Provided Message: Bill Gilwood, thank you for these important comments. Please extend your thoughts for us.

Subject: Re: China Price From: Bill Gilwood To: Jennifer Date Posted: Sat, May 07, 2005 at 17:54:37 (EDT) Email Address: wgilwood@unisin.com Message: One of the serious problems we face is that nobody seems to be asking the hard questions. It seems that those who run our economy have a very limited scope of knoweledge outside of their specialty. They seem to have been schooled in the nuts and bolts of business (e.g. accounting and marketing) but seem to have very little knowledge of economics beyond introductory classes, economic theory beyond simplisms about 'free trade'(maybe they read Milton Friedmans 'Free to Choose' which is just a dumbed down, selective intepretation of Adam Smith), history (especially economic history), economic development, the interelation between military power and technical and industrial capability. Basically they seem to be half educated people whose only is their bottom line. Now, I really can't blame them; after all their only real responsibility is to their shareholders, etc.. The problem is that the government, whose responsibilty encompasses the needs of everyone, not just shareholders and private investors, has effectively abdicated its role, by handing it over, or being taken over, by people whose only responsibilty is to shareholders. The referees have been replaced by the players, and the result is a steady degeneration of our economic base, of our ability to produce wealth to maintain our standard of living and defend ourselves militarily, as the players, thinking only of next quarter's results (and their bonuses, resturns etc.) mindlessly offshore our manufacturing and R&D base. Furthermore, not only has government been coopted, but so has the media and most of academia, whose pundits and experts (fancy credentials) pontificate from on high about the glories of 'globalisation' and the 'free market' etc.

Subject: Re: China Price From: Bill Gilwood To: Jennifer Date Posted: Sat, May 07, 2005 at 17:54:06 (EDT) Email Address: wgilwood@unisin.com Message: Rather than pontificate, I feel the best approach is to ask hard questions. One of the serious problems we face is that nobody seems to be asking these questions. It seems that those who run our economy have a very limited scope of knoweledge outside of their specialty. They seem to have been schooled in the nuts and bolts of business (e.g. accounting and marketing) but seem to have very little knowledge of economics beyond introductory classes, economic theory beyond simplisms about 'free trade'(maybe they read Milton Friedmans 'Free to Choose' which is just a dumbed down, selective intepretation of Adam Smith), history (especially economic history), economic development, the interelation between military power and technical and industrial capability. Basically they seem to be half educated people whose only is their bottom line. Now, I really can't blame them; after all their only real responsibility is to their shareholders, etc.. The problem is that the government, whose responsibilty encompasses the needs of everyone, not just shareholders and private investors, has effectively abdicated its role, by handing it over, or being taken over, by people whose only responsibilty is to shareholders. The referees have been replaced by the players, and the result is a steady degeneration of our economic base, of our ability to produce wealth to maintain our standard of living and defend ourselves militarily, as the players, thinking only of next quarter's results (and their bonuses, resturns etc.) mindlessly offshore our manufacturing and R&D base. Furthermore, not only has government been coopted, but so has the media and most of academia, whose pundits and experts (fancy credentials) pontificate from on high about the glories of 'globalisation' and the 'free market' etc.

Subject: Re: China Price From: Pancho Villa To: Bill Gilwood Date Posted: Sat, May 07, 2005 at 21:11:46 (EDT) Email Address: nma@hotmail.com Message: 'Rather than pontificate, I feel the best approach is to ask hard questions. One of the serious problems we face is that nobody seems to be asking these questions.' http://www.mtv.com/charts/charts_mtvtop20.jhtml

Subject: PK's immunity? From: Pancho Villa To: All Date Posted: Fri, May 06, 2005 at 17:56:46 (EDT) Email Address: nma@hotmail.com Message: ANATOL LIEVEN How the Democrats have been paralysed by Bush The Democrats can still damage the Bush administration on foreign policy when it does something really stupid -such as nominate John Bolton as ambassador to the United Nations. They are able to do this because the kind of wild unilateralist nationalism represented by Mr Bolton divides the Republican party itself. But for the Democrats, making foreign policy a foundation for the struggle to win the presidency in 2008 comes up against two immense obstacles. The first is that, by its messianic rhetoric of spreading 'freedom' in the world and confronting 'evil', the administration has seized control of a national myth that is common to the great majority of Americans, and has most often been expressed in the past by Democrat leaders. The second obstacle is that, despite this messianic rhetoric, in practice the Bush administration in most parts of the world is pursuing a rather cautious and realist strategy. It is not carrying out the kind of extreme actions that would alarm many ordinary Americans and lead to repeated splits in the Republican party. Whatever it has done in the past and may do again in future, at the moment the foreign policy sins of the Bush administration are of omission rather than commission. Thus, dominant forces in the administration are not doing nearly enough to push Israel towards peace with the Palestinians, but they are doing far more than in their first term. They are not moving towards detente with Iran, but equally they do not seem close to attacking that country. They are not prepared to listen to the Europeans on many issues, but they are working for the public appearance of harmony and co-operation. Most of President George W. Bush's policy towards China has been characterised by considerable pragmatism and restraint. His summit with President Vladimir Putin in Bratislava, and the latest visit to Moscow of Condo-leezza Rice, US secretary of state, demonstrate a generally pragmatic approach to relations with Russia. Intellectually and morally, this combination of messianism and pragmatism is extremely contradictory. And in particular cases, the Democrats can embarrass the administration by pointing out the contradictions. They cannot, however, make such attacks the centrepiece of their own foreign policy approach. For exactly this same contradiction has over time characterised Democratic administrations too; it is no temporary phenomenon but a deep and apparently permanent feature of American political culture. Americans as a nation want to feel that they are very good people and, at the same time, to serve their own interests - like most people, no doubt, but more so and more obviously. This is not without its dangers. It can increase international perceptions of American hypocrisy and mendacity. It is in permanent danger of being shown up by events - for example, an anti-American democratic movement in a Muslim country leading to renewed US support for dictatorship and repression. It is also an unstable mixture that, if subjected to shocks, can contribute to reckless international adventures, such as Vietnam and Iraq, partly justified to the American people in terms of America's moral mission. Within America, however, this mixture works very well indeed. By stealing the Democrats' Wilsonian trousers while avoiding further international adventures, the Republicans have almost paralysed their opponents. Except when a Bolton comes along to concentrate their attention, internal Democratic discussions on foreign policy at present are generally a mixture of nitpicking, imitation and confusion. There is, of course, one immensely powerful strain in the American historical tradition that is almost absent from the national debate: namely isolationism, and this will probably be the case for a long time. Leaving aside America's stake in the world economy and interest in innumerable international issues, a turn towards isolationism would have to mean drastically reducing US dependence on imported oil, drastically reducing US support for Israel, and drastically cutting employment in the US foreign and security establishment. The US establishment is therefore united in ruling out even a mild version of isolationism. Whether this will be true forever remains an open question, given the immense financial, human and moral costs to the US of the present strategy of global domination. The writer is author of America Right or Wrong: An Anatomy of American Nationalism FT Friday May 6 2005

Subject: Re: PK's immunity? From: Emma To: Pancho Villa Date Posted: Fri, May 06, 2005 at 19:53:50 (EDT) Email Address: Not Provided Message: Pancho, interesting articles. But, please explain your chosen title 'PK's immunity.'

Subject: Re: PK's immunity? From: Pancho Villa To: Emma Date Posted: Sat, May 07, 2005 at 08:04:24 (EDT) Email Address: nma@hotmail.com Message: Dear Emma, just let your imagination go

Subject: I couldn't care less, could eye? From: Pancho Villa To: All Date Posted: Fri, May 06, 2005 at 17:43:52 (EDT) Email Address: nma@hotmail.com Message: PATRICK GAVIN Deficits cannot simply be ignored During the 2004 US presidential campaign, it was not uncommon to see headlines such as 'White House predicts 2004 deficit of $445bn - the biggest ever', alongside others proclaiming: 'Major fiscal worries not on anyone's agenda'. Americans - including their politicians - did not seem to care about the reckless fiscal course they were on. And they did not seem particularly bothered by the fact that, during President George W. Bush's first term, the US turned record surpluses into record deficits. They remain largely blasé about the deficit, despite bleak reports suggesting last year's budget deficit of $412bn (€318bn) will be eclipsed by this year's projected $427bn deficit. Even though Alan Greenspan, US Federal Reserve chairman, recently cautioned the Senate's budget committee that continued deficits would cause economic stagnation or worse, his comments barely ruffled Wall Street, much less the American citizenry. A recent Harris poll asked people to identify the two most important issues for the government. Only 10 per cent chose 'federal budget surplus/deficit'. Any economist will tell you that the dangers posed by swelling and sustained deficits are significant. So why do Americans not care more? The easy explanation is that, after the September 11 2001 terrorist attacks and wars in Afghanistan and Iraq, they have simply shifted their priorities. But there are other, less obvious, reasons. One is that many people do not understand the workings of the federal budget and its ripple effects. Most Americans probably could not explain how large deficits result in higher interest rates, indebtedness to foreigners, passing the bill to future generations, lower growth, reduced government spending and more taxes. Even more difficult for the public to grasp - and for politicians to convey -is how swelling federal deficits affect them personally. If the economy is going well, polls have consistently shown that voters care about few, if any, economic measures. Until citizens see the tangible and negative effects of federal deficits, such as spiralling interest rates or a plunging dollar, they will be reluctant to demand action from Washington. Consider recent American outrage over issues such as fuel prices (there's still ethanol but what about diesel fuel?), stagnant wages and escalating health care costs. These affect everyday life for most Americans, hence the immediate controversy. In addition, voters have seen deficits come and go before, so why should they care this time around? In the past 20 years, Americans have seen enormous federal deficits amassed during Ronald Reagan's administration disappear in the Bill Clinton years. If it was done once, some believe, America can do it again. Many voters - and most economists - believe that, during times of trouble, deficits can be a force for good. In economic recessions and depressions, for example, it is sound economic policy for the federal government either to cut taxes or increase spending, or both, to boost the economy. This further confuses the voter on the dangers of federal deficits: how do you convince them that one kind of deficit (that is, cyclical or short-term) is fine at one point, while another (structural or long-term) is not. The fault lies partly with politicians, who seldom make the case for curbing federal spending - consider the remark attributed to Dick Cheney, US vice-president, that 'Reagan proved deficits don't matter'. For governments, one problem of deficit reduction is that it is nearly impossible to create a bipartisan consensus, partly because serious fiscal restraint involves tough decisions and politically painful choices. Usually, the only politicians interested in reining in the federal budget are the ones out of power, who can use it as a rallying cry against the majority party. And although all politicians may claim they are for balanced budgets, they want to balance them only by reducing the other party's priorities: Republicans want to reduce social spending, Democrats want to reduce military spending, for instance. Very few care to reduce both. Of course, Americans' lack of interest in federal deficits may simply come down to plain ignorance. Larry Bartels, the Princeton university professor, recently produced evidence suggesting that Americans often support policies that negatively affect them. His best example lay with the estate, or 'death' tax. Even though most Americans agree that economic inequality has increased in the US, they still supported the repeal of the estate tax, despite the fact it would only fuel economic inequality. Recall the popular phrase: Be careful what you wish for, you may just get it. Americans - and their elected officials in particular - are clamouring for more and more from their government: more benefits, more services, more military power ... while wanting to give less and less in the form of taxes. In this case, continued wishing could mean they will get exactly what they ask for: fiscal disaster. The writer is a Washington-based commentator on US affairs FT Friday May 6 2005

Subject: Re: I couldn't care less, could eye? From: Setanta To: Pancho Villa Date Posted: Mon, May 09, 2005 at 14:54:07 (EDT) Email Address: Not Provided Message: sound like he is describing economic bulimia! its only after feeling the effects of a gorging frenzy that the guilt sets in, followed quickly by a visit to the tiolet and a 'talk with god on the ceramic telephone'! isn't it amazing how shortsighted we can be as a people?

Subject: There will be...... From: Pete Weis To: Pancho Villa Date Posted: Fri, May 06, 2005 at 21:40:25 (EDT) Email Address: Not Provided Message: no public demand for change until present economic policies inevidably result in a strong poke in the eye.

Subject: Education From: Terri To: All Date Posted: Fri, May 06, 2005 at 16:44:33 (EDT) Email Address: Not Provided Message: Though I would like to see more students become involved in natural science based education, and though Asian countries in particular are graduating more students with science based educations, I would simply settle for more and more encouragement for American students to complete college in any academic concentration. Quality education from the humanities to social studies to natural sciences has been a wonderful strength. What worries me then is not a choice away from math or chemistry or engineering, but a choice away from being a serious student.

Subject: A Monetary Policy Success From: Terri To: All Date Posted: Fri, May 06, 2005 at 16:31:40 (EDT) Email Address: Not Provided Message: There has been no fiscal policy stimulus expressly designed to increase employment from the recession on, however monetary policy insured a short and shallow recession and a fair recovery. The recovery continues though the Federal Reserve is raising short term interest rates. For all the arguments about growth being unbalanced and too centered on housing, and for all the due concern with increasing prices for real estate, monetary policy has been a success at keeping us growing and building employment. I wish fiscal policy had been prudently used, but I am still pleased with the economic response to Fed policy.

Subject: Strong, Broad-Based Job Growth From: Terri To: All Date Posted: Fri, May 06, 2005 at 13:35:28 (EDT) Email Address: Not Provided Message: http://www.epinet.org/content.cfm/webfeatures_econindicators_jobspict_20050506 May 6, 2005 Strong, Broad-Based Job Growth Surpasses Expectations In contrast to the recent spate of disappointing reports on the economy, last month's job market performance was surprisingly upbeat. According to the report from the Bureau of Labor Statistics, employment grew by 274,000, easily beating forecasters' expectations of gains of around 170,000. Furthermore, job gains for February and March were revised up by a combined amount of 93,000. With these additions, the average monthly growth of payrolls over the past year has been 181,000. While this rate of job growth is less robust than that of past recoveries—monthly employment growth over a comparable period in the last recovery was over 300,000—it is at least strong enough, in the sense of job and income creation, to sustain the ongoing economic expansion. In another positive sign, job growth was widespread across most industries.... While hourly wages grew at a similar pace as in recent months—up 2.7% over the past year—weekly earnings got a 0.2 tenths of an hour bump up to 33.9 hours per week, the highest level of weekly hours since September 2002. This pushed weekly earnings up 3.3% over the past year, slightly above the latest inflation readings, which have been around 3% per year. These represent the first real weekly earnings gains for production, non-managerial workers in recent months....

Subject: Satisfying Employment Numbers From: Terri To: All Date Posted: Fri, May 06, 2005 at 12:18:11 (EDT) Email Address: Not Provided Message: The job creation numbers were satisfying. We need from 150,000 jobs added a month to keep up with population growth. The last 3 months we have been above 150,000, which allows for additional entry to the labor market. Construction related employment is especially robust.

Subject: A Mild Slowing From: Terri To: Terri Date Posted: Fri, May 06, 2005 at 13:05:42 (EDT) Email Address: Not Provided Message: The employment numbers suggest there has been only a mild economic slowing, as the Federal Reserve has expected. So, we should surely continue to expect Fed tightening, while hoping for reasonable growth.

Subject: Kenya: A Better Way to Fight Poverty From: Emma To: All Date Posted: Fri, May 06, 2005 at 11:18:48 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/05/opinion/05thu1.html A Better Way to Fight Poverty Kenya has never seemed to be able to live up to the potential of its rich farmland and staggeringly beautiful valleys. Its government is corrupt. Its capital, Nairobi, has become a haven for street thieves and muggers. Some 56 percent of the population lives below the poverty level. Malaria, which could be as treatable as strep throat, kills one in five children every year because the government grossly shortchanges its public health system. All in all, it is a classic case of how African governments can squander foreign aid. But far from the noise, pollution and public and private crooks of Nairobi, the village of Sauri, practically smack on the equator, is an example of a better way to do things. It is one of two test cases for the United Nations' ambitious program to cut poverty in half by 2015. Sauri's story shows how direct aid can largely bypass governments, getting money and help straight into the hands of the people who not only need it the most, but also know what to do with it. Anne Omolo, the head teacher of Sauri's sole primary school, arrived six years ago to find a student population that was listless, miserable and performing poorly in national exams. Some 500 children were enrolled, but attendance was low. She soon realized the problem. 'They were hungry,' she said. So on her own, she started a food program. She went to the village parents who could afford it and asked them to bring in corn and beans. But almost half of the school's students were orphans whose parents had died of AIDS, and they couldn't afford to contribute food. So Mrs. Omolo and the 10 other teachers dug into their own pockets. Eventually, they scraped together enough to feed about 100 students. It was a terrible choice. 'Not everybody could eat,' Mrs. Omolo said. So she fed the top two grades - seventh and eighth graders - because they would soon be taking national exams to move on to high school. Students from the younger classes went to the windows to watch their older schoolmates eat. The result was instantaneous. Attendance among the older children shot up to 100 percent, and their test scores followed suit. Sauri went from 68th out of 353 schools in the district in 2000 to 7th in 2004. 'This year,' Mrs. Omolo says, 'we will be No. 1.' Part of the reason for her confidence is that this year, every schoolchild will eat. Sauri was chosen last year to be one of the United Nations' test villages - Koraro, Ethiopia, is the other - to show how poverty in Africa can be ended through programs that help villages directly. For the next five years, Sauri will receive $250,000 a year for agricultural, educational and health programs. Much of the money will go to help farmers improve their crop yields. Farms are already looking better, thanks to people like Patrick Mutuo, a Kenyan soil expert who travels there from Kisumu four days a week to teach the farmers how to get the most out of their land. Because of Mr. Mutuo and his band of agricultural extension workers, Monica Okech's six acres of corn, ground nuts and beans are lush and green. Mrs. Okech, a fiercely independent 50-year-old whose husband left her in Sauri years ago, has planted leguminous trees and plants throughout her farm. These plants provide natural fertilizer for what was once depleted soil. Mrs. Okech now feeds 10 villagers, and is building a chicken coop. The United Nations plan, spearheaded by the economist Jeffrey Sachs, seeks to expand the program to the entire district, and then all over Africa. But that will happen only if rich countries make good on their promise to ratchet up foreign aid to 0.7 percent of G.D.P. by 2015. Britain, France and Germany have all put out timetables for meeting the goal. The United States, the world's richest country, has yet to do so. In the meantime, the people in Sauri work on their farms while trying to ward off killers like malaria, hunger and AIDS - some 25 percent of them are infected with H.I.V. But all it takes is for the villagers to look across the valley at the anemic farms and dismal test scores of their neighbors to know that they are still the lucky ones.

Subject: What? From: Mik To: Emma Date Posted: Fri, May 06, 2005 at 16:49:00 (EDT) Email Address: Not Provided Message: The author of this story needs to do his/her homework. When I read, 'Malaria, which could be as treatable as strep throat,..' my first thought was - what world is this person living on? Malaria is vastly different to strep throat. In some cases Malaria is NOT treatable and you just hope to God that the infected person has a strong body to overcome the worst fevers in the hope of treating it. Then can the classic statement, '...classic case of how African governments can squander foreign aid....' I have been working in the foreign aid sector for 8 years now and know that African governments don't get involved in managing foreign aid. Foreign aid is normally direct aid bypassing the government. How can the government squander something when it doesn't get it hands onto it. I find it amazing how this one program can bring the solution to vast poverty problems throughout Africa. With all the thousands of aid workers currently trying so many amazing projects, does the author seriously believe that we have stumbled across the concept of feeding children at school only recently? This has been done in so many places for over a decade now. But I like the clinch - 'we have the solution to Africa's problems but we need the rich countries to give up to 0.7% of their GDP to the poor countries.' Perhaps the author should spend time finding out why Rich countries don't want to raise the contribution. Perhaps the author we learn that the problem is far more sophisticated than a school feeding program and nasty leaders in the rich world.

Subject: Re: What? From: Emma To: Mik Date Posted: Fri, May 06, 2005 at 20:11:22 (EDT) Email Address: Not Provided Message: Mik, this is an editorial from the New York Times so there is no stated author. The editors of the Times are interested in African aid however. The passage suggests Malaria could be as easily treatable as strep throat, not treated in the same manner. But, you are in development and aid work and should criticize such essays for us. Thank you.

Subject: States and Employers and Health Care From: Emma To: All Date Posted: Fri, May 06, 2005 at 10:22:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/06/business/06states.html?pagewanted=all States and Employers Duel Over Health Care By REED ABELSON The relentless rise in health care costs is causing states and businesses to fight over whose job it is to insure workers. And nearly two dozen states, struggling with the growing burden of providing public assistance to people with jobs but no insurance, are looking to shift more of the financial burden onto the workers' employers. Last month, for example, Maryland, which spends roughly $350 million a year on health care for the uninsured, passed a bill requiring the state's very largest employers to spend at least 8 percent of their payrolls on health benefits for their workers. Lawmakers elsewhere, including Connecticut, are considering legislation that may also require some companies to provide coverage, either directly or by paying into a state fund. Some measures, as with a New Jersey proposal, would let companies bid on state contracts only if they provided health insurance for their workers. At the very least, some states would embarrass companies whose workers are on Medicaid or other forms of state assistance by publishing the employers' names - as Massachusetts has already done with a list of companies including Dunkin' Donuts, Stop & Shop and Wal-Mart Stores. Dunkin' Donuts says individual franchised stores, not the company, are responsible for coverage, while Wal-Mart challenged the findings. Stop & Shop declined to comment. The Maryland bill may not presage passage of such measures in other states, but employers and others say there is no doubt that the issue is heating up around the country. Medicaid, the states' main public assistance health care program, now eats up about 16 percent of their budgets. Nationally, the number of uninsured is 45 million and rising. And with federal funds expected to be scaled back by $10 billion over the next five years, the states' burden seems likely to grow. Some employers, though, question whether that national problem should necessarily be theirs to solve. 'The focus of the debate is whether there should be an employer mandate,' said Ellen Valentino, Maryland director for the National Federation of Independent Business, whose state group of small companies opposed the legislation. But backers of the Maryland bill, which seemed to take special aim at Wal-Mart, the nation's largest employer, say the support for it there indicates a growing recognition of the growing financial burden of caring for the uninsured. They say taxpayers are unfairly supporting too many companies' uninsured workers, who turn to government programs like Medicaid or simply show up in the emergency rooms of hospitals subsidized by the state to provide care to people unable to pay. Jonathan Parker, campaign director of Americans for Health Care, a union-led group in Washington that helped push for the Maryland bill, said legislative pressure was rising in state capitals nationwide. 'We're going to see it in more and more states,' he said, 'and we're going to see it sooner rather than later.' Mr. Parker's group points to people like the Smiths, a couple in Portland, Ore. Cheryl Smith, 54, works as a nurse's aide at a private residential care facility, making about $20,000 a year. Her husband, Vern, 51, has diabetes and an array of conditions associated with the disease. Mr. Smith, a former security guard, has not worked for about three years, and Mrs. Smith's employer does not offer insurance. After he had a heart attack at the end of March, the couple faced enormous bills - $68,000 for the hospital stay, $38,000 for doctors' fees, with more on the way for other services. 'I personally don't know what to do with them,' Mrs. Smith said. An Oregon proposal to require all employers to contribute to a health care fund failed in 2003, but its backers vow to revive the effort. Oregon has reduced the number of people eligible for its state programs, and Mr. Smith is among those who lost benefits. Several other states, including Tennessee and Minnesota, have also been dropping people from public programs or are considering such cuts as they try to balance their budgets. 'They are in fiscal crisis, and they are looking at ways to cut costs, shift costs,' said Jeff Munn, a senior health care consultant at Hewitt Associates, which advises employers on health care and a range of other matters. 'If history is a guide, a lot of these efforts will fail,' Mr. Munn said. 'That said, it does feel like there's momentum around these efforts.' Only a few months ago, it seemed as if any momentum had stalled. California voters narrowly defeated a proposal in November that would have required large employers to pay more to insure their employees, after a campaign by unions and other groups that focused much of their energy on Wal-Mart. But the Maryland bill's passage indicates that the issue remains very much alive. 'The movement to require employers to provide health insurance coverage is by no means dead,' warned the HR Policy Association, a group of human resources executives, which urged its members last month to take 'the offensive' in coming up with solutions to problems of the uninsured. By the association's count, at least 10 states have looked into some sort of requirement that companies contribute more to their employees' health coverage. These 'pay or play' bills require companies either to directly provide coverage or to pay into some sort of state fund that would help insure those workers. Late in April, the finance committee of the Connecticut Senate reported out a bill aimed at companies with 5,000 or more employees. But similar legislation died in Washington State. In Maryland, although Gov. Robert L. Ehrlich Jr., a Republican, is expected to veto the bill, proponents say they believe they have enough votes in January, when the Legislature is next to meet, to override his veto. Democrats, who control both the Senate and the House of Delegates, pushed for the measure. Other advocates also see rising support. 'It's gone kaboom,' said Mark Federici, director of strategic programs at Local 400 of the United Food and Commercial Workers union, who says the support 'is certainly a reflection of the general frustration everyone is faced with' over health care. As in California, Wal-Mart proved to be a big target in Maryland. In the legislation passed, the insurance obligation applied to the very largest employers, those with 10,000 or more workers. Of that handful, according to the bill's proponents, only Wal-Mart appeared to be below an 8 percent threshold; the company testified that it devotes 7 percent to 8 percent of its payroll to benefits. One of Wal-Mart's competitors, Giant Food, another of the state's largest employers, came out forcefully in support of the legislation. Giant, which says it spends at least 20 percent of its payroll on health benefits, already satisfies the requirements of the law. Giant's support 'really opened the door,' said Vincent DeMarco, president of the Maryland Citizens' Health Initiative, a coalition of unions, consumer advocates and others pushing for the legislation. By focusing on such a small group of employers, the proponents succeeded in what a Maryland Chamber of Commerce official termed a 'divide and conquer' strategy toward business. 'From a policy point of view, the bill doesn't make any sense,' said Ronald W. Wineholt, a vice president at the chamber, arguing that because the legislation affected such a small number of companies, it did not address the bulk of the working uninsured. The bill was 'more politics than policy,' he said. Exactly how much Maryland would save from the legislation is unclear. By state calculations, Wal-Mart spends roughly $270 million on wages in Maryland. If it were forced to pay another percentage point or two of that toward health benefits, the additional amount would not exceed several million dollars. The bill's supporters, including Mr. Parker, say the legislators settled on a partial approach to a problem everyone acknowledges is much larger. 'Conceptually, something has to be done,' he said. He predicts more activity this summer as his group and others try to capitalize on the momentum and decide how best to focus their activities in the next legislative session. Wal-Mart and some others say that the legislation has unfairly singled out the company, which has been frequently criticized around the country for not offering more generous health benefits to its employees. 'Taking a shot at us is not a way to address all these issues,' said Nate Hurst, who handles government relations for the company, based in Bentonville, Ark. Wal-Mart says that a little more than half of its 15,000 full-time and part-time employees in Maryland who are eligible for coverage are enrolled in one of its health plans. The company will not say how many workers are eligible. Other states are taking a more limited approach, requiring companies that have state contracts or that receive tax breaks to offer insurance, according to the HR Policy Association. About 11 states, including Georgia, New Jersey and Vermont, have been considering such laws. 'I think it's probably a much easier requirement to get enacted,' Mr. Munn, the Hewitt consultant, said. Few policy analysts expect the struggle between states and employers to end anytime soon. 'It's a giant dispute that's going to bounce back and forth between all these parties,' said Mark Wietecha, chairman of Kurt Salmon Associates, a consulting firm in Atlanta that advises hospitals and others about health care issues. 'The reality,' he said, 'is almost everyone is going to try this.'

Subject: Credit Rankings of G.M. and Ford From: Emma To: All Date Posted: Fri, May 06, 2005 at 10:19:05 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/06/automobiles/06auto.html?pagewanted=all&position= Credit Rankings of G.M. and Ford Lowered to Junk By DANNY HAKIM DETROIT - General Motors and Ford Motor lost their investment grade ratings Thursday, pushing two of corporate America's biggest borrowers into the ranks of junk bonds and rattling the financial markets with the message that the collective fortunes of the remaining two domestically owned automakers have sunk to their lowest points yet. The downgrading by Standard & Poor's, the credit agency, reflects the inability of G.M. and Ford to make enough cars that people will buy without $5,000 rebates and other sales incentives, as well as worries that the two automakers may not emerge anytime soon from their troubles, starting with eroding earnings and sliding sales. S.& P. said it was especially concerned about declining sales of the large sport utility vehicles that Ford and G.M. have depended on for profit, particularly as Japanese automakers step up their interest in the pickup truck market. The downgrading reduces the number of ways the automakers can raise money and could make it more expensive for them to borrow. But for now they are likely to use other ways of financing operations besides issuing bonds. It also suggests, according to some financial experts, that the companies' pension funds pose a greater risk of failure at some point than generally acknowledged. But both companies have large enough stashes of cash at least for the short term, and other companies, including Chrysler (now part of DaimlerChrysler), have previously been downgraded to junk bond status only to stage comebacks. G.M. and Ford join several other aged blue- chip warhorses that S.& P. has cut to junk this year, including Eastman Kodak, Maytag and Sears, Roebuck. Borrowing in junk bond status, as big heavily indebted start-ups in risky fields like telecommunications often successfully have, requires paying interest rates of 7 to 8 percentage points, sometimes more, above the rate of safe government bonds. Still, the move is not expected to harm the companies' abilities to offer bargain leases and low-interest loans to auto buyers. On the New York Stock Exchange, G.M. shares fell $1.94, to $30.86. Ford shares fell 46 cents, to $9.70. The shares of G.M., in some ways, were spared a potentially worse fate, as S.& P.'s move came a day after Kirk Kerkorian, the financier, declared an offer to spend $868 million to raise his stake in G.M. to nearly 9 percent of the company. A spokeswoman at Tracinda, Mr. Kerkorian's investment firm, said Thursday that it 'remains committed to making the cash tender offer for G.M. common shares it announced yesterday.' Alone, either G.M. or Ford would have been the largest corporate debt issuer ever cut to junk bond status by one of the three major debt ratings firms. Together, the two companies have more then $450 billion in debt. Both have been increasing their reliance on alternatives to issuing bonds and are expected to continue to do so. The events of the last two days underscore that G.M.'s current management has become increasingly vulnerable as the company's market value plummets. S.& P. also said that rising gas prices put the companies even more at risk and cited a number of other concerns, from soaring health care costs - particularly for G.M., the nation's largest private provider of medical benefits - to Ford's close relationship with its former parts unit Visteon, which might require an infusion of capital from Ford. The agency was also concerned that sales at G.M. and Ford are falling even as the nation's auto sales are relatively robust, with competitors like Toyota, Nissan and Hyundai continuing to post strong sales. 'S.U.V.'s and pickups together are the segments where G.M. and Ford have the clearest competitive advantages, and we just don't feel that is something that can be relied upon going forward,' said Scott Sprinzen, S.& P.'s auto analyst, during a conference call Thursday with professional investors and the news media. A primary concern is that G.M. and Ford have not been prescient enough in diversifying their automotive operations beyond sales of big sport utility vehicles and pickup trucks in the United States. Sales of many brand name S.U.V.'s, including the Chevrolet Suburban and the Ford Explorer, are down more than 20 percent this year, as consumers shift to more fuel-efficient sport utilities. Toyota and other foreign competitors have come to dominate the passenger car market while G.M. and Ford have been forced to sell many of their cars at less than favorable terms to rental car companies, business fleets or to their own employees and their friends and families. Now, Toyota and other companies are bringing their better reputations for quality and reliability to the S.U.V. and pickup truck market. In an e-mail message Thursday, Ford's chairman and chief executive, William Clay Ford Jr., told employees about the downgrading and said S.& P.'s rationale 'suggested pretty deep pessimism about the U.S. auto industry's ability to successfully counter increasing competitive challenges.' 'I won't speak for others,' Mr. Ford wrote, 'but when it comes to Ford, we don't share anyone's pessimism. And, it is our job to prove our critics wrong.' He added that he believed that S.& P. had not given his company enough credit for its new products and had 'discounted' Ford's cash reserves and ability to raise more. Mr. Sprinzen at S.& P. was particularly bleak in his assessment of G.M., cutting the company by two notches, to BB, and also putting it on a negative outlook. This suggested that the rating agency might further downgrade the company. 'To downgrade two notches and put it on a negative outlook is a huge move,' said Craig Hutson, an analyst at Gimme Credit, a research firm. Ford was downgraded one notch, to BB , and also put on a negative outlook. 'Ford, we believe, is less burdened by the retiree health care issue to a significant extent, and looking at recent quarters, in terms of either cash flow or earnings, Ford has done considerably better than General Motors,' Mr. Sprinzen said. Last month, G.M. reported a $1.1 billion loss in the first quarter, its largest quarterly loss in more than a decade. And the company has also said it is so uncertain of the future that it is no longer able to provide an earnings projection for the full year. By contrast, while Ford has sharply cut its earnings outlook for the year, it reported a $1.2 billion profit in the first quarter and is still projecting a profit for the year. The downgrading will also have broad implications for the bond markets; not only will the junk bond market be flooded with new debt, but many large bond investors may be forced by their investment guidelines to reassess their G.M. and Ford holdings. The pension plans of the automakers are also a source of concern because of their immense size. General Motors has by far the biggest company pension plan in the United States, having promised to pay benefits worth $89 billion to its current and future retirees as of the end of 2004. Until now, G.M. has been setting aside money to make good on those promises, keeping its pension plans compliant with the law. But if it lost its ability to generate enough cash to do that, and had to default on its pension obligations, the cost could overwhelm the agency that insures pensions, the Pension Benefit Guaranty Corporation. The Bush administration has been trying to reduce that risk of a possible bailout with proposals that would tighten the way companies handle their pension funds. The package would impose tough standards on companies whose credit ratings fall below investment grade. Jerry Dubrowski, a spokesman for G.M., said, 'We're disappointed with the decision.' Most analysts do not think G.M. and Ford are at risk of bankruptcy in the near future. But their wariness increased in March when G.M. reversed projections and said it would have an outflow of $2 billion in cash, rather than generate that amount. It has since backed away from that projection and has not offered another. G.M.'s cash cushion of roughly $20 billion 'does afford the company a lot of flexibility,' Mr. Sprinzen said. 'But this is a business where large players can go through a lot of cash in a short period, too, as General Motors has demonstrated recently.' Solomon Samson, S.& P.'s chief rating officer, cited two ways G.M. and Ford could improve their fortunes. First, he said the companies would be in better shape if they could win concessions from the United Automobile Workers on health care benefits, particularly for retirees. Union leaders, however, said recently that they would not be open to talking about significant changes in benefits before the next round of contract negotiations in 2007. The other strategy would be more fundamental: make more cars and trucks people want to buy, he said. 'If one of these companies managed to hit a lot of triples and home runs, that would have the potential to stabilize things,' he said. 'Obviously, we're not banking on either of those.'

Subject: I.B.M. Job Cuts Will Hit Europe Hard From: Emma To: All Date Posted: Fri, May 06, 2005 at 10:04:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/06/technology/06blue.html I.B.M. Job Cuts Will Hit Europe Especially Hard By MARK LANDLER FRANKFURT - In the fierce global battle for jobs and capital, Western Europe just lost another round. I.B.M.'s announced cuts of 10,000 to 13,000 jobs will fall heaviest on Germany, France, Britain and Italy, where the costs are high and growth prospects have recently been dim. I.B.M. said Thursday that at least 60 percent of the cuts would be in its European operation. That division, which is based in Paris and also covers Africa and the Middle East, employs 100,000 people. 'It is no secret that there has been an extended period of soft economic conditions in several European countries,' Mark Loughridge, I.B.M.'s chief financial officer, said in a conference call with analysts Thursday. Mr. Loughridge said that I.B.M. wanted to 'rebalance' its investment from low-growth to high-growth areas. Western Europe, analysts said, was likely to lose out to the faster-growing economies of Central Europe, Asia and the United States, though I.B.M. noted that it would cut American jobs as well. The public reaction to I.B.M.'s announcement was muted here, partly because offices and stock markets were closed in France, Germany and other countries in observance of Ascension Day. But I.B.M.'s move, coming on the heels of other large jobs cuts by American and European corporations, is likely to deepen fears that Europe is losing its competitiveness as a place for business. Last fall, General Motors announced it would cut up to 12,000 jobs in its money-losing European operations, which include Opel and Saab. Deutsche Bank is pressing ahead with plans to cut 1,920 jobs in Germany, despite reporting better profits in the first quarter. 'If Germany does not reinvent itself, multinational companies will readjust their investments, as some are already doing,' said Frederick B. Irwin, the head of the American Chamber of Commerce in Frankfurt. The loss of jobs to Central Europe strikes a particular nerve here. I.B.M. is shutting several of its smaller sites in Germany and consolidating at service centers in Hungary and the Czech Republic, among other countries. These centers perform a variety of administrative and back-office tasks for customers. For France, the impact may be as much symbolic as economic. As part of the reorganization, I.B.M. is downgrading its European headquarters in Paris to a much smaller operation, and performing its operating responsibilities in a pair of new hubs in Zurich and Madrid. With unemployment running at double-digit rates in France and Germany, I.B.M.'s announcement is also likely to ripple across the political landscape, according to pollsters and analysts. Both countries face important elections in coming weeks, with joblessness looming large as an issue. In France, President Jacques Chirac is fighting an uphill battle to win a referendum on the European Union's new constitution, while in Germany, Chancellor Gerhard Schröder is trying to stave off a defeat of his Social Democratic Party in the state of North Rhine-Westphalia. The Social Democrats have seized on layoffs by big employers, notably Deutsche Bank, to shore up their blue-collar base there. The party's leaders have also appealed to antiforeign sentiment, using the word 'locusts' to describe private equity investors who have taken over German companies. 'They can just add this one to their list,' said Reinhard Schlinkert, the chairman of Dimap, a polling firm in Bonn. Last week, union members rallied in front of I.B.M.'s German headquarters in Stuttgart to protest a previously announced plan to shut two service operations, in Hanover and Schweinfurt, affecting 580 jobs. In a call for members to gather, posted on the Internet, the unions warned that their jobs were in danger of being lost to lower-cost locations like Budapest, Bratislava and Slovakia, or Shenzhen in China. I.B.M., they said, was selling off chunks of its business, including the recent sale of its PC business to Lenovo of China. While the announcement of the cuts was timed to come after the sale to Lenovo had been completed, I.B.M. officials said that deal did not affect the size of the layoffs here. I.B.M. declined to break down the job reductions by country. But a spokesman said the 580 job cuts already announced in Germany would be included in the overall target. It will also include 538 jobs to be trimmed in Sweden, where I.B.M. announced it would close five service centers. Mr. Loughridge said he expected most of the cuts in Europe to be voluntary, and that I.B.M. had begun negotiations with workers' representatives. Laying people off in Europe can be a time-consuming and costly exercise. I.B.M. expects to record a pretax charge of $1.3 billion to $1.7 billion in the second quarter to pay for the revamping, he said. But I.B.M. also expects to save up to $500 million in the second half of 2005 because of these cuts. 'There is no longer a need for a pan-European management layer,' Mr. Loughridge said.

Subject: Socialist Economics From: Poyetas To: All Date Posted: Fri, May 06, 2005 at 09:47:23 (EDT) Email Address: Not Provided Message: The last postings on the site have revitalised a hunch I have had for a long time. Countries that have never gone through a country-wide socialist experiment, experience more long-term economic problems. I'm not referring to complete socialism of course, but lets look at it this way; For years during the cold war it was capitalism versus socialism. Black versus white. But, like Marx said, the capitalist thesis encountered the socialist anti-thesis and a new hybrid was formed. Social capitalism. Look at the economic performance of countries that have adopted various aspects to varying degrees of socialist societies. Sweden, Canada, Brazil. Now compare them to places like Russia, US and Peru. Compare Chile during Pinochet's 'free market era' to Chile today. Like Krugman emphasized, the free market doctrine is dead. It cannot work for it defies true human nature.

Subject: Re: Socialist Economics From: Emma To: Poyetas Date Posted: Fri, May 06, 2005 at 10:27:15 (EDT) Email Address: Not Provided Message: Interesting argument about historical perspective and how a culture is shaped.

Subject: You have to wonder.... From: Pete Weis To: Emma Date Posted: Fri, May 06, 2005 at 21:46:11 (EDT) Email Address: Not Provided Message: how economic events in the years immediately ahead will form new social and political will and, in some cases, who will use events and conditions to manipulate these two entities and for what purpose.

Subject: Those earnings reports From: Pete Weis To: All Date Posted: Fri, May 06, 2005 at 09:14:05 (EDT) Email Address: Not Provided Message: NYT's: May 6, 2005 Smooth Earnings Growth Was Reassuring, but It Was Often Fictional SMOOTH is dead. That means less business for financial firms and more erratic earnings for others. To an extent not understood by investors or regulators, it appears that insurance companies, as well as investment and commercial banks, had profitable little businesses in what might politely be called financial statement beautification. They sold products that had little or no economic rationale, but that were promoted - ever so quietly - as being able to hide losses or smooth earnings. In some cases, the products arguably complied with accounting rules. But the intent was to deceive investors, and in the post- Enron world that is not permissible. It may be that the biggest error of Maurice R. Greenberg, the deposed boss of the American International Group, was that he did not realize the world had changed. This week's revelations about A.I.G. show a wide range of transgressions. Insurance companies have always had latitude to estimate required reserves, and top management seems to have used it with a bit more abandon than was proper. Convoluted transactions shifted profits around to impress investors. Transactions with related insurance companies served to hide unwanted losses. Regulators and auditors were misled. If the revelations so far are all that is going to come out, the scandal is in a different league from Enron and WorldCom, which were hiding the fact that their assets were worth far less than they owed. Even with expected restatements, A.I.G. appears to be in fine shape, albeit not as good as it claimed. That makes this case far more interesting than Enron, where the motive for deceit was clear. Was A.I.G. management determined to show it was perfect? Or did it think that fudging was completely acceptable, whatever some rule might say? The most revealing fact may be the cavalier way A.I.G. treated its derivative securities. Some years ago, accounting rule makers realized that area was prone to abuse, and set down perhaps the most detailed accounting rule ever, known as Rule 133. That rule makes it possible for companies to smooth their results by using what is called hedge accounting. It lets them not take into earnings the gyrations in value of certain derivative securities, so long as those securities are being used to hedge other risks and assets, and so long as the company documents just what is being hedged and whether the hedge is effective. A.I.G. now says it did not bother to comply with the details of the rule, so it must redo its books. That change is not disastrous; it will cause the company's net worth to rise, although it will be more volatile in the future. This is remarkably similar to what happened at Fannie Mae. There, too, an investigation showed management had ignored the details. In that case, Fannie Mae appealed to the Securities and Exchange Commission and seemed to be amazed that the S.E.C. said the details mattered. That two major companies acted in this way, with their auditors not objecting, raises fascinating questions that the Public Company Accounting Oversight Board should investigate. Were the auditors unable to police compliance with the rule? Or did they figure that such a complicated rule was not really meant to be followed in detail? In the new world, financial institutions will be able to sell fewer financial beautification products. Those products were profitable -at least before regulatory penalties were deducted - and that may mean lower earnings. Reported profits for companies that once used such products will be far more volatile. It will not always be easy for investors to tell whether a fall in earnings reflects a real downturn in the business or just volatility that will be reversed in the next quarter or year. But volatile reality will better serve investors than fictional smooth growth.

Subject: Protectionist moves From: Setanta To: All Date Posted: Fri, May 06, 2005 at 09:00:51 (EDT) Email Address: Not Provided Message: I hear, over this side of the pond, that Greenspan has warned about protectionism. can it be the the great sage is finally doing something right and remembering Econ 101 from his freshman days. it certainly makes a change since his head is usually stuck so far up Bush's a**e that he doesn't see whats going on.

Subject: Re: Kudos to GS for... From: Pancho Villa alias Triché II To: Setanta Date Posted: Fri, May 06, 2005 at 17:16:09 (EDT) Email Address: nma@hotmail.com Message: ...this (IMO) excellent speech: http://www.federalreserve.gov/boarddocs/speeches/2005/20050310/default.htm March 10, 2005 Remarks by Chairman Alan Greenspan Globalization At the Council on Foreign Relations 'Can market forces incrementally defuse a buildup in a nation's current account deficit and net external debt before a crisis more abruptly does so? The answer seems to lie with the degree of market flexibility. In a world economy that is sufficiently flexible, as debt projections rise, product and equity prices, interest rates, and exchange rates presumably would change to reestablish global balance. We may not be able to usefully determine at what point foreign accumulation of net claims on the United States will slow or even reverse, but it is evident that the greater the degree of international flexibility, the less the risk of a crisis. Should globalization continue unfettered and thereby create an ever-more flexible international financial system, history suggests that current account imbalances will be defused with modest risk of disruption. Two Federal Reserve studies of large current account adjustments in developed countries, the results of which are presumably applicable to the United States, suggest that market forces are likely to restore a more long-term sustainable current account balance here without substantial disruption.8 Indeed, this was the case in the second half of the 1980s. I say this with one major caveat. Protectionism, some signs of which have emerged in recent years, could significantly erode global flexibility and, hence, undermine the global adjustment process. We are already experiencing pressure to slow down the expans of trade. The current Doha Round of trade negotiations has faced difficulties largely because the low-hanging fruit available through negotiation has already been picked the trade liberalizations that have occurred since the Kennedy Round. On a more encouraging note, some recent indications of progress may be pointing to a heightered probability of completion of the Doha Round.'

Subject: Japan's Deflation From: Terri To: All Date Posted: Fri, May 06, 2005 at 06:01:06 (EDT) Email Address: Not Provided Message: Japan has been and is a wealthy country. There has been no depression in Japan and only mild recessions in the last 15 years. Deflation does not mean either recession or depression, only growth that is far slower than the potential. We have grown far faster than Japan for 15 years. Europe has grown far faster than Japan. There is a serious economic problem as Paul Krugman has shown, however Japan is still a wealthy and highly competitive country and will stay so. What has kept Japan from serious recession or depression are government spending and low interest rates, along with fine infrastructure including education and high household saving.

Subject: Re: Japan's Deflation From: Pete Weis To: Terri Date Posted: Fri, May 06, 2005 at 09:37:17 (EDT) Email Address: Not Provided Message: 'What has kept Japan from serious recession or depression are government spending and low interest rates, along with fine infrastructure including education and high household saving.' What has prevented Japan from going into a deeper depression has been the American consumer. During the 90's when Japan began to have its troubles the US economy was booming and US consumers were pumping lots of money into the Japanese economy. Since the US Fed started dropping rates this has continued. This is how a global economy is supposed to work. But what happens to the Japanese (and the Chinese) economies when the US consumer runs out of gas (no pun intended). Presently much of US consumption and the Chinese and Japanese economies are built on the US housing market. It has been the Japanese trade surplus which has kept it from going deeper into depression. If our housing market, as well as other inflated housing markets in the West, do not continue to hold up for quite some time yet, then the Global economy is in big trouble since Chinese consumers don't seem to be big spenders on either US or European goods at this point and there doesn't seem to be anything on the horizon to change that yet. In my view, the global economy is presently foundationed on a number of inflated housing markets throughout the Western world.

Subject: Re: Japan's Deflation From: Terri To: Pete Weis Date Posted: Fri, May 06, 2005 at 14:38:27 (EDT) Email Address: Not Provided Message: There has been slow growth, mild recession and deflation in Japan, but nothing like a depression. Unemployment seldom rose to 5% since 1989, and wages have been relatively high. Of course exports are important to Japan, but fiscal policy is what has kept Japan growing through the roughest periods. That fiscal policy has worked is a comfort to me.

Subject: Education From: Terri To: Terri Date Posted: Fri, May 06, 2005 at 07:27:33 (EDT) Email Address: Not Provided Message: Education has been a key to infrastructure development in Japan, and has been and must continue to be for us.

Subject: Re: Education From: Setanta To: Terri Date Posted: Fri, May 06, 2005 at 09:11:55 (EDT) Email Address: Not Provided Message: America can take its place, once again, as the leader of the world in science, medicine, engineering, commerce and all other disciplines. all it has to do is rid the education system of religious interference. adam did not frolick in the garden of eden with the dinosaurs; the world was not created 3000 or so years ago and evolution is not just a theory....where will it stop, will physics be classified as witchcraft and will astrophysicists be burnt at the stake as heretics? sieze your education system back from those who want to drag it back to the dark ages. remember, an ill-educated population is the easiest to control/rule. they do not ask questions and are content with their lot, injust as it may be.

Subject: Re: One Step Beyond From: Pancho Villa To: Setanta Date Posted: Fri, May 06, 2005 at 16:45:49 (EDT) Email Address: nma@hotmail.com Message: http://www.teachforamerica.com/flash_movie.html

Subject: You speak truth Setanta From: Pete Weis To: Setanta Date Posted: Fri, May 06, 2005 at 09:38:45 (EDT) Email Address: Not Provided Message:

Subject: Re: You speak truth Setanta From: Emma To: Pete Weis Date Posted: Fri, May 06, 2005 at 10:12:53 (EDT) Email Address: Not Provided Message: America's strength has been in secular education, in education that separates religion from the sciences and social studies, as has Europe's. Well expressed, all.

Subject: Japan conundrum From: johnny5 To: All Date Posted: Fri, May 06, 2005 at 05:27:18 (EDT) Email Address: johnny5@yahoo.com Message: Now since 89 japans real estate market and stock market have tanked, their economy has been in a deflation right? But you know I buy a lot of stuff that was made in japan - my gamecube, the games for it, games for other systems: http://www.play-asia.com/ I am constantly buying products from this website. I haven't bought an american car since 91 and had a lot of problems with my last mercury cougar in 91 but my toyota car was always pretty good to me, if things were so bad from a deflationary economy and falling housing and stock market - why has japan been making the better cars and electronics and cell phones for the past 10 years? They seem to have been on the cutting edge of so many things, even with thier problems - is what happened to them in deflation to be greatly feared then? They have been leaders in several sectors during thier deflation.

Subject: Re: Japan conundrum From: Terri To: johnny5 Date Posted: Fri, May 06, 2005 at 20:47:50 (EDT) Email Address: Not Provided Message: This is a fine question, but I have no ready answer.

Subject: Credit Ratings and Bond Fund Prices From: Terri To: All Date Posted: Thurs, May 05, 2005 at 20:06:06 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName Interestingly, there was a gain in prices for better quality high yield bonds after the down grade of General Motors and Ford debt to high yield quality. Ah, I understand. Even though long term Treasury bonds increased in price, there was a loss for long term investment grade corporate debt with the down grades. The loss to the Vanguard Long Term Bond Index looks to be about 0.2%.

Subject: New York City Revenue Streams From: Terri To: All Date Posted: Thurs, May 05, 2005 at 18:55:09 (EDT) Email Address: Not Provided Message: Notice the recovery of the revenue stream for New York City government from the increase in real estate values, and financial and real estate market associated income increases.

Subject: Productivity and Labor Demand From: Terri To: All Date Posted: Thurs, May 05, 2005 at 16:29:58 (EDT) Email Address: Not Provided Message: Notice productivity growth for the quarter continues to be fine. Production costs are rising but not because of wages, rather because of the costs of benefits. This will limit profit growth to some extent, and limit job creation. Retail sales are just keeping up with inflation. Not a pleasing economic mix. We have to grow faster to strengthen labor demand.

Subject: Productivity and Economic Growth From: Terri To: Terri Date Posted: Thurs, May 05, 2005 at 17:18:25 (EDT) Email Address: Not Provided Message: Productivity always captures the importance of labor, but high levels of productivity which allow for faster economic growth over time, do not mean there will be higher employment or wage levels or even that there will be fater economic growth. The potential will be there, however. Productivity growth has been above 4% for 4 years, and potential labor force growth above 1%. We needed to grow about 5% simply to create enough demand for healthy job growth and wage and increases.

Subject: Re: Productivity and Economic Growth From: Poyetas To: Terri Date Posted: Fri, May 06, 2005 at 09:12:33 (EDT) Email Address: Not Provided Message: Productivity growth without an increase in wages? Sounds like someone's union is not negotiating their collective bargaining agreements correctly. This would have to be in a more or less purely automated industry where the only one who reaps the benefits of higher productivity is the owner. If there is a balassa-samuelson effect, we should see wages (and inflation) increase, country wide. Moreover, if wages do not increase, demand will stagnate and prices will fall by more than they should and overall profitability will go down. Does increased productivity translate immediately into greater demand for labour? It seems to me that there is a huge demand gap in the US economy. I think the graph that Johnny 5 showed regarding consumer spending relative to wages emphasized this point.

Subject: Teens getting on Drugs From: johnny5 To: Terri Date Posted: Fri, May 06, 2005 at 05:17:05 (EDT) Email Address: johnny5@yahoo.com Message: I just saw a commercial on CNBC yesterday about getting kids involved in after school activities like plays and sports so they don't get on drugs. My sisters did beauty pageants, why doesn't the commercial say play more chess or do mental activities? This is a problem in this country - occupy your time with football or shopping or beauty pageants - not reading science journals or economic theory. I have seen a ton of teenagers get on drugs in my area - this is destroying my community - they are bored and don't have rewarding after school jobs and they are smoking pot and taking exstacy in great numbers. I try to get them interested in chess tournaments or reading the PKarchive BBS to expand thier mind - but they think that is for losers and geeks. If I offer to take them shopping or to a football game - they get very excited - why do they have this impression - who taught them that only dork losers read pkarchive BBS? American Media and marketing are destroying this country from the inside out - rotting the brains of our children I feel. People say we have to tighten the belt and let china have our manufacturing and we should do more mental things - I don't see how - the asian students I meet are like robots from an asimov wet dream, they started reading the IEEE and science journals at 8 - 10 years old while little johnny over here was supposed to give all his time to football and little suzie all her time to cheerleading. Is football and cheerleading big events for students in china during thier after school free time?

Subject: Whole Foods and Trader Joe's: Hmmm From: Terri To: All Date Posted: Thurs, May 05, 2005 at 14:19:03 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/financialtimes/business/FT20050504_29144_562789.html Whole Foods CEO hails 'tipping point' By FT.COM John Mackey, chief executive of Whole Foods Market, said on Wednesday the high-end supermarket chain had reached 'a tipping point' for sustained and rapid growth, as quarterly sales topped $1bn for the first time. 'All the indications are pointing to the fact that the Whole Foods Market brand has definitely hit tipping point,' Mr Mackey said. 'We are building a record pipeline of new stores and have sufficient capital to grow as rapidly as we can...the brand continues to strengthen and we open bigger and better stores at an accelerated rate in the years ahead.' Whole Foods' sales at stores opened for at least a year increased by 11.6 per cent during the company's second quarter, while total sales increased 21 per cent to $1.1bn. Net income was up 25 per cent to $89.9m, with diluted earnings per share up 20 per cent at $1.33. The retailer also increased its forecast for comparable store sales growth in the coming quarter to 9 to 11 per cent, from 8 to 10 per cent, and said it expected full year sales growth to be 'at the high end' of its forecast of 15 to 20 per cent. Mr Mackey highlighted the performance of the company's third new store in New York City, at Union Square, which he said had achiveved 'amazing' results without any expenditure on marketing or advertising. Whole Foods also said it hoped to finalise plans soon for a new large store in central London, to add to its existing eight Fresh & Wild brand stores in the UK, acquired in January last year. 'We think there are opportunities well beyond the UK ...in Ireland, the Netherlands and elsewhere. We think this is a long-term process, but that it will in the long term produce tremendous opportunities for the company,' said Lee Valkenar, executive vice president for global support. The strong overall sales growth in the recent quarter was also supported by the retailer's continuing expansion of its store network and its use of larger stores, with the weighted average square footage of its 168 stores up by 13 per cent over the year. Whole Foods has set itself a long-term growth goal of $10bn in sales by 2010, from $3.9bn in 2004, and currently has 59 new stores in development. Mr Mackey also stressed Whole Foods Market's emphasis on selling perishable foods, which currently account for over two thirds of its sales, saying he would not be surprised if the share of sales increased to 75 per cent. Whole Foods' focus on high quality presentation of fresh food is contributing to the reshaping of the US food retail business, bringing additional pressure on the large retail chains who are already facing increased low cost competition from Wal-Mart, Target and other discounters. Safeway, which had annual sales of $18bn last year, is currently remodelling its stores to emphasise its fresh products, in a move that analysts see as a response to the challenge from Whole Foods.

Subject: Re: Whole Foods and Trader Joe's: Hmmm From: Dorian To: Terri Date Posted: Fri, May 06, 2005 at 04:31:33 (EDT) Email Address: Not Provided Message: Terri, I know Whole Foods is doing well and is likely to continue to expand as long as the economy holds out. But I imagine the stock is expensive too (like their prices). Trader Joe's would be a great investment. I've been buying from them for decades. However, they are privately held so you can't purchase stock unfortunately. Or at least that was the case when I last inquired about it. Dorian

Subject: Re: Whole Foods and Trader Joe's: Hmmm From: Terri To: Dorian Date Posted: Fri, May 06, 2005 at 06:08:02 (EDT) Email Address: Not Provided Message: I know, and I do agree, but I just love both stores. Whole Foods is much less expensive when looking to the company's own products. The company's will slowly change much of the supermarket business for the tastier and healthier for us. Yummm :)

Subject: Re: Whole Foods and Trader Joe's: Hmmm From: Terri To: Terri Date Posted: Fri, May 06, 2005 at 06:32:27 (EDT) Email Address: Not Provided Message: The strength of Whole Foods and Trader Joe's can improve the entire industry, and give us far more access to healthier, more environmentally friendly products. What a pleasure. We do not need ever more of a Wal-Mart approach to groceries :)

Subject: General Motors and Ford From: Terri To: All Date Posted: Thurs, May 05, 2005 at 13:33:48 (EDT) Email Address: Not Provided Message: Well, Standard and Poors has cut General Motors and Ford debt to junk status. General Motors has long been among the largest international issuers of debt. This year even though long term bonds remain strong, below investment grade debt has fallen in price.

Subject: Re: General Motors and Ford From: Setanta To: Terri Date Posted: Fri, May 06, 2005 at 06:56:18 (EDT) Email Address: Not Provided Message: i heard this on the radio in ireland at 6.30am (gmt). i heard that sales are strong yet the bonds are like tiolet paper. is this something to do with the walmart effect - margins so low that while revenue may be up, the ebitda is low? maybe they should start paying their employees walmart wages and scrap the pension plan and health benefits (sorry thats a sick joke!)! how can companies like GM and Ford shave costs in a ethical manner to restore credibility. personally i think they should phase out SUVs and build cars like volkswagen - small, EFFICIENT, and very well built, after all oil ain't going to last forever and people will realise that sooner or later. better retool now and set the trend in the market - the escalade and its kin will go the way of the giant dinosaurs, make room for the small furry mammals.

Subject: Re: General Motors and Ford From: Poyetas To: Setanta Date Posted: Fri, May 06, 2005 at 11:10:40 (EDT) Email Address: Not Provided Message: 'i heard this on the radio in ireland at 6.30am (gmt). i heard that sales are strong yet the bonds are like tiolet paper. is this something to do with the walmart effect - margins so low that while revenue may be up, the ebitda is low?' thats exactly what it is satanta. I was working closely with the auto industry a couple of years back and everyone was looking for liquidity. The terms that suppliers had to sign just to get business were ridiculous. Its called PPAP. The auto industry is definetley sick. SUV's if i am not mistaken is the most profitable business for them. I don't think they're gonna let up until the demand falls.

Subject: As Britain Votes From: Emma To: All Date Posted: Thurs, May 05, 2005 at 12:32:25 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/05/international/europe/05britain.html As Britain Votes, Tight Races for Older Voters Hold the Key By ALAN COWELL BRAINTREE, England - On the eve of Britain's election on Thursday, there are people in this unpretentious little town like retired secretary Evelyn Childs, 72, who says she is so disenchanted by the mainstream parties that she will not vote for any of them. Then there are people like Brooks Newmark, a 46-year-old American-born financier and candidate for the opposition Conservatives, who are seeking to win over voters like Mrs. Childs with promises of more generous pensions and lower local housing taxes. Linking the two, there is a sense that the election will be decided in places like this where Tony Blair's Labor Party has only a slender lead on the Conservatives and where, as elsewhere, older people are far more likely to determine the outcome of the vote than the young. Some people call it gray power, the notion that the preponderance of older voters at the polls skews the political agenda in favor of them while the young remain disaffected. No one seriously doubts that Labor will emerge the overall winner; its lead over the Conservatives in the latest opinion polls has widened to an average 7.5 percentage points, compared with 0.8 when Mr. Blair called the election on April 5. If the opinion surveys - and bookmakers - are right, Mr. Blair will be returned to office with a majority of up to 90 seats, down from the roughly 160 since his landslide victory in 2001, a decline ascribed to the broad sense of disaffection stemming from his handling of the war in Iraq. A lackluster win like that would have far-reaching political consequences for Mr. Blair, once the smiling, charismatic vote-winner who brought Labor out of 18 years of opposition and who has been the dominant feature of Britain's political landscape since he first won power in 1997. If, as expected, he becomes the first Labor leader in the party's 80-year history to win a third straight term, the celebration may be no more than a prelude to questions over his tenure. 'Even if Labor wins a sizable majority, Blair's time is over as the ground shifts fast beneath his feet; he is yesterday's man,' said Polly Toynbee, a columnist in the newspaper The Guardian, which endorsed Labor on Monday. 'If Labor wins it will be despite not because of him, and that marks a mighty change in the political weather.' The key to the outcome is likely to be in places like Braintree, 40 miles northeast of London, where, in 2001, the Labor candidate, Alan Hurst, beat Mr. Newmark by a mere 358 votes, the second narrowest margin of victory in the scores of so-called marginal constituencies where Labor's majority over the Conservatives is especially vulnerable to defections or a low turnout. That is precisely the nightmare situation that Mr. Blair has used as an argument - or scare tactic - to persuade Labor voters disaffected by the war in Iraq to avoid switching to the antiwar Liberal Democrats in protest. 'Whatever the opinion polls say,' Mr. Blair said Wednesday, 'in the key seats, a few hundred votes or a few thousand votes could determine it either way.' Some experts believe that a shift on the scale needed for an overall Conservative victory is simply not possible. There is also a question about voter participation among the 44 million in the electorate. Turnout fell in the 2001 elections to 59.4 percent, the lowest since World War II. 'There's a lot of people that aren't voting at all,' said Lisa Pope, 35, a mother of five out shopping with her own mother, Barbara Batt, 58, in Braintree. 'I think they just can't be bothered.' Her mother thought she knew why. 'A lot of parties make promises and they are not kept,' she said. Mrs. Childs, 72, has no doubt about where the problems lie. 'Young people don't vote until something gets under their skin,' she said, as she browsed a street stall of plants and shrubs. Paul Linehan, 21, who sold cosmetics from a market stall, seemed to confirm her view. 'I'm not really interested in politics,' he said, adding that he had no plans to vote Thursday. As for the politicians, said Katie Twycross, a 23-year-old bartender, 'they know young people don't vote, so therefore they don't really care what we want.' (She says she plans to vote Conservative only to register a protest against this year's Labor-led ban on hunting with dogs.) Indeed, said Mr. Newmark, the candidate, as he went door to door in time-honored fashion seeking votes, 'pensioners will spend the most amount of time talking to you because they are the most concerned group' - and, he believes, the most susceptible to his party's promises on pensions and local taxes. According to Sir Robert Worcester, the head of the MORI polling institute, voters over the age of 55 make up just over one-third of the electorate but account for at least 45 percent of the vote. While three-quarters of people over 65 say they will definitely vote, only one- third of those under 25 say they will. Moreover, polling experts say the latest opinion surveys suggest an unusual volatility among voters - and higher levels of indecision than is usual - that could make the results in several districts with close margins much more unpredictable. That is why, on Wednesday, the party leaders spent the day crisscrossing the country frenetically from one public appearance to the next. Less noticed in the tussle has been a slow advance in the opinion polls for the Liberal Democratic Party, which seems almost a party of choice among the relatively few young voters likely to go the polls. Some polls on Wednesday said it might get up to 25 percent of the vote.

Subject: Politicizing Public Broadcasting From: Emma To: All Date Posted: Thurs, May 05, 2005 at 11:43:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/04/opinion/04wed2.html?ex=1115438400&en=c0a57bc6eefb90f9&ei=5070 Politicizing Public Broadcasting The last thing Americans need is public broadcasting where the politics of the moment limits the news of the day. Yet that could be where the Corporation for Public Broadcasting is heading if Kenneth Tomlinson, the chairman, keeps pushing for partisan Republicans in the management of public television and radio. Mr. Tomlinson, a former editor in chief of Reader's Digest, has repeatedly criticized PBS as too liberal over all and has said that his goal is to satisfy a broader constituency. Satisfying more people with public television and radio is a worthy aim, but several recent surveys for public broadcasting have shown that most viewers and listeners admire what's on now. More than half of PBS's viewers say they find its news more 'trustworthy' than the commercial stations'. Public television and radio programs like 'Frontline,' 'The NewsHour With Jim Lehrer' and 'All Things Considered' have even higher 'favorable' ratings. There was a time when a passionate conservative might have looked at PBS programming and called it too liberal. But those days seem long past. And in any case, as an article in The Times this week showed, Mr. Tomlinson's goal of expanding the audience for PBS does not include bolstering PBS's balance with centrist programming. It involves pushing public broadcasting over the ideological line to the Republican side, with blatantly partisan programming and the hiring of more Republican partisans to control the corporation. Mr. Tomlinson seems to have aimed primarily at the program 'Now With Bill Moyers,' which he found too liberal and 'populist.' As a result, he pushed for a new conservative talk show featuring right-leaning editorialists from The Wall Street Journal as 'balance.' Many stations now take both shows, even though Mr. Moyers has left 'Now,' which features investigative journalism, and The Journal's show is not too different from many offerings on cable news. Mr. Tomlinson has hired a staff member from the Bush White House to set up guidelines for the ombudsmen hired to critique shows on public broadcasting. And he is trying to hire a State Department official, a former co-chairwoman of the Republican National Committee, as the Corporation for Public Broadcasting's president and chief executive. Although he has insisted that he does not want to politicize PBS or cut any programs, Mr. Tomlinson has managed to spread the word throughout the PBS community that he does not like anything that he considers too anti-corporate, anti-White House or anti-Republican. For journalists whose basic code is to 'speak truth to power,' this is not good news: those are the main powers in the country. Their real fear, an understandable one at this stage, is that Mr. Tomlinson and his supporters have a larger agenda - to 'hollow out' public broadcasting and fill it with programming that suits their political agenda. And if public broadcasting becomes too political to suit all but the most loyal Republicans or too boring in the name of balance, that could mean the slow death of such broadcasting, which could have been the goal all along. Unlike such organizations as the Voice of America, where Mr. Tomlinson once worked, public broadcasting is not supposed to be an arm of the government. The Corporation for Public Broadcasting was designed to serve as a heat shield protecting the broadcasting wing from Washington's political friction. Instead of shielding PBS, Mr. Tomlinson's corporation is in danger of spreading today's political heat throughout every level of the network.

Subject: International Borrowing From: Terri To: All Date Posted: Thurs, May 05, 2005 at 11:37:11 (EDT) Email Address: Not Provided Message: Support given by Alan Greenspan for a series of tax cuts, tax cuts that were little designed to stimulate the economy, was a drastic mistake. The tax cuts were a drastic mistake. The resulting loss of revenue has left us with a structural deficit that can not be solved by cutting spending on social benefit programs such as Medicaid or housing subsidies or food stamps. A government budget deficit and minimal household saving has led to extensive borrowing abroad to finance a trade imbalance. However, that we are able to borrow at low long term interest rates has been a signal economic help. Beyond China, capital has come to us from South Africa, Brazil, Japan, Korea, and on....

Subject: Housing and Growth From: Terri To: All Date Posted: Thurs, May 05, 2005 at 11:35:57 (EDT) Email Address: Not Provided Message: There is a school of thought that argues when there is an economic problem turn aside, the market will adjust. The economy here and abroad began to slow significantly from September 2000, so the Federal Reserve began to lower interest rates decisively. The result was a short and shallow recession, through a crisis period, as housing and vehicle sales grew in response to lower intermediate and long term interest rates. Where was the problem? I rather wish the Fed were a bit more cautious about raising rates even now. But, I do not fault monetary policy and am pleased at the general effects of growth in housing.

Subject: Re: Housing and Growth From: Pete Weis To: Terri Date Posted: Thurs, May 05, 2005 at 15:26:57 (EDT) Email Address: Not Provided Message: Terri. You believe in balanced investing. What about a balanced economy? Is it a good thing that we have nearly all our eggs in one basket - housing? Did the monetary policy pan out the way Milton Friedman drew it up or the way Greenspan had expected?

Subject: Re: Housing and Growth From: Terri To: Pete Weis Date Posted: Thurs, May 05, 2005 at 19:05:55 (EDT) Email Address: Not Provided Message: Whether real estate gains of this strength were expected by Alan Greenspan, I can not say. But, I think he should be and is pleased with Fed policy. Milton Friedman is far too rigid a thinker on benign economic policy to interest me any longer.

Subject: Re: Housing and Growth From: Ryan To: Terri Date Posted: Thurs, May 05, 2005 at 15:26:17 (EDT) Email Address: Not Provided Message: You wish to see interest stay lower for a longer period, but think about the consequences that may cause. Major cities are beginning to see a housing bubble form, due to low interest rates. If they stay lower new home construction will continue to increase and exceed the demand for new housing. The fed needs to raise interest rates in order to maintain some control over the economy. What happens two years down the road with interest rates still very low. Everyone has financed a new home and/or car. Construction workers become unemployed, automobile manufactures see a sharp decline in sales, the baby boomers that don't have new mortgages and car loans decide to retire and more houses become available. In short another recession. This time interest rates are not high, the Fed no longer has a vehicle to control the economy. We need to see interest rates increase. The stock market may not like it, but a couple years down the road, everyone will appreciate it.

Subject: Re: Housing and Growth From: Terri To: Ryan Date Posted: Thurs, May 05, 2005 at 17:32:58 (EDT) Email Address: Not Provided Message: Agreed. The point is to sustain economic growth, and that was precisely what the Federal Reserve did from Janaury 2001 when the cycle of interest rate reductions began. The Fed however does not control assets prices other than for short term bonds. To the extent that there is concern with mild inflation, the Fed needed to begin a tightening cycle and has done so. I would hope the cycle will be quite moderate.

Subject: From: Mozilla/5.0 (Windows; U; Windows NT 5.1; de-DE; rv:1.7.6) Gecko/20050223 Firefox/1.0.1 To: Pancho Villa Date Posted: All Email Address: NA Message: No free lunches for pensioners Bush's deceptive plans for the US social security system show why privatisation is not the answer to the global pensions crisis Joseph Stiglitz Tuesday April 19, 2005 The Guardian It is almost an optical illusion: looming on Japan's horizon, and on Europe's and on America's, is a pensions crisis. The problem is real, though exaggerated. The illusion is in some of the plans being devised to deal with it. The main question is whether privatising pension systems, as George Bush has proposed for social security in the United States, would solve the problem or merely make matters worse. With many countries pondering whether to adopt variants of the Bush plan, the question requires careful examination. By itself, privatisation is clearly not the solution. America's troubled private pension system - now several hundred billion dollars in debt - already appears to be heading for a government bail-out. There was a time when privatisation - allowing individuals to set up individual savings accounts - seemed better than social security, which invests in lower-yielding Treasury bills (government bonds). Advocates of privatisation argued that funds would do much better if invested in stocks, predicting a return of 9%. But the stock market does not guarantee returns; it does not even guarantee that the stock values will keep up with inflation - and there have been periods in which they have not. America's social security system insulates individuals against the vagaries of the market and inflation, providing a form of insurance that the private market does not offer. It does so with remarkable efficiency. The costs of managing the social security system are far smaller than those likely to be associated with privatised accounts. This is understandable: private investment firms spend an enormous amount on marketing and salaries. It is possible that to reduce these transaction costs, Bush will propose restricting choice, which was the main argument for privatisation in the first place. But these limited kinds of choices - for example, a T-bill fund with 90% in T-bills and 10% in an indexed stock fund - could easily be introduced into the public social security system. Bush says that reform is urgently needed, because the system will be insolvent in about a quarter of a century. But the problem depends on America's growth rate: if the growth rates of the late 1990s return, there is no problem. Even if there is a problem, it can easily be fixed: spending a fraction of the money that went into Bush's two tax cuts would have fixed social security for 75 years; slight benefit cuts, adjusting the age of retirement, or minor adjustments in the level of contributions could fix the system permanently. Moreover, Bush's proposals won't fix social security - unless they are accompanied by drastic benefit cuts. For how could they? He proposes diverting almost a third of the social security tax to private accounts. That means less money coming in. If benefits are not reduced, the gap between receipts and expenditures will increase. One doesn't need a Nobel prize to figure that out. So privatisation would not protect retirees against the social security system's insolvency; it would merely add enormously to today's fiscal deficit, because partial privatisation entails diverting money to private funds that would have been used to close the gap between government expenditures and revenue. The anticipated increase in the fiscal deficit is striking. The central plan discussed by Bush's council of economic advisers would - according to the council's own estimates - increase America's fiscal deficit by $2 trillion over the next decade. Advocates of privatisation claim to believe in markets, but they are proposing budget gimmickry that would move those losses off the books, as if markets could be easily fooled. America and the world should remember: Argentina's privatisation of its pension system was at the centre of its recent fiscal woes. Had Argentina not privatised, its budget would have been roughly in balance. The US is starting on its privatisation venture with a fiscal deficit of 4% of GDP. Privatisation advocates insist, however, that investments in stocks would yield sufficiently higher returns to give individuals the same retirement income as before, with the surplus used to fill the gap. But if markets are working well, then returns will be higher only because risk is higher. There is still no free lunch in economics. With higher risk, there is a chance that, 40 years from now, many individuals will find themselves with less than they need to retire. But if one really thinks that free lunches exist, there is still no reason to privatise: the government could get the additional returns by investing in the stock market itself. Indeed, President Clinton proposed doing just that. With increased transaction costs, worsening solvency for the system, increased budget deficits and decreasing benefits and security for retirees, why the drive for privatisation? One reason is the interest financial markets have in grabbing a piece of all those transaction costs. A second is the Bush administration's ideological hostility to the modest amount of wealth redistribution implied by the public system. America's social security programme has been so successful in reducing poverty because the poor get back a little more than they contribute, and the rich get back a little less. Even with social security's mildly redistributive effect, poverty and inequality in America are increasing. Privatisation will only make matters worse. Bush has tried to scare America about the magnitude of the problem, and he has tried to fool America about how privatisation would solve it. The social security deficit pales by comparison with the deficits created by Bush's huge tax cuts for upper-income Americans or in comparison with the deficit in Medicare, which provides healthcare for the aged. Why has he ignored these problems? Is there another agenda? · Joseph Stiglitz is professor of economics at Columbia University and a Nobel prize winner http://money.guardian.co.uk/pensions/story/0,6453,1463016,00.html

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Subject: Social Security From: Mona Smith To: All Date Posted: Thurs, May 05, 2005 at 10:50:39 (EDT) Email Address: k31h35@yahoo.com Message: We have some of the greatest math and economic minds in the world. Why can't these people get together for the good of the people (not the money) and figure out how to save SS. I just cannot belive that there isn't someone out there that has better ideas than the current administration. Perhaps if these gurus could get togeter and acutally agree and publish their work the rest of us 'little people' could spread the word to the masses and our representatives. The idea that I have worked all my life and paid into a program that is going broke is ludicrous. The number of working baby boomers should have made this program solvent for years. Govenment should admit to everyone that the screwups were their fault and not the fault of the American people. Then they should quit acting like they are hiding a broken vase from their mother and FIX the problem, by raising taxes, extending the cap on taxed wages or SOMETHING. I am sick of the whiney BS. Pitting the poor, middle class and upper class against one another is not the answer. The sooner everyone realizes what the administration is trying to do the sooner we can stop it. And when the problem is fixed, it should be mandated that the money in the 'newly locked box' NEVER be used for any other purpose EVER

Subject: Re: Conservatives and GOP hate Social Security From: Susan D. To: Mona Smith Date Posted: Thurs, May 05, 2005 at 15:08:02 (EDT) Email Address: Not Provided Message: In the 30's, the Republicans opposed SS. In the 60's, they tried to abolish it and in the 80's they vowed to destroy it. I have an idea. Why don't we Progressives suggest this: Let's wait for Bush's term to be done and wait for a President to come along who doesn't HATE Social Security. Then, let's allow the person who doesn't despise it to fix it. Doesn't that make more sense? Don't you think that someone who likes the program would try harder to fix it properly??? I think that idea is the only idea that makes sense. Would you want someone who hated you to be in charge of you if you were to ever be on life support or would you trust someone who loved you more??? I know what I would do. The same is true for SS, too.

Subject: Re: Conservatives and GOP hate Social Security From: Mona To: Susan D. Date Posted: Thurs, May 05, 2005 at 17:01:56 (EDT) Email Address: Not Provided Message: Great Idea, now if we can just get dems in the senate and house to sign on to the idea of keeping it off the floor for a while longer. Hey, we can get them to appoint a special procecutor for Delay. Look how long they kept Bill Clinton and the govenment tied up just gettin him to admit to foolin around. (Which sure didn't have anything to do with running the government)

Subject: Re: Social Security From: Emma To: Mona Smith Date Posted: Thurs, May 05, 2005 at 11:05:06 (EDT) Email Address: Not Provided Message: What a fine comment; I would echo you as would Paul Krugman. The problem is that the push to change Social Security is not dirven by confusion. There are many conservatives who have long wished to end Social Security and find this as the moment. There is no Social Security crisis, nor will there be in 10 or 20 or 30 years. With moderate growth Social Security will be fine for decades beyond 2045, but the system is under attack for political reasons by those who would end the New Deal legacy.

Subject: we FEEL you From: johnny5 To: Mona Smith Date Posted: Thurs, May 05, 2005 at 10:59:54 (EDT) Email Address: johnny5@yahoo.com Message: Those of us here FEEL your pain, but now is not the time to get emotional, bush has started a CLASS WAR for his have more's - until the middle class of america take drastic action at the polls and with thier pocketbooks it will be hard to change. But you have to understand, big companies brought CHINA online for profit at a fast pace - and it is going to be hard to stop those 1.1 billion now that they have tasted the sweetness of success. Accept that you probably won't have the nice easy retirement your forefathers had after ww2 when america was one of the few countries not war torn and we had a free gift in OIL - those are going away now with PEAK OIL and global labor and manufacturing competition that america has never had to face in the past 50 years. The gubbment can only do so much. You do have a greenhouse and garden right? Next to a nice stream way up in the mountains away from any people?

Subject: Re: we FEEL you From: Setanta To: johnny5 Date Posted: Thurs, May 05, 2005 at 12:05:22 (EDT) Email Address: Not Provided Message: As one who should should be rallying the conservative call (a highly educated, well paid, white male whose family were part of the landed gentry - admittedly in another country!) i cannot understand the republican mindset. are their brains so small that they cannot forsee the disaster that'll enfold if Social Security is privatised??? the financial services industry will circle like sharks picking off the weak and vulnerable and taking them for every cent they have. i have seen this before all over the world (i audit and am part of the regulation of the financial services industry in the EU so I know what goes on), the financial services industry has never let a sense of morality get in the way of making more money (look at the fine print on even the smallest loan, its enough to make an accountant blanch). furthermore, is it not SOCIETY'S job to take care of its vulnerable members. where in the bible does it say 'thou shalt abandon thy fathers and mothers and let them provide for themselves in their old age when they were providing for you when you were a baby'? i'm sorry i cannot go on, i am so indignant that a leader could treat his/her people like this. that they would care so little for the less fortunate in their society. that they can walk into a church on a sunday with their head held high and cater to the evangelical right in every way, yet be so far removed from the the most important commandment (do onto others as you would have them do onto you). i honestly believe that Mr Bush will be held to account for his actions some day.

Subject: Re: we FEEL you From: Emma To: Setanta Date Posted: Thurs, May 05, 2005 at 12:13:08 (EDT) Email Address: Not Provided Message: Well expressed, as always. There is a time to be indignant :)

Subject: Re: we FEEL you From: Mona Smith To: johnny5 Date Posted: Thurs, May 05, 2005 at 11:49:36 (EDT) Email Address: Not Provided Message: Those of us here FEEL your pain, but now is not the time to get emotional, bush has started a CLASS WAR for his have more's - until the middle class of america take drastic action at the polls and with thier pocketbooks it will be hard to change. But you have to understand, big companies brought CHINA online for profit at a fast pace - and it is going to be hard to stop those 1.1 billion now that they have tasted the sweetness of success. Accept that you probably won't have the nice easy retirement your forefathers had after ww2 when america was one of the few countries not war torn and we had a free gift in OIL - those are going away now with PEAK OIL and global labor and manufacturing competition that america has never had to face in the past 50 years. The gubbment can only do so much. You do have a greenhouse and garden right? Next to a nice stream way up in the mountains away from any people? --- I realize that the conservatives have nothing better to do than dismantle SS. I think the class war IS the probably the true issue. If we are fighting each other, how can we present a united front especially at the polls? It is so sad that the Brits are complaining about a 59% turn out at the polls today. I think that if each American Democrat that said 'Oh Kerry will win, I don't need to vote, besides I need to stop at the video store, its raining etc. etc. had it to do over again (after they kicked themselves in the proverbial keister) they would have got out to vote. I'm from Ohio and while I was able to get family members who hadn't voted for years to the poles along with everyone I knew that was a dem, it was just not enough to beat out the combination of lazy people and Christian right. My daughter almost changed churches because she got so frustrated by the obvious political tactics of the pastor. The sad thing is that Ohio has a hideous unemployment rate, and has lost more jobs than any state except Michigan. I realize that economies evolve and we have always weathered the changes (from agricultural to manufacturing for example) but it seems that these changes were not prepared for in the same way. When I look at the people in my state, my generation is the new middle class (I'm a baby boomer) my parents were not well to do. I am scrambling to educate my teenagers for the 'new economy' but just what is the 'new economy?' The manager of the Wendy's' who makes 25,000 a year for bookoo hours? The nurse who requires a 6-year degree to stand out from the crowd? Electronics repairpersons that have spent 4 years to earn a degree for a technology that is almost throwaway (who repairs a TV now days?) It would be nice if there were some real guidance. We have to take a hard look at counties (Like China) who can make the stuff cheaper, let them have the mindless manufacturing and put our minds to developing the next generation of new 'stuff'. If we do not we are going to see a big drop in the standard of living in the US.

Subject: Mental Midgets From: johnny5 To: Mona Smith Date Posted: Fri, May 06, 2005 at 04:58:45 (EDT) Email Address: johnny5@yahoo.com Message: If you look at the IQ of people, as a nation - what is the USA's median versus other countries? My sisters were never pushed to pick up a math or science book, they were pushed to win beauty pageants and cheerleading competitions - I understand in china it is not this way - they are taught from very young to be busy little mental bees. We have people here teaching thier kids its all about fashion and image is everything and 600 dollar jeans make you special and make you an individual - yet in china they all wear the party jumpsuit like borg and all that makes you special is if you can figure out something ahead of the other guy no? America's whole social structure seems to have shifted from being the best to being the laziest - we outsource everything while we live la vida loca - look at the bush daughters - they party til they puke - they don't read science journals every night. People use to watch star trek and do very hard math homework, now they seem to watch SURVIVOR and FRIENDS and go shopping instead of do homework - is the downfall so hard to imagine.

Subject: Re: Mental Midgets From: Susan To: johnny5 Date Posted: Sun, May 08, 2005 at 06:57:27 (EDT) Email Address: Not Provided Message: It's diabolical Johnny. But it's also part of their plan. Keep the electorate stupid. Teach them about creationism instead of evolution. Dumb down the media so instead of talking about Korea, Iran and our failed domestic and foreign policies, we can talk about the run away bride, Michael Jackson and the finger in a Wendy's bowl of Chilli. First they will make us ignorant, then they will tell us lies over and over again until they become the truth. And so it begins. . . . the road to our Democracy's ruin.

Subject: Re: we FEEL you From: Mona Smith To: Mona Smith Date Posted: Thurs, May 05, 2005 at 11:55:32 (EDT) Email Address: Not Provided Message: And another thing... SOCIAL SECURITY IS NOT NOT NOT AN ENTITLEMENT PROGRAM!!!! IT IS AN INSURANCE PROGRAM THAT THE GOVERNMENT HAS ROLLED THE DICE ON HOPING THAT MOST OF US WOULD DIE YOUNG AND NOT COLLECT JUST LIKE ANY OTHER LIFE INSURANCE!!!! I JUST WANT TO CHOKE PEOPLE WHO EQUATE SOCIAL SECURITY WITH WELFARE!!!!! Sorry about yelling, I just needed to do that...

Subject: Income Insurance From: Emma To: Mona Smith Date Posted: Thurs, May 05, 2005 at 12:11:20 (EDT) Email Address: Not Provided Message: Yell away, for Social Security is not a welfare program but an income insurance program. Remember though, there is a massive and growing surplus in Social Security. The surplus will grow for at least another 15 years, and last at least another 40 years under minimal growth assumptions. Growth of 2.2% will be enough to easily support Social Security benefits far beyond 2045, and such growth is far below the average of the last 50 years.

Subject: Re: Income Insurance From: Poyetas To: Emma Date Posted: Fri, May 06, 2005 at 09:34:09 (EDT) Email Address: Not Provided Message: MOVE TO CANADA!!!! WE'D LOVE TO HAVE ALL U EDUCATED AMERICANS FILL UP THE FREE SPACE WE HAVE UP HERE! AND U NEVER HAVE TO LISTEN TO BUSH TALK S --- AGAIN!! I hate to say it but the problems u guys are having now were identified years ago by the rest of us. I still remember my professors, in 1998 predicting a US economic crash in the next decade. That's why, despite, our similarities we have long fought to keep our system as unique and free from american influence as possible. Its truly sad to see a land with so many intelligent, useful people be given the end around by their own government. My parents live in Miami, and I can say this with full conviction. The hard conservative right in the US is the lowest form of species on this planet. I think more of dogs than of them. Best of luck, PS. Americans are not lazy, just misinformed.

Subject: Re: Income Insurance From: JimBob To: Poyetas Date Posted: Fri, May 06, 2005 at 11:05:40 (EDT) Email Address: Not Provided Message: how about redefining the border to encompass the blue states on the east and west coast and chicago. i'm sure the rest of red america would be glad to get those liberals with their dangerous ideas out of their purifanatanical country!

Subject: The Thrift Imperative From: Emma To: All Date Posted: Thurs, May 05, 2005 at 10:47:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/05/opinion/05thu2.html The Thrift Imperative The stock market has been a scary place lately: new yearly lows followed by big daily gains, then more lows and so on. While no one fully understands these gyrations, we do know that markets become skittish when fundamentals are out of whack. There's arguably no more fundamental imbalance these days than the United States' low national savings - the amount Americans save minus the amount the government borrows. But don't expect to hear our nation's leaders talk about it. From 2002 through 2004, the rate of national savings was lower than at any time since 1934. This year, savings are once again off to an anemic start. That's a problem for stocks because the market looks forward, and a lack of national savings means that both the private and government sectors must borrow to pay for all of the things we wish for ourselves, our progeny and our society, like modern industrial plants, secure retirements, good education and better health care. If current trends continue, the United States will borrow an unprecedented $1 trillion this year alone, mostly from abroad, a sum that is reflected in the nation's huge budget and trade deficits. Any sane market analyst has to wonder how long that can last, and such underlying angst intensifies market swings. How we got to this point is now sadly familiar. The biggest culprit is the Bush administration's profligacy, with tax cuts the most glaring driver of the swing from budget surplus to budget deficit over the past four years. Currently, the deficit offsets most of the economy's net private savings. Individuals also do not save enough, as reflected in the widespread inadequacy of retirement savings. Some argue that the amount of personal savings is understated because it does not take into account the increase in housing values, which has many homeowners feeling flush. But elevated home values do not add to national savings. Such wealth is not converted into cold hard cash until houses are sold, and at that point the money flowing into the sellers' pockets is simply money that is flowing out of the buyers' pockets. No new wealth is created unless a seller saves the windfall - which is generally not the case in today's consumer economy. Instead, sellers increase their purchasing power, while the saving rate declines and the country as a whole becomes poorer. The uncomfortable reality is that saving is possible only by deferring today's consumption, not by spending freely while one's house appreciates. The most powerful way to increase national savings is to cut the budget deficit. To do that, President Bush and his allies in Congress must defer the gratification they would derive from showering more tax cuts on the affluent. Lawmakers should also refocus their efforts on increasing personal savings. For decades the emphasis has been on granting tax incentives to savers, and for decades the amount of personal savings has trended downward. Congress should instead encourage all employers to improve the structure of retirement savings plans in ways that have demonstrably increased participation, including automatic enrollment upon hiring and the automatic allocation of employee contributions. The alternative is economic decline. The markets are right to be skittish.

Subject: Employment From: Terri To: All Date Posted: Thurs, May 05, 2005 at 10:12:08 (EDT) Email Address: Not Provided Message: The problem for the American economy is that productivity growth has averaged over 4% for the last 4 years, potential labor force growth is about 1%. So, we need to grow about 5% to keep up with the growing labor supply. Growth much below 5% will leave less need for job creation because of productivity increases. Though we are growing and though the is job creation, neither figure is high enough to provide a robust labor market where those who wish work can readily find work and where wages and benefits are increasing fast enough to keep up with productivity increases or lately mild inflation. At a time when the Federal Reserve is raising short term interest rates to slow growth, I am not optimistic about employment.

Subject: Re: Employment From: Ryan To: Terri Date Posted: Thurs, May 05, 2005 at 15:19:09 (EDT) Email Address: Not Provided Message: I'm not sure how much I believe your story about needing to grow at 5% per year to maintain job creation. Maybe in the current year potential labor force is growing at 1% per year, but in the upcoming years many more individuals will hit retirement. If fact when the baby boomer generation decides to retire, the potential labor force will start to shrink. Leaving the economy with a shortage in the labor markets. I'm not disputing your 4% figure for proditivity growth, but in what sector did that 4% come from. Was it from increases in capital, labor, or technologoical advances. Yes, if labor has become more productive less workers will be required, but if its in technology (which is more likely), than that will create demand for new jobs not decrease demand. As for keeping up with mild inflation, most wages are tired to inflation indicies. When prices increase real wages are remaining the same.

Subject: Re: Employment From: Terri To: Ryan Date Posted: Thurs, May 05, 2005 at 16:48:34 (EDT) Email Address: Not Provided Message: Ryan, nice response. A healthy labor market needs wages increasing beyond inflation. This is precisely why a change in indexing of Social Security benefits to prices rather than wages will destroy Social Security. Wages now are barely keeping up with inflation, and lagging behind productivity. The productivity growth rate I pointed out, as computed by the Labor Department, does indeed directly effect demand for labor. With healthy demand, no matter how fast productivity grows there will be ample demand for labor. Not now. We need to grow faster, but we are actually slowing.

Subject: Germany Faults Overseas Investors From: Emma To: All Date Posted: Thurs, May 05, 2005 at 09:55:37 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/05/business/worldbusiness/05private.html?pagewanted=all Report to German Ruling Party Faults Overseas Investors By MARK LANDLER PADERBORN, Germany - Karl-Heinz Stiller might have felt entitled to a victory lap, right about now. His company, Wincor Nixdorf, has completed a grueling five-year run during which it was sold to demanding American private equity investors, rebuilt from the ground up, and taken public in Germany's first major stock offering since 2001, after the Internet bubble burst. Not only did Wincor Nixforf survive, but it thrived. The company, which makes automated teller machines and cash registers, has hired 3,200 employees since 1999. Its stock has risen 57 percent since the offering a year ago. But last week, Mr. Stiller was startled to find that his company had won notoriety of a different sort, when its name - and those of its former investors, Kohlberg Kravis Roberts & Company, the leveraged buyout firm, and Goldman Sachs - turned up on a so-called locust list. This internal report, prepared by Parliament researchers for Germany's governing Social Democratic Party and leaked to the press, named Kohlberg Kravis, Goldman Sachs, and other American and British firms as foreigners who have plundered German assets, laid off workers or been just plain greedy. Earlier, the party's chairman, Franz Müntefering, told the German tabloid Bild that such investors 'stay anonymous, have no face, fall upon companies like locusts, devour them and move on.' Deploring foreign investors as parasites or carpetbaggers is neither new nor limited to Germany. Russia has become chilly toward foreign firms with interests there, and Malaysia's former leader, Dr. Mahathir Mohamad, a few years ago blamed the financier George Soros for the Asian currency crisis. In Germany, the antiforeign sentiment these days is stoked by the convergence of three trends: a flood of private equity money into the country; the extended weakness of the nation's economy, which feeds fear that German jobs are leaching out of the country; and the fading fortunes of the Social Democratic Party and its leader, Chancellor Gerhard Schröder. 'Equating financial investors with locusts is something that has a history in this country,' said Jan Pieter Krahnen, director of the Center for Financial Studies at the University of Frankfurt. 'It alludes to some deep sentiments, which may or may not be there, but which can be exploited.' German industrialists, academics and other politicians have roundly criticized Mr. Müntefering's attack, which seems calculated to shore up the leftist base of the Social Democrats before a crucial election on May 22 in North Rhine-Westphalia, a large and an economically troubled state. A prominent German-Jewish historian, Michael Wolffsohn, even detected a whiff of anti-Jewish sentiment in the list, which also included Blackstone, the New York private equity investment group, and Saban Capital, which is controlled by the Israeli-American billionaire, Haim Saban. Mr. Schröder has not joined in such attacks, and Social Democratic officials in North Rhine-Westphalia said it made no sense to put Wincor Nixdorf on a list of supposed victims. For Mr. Stiller, who guided Wincor through its overhaul and remains the chief executive, the whole matter is baffling. 'We are absolutely the wrong example for this,' he said in an interview at company headquarters here in Paderborn, a city of 141,000 in a rural part of Westphalia. 'My own view,' he said, 'is that it is absolute nonsense, and stupid, to attack private equity investors. As a country, we should be open to any investor who puts his money on the table.' It is not that Mr. Stiller, 63, thinks all foreign investors are white knights. Some takeovers, he acknowledges, have gone badly. Some have resulted in wholesale layoffs or the dismantling of companies. But Wincor Nixdorf's story, he said, illustrates that numbers-driven investors can do good. By demanding rich returns and using unforgiving methods - chiefly a preoccupation with cash flow - they can get solid, but underachieving, German companies into shape. 'We are much more focused on financial stability because of them,' Mr. Stiller said. 'This has helped us, as a public company, in talking to analysts, shareholders and institutional investors.' That is a far cry from six years ago, when Nixdorf languished as a small part of the sprawling computer division of Siemens. In those days, people at the company said, Nixdorf executives were not sure exactly where their profits were coming from, since its sales, service and cash management were all handled by the parent company in Munich. It was a humbling turn of events for Nixdorf, which had once been Germany's most successful computer maker. Founded in 1952 by Heinz Nixdorf, the company was a pioneer in wiring offices with desktop terminals that were connected to remote databases. But in the mid-1980's, it lost its market to I.B.M. and other rivals after it failed to recognize the potential of personal computers. In 1986, Mr. Nixdorf died suddenly, leaving the company rudderless just as its business was evaporating. By the time Siemens took it over in 1990, Nixdorf was facing a real threat of failure. In the course of integrating its operations, its work force was cut to 12,000 from 26,000. Mr. Stiller, who had been recruited by the founder in 1966, stuck with the company under Siemens ownership, overseeing Nixdorf's still-profitable business in A.T.M.'s and cash registers. But he and his colleagues chafed at the limitations that came with life in a conglomerate. 'If the head of Siemens France is successfully selling power plants or trains, he's not going to be that interested in selling A.T.M.'s,' said Eckard Heidloff, Nixdorf's chief financial officer. Fortunately for Nixdorf, in the 1990's, Siemens began to spin off units it deemed extraneous. It held an auction for the company, which was won by Kohlberg Kravis and Goldman Sachs with a joint bid of about 250 million euros (now $322 million), plus the assumption of hundreds of millions more in debt and other obligations. Newly independent and renamed, Wincor Nixdorf set about building its own service organization, and expanding outside Germany. Mr. Stiller and his colleagues pledged to deliver annual profit increases of at least 28 percent over five years. And they invested their own money. The pressure from Kohlberg Kravis and Goldman was unrelenting, particularly since Wincor initially lost money with its expansion drive. 'In the beginning, I was on the phone to these guys a couple of times a week,' said Johannes P. Huth, the partner in charge of European investments for Kolhberg Kravis. 'As the business matured, I didn't bother them twice a week. Maybe I called them every two weeks.' Mr. Huth scrutinized every acquisition and questioned even basic assumptions, like whether Wincor ought to stay in the retail business, which includes cash registers, bottle recycling machines and other devices. 'We didn't say, 'You've got to get out,' ' he recalled. 'We said, 'Let's understand this better.' ' Wincor Nixdorf's management persuaded him to stick to its strategy - largely, Mr. Stiller said, because the company never failed to meet its profit targets. Kohlberg Kravis and Goldman hoped to recoup their investment through an initial public offering, and by 2003, with a cash flow of 104 million euros on sales of 1.44 billion euros (now $1.86 billion), the company was clearly ready. The trouble, Mr. Stiller said, was that the German market was in the dumps. To compensate the investors for having to hold their stakes longer, Wincor Nixdorf paid them a special dividend of 160 million euros ($207 million). But four months later, the market picked up, and Wincor was able to list its shares successfully, netting Kohlberg Kravis and Goldman 260 million euros ($336 million). After the stock rose strongly, the two investors decided to sell their remaining shares in Wincor Nixdorf last January. That sale netted them a further 333 million euros ($431 million), bringing the total proceeds from the deal to $974 million - or more than triple their original investment. These windfall profits have provoked criticism in Germany, particularly since the company itself received only about $130 million from the public offering. Mr. Heidloff, the chief financial officer, said Wincor Nixdorf had net debt of just $233 million, giving it enough financial muscle to bankroll its expansion. As for the rich returns, Kohlberg Kravis and Goldman say they are not so unusual for private equity deals. And they note that Wincor Nixdorf employees and shareholders have also benefited. 'We've generated an incredible number of new jobs through this deal,' Mr. Huth said. Not all such deals create jobs, of course. Kohlberg Kravis's experience with the German telecommunications firm Tenovis may be more typical. It bought the company in 2000, pushed through deep job cuts and sold it to an American telephone equipment maker, Avaya, last fall. Executives at Kohlberg Kravis and Goldman declined to comment directly on Mr. Müntefering's accusations. But they are clearly stung. Kohlberg Kravis has invested more than eight billion euros in German deals, Mr. Huth said, while Goldman invested one-quarter of its last private equity fund, or $1.37 billion, here. 'This is self-defeating in a number of ways,' said John C. Kornblum, a former American ambassador to Germany who now runs Lazard's office in Berlin. 'It's not likely,' he said, to help the Social Democrats win the election, 'and it's going to make this swarm of locusts want to invest elsewhere.' Alexander Dibelius, a Goldman partner who runs its German operation, said the economic measures adopted by Chancellor Schröder have helped make the country an attractive place to invest. But the current tempest, he said, stirred memories of earlier times, particularly the 1970's, when anticapitalist sentiment made it tough to do business here. 'You've woken up ghosts you didn't want to see anymore,' Mr. Dibelius said. 'The question is, Can you put them back to bed?'

Subject: I.B.M. Lay Offs in Europe From: Emma To: All Date Posted: Thurs, May 05, 2005 at 09:53:42 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/05/technology/05ibm.html?pagewanted=all&position= I.B.M. to Lay Off Over 10,000 in Struggle to Keep Up Profits By STEVE LOHR I.B.M. announced yesterday that it would lay off 10,000 to 13,000 workers, mostly in Europe, as it struggles to keep up its profits at a time when global competition in the technology business spreads beyond selling computers to providing services. The cutbacks come after I.B.M. reported disappointing quarterly earnings last month and the price of its shares dropped. But I.B.M. portrayed the move as mainly an evolution in its strategy of globalizing its operations by moving back-office work like accounting and procurement to low-cost locations and pruning operations in high-cost and slower-growth markets like France, Germany and Italy. The job cuts, the company said, are primarily in administrative offices in European countries that were set up in the postwar years to serve those markets, which were growing rapidly. I.B.M. executives said those national and regional administrative centers were being dismantled. That older style of multinational corporation, they said, is being replaced by a leaner global operation, with work being sent digitally across the Internet to where it can be done most efficiently. 'We're still going to have deep roots locally, but we are increasingly globalizing our operations and processes,' Robert W. Moffat, an I.B.M. senior vice president, said in an interview. 'And the first-quarter financial results did accelerate some of the things we did, but these actions are not a reaction to the first quarter.' I.B.M. employs about 322,000 people worldwide today, after 10,000 I.B.M. workers were transferred to Lenovo of China, which this week completed its purchase of I.B.M.'s personal computer business. So the payroll cuts will amount to 4 percent or less of the work force. While most of the trimming will come from West European countries, among them Germany, France and Italy, some will also be made in the United States, where I.B.M. employs 120,000 people. I.B.M. did not say how many American workers would be affected. I.B.M. will take a charge of $1.3 billion to $1.7 billion in the current quarter to pay for severance packages and other payments to the laid-off workers. Wall Street analysts estimate that the cutbacks will reduce I.B.M.'s annual operating expenses by $1 billion or more. The job cuts are expected to be completed by the end of this year. I.B.M. made the announcement after regular trading ended yesterday; the company's stock price rose 77 cents, to $77.85, in after-hours trading. So far this year, however, I.B.M.'s share price is down 22 percent. I.B.M. remains a solidly profitable company with nearly $9 billion in cash in the bank, even after the company spent $3.4 billion in the first quarter to repurchase shares and set aside $1 billion more than it did in the same quarter a year earlier to cover its pension obligations to retirees. Still, I.B.M. reported a profit for the first quarter of 85 cents a share, 5 cents a share below Wall Street's expectations. The shortfall was regarded by investors as a surprising stumble. The company attributed its weak performance primarily to its big services business, which now accounts for more than half the company's revenue and is supposed to be the main engine of I.B.M.'s growth in the future. In a sense, I.B.M.'s strategy in moving toward services mirrors the course of the American economy. The company depends less on manufacturing than it did in the heyday of mainframe computers as it moves up the economic ladder to helping corporate customers use information technology. Increasingly, I.B.M. researchers and software programmers are put to work for customers redesigning and automating business tasks like procurement, accounting and customer service. Yet I.B.M. faces increasing competition and price pressure in services from low-cost rivals like Dell, which is rapidly expanding in services, as well as Indian outsourcing companies like Wipro, Tata Consulting and Infosys. Those competitors operate mostly in the mundane but big part of the services industry, which helps companies run their computer data centers. The disappointing earnings report raised the question of how competitive I.B.M. really is in the services market, and how quickly it can develop the more profitable business of helping companies use technology to increase sales and streamline operations. 'The issue is what if the old-style services decline more rapidly than the new business-transformation services picks up the slack,' said Mark D. Stahlman, an analyst at Caris & Company, an investment firm. For months before I.B.M. reported its lower-than-expected profit, Samuel J. Palmisano, the chief executive, talked publicly about the need to 'lower the center of gravity' of the company by eliminating administrative layers and putting more authority and resources in the hands of employees who deal directly with customers. Last December, after I.B.M. announced the sale of its PC business to Lenovo, Mark Loughridge, the chief financial officer, said in a conference call that some of the proceeds from the $1.75 billion deal, including cash, stock and debt, would be invested in 'the transformation and globalization of I.B.M.'s business model.' Yet industry analysts said the big cutbacks announced yesterday suggest that the transition to more profitable businesses and faster-growing markets is not going as smoothly as I.B.M. had anticipated. 'The technology services business has changed, and I.B.M.'s operations have to change with that shift,' said Laura Conigliaro, an analyst at Goldman Sachs & Company. 'As we've seen, I.B.M. has not done a picture-perfect job of it.' And while trimming the payroll will reduce costs, it remains to be seen whether the pruning will increase the company's competitiveness and sales in the long run, analysts noted. 'This move is an acknowledgement that I.B.M.'s competitiveness is not as good as it could be,' said A. M. Sacconaghi, an analyst at Sanford C. Bernstein & Company. 'Taking costs out is the easy part,' he said. 'The issue is whether the result will be a more competitive, vibrant I.B.M. or not.' Job Cuts at Hewlett-Packard By Bloomberg News The Hewlett-Packard Company, the world's largest printer maker, said yesterday that more than 1,900 workers at its printing and imaging unit had accepted severance packages. Employees in the United States and Puerto Rico were offered and accepted voluntary severance packages last month, said Monica Sarkar, a spokeswoman for the company, based in Palo Alto, Calif. Most cuts will be at the company's offices in Boise, Idaho, and Corvallis, Ore., she said. Profit in the printing group, which accounts for more than two-thirds of Hewlett-Packard earnings, fell 3.6 percent last quarter as the company cut prices deeply. The cuts are 'part of the transformation of I.P.G. to maintain market leadership and improve the cost structure,' Ms. Sarkar said. She declined to say how many workers remained in the unit.

Subject: Social Security and Treasury Bonds From: Terri To: All Date Posted: Thurs, May 05, 2005 at 06:25:16 (EDT) Email Address: Not Provided Message: The issuing of 30 year Treasury debt to finance what would amount to an ending of Social Security with benefit reductions and a beginning of private accounts would increase economic risk in dramatic fashion. To threaten Social Security benefits is a needless tragedy.

Subject: Treasury Bond Market Duration From: Terri To: All Date Posted: Thurs, May 05, 2005 at 06:00:00 (EDT) Email Address: Not Provided Message: What seems most important is that long term interest rates stay reasonably low to protect the economy. I am quite worried about extending the duration of the Treasury market with 30 year bonds at a time when the economy is slowing in growth as the Federal Reserve gradually raises short term rates. Extending Treasury bond market duration and likely increasing volatility would not be called for in such a delicate period.

Subject: A Promising Stock Market From: Terri To: All Date Posted: Wed, May 04, 2005 at 14:58:59 (EDT) Email Address: Not Provided Message: The stock market has the same feel as in 1994. A stable market that drifts down for a while and moves back towards zero. As this market drifts along with international markets, profits are fine and so stocks are getting cheaper for long term investors. The long term bond market is steady and high priced. This appears promising for long term stock investing.

Subject: Economic Worries From: Terri To: Terri Date Posted: Thurs, May 05, 2005 at 10:56:31 (EDT) Email Address: Not Provided Message: The stock market can offer reasonable and attractive value while the economy is troubled and slowing. While the market pattern is like 1994, we had Bill Clinton and Robert Rubin handling our fiscal policy in 1994. The budget was well controlled, the labor market was strong and growing stronger, America was about to experience a wonderful period of productivity and economic growth.

Subject: 1994 vs 2005 From: Pete Weis To: Terri Date Posted: Thurs, May 05, 2005 at 15:21:01 (EDT) Email Address: Not Provided Message: The difference between now and 1994 is like 'night and day' - please forgive my triteness. We were right in the middle of the hightech boom and high paying hightech jobs were still increasing at a rapid rate. Our economy hadn't become dependent on extracting equity from an overblown housing market and consumers were not nearly as heavily in debt. Oil and energy was very, very cheap. Our current account deficit, while growing, wasn't nearly at the level it is now. Investment services and investment banking were still legally separate and corporate execs were just begining to catch on to bleeding their companies by awarding themselves numerous, large stock options. I could go on about how global investment was leaving enmass from Japan and Asia in the 90's to the one stock market which was still doing well (the US). Bottom line - it's very easy to see how extremely different things are now from the way they were back in 1994!

Subject: Deja Vu From: johnny5 To: Terri Date Posted: Thurs, May 05, 2005 at 08:40:23 (EDT) Email Address: johnny5@yahoo.com Message: You are the third person I have heard make that comment in the past week - Gary Kaultbaum of Investors Edge http://www.businesstalkradio.net/weekday_host/gk.shtml said this was like 1994 a few days ago and an analyst on CNBC said that last week too. Several of my friends who just lost thier IBM job overseas are very said this week. Please pray for them Terri.

Subject: Re: A Promising Stock Market From: Pete Weis To: Terri Date Posted: Wed, May 04, 2005 at 21:30:27 (EDT) Email Address: Not Provided Message: Terri. Your spirits seem to go up and down with the market.

Subject: Re: A Promising Stock Market From: Terri To: Pete Weis Date Posted: Thurs, May 05, 2005 at 05:52:02 (EDT) Email Address: Not Provided Message: Investing is about finding value in stocks, and I have been finding value in stocks. A weak to flat market can be a helpful shopping time.

Subject: Paul Volker and this..... From: Pete Weis To: Terri Date Posted: Thurs, May 05, 2005 at 09:24:36 (EDT) Email Address: Not Provided Message: Israeli economist don't see the similarities with 1994: Leiderman: Global financial crisis looms; Israel ready Bank Hapoalim chief economist Prof. Leonardo Leiderman expects an upgrade to Israel's credit rating. Dafna Zucker 3 May 05 19:10 'The global economy faces the risk of an international financial crisis. Nevertheless, the Israeli economy is well prepared to cope with international financial shocks,' Bank Hapoalim chief economist Prof. Leonardo Leiderman said today. Leiderman made his remarks in a lecture entitled 'The US Economy, Global Markets and Israel: An Updated Outlook' at the Israel-America Chamber of Commerce. The reason for Leiderman's pessimistic prophecy is the lack of balance in the global economy. Leiderman: 'The main concern is the huge US balance of payments deficit, which is expected to pass the $700 billion mark, or 6% of GDP, this year. 'This deficit mainly reflects a fall in the American rate of savings since 2000, including the development of a fiscal deficit, amounting to 4.4% of GDP. The main reason for this is the low real interest rate in the US. The real short-term rate is currently zero, while the annual inflation rate in the US is 2.7%. The US and the world are headed towards higher interest rates. The pace and timing of the rises represent important uncertainty factors.' According to Leiderman, the situation today is that the US depends on the rest of the world to finance its balance of payments deficit, and it requires the purchase of dollar assets to the tune of $2.6 billion every business day to prevent international financial stability being undermined. The key to remedying the lack of global balance lies, according to Leiderman, in a combination of factors: reducing the US fiscal deficit, raising the US national saving rate, restoring short-term US interest rates to a 'normal' level of 2%, floating of East Asian currencies and revaluation of those currencies, a rise in aggregate demand in Europe and Japan. 'Getting the global market back in balance requires coordinated action by US, European, and Asian leaders. At the moment, there is no progress in this direction. This gives rise to uncertainty and much anxiety on the financial markets,' Leiderman said. He said the Israeli economy was well prepared to cope with international financial shocks. 'The fact that the shekel is a floating currency, together with monetary discipline and the US loan guarantees, and the optimism about the peace process, contribute to the economy's robustness,' Leiderman said. According to Leiderman, the rating agencies can be expected to upgrade Israel's sovereign rating, thanks to the economy's performance, the diplomatic process, and also because of Stanley |Fischer's appointment as Governor of the Bank of Israel, which contributes to the credibility of economic policy in Israel. He said he believed that the emphasis on meeting the government's inflation target would remain at the Bank of Israel under Fischer

Subject: Health Care in South Africa From: Terri To: All Date Posted: Wed, May 04, 2005 at 13:49:04 (EDT) Email Address: Not Provided Message: http://www.southafrica.info/ess_info/sa_glance/health/health.htm Health Care in South Africa South Africa's health system consists of a large public sector and a smaller but fast-growing private sector. Health care varies from the most basic primary health care, offered free by the state, to highly specialised hi-tech health services available in the private sector for those who can afford it. The public sector is under-resourced and over-used, while the mushrooming private sector, run largely on commercial lines, caters to middle- and high-income earners who tend to be members of medical schemes (18% of the population), and to foreigners looking for top-quality surgical procedures at relatively affordable prices. The private sector also attracts most of the country's health professionals. Public versus private spending Although the state contributes about 40% of all expenditure on health, the public health sector is under pressure to deliver services to about 80% of the population. Despite this, most resources are concentrated in the private health sector, which sees to the health needs of the remaining 20% of the population. Drug expenditure per person varies widely between the sectors. In 2000 about R8.25-billion was spent on drugs in South Africa, with the state spending only 24% of this. Thus, R59.36 was spent on drugs per person in the state sector as opposed to R800.29 on drugs per person in the private sector. Of all the country's pharmacists, 40% work in Gauteng in the private sector. The number of private hospitals and clinics continues to grow. Four years ago there were 161 private hospitals, with 142 of these in urban areas. Now there are 200. The mining industry also provides its own hospitals, and has 60 hospitals and clinics around the country. Most health professionals, except nurses, work in private hospitals. With the public sector's shift in emphasis from acute to primary health care in recent years, private hospitals have begun to take over many tertiary and specialist health services. Public health consumes around 11% of the government's total budget, which is allocated and spent by the nine provinces. How these resources are allocated, and the standard of health care delivered, varies from province to province. With less resources and more poor people, cash-strapped provinces like the Eastern Cape face greater health challenges than wealthier provinces like Gauteng and the Western Cape. Transforming the health sector After South Africa's first democratic elections in 1994, the dismantling of the country's race-based health system began. Previously, hospitals were assigned to particular racial groups and most were concentrated in white areas. With 14 different health departments, the system was characterised by fragmentation and duplication. There was no real attempt to deliver primary health care to the majority of people, and the health sector was largely focused around hospitals. Those living in rural areas had to travel long distances for medical care. A transformed health system Over the past few years the health sector has undergone rapid change to make it more equitable and accessible to the needy. A district-based health system is being developed to ensure local-level control of public health services, and to standardise and co-ordinate basic health services around the country to ensure that health care is affordable and accessible to everyone. There are 42 health regions and 162 health districts in the country. A new administrative structure is being put in place which will see primary health care clinics fall under the auspices of district authorities while hospitals remain under the control of provincial authorities. Greater access to primary health care Since 1994, more than 700 clinics have been built or upgraded, 2 298 clinics upgraded and given new equipment, and 125 new mobile clinics introduced. There are now more than 3 500 clinics in the public sector. Free health care for children under six, and for pregnant or breastfeeding mothers, is also available at these clinics. Doctor shortages To combat the long-standing shortage of doctors in rural areas, 450 foreign doctors, mainly from Cuba, were employed. The government has also made it easier for other foreign doctors to register here. Newly graduating South African doctors and pharmacists now complete a year of compulsory community service in understaffed hospitals and clinics. The country continues to suffer from a tremendous 'brain drain' of South African doctors who are highly sought after in countries like Britain and Canada because of the high standard of training and the cutting-edge medical experience they receive here. In 2000, 29 788 doctors in both public and private sectors were registered with the Health Professions Council of South Africa, the health practitioner watchdog body. Doctors must comply with the Continuing Professional Development System, which compels them to attend regular workshops, seminars and refresher courses to retain their yearly registration. New legislation In recent years, legislation has been passed to: Make drugs more affordable and promote the use of generic equivalents; Regulate the medical schemes industry to prevent it from discriminating against 'high risk' individuals like the aged and sick; Legalise abortion and allow for safe access to it in both public and private health facilities; Limit smoking in public places and make the public aware of the health risks of tobacco by placing restrictions on tobacco advertisements. Public/private partnerships To address some of the resource and personnel shortages facing the public sector, partnerships between the public and private sectors are slowly being forged. Some private hospitals are now offering beds and providing medical care to public sector patients. They are also beginning to offer post-graduate teaching facilities to university medical faculties in an effort to stop the flow of doctors out of the country. Poverty, Aids, TB, malaria Aids and other poverty-related diseases like tuberculosis and cholera are placing a tremendous strain on South Africa's health care system, eroding attempts to improve the general health of South Africa's people. HIV/Aids poses the biggest threat by far, with an estimated six million South Africans expected to die from Aids-related diseases over the next 10 years. Based on the Department of Health’s national ante-natal survey, involving anonymous testing of pregnant women at state health facilities, an estimated 4.5-million South Africans were living with HIV in the year 2000. Government agencies, as well as myriad non-governmental organisations, have risen to this challenge, mounting tremendous efforts to create awareness around HIV/Aids, promote behaviour change, and provide medical, social and economic assistance to those affected by the epidemic. Poverty and unemployment High levels of poverty (71% in rural areas and 50% overall) and unemployment (at least 38%) make it difficult for most people to pay for health services, which places immense strain on the public health sector. There have been significant improvements in some areas of basic health care delivery, such as ante-natal care, combating acute childhood illnesses, and managing to administer DOTS (directly observed treatment strategy) to combat tuberculosis in 80% of clinics. But the challenges in primary health clinics are still enormous. Many clinics still lack basic equipment, drugs, tests for HIV and essentials like piped water, telephone access and reliable electricity supplies. There has been a real increase in funding for public hospitals, which consume two-thirds of the health budget, but most of this money has gone towards better salaries, and our state hospitals, under growing pressure to accommodate people dying of Aids-related illnesses, are more overstretched and cash-strapped than ever. Tuberculosis The high rate of tuberculosis infection is another pressing health problem. South Africa is one of 22 countries around the world with the highest infection rates of TB. The implementation of DOTS (directly observed treatment strategy) - where health workers monitor and observe TB patients taking their medication - in most clinics around the country has made significant inroads into controlling the disease. However, the spread of HIV has been accompanied by an upward swing in the TB epidemic. More than half of the country's TB cases are HIV-related. People with HIV are far more susceptible to TB infection, and less able to fight it off. Malaria The prevalence of malaria in South Africa has increased steadily from the mid-1980s, with a rapid increase since 1996. In 2000 around 62 000 South Africans contracted malaria, and 423 died of the disease. However, malaria occurs only on the fringes of the country, affecting the three north-eastern provinces: KwaZulu-Natal, Mpumalanga and Limpopo. Malaria transmission occurs seasonally, with peak rates of infection occurring in April and declining by June. Reasons for the spread of malaria over the past decade include drug resistance, increased cross-border travel between South Africa and Mozambique, the spread of HIV, and reductions in DDT spraying. Government efforts to curb malaria with the reintroduction of DDT spraying - 1.1 million households were sprayed last year - and distribution of bed nets are paying off, however, and the number of malaria cases in the northern parts of KwaZulu-Natal has been reduced by 70%.

Subject: Re: Health Care in South Africa From: Mik To: Terri Date Posted: Thurs, May 05, 2005 at 13:32:34 (EDT) Email Address: Not Provided Message: Terri, I'm glad to see you have done some research into the topic. Your research shows the overall picture of health care in South Africa and the role of the private sector. Which from what I can see in the post, looks pretty impressive. Can I suggest you do some research into the Medical Insurance/Aid companies of South Africa and their systems and similarities to the USA. The South African company 'Discovery Health' is today the world's largest provider of consumer-driven health plans. They have a subsudary company called 'Destiny Health' based out of Chicago and recently they merged with Tufts Health Plan. Bringing South African private sector medical systems to the USA and becoming the fastest gowing medical insurer in the USA. Take a look at this site: http://www.destinyhealth.com/liberty/liberty_press_7_april.jhtml?subsection=LibertyProduct The final point comes back to Krugman's statement. He should look at your post and perhaps research South Africa's private sector health care management systems that show very good results. Especially when those systems are already being introduced in the USA.

Subject: Re: Health Care in South Africa From: Terri To: Mik Date Posted: Thurs, May 05, 2005 at 16:36:20 (EDT) Email Address: Not Provided Message: Thanks, Mik. Now to look carefully at Destiny Health or Discovery Health. We can send Paul Krugman what is germane. The topic is not going to become less important over time.

Subject: Re: Health Care in South Africa From: Terri To: Terri Date Posted: Thurs, May 05, 2005 at 18:17:13 (EDT) Email Address: Not Provided Message: Mik, I understand why you are impressed. The South African private-public health care system is surely worth studying.

Subject: Why Can't Wal-Mart Pay More? From: Emma To: All Date Posted: Wed, May 04, 2005 at 13:04:19 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/04/business/04wages.html?pagewanted=all&position= Can't Wal-Mart, a Retail Behemoth, Pay More? By STEVEN GREENHOUSE BENTONVILLE, Ark. - With most of Wal-Mart's workers earning less than $19,000 a year, a number of community groups and lawmakers have recently teamed up with labor unions in mounting an intensive campaign aimed at prodding Wal-Mart into paying its 1.3 million employees higher wages. A new group of Wal-Mart critics ran a full-page advertisement on April 20 contending that the company's low pay had forced tens of thousands of its workers to resort to food stamps and Medicaid, costing taxpayers billions of dollars. On April 26, as part of a campaign called 'Love Mom, Not Wal-Mart,' five members of Congress joined women's advocates and labor leaders to assail the company for not paying its female employees more. And in a book to be published this fall, a group of scholars will argue that Wal-Mart Stores, having replaced General Motors as the nation's largest company, has an obligation to treat its employees better. Among workers at Wal-Mart's 3,700 stores across the United States, the debate is also heating up. Frances Browning, for example, once earned $15 a hour, but now at Wal-Mart, where she is a cashier in Roswell, Ga., she is paid $9.43. She says she is happy to have the job. 'I was unemployed for two and a half years before I found my job at Wal-Mart,' Ms. Browning, 57, said. 'Like everybody else I'd love to make a lot more, but I have to be realistic.' But Jason Mrkwa, 27, a high school graduate who stocks frozen food at a Wal-Mart in Independence, Kan., maintains that he is underpaid. 'I make $8.53, even though every one of my evaluations has been above standard,' Mr. Mrkwa (pronounced MARK-wah) said. 'You can't really live on this.' Labor groups and their allies are focusing on Wal-Mart because they say that the campaign will not just benefit its workers but also reduce the existing pressure on unionized competitors to reduce their own wages and benefits. 'Wal-Mart should pay people at a minimum enough to go above the U.S. poverty line,' said Andrew Grossman, executive director of Wal-Mart Watch, the coalition of community, environmental and labor groups running the series of ads criticizing Wal-Mart. 'A company this big and this wealthy has the ability to pay higher wages.' H. Lee Scott Jr., Wal-Mart's chief executive, vigorously defends his company, arguing that wages are primarily determined by market forces and that Wal-Mart pays more than most retailers and provides better opportunities for advancement. 'If people tell you that Wal-Mart is leading the so-called 'race to the bottom' in terms of job quality or pay, they're not only wrong, they're dead wrong,' he said to journalists at a company-sponsored conference here in April, the first time Wal-Mart has gone out of its way to invite a number of reporters to its headquarters to hear its views. 'We are instead creating a better workplace with more opportunity and more benefits than have been available in retail.' Mr. Scott contends that the critics, including competitors, are defenders of an outdated status quo, intent on upholding a retailing system full of inefficiency and inflated prices. He said that if Wal-Mart were as greedy as its detractors say, it would never have attracted 8,000 job applicants for 525 places at a new store in Glendale, Ariz., or 3,000 applicants for 300 jobs in outlying Los Angeles. Michael T. Duke, chief of the company's stores division, said, 'Wal-Mart is a very good place to work for our associates, and every day we make it even better.' Mr. Mrkwa, the food stocker, does not see it that way. With pay that brings him about $20,000 a year, he said he could not afford a decent apartment or a vehicle better than his 1991 Dodge Dakota. 'I don't see why Wal-Mart can't pay more,' Mr. Mrkwa said. 'Unfortunately, in the market we live in there just aren't many jobs available.' Wal-Mart says its full-time workers average $9.68 an hour, and with many of them working 35 hours a week, their annual pay comes to around $17,600. That is below the $19,157 poverty line for a family of four, but above the $15,219 line for a family of three. Wal-Mart critics often note that corporations like Ford and G.M. led a race to the top, providing high wages and generous benefits that other companies emulated. They ask why Wal-Mart, with some $10 billion in profit on about $288 billion in revenue last year, cannot act similarly. 'Henry Ford made sure he paid his workers enough so that they could afford to buy his cars,' said William McDonough, executive vice president of the United Food and Commercial Workers union. 'Wal-Mart is doing the polar opposite of Henry Ford. Wal-Mart brags about how its low prices help poor Americans, but its low wages are helping increase the number of Americans in poverty.' Mr. Scott argues that retailers, with narrow profit margins, face a different competitive situation and cannot afford to be as generous to their workers as automakers and other capital-intensive companies. 'Some well-meaning critics,' he said, 'believe that Wal-Mart, because of our size, should play the role that General Motors played after World War II, and that is to establish the post-world-war middle class that the country is so proud of. The facts are that retailing doesn't perform that role in the economy as G.M. does or did. Retailing doesn't perform that role in any country in the world.' Many of those assailing Wal-Mart argue that the company can, and should, pay its workers at least $2 more an hour and add $1 or $2 an hour beyond that to improve its health benefits. A Harvard Business School study found that Wal-Mart paid $3,500 a year for each employee for health care, while the typical American corporation paid $5,600. If Wal-Mart spent $3.50 an hour more for wages and benefits of its full-time employees, that would cost the company about $6.5 billion a year. At less than 3 percent of its sales in the United States, critics say, Wal-Mart could absorb these costs by slightly raising its prices or accepting somewhat lower profits. But company executives dismiss such proposals, saying they would largely wipe out Wal-Mart's profit or its price advantage over competitors. Wal-Mart had a profit margin on sales last year around 3.5 percent. If 'we raised prices substantially to fund above-market wages, as some critics urge,' the company argued in a recent two-page ad in The New York Review of Books, 'we'd betray our commitment to tens of millions of customers, many of whom struggle to make ends meet.' Here in Bentonville, Mr. Scott pursued that theme. 'If you're telling me because you're Wal-Mart and you're going to pay $12 an hour and this other retailer is going to pay $5.15 an hour, the federal minimum wage, and they're not going to provide any benefits at all and somehow the consumer is rewarded in all this, all you're doing is perpetuating the status quo,' he said. 'You're driving inefficiencies into the system. It doesn't make any sense.' Wal-Mart argues that, as retailing companies go, it treats its workers better than average. It says 74 percent of its employees work full time, compared with fewer than 40 percent at many other retailers. But critics note that a leading competitor, Costco, pays $16 an hour - 65 percent more than the average wage at Wal-Mart stores and 33 percent more than the $12 average at its Sam's Club stores. At Costco, 82 percent of the workers are covered by company health insurance, compared with 48 percent at Wal-Mart. George Whalin, president of Retail Management Consultants in San Marcos, Calif., said that Wal-Mart should ignore the attacks. 'Retail has always paid poorly and it probably always will,' he said. 'Wal-Mart has a responsibility to serve their customers - to give them a good product - and to their shareholders. They don't have a responsibility to society to pay a higher wage than the law says you have to pay.' But Burt Flickinger, another retailing consultant, said it would be in Wal-Mart's long-run interest to pay better. 'Wal-Mart's turnover will be close to half a million workers this year,' he said. 'By paying higher wages, Wal-Mart will make its employees happier and will reduce turnover. A lot of its new workers, for instance, don't know where to stock things. Higher wages will mean more productivity per person, and that should help raise profits.' The debate is far from over. LaTasha Barker, a single mother who worked for two years as a cashier at a Sam's Club in Cicero, Ill., said she earned so little that she could not afford the $1,860 a year for family health insurance. 'They don't pay a living wage,' said Ms. Barker, who quit her $8.40-an-hour job in 2004 to take a $15-an-hour social work job. While at Sam's, she said, she qualified for Medicaid and $139 a month in food stamps. By contrast, Jamie Schifferer, manager of the health and beauty aids department at a Wal-Mart in Algonquin, Ill., said Wal-Mart was a terrific employer. She quit her $25,000-a-year post running a Cingular wireless shop to go to Wal-Mart. After 20 months, she earns $12.50 an hour - close to her previous pay - but now works 40 hours a week rather than the 60 hours at Cingular. 'I was very miserable,' she said. 'As soon as I heard about this store opening, I jumped. It's perfect for me right now.'

Subject: David Tice Prudent Bear on CNBC 2pm From: johnny5 To: All Date Posted: Wed, May 04, 2005 at 11:23:42 (EDT) Email Address: johnny5@yahoo.com Message: Street Signs 2:00 PM - 3:00 PM ET David Tice The Prudent Bear Fund

Subject: A New 'China Syndrome' From: Emma To: All Date Posted: Wed, May 04, 2005 at 10:31:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/iht/2005/05/03/business/IHT-03mchina.html A New 'China Syndrome' By HOLLY HUBBARD PRESTON International Herald Tribune China, the perpetual motion machine of world economies, is showing no sign of letting up in 2005. This month the country posted its second consecutive quarter of 9.5 percent growth in gross domestic product. Consumers, buoyed by consistent increases in benefits and wages, have seen their incomes rise by 10 percent in urban areas and 15 percent in rural areas. Chinese producers are moving more product than they are storing, as reflected by a historically low inventory-to-sales ratio of 65 percent. Capital investment, though down from a year ago, still pumped out 22 percentage points of growth last quarter. So China is firing on all cylinders, save for the one most germane to investors: its domestic stock markets. The Shenzhen-A Composite index hit its lowest point in six years, showing a 56 percent drop from its historical peak in 2000. The Shanghai-A Composite index dropped by more than 40 percent during the same period, breaking through its five-year low, according to a February report from QuamResearch Weekly, an online publication. How could China's stock market be weak when its economy is so buoyant? 'GDP represents the top-line revenue growth of all companies in a particular country,' said Joe Zhang, an equity research analyst with UBS Warburg in Hong Kong. 'It says nothing about earnings.' As Zhang noted in a telephone interview, China's equity market abounds with gleaming revenue reports juxtaposed with 'horrible earnings and even more horrible earnings per share' figures. A prime example, said the analyst, is Beijing Yanjing Brewery, a subsidiary of Beijing Enterprise Holdings. The company has seen virtually no change in its stock price for the past seven years despite a quadrupling of its revenue and a 50 percent increase in earnings during the period. 'The stock has just collapsed,' Zhang said. 'It's the China syndrome.' The downward spiral in stock prices has not gone unnoticed by investors. Last year, an estimated one third of all A-share investors left the market, according to QuamResearch. There are a variety of reasons for the country's lackluster investment returns. In the past 10 years, the Chinese market has been flooded with new companies, 1,400 of which have made public offerings. With the exception of China's infrastructure and resource stocks, however, the country's publicly held industrial, home appliance, retail, property and conglomerate sectors have been consistent underperformers - the result of low entry barriers, overcapacity, weak pricing power, and short product cycles. Another debilitating factor, said Zhang, is the undisciplined manner in which Chinese companies are diluting their stock. 'Stock price is all about earnings per share,' he said, 'and there is no use talking about total profits increasing by 50 percent if the number of shares issued increases by 70 percent.' Lastly, Zhang pointed to the increasingly high cost of doing business in China. While labor costs remain competitive relative to the rest of the industrialized world, China's seemingly insatiable demand for commodities - raw as well as processed - has created an unprecedented global upswing in prices for everything from metals in raw and finished form to cement, oil, natural gas and coal. The costs are not likely to abate in 2005. Ken Simonson, chief economist for the Associated General Contractors of America in Alexandria, Virginia, noted that 'at least half the world has a strong appetite for steel right now. China is only part of the story.' Simonson, whose group tracks building supply trends for the American construction industry, referred to producer price statistics for March from the U.S. Bureau of Labor Statistics which showed a 27 percent increase in steel prices compared with the year-ago period; a 19 percent increase for iron ore; and 13 percent increase for iron and steel scrap. The rise in metal prices, while a boon for global mining concerns such as Rio Tinto of Australia and Rio do Vale Doce of Brazil, is taking a broad chunk out of China's corporate profits. Choon Yoon Lai, a fund manager for Comgest in Singapore, noted that 2004 year-end financial results for China's public companies were 'peppered with comments of high raw material prices, inability to raise selling prices thanks to competition, and margin squeeze.' The fund manager cited the Chinese automaker Avichina, which suffered an 82 percent decline in net profit last year, in part because of increased material costs. Choon reported seeing similar losses at industrial concerns like Johnson Electric and Asia Aluminum; athletic and leisure shoe manufacturers such as Yue Yuen and textile companies such as Texwinca. While the country is a major source of finished commodities, including steel and aluminum, it is lacking in natural resources, said Chen Zhao, research director for BCA Research in Montreal. 'Anything that has to be dug out of the ground - water, oil, copper, lumber or iron ore - is scarce in China. Manufacturers have no choice but to go elsewhere for those resources.' Moreover, investors hoping to profit from the Chinese government's current attempt to shift focus from infrastructure investment to consumer spending are likely to be disappointed. Analysts note that the 1.3 billion Chinese have a savings rate amounting to 40 percent of GDP. 'The Chinese want to engineer a shift in the growth engine to allow consumption to be the driving force, but to do that the savings rate is going to have to come down,' noted Frank Gong, chief Asia economist for JP Morgan in Hong Kong. Amid all the bad news, analysts can still find stocks to recommend. Zhang particularly likes natural resources stocks because, compared to industrial and service companies, they require less management expertise - one of the other commodities that is in short supply in China. Among Zhang's top natural resource recommendations are Yanzhou Coal, the world's largest pure coal mining company; Jiangxi Copper, which in addition to manufacturing copper, also owns copper ore mines and accounts for about one-third of China's reserves; Aluminum Corp. of China, known as Chalco, China's only aluminum refinery catering to hundreds of bauxite mining companies; and Anhui Conch Cement, a cement manufacturer that controls many of the country's contracts for low-grade limestone, which is in diminishing supply in China. UBS also likes petrochemical companies, which it expects to outperform metals for the rest of 2005. The sector is also a good hedge for a more consumer-driven economy in China since, as Zhang noted, household goods use textiles and plastics that require petrochemicals. As of this month, UBS had buy ratings on Shanghai Petrochemical, Zhenhai Refining, PetroChina and Sinopec. Monopolies are another area UBS finds promising. Zhang said that although many of the companies in this category have suffered from overbuilding and underutilization, they are improving their efficiency. Among its picks are several China-controlled natural monopoly and infrastructure stocks listed in Hong Kong, including the toll road companies Zhejiang Expressway, Guangshen Railway and GZI Transport; two port authorities, Shanghai Port and Shenzhen Chiwan; and two fixed-line telecommunications providers, China Telecom and China Netcom. Choon of Comgest said her fund was avoiding basic materials plays like BHP, Angang Steel and Jiangxi Copper, since their earnings were 'hardly predictable and stable.' Instead, she has focused on Chinese companies poised to benefit from the trend in rising commodity prices without being directly exposed to their fluctuations. Comgest holds Noble Group, a company listed in Singapore but based in Hong Kong that sources products for customers in four main product groups: grains (soy beans, corn, wheat), softs (coffee, cocoa), energy (coal, coke, fuel oil), and metal alloys (aluminum, iron ore, steel). In 2003, 25 percent of its revenue came from China demand. Even with a defensive strategy, Zhang said, investors from outside the country might find that China's equities simply don't offer adequate returns. Then again, there seems to be no place for these stock markets to go from here but up.

Subject: Re: A New 'China Syndrome' From: Pancho Villa To: Emma Date Posted: Wed, May 04, 2005 at 11:21:56 (EDT) Email Address: nma@hotmail.com Message: JOE ZHANG China's corporate cost advantage is a myth China's costs of labour and land are low and its currency is regarded as undervalued and competitive. Yet Chinese companies are making relatively little money and the domestic stock market is at a six-year low. The reason lies in the country's high - and rising - costs of doing business. If the government does not urgently address this issue, the country will not only fail to develop a services industry but will also miss out on the foreign investment its underemployed labour force needs. In the past decade, three types of costs - operational, regulatory and external - have been suffocating business in China. Even its numerous special economic zones have been affected, in spite of lower taxes and less onerous regulations. In 2004, China overtook the US to become the world's largest beer market. But the largest three Chinese breweries, which account for a total 35 per cent of the market, made a combined profit of only $lOOm (€77m) in 2004 - equal to one-seventh of Heineken's profits and five per cent of Anheuser-Busch's in that year. Apart from managerial inexperience, high costs drive the disconnect between impressive top lines and anaemic earnings. First are the operational costs. For most manufacturers, costs of imported energy and raw material - on which China is relying ever more heavily - far outweigh those for land and labour. While input costs are rising, overcapacity, falling entry- barriers and high tolerance for low returns on investments will continue to depress profit margins. In fact, Chinese manufacturers often have to pay more for energy and raw materials than their overseas counterparts, not only because of shipping costs but also due to import tariffs and 17 per cent value added tax. Over time, this cost disadvantage will probably spread to a larger part of the economy. While low wages have led to labour shortages in the private sector in China's southern Guangdong province, wages and benefits have exploded in the country's bloated state sector that still accounts for about two-thirds of gross domestic product. In 1990, a typical state-sector employee's take-home pay was less than Rmb200 (€19) per month. The figure is now Rmbl,500 (excluding employers' contributions to housing funds and insurance payments) - representing annual compound growth of 15 per cent, far exceeding productivity gains and consumer price inflation. Of course, Chinese labour costs are still low by global standards, but they are not that low if overstaffing and inefficiency are taken into account. Moreover, there is a real risk that China's state-sector labour costs may run out of control, as there is no real 'owner' to exercise restraint. Second are regulatory costs - a serious burden for Chinese companies that has fuelled uncertainty about government policy. For example, the government keeps the world guessing when it will grant 3G telephone licences and when it will raise electricity prices. Many Chinese corporate executives also complain of interminable government meetings and endless random 'inspections'. The first foreign bank set up its Beijing representative office in 1982, but foreign banks are still subject to tight restrictions and it remains unclear when they will be allowed to operate like local banks and recoup their expenses. Another concern for Chinese companies is the need to constantly lobby for government favours including tax holidays, government contracts and business licences. These unproductive and wasteful pursuits clearly add to the mounting costs of business. In the 1980s, a small entrepreneur could start a business with just RmblO.OOO in seed money. Today, local government taxes, fees, licence requirements and convoluted rules have made life much harder for the small entrepreneur. Finally, there are external costs which, while more subtle, are equally painful. The budding entrepreneur may, for instance, think he has discovered a new formula to make noodles only to find a dozen similar shops selling the same noodles the next day. Weak enforcement of intellectual property rights hurts China in many more ways. Scarce resources do not get channelled into product innovation, but instead wreak havoc on existing well-run businesses. These small operators may not be efficient, but their ability to slash product prices is unlimited. China's cost advantages today, therefore, are only limited to some simple exporting processing sectors. To nurture indigenous capital formation and attract 'smart' foreign investments China must work hard to greatly improve its business environment. The writer, a managing director and co-head of China research at UBS Securities Asia Limited, formerly worked for the People's Bank of China in the 1980s FT Friday April 29 2005

Subject: Pozen Pill (Prozac?) From: Pancho Villa To: All Date Posted: Wed, May 04, 2005 at 08:55:34 (EDT) Email Address: nma@hotmail.com Message: Pozen Pill How Bush's version of 'progressive indexing' would kill Social Security. By Brad DeLong Posted Tuesday, May 3, 2005, at 2:45 PM PT George W. Bush has come out in favor of a proposal for cutting Social Security benefits called 'progressive price indexing.' Or has he? On May 1, White House Chief of Staff Andrew Card appeared on Meet the Press. A proposal by Robert Pozen '... is really not necessarily the president's plan,' Card noted. 'It's directionally consistent with the president's plan.' So what does Pozen say, and where does Bush differ? As everyone knows, Social Security has a problem: The current level of dedicated Social Security taxes is very unlikely to bring in enough money to fully pay the benefits currently specified by law beyond the middle of this century. Social Security taxes will have to go up, Social Security benefits will have to be cut below currently projected levels, or other tax revenues will have to be earmarked to pay Social Security benefits. Robert Pozen proposes to fill the post-2050 projected funding gap by using other tax revenues and reducing benefits. He would fill 30 percent of the hole by tapping into income tax revenue. He would fill another 10 percent of the hole by cutting Social Security disability payments. He would fill 60 percent by shifting to 'progressive price indexing' of the Social Security retirement benefit formula. That means cutting benefits relative to current-law projected levels for people at the top and the middle. To understand where Bush might be going with this, let's first review how Social Security works. People contribute to the program through Social Security taxes—12.4 percent of their wages, up to a maximum payment of $11,260 a year taken from them and their employers. In return, they get a disability insurance program, a survivors' insurance program, and a prescribed level of retirement income that's protected against inflation. The retirement-income component of Social Security provides a better relative deal to the working poor than it does to the relatively rich. For somebody making half the average wage (that is, making $18,000 a year today), Social Security benefits 'replace' 49 percent of pre-retirement earnings. For somebody making the average wage ($36,000 a year today), the 'replacement rate' is 36 percent. For somebody making the maximum taxed by Social Security ($90,000 this year), it's only 24 percent. This declining replacement-rate benefit formula makes sense: Social Security returns relatively less to high earners, who are more likely to have other retirement savings. But it's not supposed to be a means-tested welfare program: Someone at the Social Security maximum wage gets a check about two-and-a-half times as large as someone making half the average wage. Now let's look at Pozen's numbers for those retiring in 2075. Pozen would keep the replacement rate at 49 percent for the working poor—those making half the average income. But the replacement rate for those making more would be cut: At the average income, the replacement rate would go from 36 percent to 26 percent; at one-and-a-half times average, from 30 percent to 17 percent; at the Social Security maximum, from 24 percent to 12 percent. Pozen's proposal gradually turns Social Security from a program in which benefits rise with incomes to one in which nearly everybody's benefit is roughly the same: about $1,900 of today's dollars a month. These are ferocious benefit cuts for those at or above average incomes—an across-the-board benefit cut of about one-seventh would do as much for Social Security's overall finances. But that's the point. Pozen's central aim is to keep the poorest one-third of beneficiaries from bearing any of the burden of future benefit cuts. This sounds like a not unreasonable way to keep Social Security healthy through most of the century. And progressive price indexing, by itself, is neither left-wing nor right-wing. Insulating the working poor from benefit cuts and tapping income-tax revenues to fund Social Security is 'liberal.' For Social Security to become a flat-benefit guardian against destitution, rather than a substantial base line layer of retirement income for everyone, is arguably 'conservative.' But when you combine Pozen's progressive indexing with Bush's separate proposal for private accounts, it becomes something different: a way of phasing out Social Security altogether. Here's how: Pozen's proposal caps the maximum Social Security retirement benefit at roughly $22,500 dollars a year (adjusted for inflation). Bush's private-accounts plan—which would allow people to contribute 4 percent of their wages—makes retirees repay the taxes they diverted into private accounts out of their standard Social Security benefit. Medicare premiums are already deducted from your Social Security check. Deduct the claw-back for the private-accounts diversion as well, and by late in this century the odds are that—at least for the upper middle class—the standard Social Security check would be zero. Social Security would no longer be a universal program: It would be a program in which the half of America that is richer and more powerful and more likely to vote sees large chunks of its money going in and nothing coming out. Even without private accounts, aggressive means-testing a la Pozen risks undermining Social Security over time. Insulating the poor from cuts is a left-wing goal. But it will create a large class of Americans who get much, much less out of Social Security than they put in and for whom Social Security as a whole is demonstrably a very bad deal. Early Social Security guru Wilbur Cohen may well have been correct in his belief that 'in the United States, a program that deals only with the poor will end up being a poor program. ... ' Loading a large chunk of the burden of fixing Social Security onto America's upper middle class may be the first step in the creation of a mid-21st-century political majority for the phasing-out of the program as a whole. Viewed in this way, Bush's embrace of a program to make the distribution of income more equal can be explained as a Trojan horse to eliminate Social Security in the long run. That must be what Bush is thinking, right? It's not that he's suddenly worried that the working poor don't get a large enough share of America's wealth, right? But quite possibly wrong. It's also possible that the White House is just desperate to somehow generate forward motion on Social Security, and that it hopes that a fiscally progressive policy change will be popular. Bush's recent press conference did not illuminate much, and the information released smelled as though the administration did not fully know what it was doing: The headline numbers made sense only if Pozen's proposal to cut disability benefits was also part of the package, but Bush expressly said disability benefits were not to be touched. So what, exactly, are the pieces of Pozen's proposals that Bush has signed on to? Will the next step be a proposal for income tax increases to cover the rest of the funding gap? Is there a second round of benefit cuts coming—possibly targeted at the poor? When it comes to the administration's ideas for Social Security, we're back where we started. No one knows. Related in SlateIn March, Jacob Weisberg explored how Bush might respond to defeat on privatization. In February, William Saletan suggested that biology might solve the Social Security debate. That same month, Steven Landsburg argued the program's 'problem' wasn’t really a problem at all, while Chris Suellentrop decoded Bush's message to seniors. In January, Suellentrop wondered why the president wouldn’t look at the numbers. In 1996, a committee of panelists discussed making Social Security secure. That same year, Michael Kinsley delivered a 'prejudiced primer on privatization.' In 2001, he looked at Social Security's magic tricks. Brad DeLong is a professor of economics at U.C. Berkeley and a research associate of the National Bureau of Economic Research. Click here to read his blog. http://slate.msn.com/id/2117948/

Subject: Re: Pozen Pill (Prozac?) From: Jennifer To: Pancho Villa Date Posted: Wed, May 04, 2005 at 09:50:52 (EDT) Email Address: Not Provided Message: Robert Pozen wishes to destory middle class Social Security support by reducing middle class benefits. What a disgrace. There is your Chair of MFS Investment. Yuch.

Subject: Saving Bluefin Tuna From: Terri To: All Date Posted: Wed, May 04, 2005 at 05:51:38 (EDT) Email Address: Not Provided Message: Whole Foods and Trader Joe's are fine places to shop, but we must make sure they are as sensitive to the environment as they claim to be. Sushi is wonderful and increasingly popular, but we should make sure of what we eat in sushi or in seafood in general and make sure our stores do not abuse nature. The must be pressure internationally to preserve life in the seas.

Subject: Re: Saving Bluefin Tuna From: Terri To: Terri Date Posted: Wed, May 04, 2005 at 05:53:52 (EDT) Email Address: Not Provided Message: We must be especially careful in eating sushi. The plight of the bluefin tuna is a most disturbing problem. Can you imagine such a wonderful creature gone from the earth?

Subject: Hitting the Middle Class, Again From: Emma To: All Date Posted: Tues, May 03, 2005 at 20:15:37 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/03/opinion/03tue1.html Hitting the Middle Class, Again As he moved into the home stretch of his 60-day Social Security road show last week, it became clear that President Bush had saved the worst for last. Mr. Bush endorsed a proposal that would take a huge bite out of the Social Security retirement benefits for the middle class, claiming that would close some 70 percent of the system's financing gap. That figure is almost certainly overstated. Under the proposed reductions, young workers who now earn about $36,000 would face a 16 percent cut; those earning about $58,000 would face a cut of 25 percent, and those earning $90,000, 29 percent. People not yet in the work force would face even larger reductions. Mr. Bush says these cuts would enable the system to continue paying benefits at the current level to the 30 percent of recipients who now make less than $20,000. But fully two-thirds of retirees rely on Social Security for more than half of their income. Moreover, the Bush plan gives the false impression that the wealthiest beneficiaries would bear the most pain. That's not the case. The wealthier one is, the lower the percentage of retirement income coming from Social Security, so even a big cut has little impact. By 2075, an average worker's benefit cut would equal 10 percent of pre-retirement income; a millionaire's reduction would be only 1 percent. Worse, if Mr. Bush succeeded in creating private accounts, these newly proposed cuts would be only the first whack at retirement benefits. Workers who opened private accounts would also see their government benefits reduced by one dollar for every dollar invested - plus interest, computed at 3 percentage points above inflation. That would occur even if a private account performed miserably. In the end, the Social Security checks would be minimal - or nonexistent - for millions of Americans. But Social Security can be strengthened without cuts as blunt and inflexible as the ones Mr. Bush proposes. Let's start by incorporating Americans' longer lives into the formula for Social Security benefits, ending the need for continual increases in the retirement age. To account for the life expectancy of today's average 35-year-old, for example, adjustments could be made now that would reduce the benefit in 2036 by about $300 a year. A chunk of the Social Security shortfall could also be closed by linking life expectancy to income level. The affluent live longer than the poor, and the gap is growing. Politicians also have to face the hard truth about taxes. Raising the payroll tax by a mere three-tenths of a percentage point - starting 10 years from now and adding tiny increments over the succeeding 20 years - would be fair and lucrative, without being too steep or too sudden. It would also be fair to raise the cap on wages subject to the Social Security tax to about $150,000 from the current $90,000. President Bush's overall approval rating and his marks for his handling of Social Security have declined since he put privatization at the top of his agenda. The American people are trying to tell him that there are better ways to go. He obviously can't hear them, but we hope Congress can.

Subject: Social Security is Wonderful From: Terri To: Emma Date Posted: Wed, May 04, 2005 at 06:07:37 (EDT) Email Address: Not Provided Message: Social Security must be preserved as is. There must be no benefit cuts, and need be no such cuts.

Subject: Outsourcing to a Ship From: unlawflcombatnt To: All Date Posted: Tues, May 03, 2005 at 18:14:45 (EDT) Email Address: unlawflcombatnt@aol.com Message: OUTSOURCING TO A SHIP The most egregious outsourcing plan yet is one by a company named SeaCode. They plan to outsource 600 IT jobs to a cruise ship just off the California coast. The ship will be outside the 3-mile limit, thus exempting it form California labor and environmental regulations. The workers won't need H1B visas, unlike other foreign employees that work in the United States. This will provide American IT companies with cheap foreign slave-labor without going overseas. It will also greatly enhance downward pressure on American IT worker wages. The link to the LA Times story is:[url=http://www.latimes.com/business/la-fi-golden2may02,1,4320743.column?coll=la-headlines-business]LA Times: Offshoring to a Ship[/url] http://www.latimes.com/business/la-fi-golden2may02,1,4320743.column?coll=la-headlines-business Mike (unlawflcombatnt) http://www.unlawflcombatnt.blogspot.com/ Unlawflcombatnt:EconomicPopulistCommentary Unlawflcombatnt:EconomicPopulistCommentary www.unlawflcombatnt.blogspot.com/

Subject: Outsourcing to a Ship From: unlawflcombatnt To: unlawflcombatnt Date Posted: Tues, May 03, 2005 at 18:18:24 (EDT) Email Address: unlawflcombatnt@aol.com Message: OUTSOURCING TO A SHIP The most egregious outsourcing plan yet is one by a company named SeaCode. They plan to outsource 600 IT jobs to a cruise ship just off the California coast. The ship will be outside the 3-mile limit, thus exempting it form California labor and environmental regulations. The workers won't need H1B visas, unlike other foreign employees that work in the United States. This will provide American IT companies with cheap foreign slave-labor without going overseas. It will also greatly enhance downward pressure on American IT worker wages. The link to the LA Times story is:[url=http://www.latimes.com/business/la-fi-golden2may02,1,4320743.column?coll=la-headlines-business]LA Times: Offshoring to a Ship[/url] http://www.latimes.com/business/la-fi-golden2may02,1,4320743.column?coll=la-headlines-business Mike (unlawflcombatnt) http://www.unlawflcombatnt.blogspot.com/ Unlawflcombatnt:EconomicPopulistCommentary --- Here's the link to the LA Times article on 'Offshoring to a Ship.' Offshoring to a Ship www.latimes.com/business/la-fi-golden2may02,1,4320743.column?coll=la-headlines-business

Subject: Federal Reserve Policy From: Terri To: All Date Posted: Tues, May 03, 2005 at 17:07:01 (EDT) Email Address: Not Provided Message: The sense I have is there is no reason to change expectations of modest or measured pacing in Fed interest rate adjustments as long as long term rates are benign. Were long term rates to spike, I would expect a half percentage point move. Hopefully the low long term rates keep us growing moderately through the cycle.

Subject: Re: Federal Reserve Policy From: Pete Weis To: Terri Date Posted: Tues, May 03, 2005 at 21:36:17 (EDT) Email Address: Not Provided Message: The economy seems to be slowing along with the US consumer. Might the Fed stop raising rates after this .25% rate increase if the economy continues to slow?

Subject: Re: Federal Reserve Policy From: Terri To: Pete Weis Date Posted: Wed, May 04, 2005 at 05:44:05 (EDT) Email Address: Not Provided Message: The Fed message tells us there will be no stopping rate increases soon. We are headed to a 4% Federal Funds rate by the end of this year unless there is a dramatic economic change.

Subject: Bond Price Stability From: Terri To: All Date Posted: Tues, May 03, 2005 at 15:47:15 (EDT) Email Address: Not Provided Message: There was no particular reaction in the long term bond market before closing, so bond investors evidently find Federal Reserve policy yet predictable and mild for a while. The bond market has lacked volatility for almost 2 years. All that has happened recently is a decline in price for below investment grade issues. Notice, I still think the long term bond market is revealing even with central bank bond purchases.

Subject: Re: Bond Price Stability From: Pete Weis To: Terri Date Posted: Tues, May 03, 2005 at 21:40:23 (EDT) Email Address: Not Provided Message: Are bond investors getting a whiff of deflation?

Subject: Re: Bond Price Stability From: Terri To: Pete Weis Date Posted: Wed, May 04, 2005 at 05:41:35 (EDT) Email Address: Not Provided Message: Terrific question, but the liklihood is far more slow growth, or growth below the potential of productivity, than deflation. We need to grow above 4% in a high productivity environment to have a strong labor market.

Subject: Insider selling From: Pete Weis To: All Date Posted: Tues, May 03, 2005 at 15:02:04 (EDT) Email Address: Not Provided Message: From AAII (American Association of Individual Investors - requires subscription & login): 'Corporate 'insiders', that is directors and senior management are selling in record numbers. During this past March alone insiders sold 60 times more company shares than they purchased (60:1). This is close to the most extreme ratio ever. How extreme is this? Historically speaking, a 20:1 selling to buying ratio is considered a bearish indicator; today's figure is 3x as great.' But as for what the crowd of investors is doing, AAII's survey shows that '67% of the individual investors' portfolios remain invested in stocks.' Another recent survey shows that a near record 57.4% of U.S. households own equities.

Subject: Re: Insider selling From: Terri To: Pete Weis Date Posted: Tues, May 03, 2005 at 15:13:15 (EDT) Email Address: Not Provided Message: Selling stock in a particular company does not mean selling stock in general, though it might.

Subject: What is Being Bought From: Terri To: Terri Date Posted: Wed, May 04, 2005 at 05:47:02 (EDT) Email Address: Not Provided Message: What is being bought, including bonds?

Subject: Re: What is Being Bought From: Pete Weis To: Terri Date Posted: Wed, May 04, 2005 at 08:56:25 (EDT) Email Address: Not Provided Message: Don't know what insiders buy after they sell their own company stock, since there is no requirement to report purchases of other investments.

Subject: Tracking the Imperiled Bluefin From: Emma To: All Date Posted: Tues, May 03, 2005 at 12:47:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/03/science/earth/03tuna.html?pagewanted=all&position= Tracking the Imperiled Bluefin From Ocean to Sushi Platter By ANDREW C. REVKIN For sushi aficionados, the essence of the Atlantic bluefin tuna is its fat-laced, butter-soft belly meat, called toro. For the long-liners, purse seiners, harpooners, trappers and fish farmers who seek the bluefin from Cape Hatteras to the frigid waters south of Iceland to the balmy Mediterranean, the fish are a potential bonanza, with choice specimens fetching $50,000 or more in Tokyo. But the intensifying trade in bluefin may soon empty the waters of this master of the sea. In just the last 35 years, exploding markets for sushi-grade tuna, combined with intensifying industrial-scale hunts aided by satellites and spotters in airplanes, have devastated not only the fish but also many fisheries. Dozens of Mediterranean towns that maintained coastal net traps for half a millennium or more are turning away from now-barren waters. Anglers off New England, who once watched great parading schools of bluefin migrate north at the end of each summer now scour the seas for scattered fish. Most vulnerable, by far, marine biologists say, is the apparently distinct population of bluefin tuna that breeds in the Gulf of Mexico. The threat to the bluefin was underscored last week by researchers who have tracked hundreds of the fish on their ocean-spanning journeys using electronic tags. They found that the tuna that spawn in the west, which are most severely depleted, are further threatened by an ever-broadening gantlet of hooks, seines, harpoons, traps and now farm-style pens, in which netted fish are raised and fattened - all to supply the Japanese sushi trade. Dr. Barbara A. Block, a marine biologist at Stanford and the lead author of a study, published in the April 28 issue of Nature, said she found it hard to believe that 'a fish of this size and beauty, an animal that had captured the hearts of fishermen and scientists alike for millennia, is slipping off Earth.' The bluefin, known to biologists as Thunnus thynnus, is a wonder of metabolic and evolutionary perfection, a Ferrari-like mix of refinement and brute power. Adult bluefins, some topping half a ton and living 40 years, slice through icy or tropical waters while maintaining their body temperature around 80 degrees. Their physiology allows their ruby-red muscles to generate a split-second tail flick, rocketing the fish to on-ramp speeds in pursuit of prey. But having an oceanic range may also be their undoing, exposing them to harvests at every turn. Dr. Block has been studying the physiology and behavior of tunas for 25 years. Lately, she has spent much of her time at sea, surgically implanting tags in thrashing giants hauled briefly onto the decks of sport and commercial fishing boats assisting in her research. From her base next to the Monterey Bay Aquarium, which helps support her work, she leads a research team that focuses on every facet of the bluefin, from its evolution, genetics and unique muscle physiology to its diet and migrations. 'We're trying to see the planet through their lens,' Dr. Block said. But increasingly, she added, the bluefin are seeing the end of a fishing line, the inside of a net and the hold of a fishing boat. The new study is based on the research team's grueling, decade-long effort to implant hundreds of increasingly sophisticated electronic tags in the giant fish, an enterprise that is beginning to reveal in new detail their ocean paths, from feeding grounds along the East Coast and in frigid waters south of Iceland to spawning areas in the balmy Gulf of Mexico and Mediterranean. Most tagging studies provide only two data points - the place and time of release and the place and time of capture. In this study, 772 fish were tagged with sophisticated devices that continually record body and water temperature, depth and daylight. Some tags stayed in the fish until they were caught, often for years. Others were intended to break a tether, pop to the surface and relay stored data to satellites after a programmed number of weeks. In all, 330 tags provided unparalleled records of fish as they repeatedly dove thousands of feet, traversed the ocean in a few weeks, and routinely crossed imaginary lines drawn nearly 25 years ago by tuna-fishing nations to divvy up what were thought to be separate eastern and western populations. In the study, Dr. Block's team showed that there indeed appear to be distinct populations of bluefin that spawn either in the gulf to the west or the Mediterranean to the east. But when the fish disperse across the Atlantic to feed, they mingle, rendering the management boundary, which runs along the 45th meridian, relatively meaningless. That means that big quotas, granted for two decades to countries fishing east of the line, probably added pressure to the ailing western bluefin population, said Dr. John J. Magnuson, an emeritus professor of zoology at the University of Wisconsin. He was chairman of a National Academy of Sciences panel that included Dr. Block and that assessed the tuna's problems in 1994. 'Fishing the mixed fishery as though it is a strong stock depletes and can eliminate the weak stock,' he said. The tuna spawning in the gulf are even more endangered, Dr. Block and her team said, because spawning 'hot spots' overlap with areas where boats, using long lines of baited hooks, pursue another tuna species, the yellowfin. When big adult bluefin get caught on the lines, the researchers said, the warm water and their high-revving metabolism can push them beyond their physiological limits. Many die before they can be released. The toll is significant because it includes fish at the peak of their reproductive potential, the researchers said. In the paper, Dr. Block and her colleagues recommended seasonal bans on long-line fishing in spawning hot spots in the gulf. They also urged tighter controls on fishing in the Central Atlantic, where a feeding area straddles the existing boundary line and fish from both coasts congregate. Right now, that area is intensively fished by a host of countries with almost no monitoring. Without action, Dr. Block said, the western population has little hope. 'If such megafauna can disappear, imagine what else is occurring?' she said. 'And it's all because we do not have a system that manages the oceans properly.' American boat owners say that existing restrictions on long-line fishing in the Gulf are sufficient, and add that the spawning zones identified by Dr. Block are likely to shift each year, making specific 'time-area closures' impossible. Long-liners in the area also use lightweight hooks that hold smaller yellowfin but are designed to uncoil under the powerful tug of a bluefin, they say. Dr. Block said that when she worked on long-line vessels in the region, the same smaller hooks caught and killed a substantial number of bluefin. She added that only a few percent of longliners in the area carry observers who independently tally bluefin deaths. Perhaps the biggest unresolved question is whether the new information can change an international regulatory regime that almost everyone, from anglers and commercial fishers to biologists and tuna diplomats, agrees is broken. There are signs that the accumulated scientific evidence is starting to sway some members of the International Commission for the Conservation of Atlantic Tunas, the body created under a treaty in 1969 to oversee the fishery. For two decades, many marine biologists have criticized the organization for setting quotas too high and for favoring data and analyses provided by the industry. In an interview last week, Masanori Miyahara, the chairman of the commission and a senior fisheries official from Japan, acknowledged that the existing system had failed. 'We've spent too much time under the wrong assumption - two-stock management,' he said. 'After 25 years of those measures we don't see any improvement in western spawners. We believe something is definitely wrong.' He said that eastern catch limits needed to be better enforced, and he noted that a particular problem was the greatly increased penning of Mediterranean tuna, which disrupts spawning. A meeting of scientific advisers to the commission will take place next month to consider new ways to manage the fish stocks. Mr. Miyahara added that Japan was particularly committed to restoring the bluefin. 'We feel some responsibility for this mess,' he said. 'Japanese buyers are running all around the world and buying as many fish as possible, particularly bluefin. 'We're seriously working with our buyers now to contain their eagerness,' Mr. Miyahara said. Even with such statements, and the new research, many scientists and scholars who study tuna and tuna fishing said they doubted much would change. Glenn Delaney, an American who formerly served on the international commission and represents American fishing companies at meetings of the group, said Dr. Block's findings, while possibly correct, were at best preliminary and spotty - and thus unlikely to move the commission to act. Mr. Delaney is one of many people in the tuna debate, including a host of biologists and environmental campaigners, who view Europe as a bigger impediment to better protections than Japan or the United States. Under the longstanding division of the Atlantic bluefin population, Europe has long had the advantage, with recent quotas of more than 30,000 metric tons of bluefin a year; less than a tenth that is allocated for western waters. In an e-mail message, John Spencer, the chief European negotiator in international commission meetings, said that Europe had an 'open mind' about management options after 2006. But, he added, 'If we are going to change the current system, which has brought stability to the management, then we need to be demonstrated the added value of any new system.' William T. Hogarth, the assistant administrator for fisheries of the National Oceanic and Atmospheric Administration, said that trade sanctions or other economic measures may be required to push some countries to end routine violations of size and catch limits by their fleets. As long as the issue is hashed out only in the invisible realm of fisheries bureaucracies, there will be little progress, environmental experts and industry representative agreed. They also agreed that while the international commission has been a problem, the organization and the underlying treaty are the only source of a solution, as well. For the moment, however, there are few signs of change. Last month, a group of fisheries experts from the international commission met in Fukuoka, Japan, to ponder alternative systems for managing the shared resource. The main camps - the United States, Europe and Japan - staked out starkly different positions. Several tuna experts who were not involved with the new study said that Dr. Block's pointillist maps, showing the movements of some tuna for more than four years, were sufficiently concrete that they could force an end to the prolonged stalemate. 'Without her, we'd be in exactly the same place we were 15 years ago: a bunch of theoreticians waving their hands and a bunch of European fisheries politicians arguing the case based on no data,' said Dr. E. Don Stevens, an emeritus professor of zoology at the University of Guelph in Ontario and an author of the 1994 National Academy of Sciences tuna study. 'If the managers do not accept this evidence,' Dr. Stevens said, 'then it seems to me that they will never accept any evidence and that their argument is not based on logic but rather is based on shortsighted political grounds.'

Subject: It's amazing to watch..... From: Pete Weis To: Emma Date Posted: Tues, May 03, 2005 at 21:49:17 (EDT) Email Address: Not Provided Message: a resource (in this case one of God's creatures) be diminished and see demand increase to a frenzied pace because it is becoming more rare and higher priced. The act of decimation feeds on itself!

Subject: Saddening From: Terri To: Pete Weis Date Posted: Wed, May 04, 2005 at 05:48:53 (EDT) Email Address: Not Provided Message: This is the sadest of possible articles. I will never eat such a fish, never.

Subject: A.I.G. Accounting From: Emma To: All Date Posted: Tues, May 03, 2005 at 11:23:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/03/business/03place.html?pagewanted=all&position= A.I.G. Disclosures Give a Hint of How Accounting Inflated Results By GRETCHEN MORGENSON and JENNY ANDERSON Maurice R. Greenberg, former chief executive of American International Group, was a guru to many. To investors and employees, he was the genius who presided over a company that produced consistent growth in a volatile business. Within the insurance industry, Mr. Greenberg was an icon for generating fewer losses than peer companies on the insurance A.I.G. wrote. Now that performance appears to have been a mirage. In A.I.G.'s most recent inventory of accounting improprieties, disclosed late Sunday, the company said it would probably reduce its net worth by $2.7 billion, $1 billion more than it had previously estimated. Mr. Greenberg, ousted as chief executive and chairman in March, now resembles the man behind the curtain, working furiously with a handful of colleagues at the top to maintain an awesome image to the investing world that was not quite reality. A.I.G. has made two disclosures about its accounting errors in recent weeks, one on March 30 and another on Sunday. Both are the result of an internal investigation into the company's practices and have focused on how the missteps will reduce its net worth or balance sheet. What may be more interesting to investors, however, is the way the improprieties artificially inflated the company's operating income. Since the company will no longer employ such tactics in the future, the accounting disclosures may provide a clue to how different A.I.G.'s operating results might be in coming years. Using the details the company provided, it appears that almost 90 percent of the $2.7 billion restatement of A.I.G.'s net worth - $2.4 billion - consisted of items that would have been reflected on its income statement, which shows profits or losses for each operating segment for the year. That figure is about 3.8 percent of its total operating income from 2000 to 2005. Chris Winans, an A.I.G. spokesman, said the company would not comment on the effects that the accounting errors might have on its income statement. Only when the company publishes its long-awaited annual report for 2004, he said, will it become clear how the income statement will look after the improprieties are incorporated in it. Mr. Winans did confirm, however, that the $2.7 billion in accounting errors acknowledged by the company going back to 2000 is an after-tax figure. On a pretax basis - A.I.G.'s tax rate is roughly 30 percent - that number will grow considerably. For the moment, investors seem relieved that the accounting tricks amount to only 3 percent of the company's net worth. Yesterday, they bid A.I.G.'s stock up $2.59, or 5 percent, in heavy trading. Its shares closed yesterday at $53.44. Yesterday, analysts at Fitch Ratings, a credit rating concern in Chicago, and at Moody's Investors Service in New York downgraded A.I.G.'s credit quality a notch. Fitch said that 'the uncertainty surrounding A.I.G.'s financial condition and future financial performance has grown to levels beyond the expectations embedded in Fitch's previous rating levels.' Fitch also said that the outlook for A.I.G.'s credit rating was negative. Sentiment at the rating agencies seemed to extend beyond the impact of the latest disclosure to the company's ability to generate the kind of stellar results that have defined it as an industry leader in recent years. 'With all that's happened, they won't quite have the stature they have had,' said Julie Burke, a managing director in the insurance group at Fitch Ratings. 'They had a unique advantage with reinsurance purchasing, pricing and risk selection. Going forward, insurers and reinsurers will put increased pressure on A.I.G. and it will be harder for them to have those advantages.' A.I.G. said Sunday that the errors in its accounting 'appear to have had the purpose of achieving an accounting result that would enhance measures important to the financial community and that may have involved documentation that did not accurately reflect the nature of the arrangements.' One new area of concern in A.I.G.'s most recent disclosure is so-called top-level adjustments, which involve $100 million of accounting entries made by top management to increase reported earnings. 'A.I.G. has determined that certain entries appear to have been made at the direction of certain former members of senior management without appropriate support,' the company noted Sunday in its news release. People briefed on the investigation said that two of the managers involved in much of the questionable accounting were Mr. Greenberg and Howard I. Smith, the former chief financial officer who was fired in March for refusing to cooperate in the investigation. Andrew M. Lawler, Mr. Smith's lawyer, did not return calls for comment. David Boies, one of many lawyers representing Mr. Greenberg, criticized the report's conclusion, and also that his client did not have a chance to participate in it. Trying to understand how A.I.G.'s results were manipulated and how the company will perform in the future without such maneuvers is, at best, a guess. But the effects of the tricks on the company's operating income back to 2000 can be approximated by examining the areas highlighted by the company's recent disclosures and seeing which of them may have enhanced operating income at A.I.G. The company has not disclosed figures relating to all of the accounting improprieties and it has not concluded that it has identified all the problems. But armed with the figures A.I.G. has supplied, it appears that roughly $2.4 billion of the accounting errors consisted of items that would have to appear on A.I.G.'s income statement. Computing that as a pretax figure puts the number at around $3.4 billion. That number may be high because some of the problems relate to A.I.G.'s investment income, which may have involved tax-free municipal bonds and other instruments with favorable tax treatment. And the company has said that the reversal of improper hedging may add $2.4 billion to its income, although changing its hedging practices will bring considerable volatility to its earnings, A.I.G. said. In any case, the overall adjustments announced by A.I.G. seem to show a company concerned about its operating income over the past five years. This is not surprising: financial analysts and investors care deeply about operating income because it is seen as the cleanest representation of how a business is performing. 'Both the proposed decrease in shareholders' equity of $2.7 billion and the proposed increase in shareholders' equity of $2.4 billion represent decisions to change what A.I.G.'s officers, directors and auditors at the time concluded were appropriate accounting decisions,' said Mr. Boies. 'Those decisions were made not merely by former senior management, but by present senior management, including operational heads, and the company's present directors and auditors as well.' As A.I.G. has acknowledged, the biggest single problematic area in the company's books is the reinsurance deals it struck with the Union Excess Reinsurance Company, a Barbados company that had been seen as independent of A.I.G. but is now viewed as a unit whose business will be consolidated onto A.I.G.'s books. As a result, the premiums recorded by A.I.G. on these deals must now be accounted for as deposits, reducing revenues by $1.2 billion. The $300 million that A.I.G. said it did not include in its allowance for doubtful accounts in its domestic brokerage group is also an income statement issue, according to an insurance analyst. So is the $300 million that A.I.G. said it recorded in net investment income when it improperly sold call options on bonds in which the company had unrealized gains. That $300 million was generated by premiums A.I.G. received from the buyers of the call options. A.I.G.'s admission that it temporarily redeemed certain investments in hedge funds to generate investment income - only to buy them back again after a financial reporting period ended - also manipulated its income. But the company provided no numbers to help quantify the effect, so it is unclear how the income statement will be affected by it. Another hit to operating income may result from A.I.G.'s improper transformation of underwriting losses into capital losses. These $200 million in losses relate to the auto warranty business conducted with the Capco Reinsurance Company Ltd., a Barbados reinsurer. An additional $200 million in deferred acquisition costs - such as commissions promised to sellers of life insurance - that the company did not account for correctly will almost certainly reduce its operating income. A.I.G.'s accounting for so-called life settlements, which allow life insurance policyholders to cash in their policies while they are still alive, was also improper. Although it is not clear that this reduction will affect its operating income, one analyst said it probably would. That mistake totals $100 million, A.I.G. said. Adjustments that A.I.G. said it would make in accounting entries at the parent company - the 'top level' entries - are also likely to be deducted from its income. These total $100 million. Taken together, the improper accounting points to a $2.4 billion impact on A.I.G.'s income statement. Regulators involved in the investigation were surprised by A.I.G.'s conclusion that a reinterpretation of rules for hedge accounting would result in a $2.4 billion increase in the company's net worth - almost offsetting the $2.7 billion decrease in net worth. Representatives from the Securities and Exchange Commission, the New York attorney general's office and the New York State Insurance Department were first briefed last week on the hedge accounting issue and were told that it was a large and complex problem that would require significant time to understand. But over the weekend, A.I.G., in conjunction with its auditors and lawyers, concluded that a $2.4 billion increase would be appropriate. One person briefed on A.I.G.'s hedge accounting said the company was able to arrive at a conclusion so quickly because its auditors at PricewaterhouseCoopers chose a method that did not require as much time as A.I.G. originally had thought. The question investors face, of course, is whether A.I.G. will be able to sustain its growth and hegemony in the insurance world without using accounting gimmickry. 'There is clearly risk associated with an investment in shares of A.I.G.,' wrote William M. Wilt, insurance analyst at Morgan Stanley, who recommends the stock. 'Moreover we do not think the stock will recapture the valuation levels it once enjoyed.' Certainly, Mr. Greenberg's famous complaints about overzealous regulators and A.I.G.'s being above the fray will no longer be heard. In his letter to shareholders in the company's 2003 annual report, he wrote: 'The whole country is paying a price for the gross misdeeds of relatively few executives who shirked their responsibility to create value for all of their corporate constituencies - shareholders, customers and employees - and abused the system to create wealth for themselves and their close associates. It is unfortunate that the misbehavior of a few companies and their executives could have a negative impact on so many.'

Subject: Re: A.I.G. Accounting From: Setanta To: Emma Date Posted: Wed, May 04, 2005 at 09:35:06 (EDT) Email Address: Not Provided Message: As A.I.G. has acknowledged, the biggest single problematic area in the company's books is the reinsurance deals it struck with the Union Excess Reinsurance Company, a Barbados company that had been seen as independent of A.I.G. but is now viewed as a unit whose business will be consolidated onto A.I.G.'s books. As a result, the premiums recorded by A.I.G. on these deals must now be accounted for as deposits, reducing revenues by $1.2 billion. (this is similar to how enron manipulated earnings. they lent to subsidiaries in the cayman islands and booked the transactions in revenue even though they should have been recorded as loans to affiliates (and therefore eliminated upon consolidation). unfortunately there is no rule/standard in the world that can prevent blatant lying like this, it is virtually impossible for auditors to know every connected company unless the management tell them, and all to easy for connected parties to slip through the net if management do not want the auditors to know.) The $300 million that A.I.G. said it did not include in its allowance for doubtful accounts in its domestic brokerage group is also an income statement issue, according to an insurance analyst. So is the $300 million that A.I.G. said it recorded in net investment income when it improperly sold call options on bonds in which the company had unrealized gains. That $300 million was generated by premiums A.I.G. received from the buyers of the call options. (These are just 'normal' booking errors, encountered in every audit. the only difference is the scale of the adjustments!) A.I.G.'s admission that it temporarily redeemed certain investments in hedge funds to generate investment income - only to buy them back again after a financial reporting period ended - also manipulated its income. But the company provided no numbers to help quantify the effect, so it is unclear how the income statement will be affected by it. (what happened here seems to be that hedging instruments (instruments to mitigate risk) were traded as treasury instruments. this is in contravention of International Standards and perhaps, elements of s.404. the fact that they sold and bought back to create profits, in my opinion, is secondary to the controls issue of trading for profit with hedging instruments.) Another hit to operating income may result from A.I.G.'s improper transformation of underwriting losses into capital losses. These $200 million in losses relate to the auto warranty business conducted with the Capco Reinsurance Company Ltd., a Barbados reinsurer. An additional $200 million in deferred acquisition costs - such as commissions promised to sellers of life insurance - that the company did not account for correctly will almost certainly reduce its operating income. (i'm not sure if this is just a disclosure issue. certainly one that investors should know about. underwriting losses have implications on the quality of the underwriting within the business, and being an insurer, this is something the market needs to know. the second issue relating to deferred acquisition costs is very complicated. i would have thought that this would have been netted against goodwill (its impossible to have negative goodwill))

Subject: The tide...... From: Pete Weis To: Emma Date Posted: Tues, May 03, 2005 at 21:37:50 (EDT) Email Address: Not Provided Message: is receding.

Subject: Thanks Eliot Spitzer From: Terri To: Pete Weis Date Posted: Wed, May 04, 2005 at 05:46:01 (EDT) Email Address: Not Provided Message: This is worrying. AIG had a superb reputation. Superb. Why did no one suspect? Thanks, thank to Eliot Spitzer.

Subject: Re: Thanks Eliot Spitzer From: Pete Weis To: Terri Date Posted: Wed, May 04, 2005 at 09:11:44 (EDT) Email Address: Not Provided Message: Terri. There have been many who have suspected the earnings reports of most public companies. I have posted articles by those who pointed to discrepancies and the lack of 'transparency' by many companies which is still taking place. They have also pointed to the fact that our present SEC is not doing its job. Morgenson at the NYT's and Fleckenstein out of the Seattle area are two who have been sounding the alarm. But most small investors now believe that much has been done to clean up Wall Street and are still trusting a system which is enriching insiders at the expense of small investors. If it wasn't for Eliot Spitzer how much of this would really have been uncovered? How much is still out there?

Subject: Re: Thanks Eliot Spitzer From: Jennifer To: Pete Weis Date Posted: Wed, May 04, 2005 at 09:47:59 (EDT) Email Address: Not Provided Message: Pete, there are companies that everyone respects and AIG was such a company. My parents never read a word of criticism about AIG. This was really surprising. Eliot Spitzer is truly heroic in following leads and illegeal and unethical practices in business. I wish there were more such elected officers. Morgenson and Fleckenstein are of course welcome helps, though Fleckenstein is not nearly as thorough.

Subject: On Path to China-Taiwan Détente From: Emma To: All Date Posted: Tues, May 03, 2005 at 10:53:02 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/03/international/asia/03taiwan.html On Path to China-Taiwan Détente, Strolling Pandas, Perhaps By KEITH BRADSHER TAIPEI, Taiwan - Taking a chapter from Chinese-American diplomacy during the Nixon administration, China announced Tuesday that it would give a pair of giant pandas to Taiwan, the latest step in an evolving détente. In gestures to mark the end of the weeklong visit to China by Lien Chan, chairman of Taiwan's opposition Nationalist Party, Chinese officials also said they would increase imports of Taiwanese fruit and allow more Chinese to visit Taiwan. The moves, announced by the official New China News Agency, are clearly intended to appeal to public sentiment here and force President Chen Shui-bian to improve ties. Many here have been pining for pandas - Taiwan has none now - and local media have been engaged in sometimes frenzied speculation that Taiwan's chance might have finally arrived. The Chinese willingness to import more fruit is a direct appeal for moderation from some of the strongest advocates of Taiwanese independence, the farmers of southern Taiwan. They are also a cornerstone of the political base of President Chen, who grew up in a farming village there. The Chinese decision to liberalize tourism could, if permitted by Taiwan, make the island's travel industry almost as dependent on the mainland as Hong Kong's, and turn hoteliers and restaurateurs into advocates of closer relations with Beijing. President Chen and his Democratic Progressive Party have risen to power by confronting China, emphasizing a separate Taiwanese identity and flirting with independence. But Mr. Lien's visit, the first by a Nationalist leader since the end of China's civil war in 1949, has put pressure on President Chen to show he can also work with China's leaders. The pressure is especially acute because elections will be held on May 14 for the National Assembly, an obscure body that has a role only in constitutional decisions and is separate from the legislature. The elections will be an indication of public sentiment, and President Chen wants to push through constitutional changes during his three remaining years in office.

Subject: Modified Rice May Benefit China From: Emma To: All Date Posted: Tues, May 03, 2005 at 10:32:23 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/03/business/worldbusiness/03rice.html Modified Rice May Benefit China Farms, Study Shows By DAVID BARBOZA SHANGHAI - Genetically modified rice could bring huge benefits to Chinese farmers, lowering their costs, improving harvest yields and greatly reducing the use of pesticides, according to a report published in the journal Science last week. The study, conducted by American and Chinese scientists who have long backed the crops, comes as the Chinese government is deciding whether to approve the sale of genetically modified rice, which would make China the first nation to adopt biotechnology crops in one of the world's leading food staples. It also comes just weeks after Greenpeace advocates said that a group of 'rogue scientists' experimenting with genetically modified rice illegally allowed the rice to seep into the food system. Backers of genetically modified crops - who insist there is no scientific proof of health threats - hope that if China approves the altered rice, that endorsement might alleviate health and environmental concerns. In China, genetically modified rice is approved for use only in designated experiments. Greenpeace advocates said two weeks ago that they had purchased bags of the rice in seed markets, and called on the government to stop the rice from spreading more widely into the food supply. Greenpeace said the rice could possibly be harmful, as its long-term effects were unknown. The Chinese government said it was investigating whether the rice entered the food supply in Hubei Province, a rice-producing region. The Science study did not address whether genetically modified rice could be harmful to people if eaten. But it did say the rice was probably better for farmers: genetically modified rice cut pesticide use by as much as 80 percent. The altered rice has a gene that acts as its own insecticide. Reduced pesticide use would allow farm incomes to rise, the study said. 'We estimate that if 90 percent of the farmers plant G.M. rice, then the annual agricultural income of China will increase by $4 billion,' said Huang Jikun, an author of the paper and the director of the Agriculture Policy Research Center at the Chinese Academy of Sciences in Beijing. Some experts, however, say the Chinese government may not approve genetically modified rice this year because of safety concerns. 'They are trying to be very thorough in their investigation,' said Carl Pray, an author of the Science study.

Subject: Beijing and Tokoyo From: Emma To: All Date Posted: Tues, May 03, 2005 at 10:28:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/03/international/asia/03china.html?pagewanted=all&position= Beijing Finds Anti-Japan Propaganda a 2-Edged Sword By JOSEPH KAHN BEIJING - Of all the customers his paper company has worldwide, Wang Liqun appreciates Japanese the most. Unfailingly polite and punctual, they cultivate long-term business ties and always pay their bills, he says. Yet even when he and his best clients share a quiet meal and unburden themselves with sake, they studiously steer clear of discussing the past, especially the atrocities Japan committed during its World War II-era occupation of China. 'They have a tendency to avoid sensitive topics,' Mr. Wang said. So as China's popular uprising against Japan gathered steam last month, he ordered employees in his Beijing headquarters to stop buying Japanese goods 'to show we have not forgotten.' Surging anti-Japan sentiment, which has plunged relations between Asia's leading powers into crisis, has been fanned in part by official propaganda and hot-headed Chinese youth. But pressure on Japan to face up to its own history was initiated, and could be sustained well into the future, by people like Mr. Wang, 37, who has an M.B.A., travels abroad, runs his own company and cares passionately about Japanese amnesia. Japan has joined traffic jams and the housing bubble as a top concern for the urban middle class. Entrepreneurs and white-collar professionals have benefited disproportionately from China's economic policies, but many say they worry their government will not press historical grievances against Japan, a major investor and trading partner, for long. 'Our government takes a soft line on foreign policy,' said Li Bin, the chief executive of Nirvana, a health club chain that has supported the anti-Japan movement. 'They put economic development first. It is critical for successful people to stand up for the rights and interests of the country.' Such sentiments make the Japan issue - and nationalism generally - a double-edged sword for the government. China reversed course late last month and ordered people to let the government handle Japan itself. But the authorities are clearly worried that patriotic protests could return, perhaps as soon as May 4, the anniversary of a protest in 1919 that defined modern Chinese patriotism. More protests could put as much pressure on the Chinese government as on Japan. The Communist Party stirs patriotic feelings to underpin its legitimacy at a time when few, even in its own ranks, put much faith in Marxism. Official propaganda and the national education system stress the indignities suffered at the hands of foreign powers from the mid-19th century through World War II. Japan, which China says killed or wounded 35 million Chinese from 1937 through 1945, gets the most attention. This spring officials did little to stop a petition drive against permanent Japanese membership in the United Nations Security Council, to discourage a boycott of Japanese goods or even to prevent unusual and sometimes violent street protests. The government used the popular movement as leverage to demand concessions from Japan and flex its muscles at the United Nations. But China has never made nationalism the driving force of its foreign policy. The government mainly emphasizes its desire to have a 'peaceful rise' that does not impinge on its neighbors, and the authorities are nervous about disrupting the flow of investment and technology that has powered economic growth. Moreover, anti-Japan protests have a long and, for the government, a sobering history. A student-led march on May 4, 1919, to protest the decision by World War I Allied powers that allowed Japan to take over Germany's colonial territories in China spawned Chinese resistance against Western colonialism. But the May 4 movement and uprisings in 1931 and 1937 turned against the government. 'My impression is that the well-educated elite in China are genuinely baffled and upset by how long the government has tolerated provocations from Japan,' said Wenran Jiang, an expert on China-Japan relations at the University of Alberta in Edmonton. 'Every anti-Japan movement has sooner or later turned against the government.' The police have broadcast a blizzard of messages to mobile phone users in major cities warning against 'spreading rumors, believing rumors or joining illegal demonstrations.' In recent days several organizers of online petition drives and popular protests against Japan have been detained, or their computers have been confiscated. One major state-run newspaper published a viciously worded editorial warning that anti-Japan protests were cover for an 'evil conspiracy' to undermine the government. Even so, some urban professionals have promoted a march on the May 4 anniversary. 'I think we need another march,' said Guo Hui, 30, who runs his own public relations company. 'I feel it needs to be peaceful and well organized. But we have to push ahead.' Mr. Guo said he had no major grievances against the government. But during an interview at a Starbucks in Beijing, which Mr. Guo recorded on his hand-held computer 'to avoid any misunderstandings,' he said he tended to care much more about political and diplomatic issues than his parents' generation had. 'They never got involved in anything,' he said. 'But I think you have certain responsibilities as an individual. If every individual says something, that has much more force than if the Foreign Ministry says it.' Whether such involvement might lay the foundation for Chinese civil society, injecting a dose of pluralism into policy making, is a matter of debate. But a senior editor at a party newspaper says the persistence of the anti-Japan campaign and the participation of urban professionals has alarmed the authorities. Officials are accustomed to dealing with unrest among peasants and workers who feel defrauded or disenfranchised by China's economic boom, not among the urban elite, who are its primary beneficiaries. 'The white-collar middle class is supposed to be a pillar of stability,' the editor said. Mr. Li of Nirvana employs 500 people at his five health clubs in the capital. He said his generation felt pride in China's status in the world. But he thinks the Japanese still look down on Chinese, much as they did 60 years ago. 'The Japan issue is deep in our bones,' he said. When protests against Japan began in March, Mr. Li posted banners in each of his health clubs so employees and patrons could sign a petition against permanent Japanese membership on the United Nations Security Council. Some of his workers took part in the marches in April as well, though he said he warned them, 'for their own safety,' to be cautious about joining protests this month. For Mr. Wang, Japan has been an issue since childhood. When he was a boy his grandmother whispered about how her family had suffered under 'Japanese devils' and how his grandfather had died fighting Japanese troops. Beijing Meili Prospect Paper Company, which Mr. Wang founded after graduating from Beijing University, has many customers in Japan. But he said he felt the weight of history every time he walked the tidy, efficient streets of Tokyo and seethed over how the Japanese systematically skirted sensitive topics. He fears that the government will quietly drop the issue. 'Their No. 1 goal is economic development, and they don't want anything to get in the way,' he said. While discussing the matter over coffee on Saturday, Mr. Wang's two mobile phones - one for business, one for personal affairs - chimed brightly in succession to alert him about new text messages. They were mass mailings from the Beijing Public Security Bureau, warning residents to stay off the streets. 'Look how worried they are,' he said with an impish grin. 'They lit a spark and set off a wildfire.'

Subject: The counter-revolutionaries From: Setanta To: All Date Posted: Tues, May 03, 2005 at 08:59:09 (EDT) Email Address: Not Provided Message: The counter-revolutionaries 03/05/2005 The power of the Leaving Cert (Irish equiv of the SATs) was quite extraordinary in searing into our petrified memory verses of poetry like WB Yeats' September 1913. Twenty years on, it is still there in the back of the head somewhere. Yeats, the spiritual leader of the Gaelic League, 'the Arch-Poet', as Roy Foster referred to him in his biography last year, saw the grabbing, greasy fingers of the small shopkeepers in Dublin as the enemy of Romantic Ireland. 'What need you, being come to sense, But fumble in a greasy till And add the halfpence to the pence And prayer to shivering prayer, until You have dried the marrow from the bone? For men were born to pray and save: Romantic Ireland's dead and gone, It's with O'Leary in the grave.' Yeats identified the greedy, fawning petit bourgeois grocers as the enemy - those who would put today's profit ahead of tomorrow's dream. For Yeats, these people - the small, Mass-going shopkeepers, the mercantile cute hoors (transl. sly dogs!) - were inimical to Romantic Ireland, the Ireland of the soul, the Ireland that could be great, distinct, sovereign and meaningful. Yeats wasn't the only big thinker who targeted grocers. Napoleon's famous put-down of the English was they were “only a nation of shopkeepers'‘. Whatever about the threat to France posed by Austrians, Russians or Prussians, surely, Napoleon concluded, these little people with their double-entry accounting system, obsession with money, bills and accounts could not subvert his glorious imperial ambitions for a French Republic of Europe. More recently, commentators - particularly snobs from the Tory grandee set, the one-nation aristocrats - used the “grocer's daughter from Grantham'‘ as a put-down of Margaret Thatcher. Their narrative was the Yeatsian and Napoleonic line that could not countenance anything heroic, revolutionary, idealistic or dreamy coming from such stock. In the end, Thatcher ate them for breakfast and sent them the bill afterwards. Her foot-soldiers were the grocers of middle England. Over the years, grocers have been seen as a stultifying, craven class only interested in the greasy till, who could be counted on by the forces of the establishment to quietly back the status quo. The grocer of middle Ireland, the local gombeen in a dirty white coat, overcharging for hairy bacon, butter and bread, is the stuff of Patrick McCabe novels. He was the solid backbone of the Fianna Fáil party, the Legion of Mary and the local GAA club. In fact, the grocer was so central to the GAA that to this day the two umpires who determine whether a point is a score or a wide are dressed as 1950s grocers, replete with white coat and cap. Extraordinary. The grocer/umpire could be counted on. He was solid; he would uphold the establishment and keep the faith. For years, he was the face of the Irish petit bourgeois: the gombeen of the Irish centre-right. As such, the grocer/umpire was the enemy of the left-wing liberals, trade unionists, revolutionaries, romantic poets and anti-clerical radicals. But in the past few years, something profound has happened in Ireland. Go into any well-heeled town or suburb of the country and you will see the grocer up there with the farmers' marketers as the darling of the left and the environmental movement. The deification of the local grocer, in the eyes of the right-on anti globalisation movement, has been quite remarkable. The grocer is seen as a local bulwark against the evils of hypermarkets and Tescos. Overnight, the grocer has gone from gombeen zero to revolutionary hero. He will protect us against nasty E numbers, processed food and battery eggs. The grocer is now the heartbeat of the trendy upmarket suburbs with his rosemary and thyme sour dough organic breads, his Fairtrade coffee and his flu-buster smoothies. Fashionably socially-aware mummies make a beeline for his organic carrots, his probiotic yoghurt and his Omega 3 oils. In short, the grocer is the home of a quiet, anti-Big Business counter-revolution. When Naomi Klein talks about consumers exercising their sovereignty and punishing Big Business, she is acting as a cheer leader for the new grocer. So what has happened? Why would Yeats now see the local independent grocer as an ally rather than an enemy? Well it appears that two major economic factors have forced the change. On the one hand, the Tescos, Lidls and Dunnes of this world have slashed margins so much that local grocers could not survive against the out-of-town superstores, so they have had to change their game. The smarter ones have gone upmarket offering quality at a price, rather than quantity at a discount. By going upmarket and sourcing produce locally, the grocer has positioned himself nicely on the crest of a wellness wave. Many of us are now much more concerned about what we are putting into our bodies and the exercise we take. There has been a spiritual revolution where being right in the head and soul is seen by many as linked to what food we eat. This has led to a fusion where food meets apothecary, physical wellbeing and spiritual calm. The new ubergrocer is sitting at that crossroad, open for business. On top of these psychic and spiritual changes, the new grocer is tapping into a need that everything we buy should have a story. In an age of abundance, merely having the possession is not enough to satisfy - we also like to have a narrative. So, for example, free range eggs are now outselling battery eggs worldwide. What does the free range egg offer - better taste, increased size, and more protein? No, it offers something much more compelling. It offers a story. The story is of the local farmer and his family, the image of his tranquil farm with the hens clucking around freely. This is a tangible tale, peppered with reassuring nostalgia. Contrast this with the brutality of the factory farm: the image of the thousands of frightened, force-fed hens in filthy, dark cages. The free range egg is local, authentic and homely - it has a happy ending, almost. The battery hen is remote, industrial and cruel. Likewise the coffee. Our local ubergrocer - Oliver of Select Stores in Dalkey - sells Fairtrade coffee called Tiki, which goes under the slogan 'Tiki Coffee – A great deal for everyone without exploiting people or the planet'. Now what right-minded, socially conscious individual could fail to buy that stuff? Its package tells the story of the Indian farmers in Honduras who harvest the beans (sure that's a dinner party conversation all on its own). This is where your daughter's transition year on the Machu Picchu trail in Latin America meets Noam Chomsky - a delicious sweet spot for the bottom line of the new grocer. The bottom line is never mentioned, because the new upscale grocer isn't a shop - it's a campaign, a state of mind, a statement. What sort of person are you? A jumbo-sized packet of Tesco Fruit and Fibre person, or an apple, mango and passion fruit smoothie person? In the age of abundance, an increasing number of us are joining the latter tribe. Because of this form of ‘statement shopping', the grocer has become the darling of the right-on brigade. Editorials in liberal newspapers eulogise him, and academic conferences put him on their panels ahead of published social scientists. He is the new suburban Trotsky, the vanguard of a new counter-revolution. Who would've guessed that Romantic Ireland's 21st century hero would be the once fumbling, greasy-tilled grocer? Not even O'Leary - but then again, he's dead and gone. www.davidmcwilliams.ie

Subject: Interest Rates From: Terri To: All Date Posted: Tues, May 03, 2005 at 06:21:53 (EDT) Email Address: Not Provided Message: As long term interest rates remain low through the Federal Reserve tightening sequence we can in creasingly consider this Fed cycle another success. Long term rates and job creation seem our most important indicators of near term economic health at present. Job creation is sadly weak however.

Subject: The great bind From: Pete Weis To: Terri Date Posted: Tues, May 03, 2005 at 09:00:50 (EDT) Email Address: Not Provided Message: Inflation seems to be creeping in at the very time the economy is slowing - something Paul Krugman talked about in a recent piece regarding 'stagflation'. If the Chinese either revalue/untag their currency from the dollar or the US institutes tariffs on Chinese goods, inflation will get worse. But the Fed has housing to 'protect'. If the Fed fails to protect housing at this point, the US consumer and the US economy are toast. 'The basic problem appears to be that consumers have the willingness to spend more but increasingly lack the ability, while businesses have the money to step up spending but seem to lack the willingness.' - Financial Times, May 2, on the US economy.

Subject: Re: The great bind From: Terri To: Pete Weis Date Posted: Tues, May 03, 2005 at 10:25:42 (EDT) Email Address: Not Provided Message: Agreed. The Federal Reserve must be careful in moving, but the problem has been a fiscal policy turn from responsible through the 1990s to irresponsible from 2001. The guess is inflation will not be the problem however, but growth below economic potential. We should be growing above 4%, if the labor market is to improve significantly.

Subject: My jobless friends From: johnny5 To: Terri Date Posted: Tues, May 03, 2005 at 10:35:38 (EDT) Email Address: johnny5@yahoo.com Message: Yes my jobless friends in south ga don't think this government has done much to save them or thier standard of living - they are literally broke without money for food or drugs. My friend write me on his blood pressure problems with parents - the doctor want 300 dollars for a visit with his mom - now I know that is a pair of jeans to the richies - but 300 dollars a lot of money to him - he didn't have it - the doctor suggest that his mom and dad listen at some meditation music and exercise more since they cant afford doctors fees or medicine - they have bad hips and can barely stand - so they not gonna be doing much exercise.

Subject: Monetary Policy From: Terri To: All Date Posted: Tues, May 03, 2005 at 06:13:10 (EDT) Email Address: Not Provided Message: There is every reason to believe Federal Reserve policy has been very well handled since January 2001 when the cycle of short term interest rate decreases began. A short and shallow recession followed, along with sustained growth from then till now. Nor do I argue that the Fed should have been more restrictive in policy from 1995. There was minimal inflation and wonderful employment and wage gains from 1995 to 2000. Inflation is low still, and long term interest rates tell us the expectation is inflation will stay low. I have found scant reason to criticize Fed policy from 1995, though I might wish a little slower tightening cycle now.

Subject: Arnold says Girlie Men Liberals bad From: johnny5 To: Terri Date Posted: Tues, May 03, 2005 at 10:29:44 (EDT) Email Address: johnny5@yahoo.com Message: You don't compete with the inflow of mexicans like my redneck friend in south ga does for jobs - they are hurting terri BAD - they aren't up in the ivory towers with the rest of us - those chinese laborers overseas and mexican laborers here are sinking them.

Subject: Girl Power as Boy Bashing From: johnny5 To: All Date Posted: Tues, May 03, 2005 at 05:54:02 (EDT) Email Address: johnny5@yahoo.com Message: Saturday, January 15, 2005 Laura Bush Says US Neglects Boys, Favors Girls Parade Magazine interviewed First Lady Laura Bush for the issue of January 16, 2005. In this interview, Mrs. Bush surprised me with her comments about how American boys are raised: 'I think we really need to pay more attention to boys. I think we've paid a lot of attention to girls for the last 30 years, and we have this idea in the United States that boys can take care of themselves. We've raised them to be totally self-reliant, starting really too early. They need the nurturing that all humans need. And I think there are a lot of life skills that we teach girls but we don't teach boys. We actually have neglected boys.' Not only do boys now attend college at lower rates than girls, Mrs. Bush points out, but 'they're the ones who are in trouble, who have been adjudicated, who can't read, who are not doing well in school and drop out in frustration and embarrassment. A lot of the times, they're the ones with the drug and alcohol problems.' I don't remember any other high-profile person articulating the over-emphasis on girls and the neglect of boys. And, women wonder why boys don't emote in ways that would please them. In my book and articles, I stress repeatedly that men and women are the same -- unfortunately, though, we are socialized differently and programmed for conflict. Well, according to Mrs. Bush, through neglect, boys are also programmed for failure. Thank you, Laura Bush, for bringing this critical issue to light. Thursday, April 21, 2005 Girls Taught Early to Hate Boys Read the outrageous article below from today's Wall Street Journal. It's about these new shirts girls are wearing to bash boys. The maker of the shirts, Todd Harris Goldman, even has a book called Boys Are Stupid: Throw Rocks at Them. Can you imagine such a negative-titled book targeting girls like that? Can you imagine boys wearing shirts that trash girls and advocate physical abuse against them? Our double-standard society NEVER would tolerate that? The question is, Why does our society tolerate the trashing of males? If men and women don't put an end to this, by protesting against David & Goliath Apparel, boycotting shirtmaker and author Todd Harris Goldman, and boycotting the stores selling this trash, we will never have harmony between the sexes. Any girl who wears these shirts should be ashamed of herself, and her parents should be ashamed of themselves. Society deserves the behavior it tolerates and advocates. --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- - Girl Power as Boy Bashing: Evaluating the Latest Twist In the War of the Sexes by Jeffrey Zaslow, Wall Street Journal -- Personal Journal April 21, 2005; Page D1 Seventeen-year-old Bryan Blase sees girls at school wearing T-shirts that announce: 'Boys are stupid. Throw rocks at them!' Bryan, who lives in suburban Detroit, isn't offended. The shirts remind him that boys are often disrespectful to girls. 'We are stupid,' he says. 'Girls should throw rocks at us.' The age-old gender war is being sold to our children in new, and some argue, insidious ways -- and kids are spending millions of dollars to buy it. Marketers today are pitching the battle of the sexes to younger and younger consumers, using misogynistic rap lyrics, insult-laden clothing lines, confrontation-packed reality TV shows, and advertising that defines girl-power as boy-bashing. Psychologists and gender-relations researchers warn that this ratcheting up of boy/girl conflicts could damage kids' self-esteem and their ability to relate to the opposite sex. But a lot of today's media-savvy kids say they appreciate the humor behind this gender war-mongering -- and they doubt they'll be scarred by this new form of commerce. As for parents, we need to make mature judgment calls without being humorless. An antiboy shirt from David & Goliath, whose founder has also written a book (right). Apparel firm David & Goliath saw its popular 'boys are stupid' line dropped last year from about 10 store chains after protests by parenting and tolerance groups. Still, the company says its products remain in 2,500 outlets, and it expects sales to rise to $100 million this year from $90 million in 2004. (About half of its sales are these controversial products.) David & Goliath founder Todd Goldman, 36, just released a 'boys are stupid' book. It begins: 'Girls are bundles of joy and gifts from heaven. Boys pick their nose in front of 7-Eleven.' It ends: 'Just remember. For every stupid, smelly, cootie-ridden boy, there is a rock.' Mr. Goldman fell into the boy-bashing business after starting his T-shirt concern in 1999. He created a 'boys are smelly' shirt, then a 'boys have cooties' shirt, and sales jumped. 'For twenty bucks, a girl can walk around town, saying things she wouldn't normally say, without opening her mouth.' He argues that his products are just darkly comic, and critics need to lighten up. But detractors point out that our society wouldn't condone products that encouraged violence against a specific race. Nor is anyone selling 'throw rocks at girls' shirts. 'This is not humor. This is sarcasm as a weapon,' says Ted Braude, a psychologist in Royal Oak, Mich., who works with boys. Gender-bashing products are popular today in part because our society reduces childhood to zero-sum accounting, says Joe Kelly, president of the advocacy group Dads and Daughters. 'People think that in order for girls to get a hand up, we have to push boys down. For boys to get a hand up, we have to push girls down.' Title IX legislation, requiring schools to end discrimination based on sex, has heightened animosities, he says. But store owners say sales are driven not by politics, but by kids' sense of what's cool. Beautiful Girl, a boutique in Woodmere, N.Y., sells piles of boy-bashing apparel. 'Kids realize it's tongue-in-cheek,' says Jon Shapiro, the store's co-owner. 'The moms are very indulgent. If kids want it, moms buy it.' Mr. Shapiro considers the controversy overblown. 'There hasn't been a rash of boys being stoned.' Teachers and parents can ease boy/girl conflicts by avoiding the adult impulse to group kids by gender, says Barrie Thorne, author of the book 'Gender Play' and a sociology professor at University of California, Berkeley. Spelling bees and kick-ball games shouldn't be boys versus girls, she says. And she advises parents to encourage boy/girl platonic friendships; too often parents tease kids by suggesting they're in a romance. 'New Moon,' an ad-free alternative magazine for girls, purposely avoids revving up gender squabbles, focusing instead on girls' aspirations and inner beauty. That makes it a rarity on newsstands. My 15-year-old daughter notices that most teen magazines for girls depict boys as jerks. 'It's always, 'He did this to me. He did that to me.' Rarely do I read a story where a boy does something nice,' she says. Madeline Gobbo, 14, of Hood River, Ore., sees that advertisers woo girls through boy-bashing. She's amused by ads for Skechers sneakers, which show kicking or whip-wielding females and cowering males. 'Girls used to try to be equal to boys,' says Madeline. 'Now they're trying to be better. The media is picking up on that.' Movie and TV executives admit that they see dollar signs in boy/girl conflict. Reality show 'Girls V. Boys' airs on The N, Viacom's 'network for tweens and teens,' available in 43 million homes. The show pits girls against boys, as they fire water guns or joust each other off boats. In the 'Ride 'Em Cowboy' challenge, teammates dressed in cow costumes had to move around on all fours and avoid being lassoed by a team of the opposite sex. 'We wanted to set them up in situations where they'd be competing during the day and flirting at night,' explains Sarah Tomassi Lindman, a vice president of The N. She says that 'tension' has created strong drama and growing ratings. Kids I spoke to seem to know that at the root of boy/girl antagonism, there's a whole lot of attraction. In Wayne, Pa., Rachel Hobbs, 15, has a friend who wears a shirt that reads: 'Boys are smelly. Throw rocks at them!' Rachel told her friend: 'You're dating this guy. You're holding his hand. You're wearing that shirt. Why aren't you throwing rocks at him?' Her friend replied: 'Because I like him.'• See when they break up she will run crying to that first friend and BOY HATE will be reinforced to follow her throughout her life. Should we invest in the company?

Subject: Mr. Chavez viva la revolution! From: johnny5 To: All Date Posted: Tues, May 03, 2005 at 02:46:17 (EDT) Email Address: johnny5@yahoo.com Message: http://www.newsmax.com/archives/articles/2005/5/1/81915.shtml Hugo Chavez: U.S. Citizens Are Oppressed NewsMax.com Wires Sunday, May 1, 2005 HAVANA, Cuba - Saying that U.S. citizens are oppressed by their own government, Venezuelan President Hugo Chavez promised Friday that he would not visit the United States again until Americans 'liberate' their nation. Chavez, in Havana for trade talks, told an international gathering of activists here that before an earlier trip to Cuba, a U.S. State Department undersecretary he did not identify warned him not to go because he would no longer be received in Washington. Story Continues Below He said he went ahead with that trip anyway, and later traveled to the United States to visit U.S. President George W. Bush, who he said greeted him with a Coca-Cola in his hand. 'I have not returned, nor do I think about returning again, until the people of the United States liberate that nation,' said Chavez, saying that Americans are 'oppressed' by their government and U.S. media. Chavez considers Cuban President Fidel Castro a political ally and close personal friend, and Washington has grown increasingly alarmed by their deepening political and economic alliance. During Chavez's current visit, the two countries have signed a host of economic and other accords, including a deal for Cuba to buy $412 million in goods from the South American nation, with Cuba waiving all import duties. Venezuela's state oil company also has opened an office in Havana this week, agreeing to help explore for and refine any crude deposits discovered off the island's coast. It also announced that the 53,000 barrels it has been sending to Cuba since 2000 at preferential terms was recently increased to up to 90,000 barrels daily. Chavez also criticized the current Latin American tour by U.S. Secretary of State Condoleezza Rice, referring to her as an 'imperial lady' who is trying to divide and conquer the hemisphere's developing nations. Despite Chavez's anti-U.S. comments, his country is the world's fifth largest oil exporter and a top crude supplier to the United States.

Subject: Obsession with Privatisation From: Mik To: All Date Posted: Mon, May 02, 2005 at 14:19:42 (EDT) Email Address: Not Provided Message: I just read Paul Krugman's article about the attempt to privatise health care. He made an interesting statement, 'American health care is unique among advanced countries in its heavy reliance on the private sector. It's also uniquely inefficient.' That is a very vague statement. And he goes on to knock the concept of privatisation of health care, much to suit his own concept. Now I don't think that health care is great in the US, nor do I think that privatisation offers any panacea to solving health care financing problems, but I do feel that Paul has not done his homework. South Africa lives as two worlds - the developed rich world and the poor developing world. The interesting part is that although the tax money of the rich population is used to fund the government health care system focused on the poor, the health care system for the developed portion of the population is fully privatised and has been for decades. The characteristics of this portion of the population is very similar to the USA and as such merits careful research, especially before making the bold statements that Krugman has made. The South African system is not perfect, but it has come a long way and is pretty impressive. In fact the fastest growing medical insurance company in the USA is a South African company called Discovery Health (in SOuth Africa). The health insurance companies, known as Medical Aid companies in South Africa, has some impressive systems. They also have squeezed themsleves into a place where they regulate the medical industry. In essence the private sector regulating the private sector. Issues such as doctor's kick back for prescribing one drug over another doesn't happen, nor do many of the mal-practice issues plagueing the USA. Government doesn't get involved (it doesn't need to). Also the Medical Aid companies have some amazing systems rewarding people for good health. They have this card system that literally clocks the time you spend in a gym and you get discount on your monthly premium for the time you spend in the gym. More health issues such as participation in sporting clubs, non-smoking, participation in sporting events, etc, etc are all rewarded by discounts on your monthly premiums. That encourages people to think healthy with their wallets. South Africa boasts a first class medical system, yet the funding is fully privatised. Again, it is not perfect - but it has been in operation for decades.

Subject: Re: Obsession with Privatisation From: Terri To: Mik Date Posted: Mon, May 02, 2005 at 14:51:20 (EDT) Email Address: Not Provided Message: Please continue this interesting description.

Subject: Re: Obsession with Privatisation From: Mik To: Terri Date Posted: Wed, May 04, 2005 at 10:56:32 (EDT) Email Address: Not Provided Message: Terri, I don't know what more to say. I often watch debates on TV about how different people perceive the future of privatised health care. Yet I can watch certain arguments and say, 'That's not true. The system is already being undertaken. A little research and you can find a lot' Kind of makes me depressed as Paul Krugman is excellent at what he says, but in this case he keeps negatively harping on issues that have been tried and tested. The systems do work, perhaps slightly different to what even the Republicans would imagine. Take a look at this site: https://www.discoveryworld.co.za/index_login.jhtml They even have this 'Vitality Plan' where they encourage people to participate in good health programs. Also keep in mind that The Medical Insurance/Aid companies of South Africa are under serious strain as South Africa has one of the highest HIV/AIDS rates in the world. Ironically enough there is much cross-subsidisation between the revenue earned in the USA and the costs facing South African HIV/AIDS issues. All the more reason why Americans should look closely at what is happening in South Africa. Another issue is the pharmacists: They are far more qualified than what we give them credit or allow them to perform. In South Africa, pharmacists almost act as doctors giving medication that needs doctors' prescriptions in the USA. They are actually the first port of call when you are feeling sick. Of course, again the Medical Aid/Insurance companies watch over this making sure there is no abuse. But it cuts down dramatically on doctors fees and makes the whole system much more cost effective. Also pharmacists do have their limits and will refer you to a doctor when the matter is justified.

Subject: Re: Obsession with Privatisation From: Terri To: Mik Date Posted: Wed, May 04, 2005 at 12:14:54 (EDT) Email Address: Not Provided Message: I will take the time to learn more about the South African health care system. I never would have thought to look to South Africa, were it not for your comments. Suggest the same to Paul Krugman, by all means.

Subject: Methods to Reduce Blood Pressure From: Emma To: All Date Posted: Mon, May 02, 2005 at 12:50:45 (EDT) Email Address: Not Provided Message: July 2. 2002 Methods Are Many to Reduce Blood Pressure By: Jane E. Brody - New York Times Three decades after the National High Blood Pressure Education Program started saying that controlling high blood pressure saves lives, rates of hypertension are rising. In addition, the proportion of patients being treated — or treated well enough to bring their blood pressure readings under control — is falling, creating waves of alarm among cardiovascular specialists. As a result, stroke rates are going up and the decline in heart attacks has leveled off; both strokes and heart attacks are directly linked to uncontrolled hypertension. In trying to account for these changes, experts point to a number of factors. One is the sharp increase in the percentage of Americans who are overweight or obese, creating for themselves the leading risk factor for hypertension. Another is a basic quality of the condition: it is a silent disease, and a vast majority of people with it feel fine, even as it causes life-threatening or fatal damage. About 30 percent of people with hypertension don't know they have it. A third factor is the unwillingness or inability of most people with high blood pressure to change their diets and try exercise and relaxation techniques that can bring their readings down to normal. Fourth is the reluctance of many patients to take medications and the failure of many doctors to keep up with drug developments that would allow them to design individual treatments and prescribe the remedies likely to produce the most benefit with the fewest side effects. Further complicating the picture are the insurance-dictated constraints on doctors. Many of them don't take the time to educate patients about the importance of continually monitoring their pressure readings. Last but hardly least, the drug companies with the greatest financial interest in getting all people with hypertension into treatment may have had a detrimental effect on the acceptance of drug therapy. At the expense of older, less expensive drugs, pharmaceutical companies have heavily promoted newer and more expensive medications that may not always be the best for a particular patient. These may also be too costly for many older patients, who, since Medicare does not pay for drugs, have been known to take half the prescribed dosages to stay within their budget. Tailoring Treatment There are six classes of medications and scores of different drugs and drug combinations that are tailored to control high blood pressure. Which drug or drug combination is right is determined by factors like sex, age, systolic blood pressure (the higher number, representing the pressure on arteries when the heart beats), smoking habits, total cholesterol, level of protective H.D.L. cholesterol, and whether the patient has diabetes or an enlarged left ventricle, the heart's main pumping chamber. The simplest remedy that achieves the desired goal is the best choice. For example, say most experts, among them Dr. Steven A. Dosh of Escanaba, Mich., patients who have no known underlying disease are best treated initially with diuretics, which bring blood pressure down by reducing the volume of fluid the heart has to pump to outlying tissues. Diuretics in low doses are well tolerated, safe, effective and cheap and need be taken only once a day. But, as Dr. Dosh wrote recently in The Journal of Family Practice, for those who have already had a heart attack or are otherwise known to have coronary artery disease, beta-blockers, which slow the heart and reduce the force of its contractions, may be the initial drug of choice. When combined with a diuretic, beta-blockers were proved to be especially good at preventing strokes, though less effective than expected in preventing heart attacks, according to Dr. Michael Alderman, a hypertension specialist at Albert Einstein Medical Center in the Bronx. But one newer, more expensive drug may be better for some patients. For example, for patients with diabetes or systolic hypertension after a heart attack, the best remedy may be ACE, or angiotensin-converting enzyme, inhibitors. They relax blood vessels by reducing production of angiotensin I, which is converted into angiotensin II, a hormone that constricts arteries. If an ACE inhibitor's side effects — a cough and a rash — are troublesome, a patient could try an A.R.B, or angiotensin receptor blocker, which prevents the action of angiotensin II. Thus far, the A.R.B.'s appear to be more effective than beta-blockers in preventing strokes, though the drugs are equally effective in reducing blood pressure, Dr. Alderman said. The other classes are vasodilators, which relax blood vessels, and calcium channel blockers, which also relax blood vessels but in a number of studies have been linked to an increased risk of cardiovascular disease, especially congestive heart failure. However, studies have also indicated that long-acting calcium channel blockers may be more effective at preventing strokes than the ACE inhibitors, Dr. Alderman said. So far, neither the ACE inhibitors nor the calcium channel blockers have been shown to be better than diuretics in preventing heart attacks, he added. What Should a Patient Do? First, don't do what one woman in her 50's did. Having experienced swollen ankles and a rapid heart beat as a side effect of a calcium channel blocker prescribed for hypertension, she stopped taking the drug and never returned to the doctor. All drugs have side effects, a fact especially troublesome for blood pressure treatment, since the disorder itself usually produces no symptoms. Diuretics in high doses force patients to the bathroom many extra times a day and several times a night. Many diuretics also deplete the body of potassium and magnesium and may raise blood levels of cholesterol and glucose. Beta-blockers in full dose can make people groggy, slow the heart rate and cause bronchial spasms. Vasodilators can cause headaches, fluid retention and rapid heart rate. ACE inhibitors commonly cause an annoying dry cough, whereas the A.R.B.'s, which are generally better tolerated, may cause high blood levels of potassium. And nearly all the antihypertensive medications can inhibit sexual function, particularly in men. Dr. Alderman suggested that in many patients, the ideal treatment is a combination of low doses of two or more drugs. This has the advantage of limiting the likelihood of disturbing side effects while increasing the drugs' effectiveness. Patients should be closely monitored in the first months of treatment and every six months afterward; if the treatment is or becomes ineffective, it must be changed, by increasing the dose or changing drugs. Home blood pressure monitoring can alert patients to the need to see a doctor. And for any drug treatment to work optimally, otherwise healthy patients should also adopt protective habits, including eating diets rich in fruits, vegetables and low-fat dairy products and low in fat and salt and other sources of sodium. Aerobic exercise for at least 45 minutes a day three times a week is highly recommended. And, if the patient is overweight, a loss of 10 percent of total body weight can be very beneficial. Relaxation exercises like meditation may also help

Subject: 'Normal' Blood Pressure From: Emma To: All Date Posted: Mon, May 02, 2005 at 12:05:14 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/ads/astrazeneca/fifteen.html August 12, 2003 'Normal' Blood Pressure: Health Watchdogs Are Resetting the Risk By JANE E. BRODY So what really is ''normal?'' When it comes to health-related measurements, the definition of normal seems to mutate from time to time, forcing some who were previously unconcerned about a matter of health to pay closer attention and make some changes that could preserve their well-being and maybe even save their lives. For example, just 25 years ago, a serum cholesterol level of 240 milligrams was considered normal -- until studies showed that a majority of heart attacks and coronary deaths occurred in people with cholesterol levels of 240 or less. So now ''normal'' is 220 milligrams or less, and ''optimal'' is 200. Now, the watchdogs of our health have revised another definition of normal downward, the measurement of blood pressure. Not a year ago, this column told you that ''high'' blood pressure started at 140 over 90 millimeters of mercury; that a pressure of 130 to 139 over 85 to 89 was ''high normal,'' while ''normal'' was less than 130 over less than 85; and that ''optimal'' was less than 120 over less than 80. (The upper number, or systolic pressure, represents the pressure of arterial blood flow when the heart beats. The lower number, or diastolic pressure, indicates the pressure between beats.) That indeed was the thinking at the time, and it meant that 50 million people in the United States had high blood pressure, or hypertension, with nearly half inadequately treated or not treated at all and few if any with high-normal blood pressure doing anything to bring it down. But in May, a group of specialists on blood pressure convened by the National Heart, Lung and Blood Institute issued new guidelines that said additional tens of millions Americans were at risk of suffering diseases related to blood pressure. These people needed to change diet, exercise and smoking habits to bring down their readings, the panel said. The guidelines, published on May 21 in The Journal of the American Medical Association, established a condition that the committee called ''prehypertension'' to describe an additional 45 million people with readings from 120 to 139 millimeters of mercury of systolic pressure or from 80 to 90 diastolic pressure. These people face a very high risk of developing frank hypertension and its complications as they grow older, unless they do something now to lower their risk. Blood Pressure Facts Misunderstanding abounds not only about what may be a potentially dangerous elevation in blood pressure, but also about the effects of such elevations and the importance of lowering them and keeping them lowered. High blood pressure greatly raises the risk of heart attack, stroke, heart failure and kidney failure. Evidence also suggests that high blood pressure can contribute to the progression of mental deficits and dementia. Controlling elevated blood pressure can sharply reduce the risk of serious illness. For example, it can cut strokes 35 to 40 percent, heart attacks 20 to 25 percent and heart failure more than 50 percent. For every 12-point reduction in systolic blood pressure maintained for a decade in 10 patients, one death will be prevented. Note the words systolic blood pressure, the upper number. For many years, experts thought that diastolic pressure was the more important factor in preventing illness and death. But as the specialists' report pointed out, in people older than 50 ''systolic blood pressure of more than 140 millimeters of mercury is a much more important cardiovascular disease risk factor than diastolic blood pressure.'' Because it is almost always a disorder without symptoms, hypertension is called a silent killer, and nearly a third of the people who have it are unaware of it. Thus, you are not very likely to say something to a physician that would prompt a check of blood pressure. To find out whether you have elevated blood pressure, the pressure must be checked by a physician, physician's assistant or nurse on several occasions. Or you can test it yourself with a reliable home monitor. The test is noninvasive, quick and painless and should be performed at every encounter with a health professional. One fact may help to clarify the need for new guidelines. The definition of high blood pressure is arbitrary. There is no threshold at which blood pressure suddenly becomes a threat. Recent studies have shown that damage to arteries that increases the risk of heart disease or stroke can begin at blood pressure levels once considered normal -- for example, at levels as low as 115 over 75. Furthermore, for each increase of 20 over 10 millimeters of mercury, the risk of those potentially fatal diseases doubles. The point where blood pressure can contribute to serious illness depends in part on what else may be medically awry. Thus, moderately elevated pressure is considered more serious in a person with diabetes or another heart disorder. Even if your blood pressure has been normal for decades -- by the new definition of normal -- it is not safe to assume that it will remain so. As people age, their blood pressure tends to rise. According to the Framingham Heart Study, which has run for decades, 90 percent of those who have normal readings when they are 55 eventually develop high blood pressure. Blood pressure increases because most people's arteries narrow and stiffen with age, forcing blood to flow through less hospitable channels. That sets up a vicious cycle, because elevated pressure injures the arteries and causes them to stiffen even more. What Should Be Done If the systolic pressure falls between 120 and 139 or you have a diastolic pressure of 80 to 89, you are considered prehypertensive and need to change living habits to ward off serious illness. First and foremost, if you are overweight, lose the extra pounds. Heaviness is the leading risk factor for developing high blood pressure, and weight loss nearly always brings down an elevated pressure. A government-tested dietary pattern that has proved effective in controlling hypertension can help with weight loss, promote cardiovascular health, protect against osteoporosis and help prevent cancer. It should be adopted, as well, by everyone who is prehypertensive. It is popularly called the DASH diet -- rich in vegetables and fruits, whole grains and low-fat dairy products, with two or fewer daily small servings of fish or lean meat or poultry and three to four weekly servings of nuts, seeds and legumes like dried beans and peas, cooked, of course. (The acronym stands for Dietary Approaches to Stop Hypertension.) Reducing salt intake to a maximum of 2,400 milligrams a day can enhance the effectiveness of the diet, which can be as good as some drugs in controlling blood pressure. Also important is moderating alcohol intake -- no more than one drink a day for women and two for men. At the same time, adopt a regular exercise program, like brisk walking at least 30 minutes most days of the week. And if you smoke, quit. Smoking seriously damages arteries. When changing living habits is not enough to normalize blood pressure, medication is needed. The specialists' committee said treating uncomplicated hypertension should start with thiazide diuretics and, if needed, be combined with other blood pressure drugs. Most patients with seriously elevated pressure require two or more drugs to achieve a safer level, the committee reported. The medications have to be taken daily to be effective.

Subject: How Now, Dow Ow From: Pancho Villa To: All Date Posted: Mon, May 02, 2005 at 10:54:48 (EDT) Email Address: nma@hotmail.com Message: How Now, Dow Jones And How Low?Is Dow Jones (DJ ), publisher of The Wall Street Journal and Barron's, buyout bait? It's a question that Wall Street has raised regularly over the years, but some pros think the case is stronger this time. One major New York investor, who requested anonymity, has written to the board urging a sale. He wants a change in management which, he argues, overpaid in buying MarketWatch for $528 million. The money should have been used to buy back shares or boost the dividend, he says. The stock has dropped 50% in the past five years, while the Dow Jones industrial average is off just 3.8%. 'It's ridiculous that it has underperformed for so many years,' says the investor. Since last June the stock has slumped from 48 to 32. William Bird of Smith Barney is the latest analyst to downgrade Dow Jones to a 'sell.' Earnings have been sluggish, and ad revenues lackluster. If the stock continues to fall, 'Dow Jones could become an acquisition target,' says George Putnam III, editor of The Turnaround Letter -- even though the Bancroft family controls the voting stock. 'We've seen instances in which the younger generation has forced the sale of a family company,' notes Putnam. Roy Hammer, a trustee for the Bancroft family trust, says 'we're not looking to sell the company.' With a market cap of just $3 billion, Putnam notes, Dow Jones is 'an attractive target for a larger company' or a private equity group. Some investors, such as T. Rowe Price Group (TROW ), which owns 15%, protested a recent move by Dow Jones that allows the Bancrofts, who have 62% of voting rights, the flexibility to sell as much as half their current stake and still retain control. Chief Operating Officer Richard Zannino wouldn't comment on buyout talk. But, he says, at 33-34, 'our stock is a heck of a deal -- a bargain.' The investor urging a sale says Dow Jones assets are worth 70. http://www.businessweek.com/magazine/content/05_19/b3932151_mz027.htm

Subject: A Jolt to Team Japan: Bonus Demands From: Emma To: All Date Posted: Mon, May 02, 2005 at 10:53:32 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/01/international/asia/01japan.html?pagewanted=all&position= A Jolt to Team Japan: Bonus Demands By NORIMITSU ONISHI aNAN, Japan - In a country better known for copying and improving others' creations, the invention that was born here in rural Japan in 1993, at a 400-employee company surrounded by farmland, promised nothing less than a better light bulb. In fact, it was the Holy Grail of lighting technology: the blue light-emitting diode, or L.E.D., which made white light a reality. It offers the prospect of a cheap, long-lasting light source that is expected to, someday soon, replace Edison's incandescent light bulb. The invention spurred rapid growth at the company, Nichia, which now has 3,500 workers and enjoys a 50 percent profit margin on $1.8 billion revenues. But in keeping with the Japanese belief that all salarymen are equal and that the company stands above all, the man who led the inventing team was awarded a bonus of merely $200. But the man, Shuji Nakamura, did not take the move in Japanese stride. He quit, left for a new job in America, and eventually sued. The lawsuit was settled recently, though not amicably, for $8.1 million. Almost a generation after the peak of Japan's economic might, companies here are being forced to struggle with ways to reward their most talented workers while hewing to their intrinsic egalitarianism. As globalization has allowed talented workers to job-hop across continents, some here - who would have willingly sacrificed themselves for their companies until a few years ago - are saying that all salarymen are not equal. About 10 other inventors have also sued their employers, doing the unthinkable in this society that values teamwork above individual talent. Arguing that their individual talent led to huge discoveries and profits at companies like Toshiba, Canon, Hitachi, Ajinomoto and Mitsubishi Electric, they have sought money. A lot of money. 'The lawsuit changed the system in all companies in Japan in which scientists and engineers were poorly treated,' Mr. Nakamura, now a professor of materials at the University of California, Santa Barbara, said in an interview during a recent visit to Tokyo. 'I'm very much satisfied by the results that the lawsuit has brought about.' Experts agree that the effects of this lawsuit - which was led by Hidetoshi Masunaga, a lawyer who is also involved in some of the other suits - will reach beyond the treatment of inventors. 'Such scientists are the forerunners of a changing mind-set among Japan's salarymen,' said Shigeru Tanaka, president of the Hay Consulting Group in Japan. 'They have ownership of their own career development. Nakamura is not an ordinary person, but his case forecasts change among Japan's ordinary salarymen.' Time was, most employees' pay rose according to seniority inside companies where they enjoyed lifetime employment. More recently, to encourage and reward good employees, many companies have introduced performance-based pay systems. But the new systems have not been considered successful. They had the opposite effect of lowering morale among employees, who, thinking that missing a target would hurt their careers, tended not to set high goals in the first place. 'Now with the performance system, frustration seems to be everywhere, with some people not receiving what they expected or some people getting younger colleagues as bosses,' said Taisuke Kato, general manager of the intellectual property division at Toshiba Corporation. 'In the United States, companies can keep employees with high ability and lay off employees not so highly regarded. But in Japan you cannot do that. There are employees who are no good. But we should consider how to survive as a whole.' Toshiba's employees can now choose to have their salaries tied to seniority or performance. The company, which is being sued by a former employee over the development of flash memory technology, has also established clearer guidelines to reward its most talented engineers. Every year, nearly 100 of its researchers receive bonuses of more than $10,000 and several of them get more than $100,000. The sums, though, pale next to what their American counterparts would get in stock options or the amounts claimed in the recent lawsuits. Last year, for instance, Ajinomoto had to pay more than $1 million to a former worker. But it was Mr. Nakamura's case that drew the most attention through the size of the award, though it was significantly lower than the $200 million that a lower court had initially awarded. The lower court had estimated at 50 percent Mr. Nakamura's contribution to the profits earned by his former employer, but the higher court said it was actually closer to 5 percent. In the end, both sides agreed to settle, with Mr. Nakamura receiving $8.1 million from Nichia. But the settlement satisfied neither side as it left unresolved the crucial question of whether it was the individual or the company that was behind the invention. Although it has grown considerably in the last decade, Nichia, a longtime maker of fluorescent devices before the L.E.D., has not changed much, employees say. It is an hour's drive from the nearest airport in Tokushima, on Shikoku, the smallest of Japan's four main islands. Its owner famously lives in a modest house. The lives of its bachelor engineers follow an arc that goes from their homes to work to the convenience store and back. The consensus at Nichia was that though he was the project's leader, Mr. Nakamura could not have invented the L.E.D. in 1993 without the support of the company or colleagues. Until he left, Mr. Nakamura, though a hard-driving boss, had been respected here. Masayuki Senoh, 39, and Shinichi Nagahama, 38, both worked under Mr. Nakamura on the L.E.D. team. 'Anyone can see that it was not accomplished just by Mr. Nakamura,' Mr. Senoh said. 'No one can do it alone. There was data that I created, data that Nagahama created.' Mr. Nagahama said he still had fond memories of the Mr. Nakamura who worked here. 'Now he's changed,' he said. 'Now his eyes have dollar marks in them.' Although Nichia's rapid growth has drawn many employees from other companies, there remains a deep belief here that one should not put individual interests before the company's and that it is unseemly to demand a greater share of profits. In a country where the stock market still draws few individual investors, Mr. Nakamura stood out here for his interest in money. 'He did like money,' Ichiro Matsushita, 45, an assistant senior manager who was considered Mr. Nakamura's best friend here and spoke of being 'betrayed.' 'During the bubble years of the early 1990's he was talking about stocks.' Mr. Nakamura said it was natural to receive compensation commensurate to ability. 'There are still people in Japan who think money is something evil,' he said. 'But why are they working then? If they do not need money, they should donate it. You work to earn money. But in Japan, that idea has a bad image and you're not supposed to say that. It's your real feeling against what you say in public. I say what I really feel.'

Subject: Republicans Exerts Pressure on PBS From: Emma To: All Date Posted: Mon, May 02, 2005 at 09:54:37 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/02/arts/television/02public.html?pagewanted=all&position= Republican Chairman Exerts Pressure on PBS, Alleging Biases By STEPHEN LABATON, LORNE MANLY and ELIZABETH JENSEN WASHINGTON - The Republican chairman of the Corporation for Public Broadcasting is aggressively pressing public television to correct what he and other conservatives consider liberal bias, prompting some public broadcasting leaders - including the chief executive of PBS - to object that his actions pose a threat to editorial independence. Without the knowledge of his board, the chairman, Kenneth Y. Tomlinson, contracted last year with an outside consultant to keep track of the guests' political leanings on one program, 'Now With Bill Moyers.' In late March, on the recommendation of administration officials, Mr. Tomlinson hired the director of the White House Office of Global Communications as a senior staff member, corporation officials said. While she was still on the White House staff, she helped draft guidelines governing the work of two ombudsmen whom the corporation recently appointed to review the content of public radio and television broadcasts. Mr. Tomlinson also encouraged corporation and public broadcasting officials to broadcast 'The Journal Editorial Report,' whose host, Paul Gigot, is editor of the conservative editorial page of The Wall Street Journal. And while a search firm has been retained to find a successor for Kathleen A. Cox, the corporation's president and chief executive, whose contract was not renewed last month, Mr. Tomlinson has made clear to the board that his choice is Patricia Harrison, a former co-chairwoman of the Republican National Committee who is now an assistant secretary of state. Mr. Tomlinson said that he was striving for balance and had no desire to impose a political point of view on programming, explaining that his efforts are intended to help public broadcasting distinguish itself in a 500-channel universe and gain financial and political support. 'My goal here is to see programming that satisfies a broad constituency,' he said, adding, 'I'm not after removing shows or tampering internally with shows.' But he has repeatedly criticized public television programs as too liberal overall, and said in the interview, 'I frankly feel at PBS headquarters there is a tone deafness to issues of tone and balance.' Pat Mitchell, president and chief executive of PBS, who has sparred with Mr. Tomlinson privately but till now has not challenged him publicly, disputed the accusation of bias and was critical of some of his actions. 'I believe there has been no chilling effect, but I do think there have been instances of attempts to influence content from a political perspective that I do not consider appropriate,' Ms. Mitchell, who plans to step down when her contract expires next year, said Friday. Robert Coonrod, who stepped down as corporation president in July 2004, has known Mr. Tomlinson about 20 years and considers him a good friend. 'I believe that his motives are exactly what he says they are,' he said. Mr. Tomlinson is 'trying to help the people in public broadcasting understand why some people in the conservative movement think PBS is hostile to them and, two, imbue public broadcasting with the notion of balance because he thinks that long term it's a winner in getting Congressional support.' 'Whether people like the way he goes about it or not is a different issue,' Mr. Coonrod added. Though PBS's ratings have stabilized lately after several years of decline, the network has faced criticism that much of its programming - shows like 'Antiques Roadshow' and 'Masterpiece Theater' - is little different from what can be found on cable television. Though a huge bequest to National Public Radio from the estate of Joan Kroc, widow of the founder of McDonald's, has furthered the independence of public radio, corporate support and state financing for public television have slipped in recent years, making the nearly $400 million in federal money annually funneled through the corporation increasingly important. Nor have administration officials and lawmakers been shy about challenging certain programming. Education Secretary Margaret Spellings, for example, earlier this year publicly denounced a program featuring a cartoon rabbit named Buster who visited a pair of lesbian parents. The corporation is a private, nonprofit entity financed by Congress to ensure the vitality of public television and radio. Tension is hardwired into its charter, where its mandate to ensure 'objectivity and balance' is accompanied by an exhortation to maintain public broadcasting's independence. Mr. Tomlinson said that in his view, objectivity and balance meant 'a program schedule that's not skewed in one direction or another.' Some corporation board members say that complaints about ideological pressure are premature. Beth Courtney, president and chief executive of Louisiana Public Broadcasting and one of three non-Republicans on the nine-member board, said there had been no chilling of journalistic efforts. 'What we should look for are the real actions,' she said. 'We shouldn't speculate about people's motivations.' But Mr. Tomlinson's tenure has brought criticism that his chairmanship has been the most polarizing in a generation. Christy Carpenter, a Democratic appointee to the board from 1998 to 2002, said partisanship was 'essentially nonexistent' in her first years. But once Mr. Tomlinson, a former editor in chief of Reader's Digest, joined in September 2000 and President Bush's election changed the board's political composition, the tenor changed, she said. 'There was an increasingly and disturbingly aggressive desire to be more involved and to push programming in a more conservative direction,' said Ms. Carpenter, who is now a vice president of the Museum of Television and Radio. One of the more disturbing developments, she added, was a 'very vehement dislike for Bill Moyers.' It is not a shock that Mr. Moyers's work exercised Mr. Tomlinson. He is a reliable source of agitation for conservatives, who complain that 'Now' under Mr. Moyers (who left the show last year and was replaced by David Brancaccio) was consistently critical of Republicans and the Bush administration. Days after the Republicans gained control of the Senate in the 2002 elections, Mr. Moyers - an aide in the Lyndon B. Johnson administration and a former newspaper publisher who has been associated with PBS since the 1970's - said the entire federal government was 'united behind a right-wing agenda' that included 'the power of the state to force pregnant women to give up control over their own lives.' In December 2003, three months after he was elected chairman, Mr. Tomlinson sent Ms. Mitchell of PBS a letter outlining his concerns. ' 'Now With Bill Moyers' does not contain anything approaching the balance the law requires for public broadcasting,' he wrote. Shortly after, Mr. Tomlinson hired a consultant to review Mr. Moyers's program; one three-month contract cost $10,000. The reports Mr. Tomlinson saw placed the program's guests in categories like 'anti-Bush,' 'anti-business' and 'anti-Tom DeLay,' referring to the House majority leader, corporation officials said. The reports found the guests were overwhelmingly anti-Bush, a conclusion Mr. Moyers disputed. Mr. Moyers said on Friday that he did not know a content review was undertaken but that he was not surprised. 'Tomlinson has waged a surreptitious and relentless campaign against 'Now' and me,' he said, dismissing complaints that he is biased. Mr. Moyers left 'Now' to write a book but is back on public television as host of the series 'Wide Angle.' Mr. Tomlinson said he conducted the content review on his own, without sending the results to the board or making them public, because he wanted to better understand complaints he was hearing without provoking a storm. 'If I wanted to be more destructive to public broadcasting but score political points, I would have come out with this study a year and a half ago,' he said. Recently, PBS refused for months to sign its latest contract with the corporation governing federal financing of national programming, holding up the release of $26.5 million. For the first time, the corporation argued that PBS's agreeing to abide by its own journalistic standards was not sufficient, but that it must adhere to the 'objectivity and balance' language in the charter. In a January letter to the leaders of the three biggest producing stations, in New York, Boston and Washington, the deputy general counsel of PBS warned that this could give the corporation editorial control, infringing on its First Amendment rights and possibly leading to a demand for balance in each and every show. The corporation said it had no such plans, and the contract was finally signed about a month ago. Mr. Tomlinson did help get one program, 'The Journal Editorial Report,' on the air as a way of balancing 'Now.' Ms. Mitchell backed the program, but public broadcasting officials said Mr. Tomlinson was instrumental in lining up $5 million in corporate financing and pressing PBS to distribute it. Public television executives noted that Mr. Gigot's show by design features the members of the conservative editorial board of The Wall Street Journal, while Mr. Moyers's guests included many conservatives, like Ralph Reed, former head of the Christian Coalition; Richard Viguerie, a conservative political strategist; and Grover Norquist, president of Americans for Tax Reform. Mr. Tomlinson said that it was his concerns about 'objectivity and balance' that led to the creation of a new office of the ombudsman at the corporation to issue reports about public television and radio broadcasts. But the role of a White House official in setting up the office has raised questions among some public broadcasting executives about its independence. In March, after she had been hired by the corporation but was still at the White House as director of the Office of Global Communications, Mary Catherine Andrews helped draft the office's guiding principles, set up a Web page and prepare a news release about the appointment of the new ombudsmen, officials said. Ms. Andrews said she undertook the work at the instruction of top officials at the corporation. 'I was careful not to work on this project during office hours during my last days at the White House,' she said. Mr. Tomlinson has also occasionally worked with other White House officials on public broadcasting issues. Last year he enlisted the presidential adviser Karl Rove to help kill a legislative proposal that would change the composition of the Corporation for Public Broadcasting's board by requiring the president to fill about half the seats with people who had experience in local radio and television. The proposal was dropped after Mr. Rove and the White House criticized it. Mr. Tomlinson said he understood the need to reassure liberals that the traditions of public broadcasting, including public affairs programs, were not changing, 'that we're not trying to put a wet blanket on this type of programming.' But his efforts to sow goodwill have shown that what he says he tries to project is sometimes read in a different way. Last November, members of the Association of Public Television Stations met in Baltimore along with officials from the corporation and PBS. Mr. Tomlinson told them they should make sure their programming better reflected the Republican mandate. Mr. Tomlinson said that his comment was in jest and that he couldn't imagine how remarks at 'a fun occasion' were taken the wrong way. Others, though, were not amused. 'I was in that room,' said Ms. Mitchell. 'I was surprised by the comment. I thought it was inappropriate.'

Subject: A Tragedy From: Terri To: Emma Date Posted: Tues, May 03, 2005 at 08:47:46 (EDT) Email Address: Not Provided Message: What is happening at PBS is a tragedy.

Subject: something to think about From: byron To: All Date Posted: Sun, May 01, 2005 at 23:14:18 (EDT) Email Address: bluefin76020@yahoo.com Message: The Tax Justice Network recently reported that the world's riches people have placed $11.5 trillion in assets in offshore tax havens to avoid paying taxes a sum 10 times the gross domestic product of Great Britian. Plus a study has shown that that these people earn $860 billion in interest off this money. The ratio of CEO pay to average worker pay reached 301-to-1 in 2003. The average worker takes home $517 a week while the average CEO earns $155,769 weekly according to Business Week. The ratio in 1982 was 42-to-1. One out of every two jobs created in the US during the past 12 months was taken by a worker over 55. Economist Dean Baker sayes the flood of older workers is caused by the falling value of retirees' 401(k)s and the rising cost of health care.

Subject: The fundamental reasons... From: Pete Weis To: byron Date Posted: Mon, May 02, 2005 at 18:20:29 (EDT) Email Address: Not Provided Message: along with the record personal debt, why the US and global economies are in real trouble going forward. Post WW II economic theory has downplayed this imbalance of wealth which, during certain periods of our present industrial age, have gotten very severe as your stats show has happened, once again, since the early 80's. It always seems to be associated with periods of rapid technological advancement and corresponding surges in productivity. The wealth produced during these periods concentrates itself in the tiny percentage at the top and the broad consumer class takes on a great deal of debt and eventually loses its ability to keep on consuming. At the point this begins to happen, the global economic system begins to fail. This has repeted itself a number of times during the last 200 years. Human behaviour (self-interest, greed, natural competitive drive) seems to be the driving force. Unless we behave socially and politically in a different manner than we have in the past, we will end up with the same result. So far I haven't noticed anything that would indicate we are finding a way out of this mess.

Subject: The Health of Nations: England From: Terri To: All Date Posted: Sun, May 01, 2005 at 20:27:48 (EDT) Email Address: Not Provided Message: http://ezraklein.typepad.com/blog/2005/04/the_health_of_n.html April 19, 2005 The Health of Nations: England Welcome to the second installment of The Health of Nations (though it's the first one to sport a clever title). I'm your host, Ezra, and I'll be taking you on a deadly-dull tour through England's health care system. An uninteresting topic set in a country known for its dullness, should be a party. And speaking of the party, you don't want to show up not knowing anybody. So if you missed yesterday's edition on France, you might want to give it a look-see. Da' Basics: Britain's health care system finds its roots in a document called the Beveridge report. The report argued that the health care system Britain had in the 40's -- which covered about half the country and used political patronage as its sorting mechanism -- should be combined with the rest of the country's fragmented social programs and administered in a uniform way. Thus the National Health Service was created. The NHS is mostly funded through taxes -- 82% of it is, to be exact. Of the remaining, 13% comes from employer-employee contributions (much like Social Security) and 4% is user fees. Unlike France, Britain's health care system is entirely separate from employment, and there's no distinction between its social insurance aspects (covering those who contribute) and its public assistance aspects (covering those who need it). The system simply takes care of everyone on British soil. Unlike Canada, Britain allows supplementary insurance for those wanting special treatment (shorter waits, private rooms, etc). It's not nearly so widespread as in France (where 90% have it and the poor get it through public subsidies), but 11% have some form of SI and many jobs offer it as a perk. To accommodate this, doctors can have both private and public practices, meaning they can treat patients under public rules complete with queues for non-pressing procedures while, at the same time, be performing the same procedures with quick turnaround for those with supplementary private insurance. This obviously creates a certain degree of inequality in the system, and, indeed, it's a source of widespread discontent. The NHS has a gatekeeper system in which every person who wants treatment must have a general practitioner (GP) as their primary care physician. Patients can choose their PCP, and even switch if they don't like their choice. The GP's get paid via a small monthly sum per patient (capitation), not adjusted for services rendered. This is basically community rating -- GP's have long lists of patients, most don't need anything in particular during the month, so the small payment is pure profit on the majority of patients, who never come in, and thus covers the losses on the patients who do come in. Since GP's get more money for more patients, they've an incentive to keep huge lists of people. Since patients choose their GP, however, the GP theoretically can't cherrypick patients by looking for only the healthy ones. But GP's can turn patients away by saying their list is full, so it seems possible that some degree of cherry-picking can go on. Cost Control: I'm giving this it's own category because it's both what's right and what's wrong with the British system. The NHS is a remarkably frugal operation. Health expenditures in the UK accounted for 7.6% of GDP in 2002; in America, they were 14.6%, or almost double Britain's expenditure. The cost differential comes from a few places. First and foremost, single-payer systems are able limit budgets and negotiate better deals. Further, the mode of reimbursement, capitation rather than fee-for-service, is much cheaper and carries with it a disincentive, rather than incentive, to treat. In fee-for-service systems, the doctors get paid more if they run tests, perform surgeries, etc. That leads to a certain profligacy, a willingness to advocate treatment when the patient may not need it. On the other hand, capitation brings the opposite problem: an unwillingness to order treatment when the patient may need it. As a result, the UK rate for coronary artery bypass surgery was only 20% of ours, renal dialysis is performed far less often, and there are significant worries about underprescription. That's not to say everything is rationed, but much is. Further, the capitation system has led to a severe shortage of doctors, with only 2 for every 1,000 people, far below the OECD average of 2.9 and the EU average of 3.3. The lack of doctors and the paucity of funds have also led to long waiting times; 38% of patients wait more than four months for elective surgeries. The basic issue is that, as Blair has admitted, the British health care system is severely underfunded, partially because Britain's got a low GDP per capita (though I don't think he admitted that part). Interestingly, the NHS has become a major political football. Check out the Labour splash page. Every voter who heads to the Labour website is first greeted by a scare ad showing how much the Tories want them to pay for hospital procedures. The main site prominently touts the improvements Labour's made to the speed of the system and the number of doctors, particularly specialists. So, though cheap, the NHS is underfunded and providing relatively poor service and Britons know it. How Do We Stack Up?: As noted above, America's health care system is much, much more expensive that Britain's, but also less generous. But does that affect the outcomes? Yes, but only if compared to a functioning health care system. When stacked up against ours, Britain's broken system still comes out on top. American women lose 3,836 years of life per 100,000 while our men lose 6,648. By comparison, British women lose 2,947 and their men sacrifice 4,815 (go here to see how this is calculated). On the other hand, they have longer wait times and fewer doctors. The disparity comes because America's system works okay for most, but not at all for many. Britain's, by contrast, offers mediocre service but offers it to everyone in the country. If they injected their health care system with the sort of cash we pump into ours -- which'd mean spending the equivalent of 7% more of their GDP on it, it's safe to say we'd be beaten quite handily.

Subject: Britains QUESTION TIME From: johnny5 To: All Date Posted: Sun, May 01, 2005 at 19:38:19 (EDT) Email Address: johnny5@yahoo.com Message: Comes on tonight again for those that missed it today - I am amazed at Mr. Blair on this show - BUSH WOULD NEVER subject himself to this would he? http://inside.c-spanarchives.org:8080/cspan/schedule.csp 11:59 PM EDT 1:28 (est.) Broadcast BBC Question Time BBC, Question Time Tony Blair , Labour, United Kingdom Charles Kennedy , United Kingdom 12:00 AM EDT 1:30 Broadcast BBC Question Time BBC, Question Time Tony Blair , Labour, United Kingdom Charles Kennedy , United Kingdom 01:30 AM EDT 0:25 (est.) Video Magazine 2005 British Election C-SPAN

Subject: Social Security From: Emma To: All Date Posted: Sun, May 01, 2005 at 19:22:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/01/politics/01social.html?pagewanted=all&position= Social Security: Help for the Poor or Help for All? By EDMUND L. ANDREWS and EDUARDO PORTER WASHINGTON - In attempting to fix Social Security's long-term problems without raising taxes, President Bush has chosen to recast the 70-year-old retirement program as one that would keep the lowest-income workers out of poverty but become increasingly irrelevant to the middle class and the affluent. Under Mr. Bush's approach of 'progressive indexation,' a typical low-income worker who earns about $16,000 a year today would be entitled to retirement benefits equal to about 49 percent of his or her wages, the same amount that is promised today. But those earning an average income, about $36,500 in today's dollars, would see big changes. Instead of replacing 36 percent of that person's working pay, as promised under today's system, benefits would cover only 26 percent of pay by 2075. And people who earn $90,000 a year in today's dollars would continue to pay as much as ever in taxes but would receive benefits equal to only 12 percent of their pay....

Subject: Social Security ? From: Emma To: Emma Date Posted: Sun, May 01, 2005 at 20:07:39 (EDT) Email Address: Not Provided Message: What the President has proposed is a plan that will effectively end Social Security. A program that has been a glorious obligation to our grandparents and parents, and a glorious success in supporting and freeing retirees and relieving families, a program with a massive and growing surplus, this program is to be ended. Though I thought for months the point of Social Security change was ending the program, I am still surprised.

Subject: Broke retirees From: johnny5 To: Emma Date Posted: Sun, May 01, 2005 at 22:19:06 (EDT) Email Address: johnny5@yahoo.com Message: From what I have read so far when social security started decades ago, many retirees were starving poor and the young workers were richer, today it seems reversed - the old retirees in aggregate are much better off and the working poor are starving? is this incorrect? I have read this in a few places, maybe it was some politico hack job? I am all for wealth redristribution from you and terri with nice big vanguard accounts to my redneck friend who cant get prozac and his dying parents who cant get blood pressure medicine.

Subject: Judged by how you treat the least of you From: johnny5 To: Emma Date Posted: Sun, May 01, 2005 at 19:56:16 (EDT) Email Address: johnny5@yahoo.com Message: I watch on QUESTION TIME with tony blair that people are waiting 8 months for a doctors visit in that country - here if you have the money you can get seen in 1 hour - capitalism and free markets have thier benefits no? You want good medical - do something good for the world that makes you rich and you can buy it no? But it doesn't seem to be working like the thoery says or is it? My redneck friend sent me this last year - he is crying now though. THE ANT AND THE GRASSHOPPER - MODERN VERSION OLD VERSION: The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool and laughs and dances and plays the summer away. Come winter, the ant is warm and well fed. The grasshopper has no food or shelter, so he dies out in the cold. MORAL OF THE STORY: Be responsible for yourself! MODERN VERSION: The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter. The grasshopper thinks he's a fool and laughs and dances and plays the summer away. Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others are cold and starving. CBS, NBC, and ABC show up to provide pictures of the shivering grasshopper next to a video of the ant in his comfortable home with a table filled with food. America is stunned by the sharp contrast. How can this be, that in a country of such wealth, this poor grasshopper is allowed to suffer so? Kermit the Frog appears on Oprah with the grasshopper, and everybody cries when they sing, 'It's Not Easy Being Green.' Jesse Jackson stages a demonstration in front of the ant's house where the news stations film the group singing, 'We shall overcome.' Jesse then has the group kneel down to pray to God for the grasshopper's sake. Tom Daschle & John Kerry exclaim in an interview with Peter Jennings that the ant has gotten rich off the back of the grasshopper, and both call for an immediate tax hike on the ant to make him pay his 'fair share.' Finally, the EEOC drafts the 'Economic Equity and Anti-Grasshopper Act,' retroactive to the beginning of the summer. The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the government. Hillary gets her old law firm to represent the grasshopper in a defamation suit against the ant, and the case is tried before a panel of federal judges that Bill appointed from a list of single-parent welfare recipients. The ant loses the case. The story ends as we see the grasshopper finishing up the last bits of the ant's food while the government house he is in, which just happens to be the ant's old house, crumbles around him because he doesn't maintain it. The ant has disappeared in the snow. The grasshopper is found dead in a drug related incident and the house, now abandoned, is taken over by a gang of spiders who terrorize the once peaceful neighborhood. MORAL OF THE STORY: Vote Republican

Subject: Thomas Friedman on Cspan for Emma From: johnny5 To: All Date Posted: Sun, May 01, 2005 at 19:06:11 (EDT) Email Address: johnny5@yahoo.com Message: Don't know if you caught it earlier today - will be on tonight at 12am. Call-In In Depth with Thomas Friedman C-SPAN Washington, District of Columbia (United States) ID: 185389 - 05/01/2005 - 2:55 - $39.95 Friedman, Thomas L., Columnist, [New York Times], Foreign Affairs Thomas Friedman will be interviewed about his life and work and respond to telephone calls, faxes, and electronic mail from viewers. Thomas Friedman is a three-time Pulitzer Prize winning foreign affairs columnist for the New York Times. Mr. Friedman is the author of four books: From Beirut to Jerusalem (winner of the National Book Award for non-fiction), The Lexus and the Olive Tree, Longitudes and Attitudes: Exploring the World After September 11, and the recently published The World Is Flat: A Brief History of the Twenty-first Century. For more on his background and work, visit www.thomaslfriedman.com. You can join this three-hour LIVE conversation with Mr. Friedman by calling in during the program or by e-mailing Book TV at booktv@c-span.org.

Subject: Social Security? If You Were Wondering From: Terri To: All Date Posted: Sun, May 01, 2005 at 10:31:44 (EDT) Email Address: Not Provided Message: http://quote.bloomberg.com/apps/news?pid=10000006&sid=aGh_OPpEs3_4&refer=home Buffett and Munger also told shareholders they oppose U.S. President George W. Bush's plan to allow privatization of Social Security because the government has a duty to take care of the country's elderly. ``The Republicans are out of their cotton-picking minds on this issue,'' said Munger, a self-described right-wing Republican. Social Security is ``one of the most successful things that the government has ever done.'' ...

Subject: For Buffett, the One That Got Away From: Emma To: All Date Posted: Sun, May 01, 2005 at 10:02:46 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/01/business/yourmoney/01INSURE.html?pagewanted=all&position= For Buffett, the One That Got Away By TIMOTHY L. O'BRIEN TOMORROW morning, Warren E. Buffett and his board will gather in Omaha to consider the merits of three executives he considers likely to succeed him one day as Berkshire Hathaway's chief executive. Their names are still a closely guarded secret, but all the candidates work for Berkshire and none are older than 60. The directors' conclave is routine, part of an assessment of potential successors that Mr. Buffett conducts after Berkshire's annual meetings, the most recent of which was yesterday. But as Mr. Buffett approaches his 75th birthday, the financial powerhouse he began assembling 40 years ago confronts challenges that are anything but routine. Berkshire has amassed a $43 billion stockpile of cash and other liquid assets that it has been unable to unleash. Its core insurance operation is emerging from an unusually tumultuous period. And then there is the General Re Corporation, its largest acquisition - and its biggest black eye. Not only has the payoff from that 1998 purchase failed to materialize, but General Re has also been swept up recently in regulatory investigations of insurance industry abuses. Berkshire is expected to overcome each of these challenges, some sooner than others. And Mr. Buffett, whose personal fortune exceeds $40 billion, has a rare combination of discipline and insight that has allowed him to produce stellar returns for decades. But in the unforgiving argot of insurance actuaries, there is now both mortality and morbidity risk surrounding this legendary money manager. This year, perhaps more than in others of recent memory, his longevity looms large. 'A lot of what makes Berkshire tick is Mr. Buffett,' said Keith Buckley, a managing director at Fitch Ratings, a firm that monitors insurers. 'They are one of the only companies I can think of where they can have that much cash and can say to investors to be patient because they know when the time will come to use it properly. That's entirely because of Mr. Buffett's presence.' Fitch recently downgraded Berkshire's credit outlook to 'negative' from 'stable,' noting in a research report that Fitch 'does not believe that Mr. Buffett's talents can be easily replaced, or that Berkshire's current strategies would be sustainable in his absence.' Like a veteran poker player with deep pockets, Mr. Buffett is known for pushing in his chips whenever he believes he holds great cards - and for simply folding until he sees a deal that meets his standards. But what happens to the game, and to a company that so directly reflects its founder's fertile imagination, when the champion no longer sits at the table? While there are many avenues for exploring Mr. Buffett's storied career, the $22 billion General Re acquisition is instructive for what it says about Berkshire's operations, strategic goals and future. 'I think Buffett's had a remarkable track record as an acquirer, and I don't think it's one that should or will be overwhelmed by what's happened at General Re,' said Robert F. Bruner, a finance professor at the University of Virginia's Darden School of Business. 'But how is it that the world's greatest investor would buy such a Pandora's box of problems?' INSURANCE is an industry with about as much outward magnetism as drying paint. It is loosely regulated, prone to lax underwriting standards and, of course, cash rich. But Mr. Buffett saw many years ago that if he could get his hands on the torrents of money washing through an insurer, while cautiously managing the underlying business to prevent losses, he would have hefty sums to do what he loves most: buy great stocks and companies. 'The typical 'entrance' strategy for acquisitions at Berkshire is to buy a company with great economic characteristics: no debt, a robust balance sheet and positive cash flow,' he writes in the foreword to 'The Pampered Chef,' a soon-to-be-published book about the company of the same name that was one of his recent small acquisitions. 'That's important because here at Berkshire we have no 'exit' strategies. We buy great businesses to keep. My job is to stay out of the way.' Mr. Buffett has already made long-term investments in an assemblage of well-known companies: Gillette, Coca-Cola, American Express, the Washington Post Company, Moody's, Wells Fargo and H&R Block, among others. When Anheuser-Busch announced 10 days ago that Berkshire had bought a stake in it, the company's shares jumped. Mr. Buffett's scorecard as an investor-manager is so statistically anomalous as to be almost freakish. Since 1965, Berkshire's stock has annually outperformed the Standard & Poor's 500-stock index in all but six years (and Mr. Buffett had already racked up huge returns as a private money manager starting in 1956). No other thoroughbreds of modern investing - including Peter Lynch and William H. Miller III - have come close to that achievement. Mr. Buffett is the industry's Secretariat. Despite the passage of time, Mr. Buffett, who has said he enjoys his craft so much that he tap-dances to work, remains sharp-witted, and he is clearly itching to leap into the fray again. 'What Charlie and I would like is a little action now,' Mr. Buffett said in Berkshire's annual report this year, referring to the company's vice chairman, Charles T. Munger, who is 81. 'We don't enjoy sitting on $43 billion of cash equivalents that are earning paltry returns. Instead, we yearn to buy more fractional interests similar to those we now own or - better still - more large businesses outright. 'We will do either, however, only when purchases can be made at prices that offer us the prospect of a reasonable return on our investment,' Mr. Buffett added. General Re, a large insurance concern, certainly seemed to fit that bill when Mr. Buffett bought it seven years ago. It specializes in reinsurance, which is what larger insurers buy to protect themselves from outsized losses on risky policies. Mr. Buffett knew General Re well: it had helped to bail out Geico when that company was on verge of bankruptcy and Mr. Buffett had begun accumulating Geico stock. Mr. Buffett's rationale for buying General Re centered on the company's 'float' - the difference between policy premiums it collected and payments it had to make on claims. As long as the underwriting business could produce float at a break-even cost, the excess cash could land in Mr. Buffett's hands and be put to work, ideally for outsized returns. In 1998, the year it bought General Re, Berkshire had earnings of $2.8 billion on revenue of about $13.8 billion, a clear indication that it had swelled into a much larger enterprise than the tiny textile maker it was in the 1960's. And it would balloon even more: last year, the company earned $7.3 billion on revenue of $74.4 billion. Many money managers can be strangled by success. As they chalk up large gains, they have more money to put to work. But as their portfolio blossoms, it becomes more difficult to find investments that deliver big enough returns to have much effect on overall performance. They become victims of size, forced to steer an aircraft carrier when they once maneuvered a destroyer. Mr. Lynch, after a heady 13-year run at the Fidelity Magellan fund, gave up the reins in 1990 because he found it infinitely harder and more exhausting to be at the top of the charts than when he began. (Those who have run Magellan after him haven't matched his performance.) Mr. Buffett first confronted that kind of quandary years ago but stayed in the game, adding to his legend by continuing to post strong results. His ability to pick winning stocks and well-run companies did not falter, and General Re appeared to be a large acquisition that would make good use of Berkshire's resources. General Re's buoyant float and its pristine, conservative reputation seemed to match up well with Mr. Buffett's skills. But little went right at General Re after Berkshire took over. The insurer was slammed by an almost ceaseless series of underwriting losses, totaling about $7.5 billion from 1999 to 2002. Troubles that began with a thorny debacle involving workers' compensation claims culminated with the collapse of the World Trade Center towers in the September 2001 terrorist attacks. General Re, a major insurer of the twin towers, absorbed nearly $2 billion in claims on the tragedy. As dowdy as the insurance business may seem, beneath the surface it can often be a financial chess match that engages gifted oddsmakers like Mr. Buffett. The borders of high-stakes insurance matches are defined by catastrophes like hurricanes and earthquakes. For companies to play the match well, however, requires accurate assumptions about the likelihood of various disasters and the proper pricing of policies and establishment of reserves to reflect those assumptions. At the time Mr. Buffet bought it, General Re was playing a bad game of chess. It priced policies poorly, set inadequate reserve levels and had bloated expenses because of the desire of the company's chief executive, Ronald E. Ferguson, to grow the business relentlessly, according to analysts and insurance industry executives. Mr. Ferguson declined repeated interview requests. Instead of enhancing Berkshire's performance, General Re inflicted financial damage on it. Berkshire earnings fell to $795 million in 2001 from $3.3 billion a year earlier. And Mr. Buffett, while not the primary author of many of General Re's operating woes, accepted responsibility for some of them in his 2001 letter to Berkshire shareholders. 'We had either overlooked or dismissed the possibility of large-scale terrorism losses,' he wrote. 'Why, you might ask, didn't I recognize the above facts before Sept. 11? The answer, sadly, is that I did, but I didn't convert thought into action. 'I violated the Noah rule: Predicting rain doesn't count; building arks does. I consequently let Berkshire operate with a dangerous level of risk, at General Re in particular.' While General Re's huge losses hurt Berkshire, they did not wipe out the company, as they might have any other franchise that lacked its thick financial armor. But other standards at General Re were also slipping. The company is now under regulatory investigation in the United States and abroad for possible financial manipulation several years ago involving the American International Group and other insurers. Australian regulators have banned several executives of General Re from the insurance market there; none of its United States executives have been charged with wrongdoing. Mr. Buffett is not a target of those investigations, but he has cooperated as a witness. People with direct knowledge of the inquiries say that there is no evidence Mr. Buffett had prior knowledge of any questionable transactions involving General Re or other Berkshire insurance subsidiaries. Mr. Buffett has weathered other Berkshire insurance scandals, including a dust-up in the 1970's involving rogue salesmen selling bogus policies. That episode rattled Mr. Buffett, who values his reputation as much as he does his stock-picking prowess. There have been other bad acquisitions, too, including loss-plagued buyouts in the early 1990's of shoe companies that ignored the threat of competition from abroad. NONETHELESS, Mr. Buffett has astute faculties for assessing the financial promise of companies he screens and well-developed antennas for evaluating more intuitive matters, like market dominance, customer loyalty and quality of management. Because Mr. Buffett has been right so many more times than he has been wrong, he tends to have an unshakable faith in his own judgment when making an acquisition. Unlike other big acquirers, he doesn't send in swarms of investment bankers and auditors to evaluate a target. Berkshire bought General Re without exhaustively scrubbing the company for potential problems, people with direct knowledge of the transaction say. Munger, Tolles & Olson, Berkshire's law firm, represented the company in the General Re transaction. Ronald L. Olson, a Munger, Tolles partner, is a Berkshire board member and is said by people close to the company to play an influential role in helping Mr. Buffett anoint a successor. Mr. Olson, who also represents Berkshire in the various regulatory investigations, did not return calls seeking comment. Kevin Lampo, an insurance analyst at Edward D. Jones & Company, said: 'Warren Buffett's due diligence is about having faith in the management of the team he acquires. But I'm not sure they could have done the kind of due diligence at General Re that they needed to do anyway because it took a number of years for these problems to come out.' Insurance executives with direct knowledge of the matter say Mr. Buffett may have faltered in the General Re acquisition by placing too much faith in Mr. Ferguson. According to three people with direct knowledge of the events, Mr. Ferguson, who has a reputation for Calvinistic rectitude, was not running his business as conservatively as he appeared to be and had a clearer understanding than Mr. Buffett that some of General Re's highflying sales representatives and executives had been granted too much latitude. Even after problems began to surface, Mr. Buffett stood by Mr. Ferguson, in keeping with his belief in total loyalty to the management of companies he acquires. When Mr. Ferguson suffered a brain hemorrhage in 1999, Mr. Buffett chose not to use the occasion to relieve him of his responsibilities. Instead, he waited until Mr. Ferguson offered to step down in early 2001 before replacing him with Joseph P. Brandon. Since Mr. Brandon took the helm, General Re has been running its business more cautiously. The company has booked strong underwriting gains in the last two years and is poised to deliver on the potential it held when Mr. Buffett acquired it. But that reintroduces another wrinkle: Mr. Buffett's advancing years. The market conditions that have prevented Mr. Buffett from deploying Berkshire's mountain of cash have also prevented him from taking advantage of General Re's $23 billion float. Unless a crop of big bargains emerges relatively soon, it may be Mr. Buffett's successor who has to go shopping with Berkshire's billions. For as large as Berkshire is, it is run almost like a sprawling family business, and a successor will inherit that structure as well. 'It's an unusual company because so much of what Buffett does is on the investment side; he has people who report to him but he doesn't run the businesses,' said David Schiff, an insurance analyst who publishes a newsletter, Schiff's Insurance Observer. 'It's hard to say what the corporate model is because it's been unique to him. It's run by nice, honest people who don't care about earnings per share and do care about the long-term creation of value.' So far, Berkshire's model has not been flawless, but it has worked enormously well. Nell Minow, editor of the Corporate Library, a group that analyzes corporate governance issues, gives Berkshire top marks for its compensation, accounting and decision-making practices. She gives the company's board, which includes one of Mr. Buffett's sons, low marks for having too many directors who are close to Mr. Buffett. (One son, Howard, is designated to become nonexecutive chairman when Mr. Buffett dies.) But she said Berkshire's overall performance trumps cronyism on its board. 'You can't apply the same standard to Berkshire that you use for almost every other company, because Berkshire's primary asset is Warren Buffett's brain,' said Ms. Minow, who owns three Berkshire shares her father gave her years ago. 'I think he is as committed to creating shareholder value as anyone who's ever lived. I'd be happy to clone him and make him C.E.O. of every company.' WHETHER Berkshire can create an actual clone of Mr. Buffett is doubtful, but analysts and others close to the company speculate that there are three well-regarded executives who are front-runners to succeed him: Mr. Brandon; Ajit Jain, who runs Berkshire's other core insurance operations; and David L. Sokol, chief executive of another Berkshire subsidiary, MidAmerican Energy Holdings. Among the three, Mr. Jain has drawn the most lavish public praise from Mr. Buffett over the years, but regulators in Australia are examining one of Mr. Jain's insurance units in connection with possible regulatory problems there. It is unclear whether that investigation could complicate Mr. Jain's ascent. Mr. Buffett is said by people close to him to retain an unwavering confidence in Mr. Jain's integrity and abilities. A more realistic complication for Mr. Jain or others who may step into Mr. Buffett's shoes is that they will inevitably have their investing performance measured against Mr. Buffett's. Perhaps to dampen expectations, Mr. Buffett suggested four years ago that given how much both Berkshire and the world had changed, even Warren Buffett would have trouble competing with Warren Buffett. 'One final thought about Berkshire: In the future we won't come close to replicating our past record,' he wrote in his 2001 letter to shareholders. 'To be sure, Charlie and I will strive for above-average performance and will not be satisfied with less. But two conditions at Berkshire are far different from what they once were: Then, we could often buy businesses and securities at much lower valuations than now prevail; and more important, we were then working with far less money than we now have.'

Subject: The Wealth of Yet More Nations From: Emma To: All Date Posted: Sun, May 01, 2005 at 09:49:36 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/01/books/review/01ZAKARIA.html?pagewanted=all&position= 'The World Is Flat': The Wealth of Yet More Nations By FAREED ZAKARIA THE WORLD IS FLAT A Brief History of the Twenty-First Century. By Thomas L. Friedman. OVER the past few years, the United States has been obsessed with the Middle East. The administration, the news media and the American people have all been focused almost exclusively on the region, and it has seemed that dealing with its problems would define the early decades of the 21st century. ''The war on terror is a struggle that will last for generations,'' Donald Rumsfeld is reported to have said to his associates after 9/11. But could it be that we're focused on the wrong problem? The challenge of Islamic terrorism is real enough, but could it prove to be less durable than it once appeared? There are some signs to suggest this. The combined power of most governments of the world is proving to be a match for any terror group. In addition, several of the governments in the Middle East are inching toward modernizing and opening up their societies. This will be a long process but it is already draining some of the rage that undergirded Islamic extremism. This doesn't mean that the Middle East will disappear off the map. Far from it. Terrorism remains a threat, and we will all continue to be fascinated by upheavals in Lebanon, events in Iran and reforms in Egypt. But ultimately these trends are unlikely to shape the world's future. The countries of the Middle East have been losers in the age of globalization, out of step in an age of free markets, free trade and democratic politics. The world's future -- the big picture -- is more likely to be shaped by the winners of this era. And if the United States thought it was difficult to deal with the losers, the winners present an even thornier set of challenges. This is the implication of the New York Times columnist Thomas L. Friedman's excellent new book, ''The World Is Flat: A Brief History of the Twenty-First Century.'' The metaphor of a flat world, used by Friedman to describe the next phase of globalization, is ingenious. It came to him after hearing an Indian software executive explain how the world's economic playing field was being leveled. For a variety of reasons, what economists call ''barriers to entry'' are being destroyed; today an individual or company anywhere can collaborate or compete globally. Bill Gates explains the meaning of this transformation best. Thirty years ago, he tells Friedman, if you had to choose between being born a genius in Mumbai or Shanghai and an average person in Poughkeepsie, you would have chosen Poughkeepsie because your chances of living a prosperous and fulfilled life were much greater there. ''Now,'' Gates says, ''I would rather be a genius born in China than an average guy born in Poughkeepsie.'' The book is done in Friedman's trademark style. You travel with him, meet his wife and kids, learn about his friends and sit in on his interviews. Some find this irritating. I think it works in making complicated ideas accessible. Another Indian entrepreneur, Jerry Rao, explained to Friedman why his accounting firm in Bangalore was able to prepare tax returns for Americans. (In 2005, an estimated 400,000 American I.R.S. returns were prepared in India.) ''Any activity where we can digitize and decompose the value chain, and move the work around, will get moved around. Some people will say, 'Yes, but you can't serve me a steak.' True, but I can take the reservation for your table sitting anywhere in the world,'' Rao says. He ended the interview by describing his next plan, which is to link up with an Israeli company that can transmit CAT scans via the Internet so that Americans can get a second opinion from an Indian or Israeli doctor, quickly and cheaply. What created the flat world? Friedman stresses technological forces. Paradoxically, the dot-com bubble played a crucial role. Telecommunications companies like Global Crossing had hundreds of millions of dollars of cash -- given to them by gullible investors -- and they used it to pursue incredibly ambitious plans to ''wire the world,'' laying fiber-optic cable across the ocean floors, connecting Bangalore, Bangkok and Beijing to the advanced industrial countries. This excess supply of connectivity meant that the costs of phone calls, Internet connections and data transmission declined dramatically -- so dramatically that many of the companies that laid these cables went bankrupt. But the deed was done, the world was wired. Today it costs about as much to connect to Guangdong as it does New Jersey. The next blow in this one-two punch was the dot-com bust. The stock market crash made companies everywhere cut spending. That meant they needed to look for ways to do what they were doing for less money. The solution: outsourcing. General Electric had led the way a decade earlier and by the late 1990's many large American companies were recognizing that Indian engineers could handle most technical jobs they needed done, at a tenth the cost. The preparations for Y2K, the millennium bug, gave a huge impetus to this shift since most Western companies needed armies of cheap software workers to recode their computers. Welcome to Bangalore. A good bit of the book is taken up with a discussion of these technological forces and the way in which business has reacted and adapted to them. Friedman explains the importance of the development of ''work flow platforms,'' software that made it possible for all kinds of computer applications to connect and work together, which is what allowed seamless cooperation by people working anywhere. ''It is the creation of this platform, with these unique attributes, that is the truly important sustainable breakthrough that has made what you call the flattening of the world possible,'' Microsoft's chief technology officer, Craig J. Mundie, told Friedman. Friedman has a flair for business reporting and finds amusing stories about Wal-Mart, UPS, Dell and JetBlue, among others, that relate to his basic theme. Did you know that when you order a burger at the drive-through McDonald's on Interstate 55 near Cape Girardeau, Mo., the person taking your order is at a call center 900 miles away in Colorado Springs? (He or she then zaps it back to that McDonald's and the order is ready a few minutes later as you drive around to the pickup window.) Or that when you call JetBlue for a reservation, you're talking to a housewife in Utah, who does the job part time? Or that when you ship your Toshiba laptop for repairs via UPS, it's actually UPS's guys in the ''funny brown shorts'' who do the fixing? China and India loom large in Friedman's story because they are the two big countries benefiting most from the flat world. To take just one example, Wal-Mart alone last year imported $18 billion worth of goods from its 5,000 Chinese suppliers. (Friedman doesn't do the math, but this would mean that of Wal-Mart's 6,000 suppliers, 80 percent are in one country -- China.) The Indian case is less staggering and still mostly in services, though the trend is dramatically upward. But Friedman understands that China and India represent not just threats to the developed world, but also great opportunities. After all, the changes he is describing have the net effect of adding hundreds of millions of people -- consumers -- to the world economy. That is an unparalleled opportunity for every company and individual in the world. Friedman quotes a Morgan Stanley study estimating that since the mid-1990's cheap imports from China have saved American consumers over $600 billion and probably saved American companies even more than that since they use Chinese-sourced parts in their production. And this is not all about cheap labor. Between 1995 and 2002, China's private sector has increased productivity at 17 percent annually -- a truly breathtaking pace. Friedman describes his honest reaction to this new world while he's at one of India's great outsourcing companies, Infosys. He was standing, he says, ''at the gate observing this river of educated young people flowing in and out. . . . They all looked as if they had scored 1600 on their SAT's. . . . My mind just kept telling me, 'Ricardo is right, Ricardo is right.' . . . These Indian techies were doing what was their comparative advantage and then turning around and using their income to buy all the products from America that are our comparative advantage. . . . Both our countries would benefit. . . . But my eye kept . . . telling me something else: 'Oh, my God, there are just so many of them, and they all look so serious, so eager for work. And they just keep coming, wave after wave. How in the world can it possibly be good for my daughters and millions of other young Americans that these Indians can do the same jobs as they can for a fraction of the wages?' '' He ends up, wisely, understanding that there's no way to stop the wave. You cannot switch off these forces except at great cost to your own economic well-being. Over the last century, those countries that tried to preserve their systems, jobs, culture or traditions by keeping the rest of the world out all stagnated. Those that opened themselves up to the world prospered. But that doesn't mean you can't do anything to prepare for this new competition and new world. Friedman spends a good chunk of the book outlining ways that America and Americans can place themselves in a position to do better. People in advanced countries have to find ways to move up the value chain, to have special skills that create superior products for which they can charge extra. The UPS story is a classic example of this. Delivering goods doesn't have high margins, but repairing computers (and in effect managing a supply chain) does. In one of Friedman's classic anecdote-as-explanation shticks, he recounts that one of his best friends is an illustrator. The friend saw his business beginning to dry up as computers made routine illustrations easy to do, and he moved on to something new. He became an illustration consultant, helping clients conceive of what they want rather than simply executing a drawing. Friedman explains this in Friedman metaphors: the friend's work began as a chocolate sauce, was turned into a vanilla commodity, through upgraded skills became a special chocolate sauce again, and then had a cherry put on top. All clear? Of course it won't be as easy as that, as Friedman knows. He points to the dramatic erosion of America's science and technology base, which has been masked in recent decades by another aspect of globalization. America now imports foreigners to do the scientific work that its citizens no longer want to do or even know how to do. Nearly one in five scientists and engineers in the United States is an immigrant, and 51 percent of doctorates in engineering go to foreigners. America's soaring health care costs are increasingly a burden in a global race, particularly since American industry is especially disadvantaged on this issue. An American carmaker pays about $6,000 per worker for health care. If it moves its factory up to Canada, where the government runs and pays for medical coverage, the company pays only $800. Most of Friedman's solutions to these kinds of problems are intelligent, neoliberal ways of using government in a market-friendly way to further the country's ability to compete in a flat world. There are difficulties with the book. Once Friedman gets through explicating his main point, he throws in too many extras -- perhaps trying to make that chocolate sundae -- making the book seem slightly padded. The process of flattening that he is describing is in its infancy. India is still a poor third-world country, but if you read this book you would assume it is on the verge of becoming a global superstar. (Though as an Indian-American, I read Friedman and whisper the old Jewish saying, ''From your lips to God's ears.'') And while this book is not as powerful as Friedman's earlier ones -- it is, as the publisher notes, an ''update'' of ''The Lexus and the Olive Tree'' -- its fundamental insight is true and deeply important. In explaining this insight and this new world, Friedman can sometimes sound like a technological determinist. And while he does acknowledge political factors, they get little space in the book, which gives it a lopsided feel. I would argue that one of the primary forces driving the flat world is actually the shifting attitudes and policies of governments around the world. From Brazil to South Africa to India, governments are becoming more market-friendly, accepting that the best way to cure poverty is to aim for high-growth policies. This change, more than any other, has unleashed the energy of the private sector. After all, India had hundreds of thousands of trained engineers in the 1970's, but they didn't produce growth. In the United States and Europe, deregulation policies spurred the competition that led to radical innovation. There is a chicken-and-egg problem, to be sure. Did government policies create the technological boom or vice versa? At least one can say that each furthered the other. The largest political factor is, of course, the structure of global politics. The flat economic world has been created by an extremely unflat political world. The United States dominates the globe like no country since ancient Rome. It has been at the forefront, pushing for open markets, open trade and open politics. But the consequence of these policies will be to create a more nearly equal world, economically and politically. If China grows economically, at some point it will also gain political ambitions. If Brazil continues to surge, it will want to have a larger voice on the international stage. If India gains economic muscle, history suggests that it will also want the security of a stronger military. Friedman tells us that the economic relations between states will be a powerful deterrent to war, which is true if nations act sensibly. But as we have seen over the last three years, pride, honor and rage play a large part in global politics. The ultimate challenge for America -- and for Americans -- is whether we are prepared for this flat world, economic and political. While hierarchies are being eroded and playing fields leveled as other countries and people rise in importance and ambition, are we conducting ourselves in a way that will succeed in this new atmosphere? Or will it turn out that, having globalized the world, the United States had forgotten to globalize itself?

Subject: Bowling for Democracy From: Emma To: All Date Posted: Sun, May 01, 2005 at 09:44:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/01/opinion/01patterson.html?pagewanted=all&position= Bowling for Democracy By ORLANDO PATTERSON and JASON KAUFMAN Cambridge, Mass. CRICKET, the quintessential English game, is nonetheless one of the most international of sports. It is a dominant game in more countries than any other sport except soccer, in lands as varied as Australia, India, Pakistan, South Africa and the Commonwealth Caribbean. But a glance at the global map of cricket poses a remarkable cultural puzzle. Why, on the one hand, does the game flourish in lands like Pakistan and India, where a hard-fought series can transfix two nations and even lead to improved diplomatic relations? (Last month's series, in which Pakistan defeated India by 159 runs, concluded with a historic meeting between Pakistan's president and India's prime minister.) And why, on the other hand, is cricket not much played in other former British colonies like Canada - or, for that matter, in the United States, with its heritage and 'special relationship' with Britain? The puzzle only deepens when one considers that cricket was once popular in both Canada and the United States. It rivaled baseball for most of the 19th century, with as many stories in the sports pages of The New York Times until 1880. Indeed, the world's first international test match was played between Canada and the United States in 1844. So the puzzle is not so much why it was never adopted in North America, but why in the early 20th century it was subsequently rejected. Many popular explanations are flawed. Climate has nothing to do with it; cricket emerged as a summer game, and is easily played in North America during mild weather. North American multiculturalism is hardly a factor, given the game's popularity in the multicultural societies of the Caribbean and South Africa. Ethnicity cannot be the answer: while the Scots, with their preference for curling, predominated among early Canadian immigrants, there was a far greater proportion of English in North America than in India or the Caribbean; meanwhile, the preponderance of the Irish in Australia did not prevent cricket from becoming that country's national pastime. Why is it, then, that hockey and baseball eventually trumped cricket in Canada and the United States? The most common argument is that cricket was too long and slow for fast-paced North America; formal test matches last for five days. This explanation at least has some merit - though not in the manner usually understood. Cricket lost ground in North America because of the egalitarian ethos of its societies. Rich Americans and Canadians had constant anxiety about their elite status, which prompted them to seek ways to differentiate themselves from the masses. One of those ways was cricket, which was cordoned off as an elites-only pastime, a sport only for those wealthy enough to belong to expensive cricket clubs committed to Victorian ideals of sportsmanship. In late 19th-century Canada, according to one historian, 'the game became associated more and more with an older and more old-fashioned Anglo-Saxon elite.' This elite appropriation played into the hands of baseball entrepreneurs who actively worked to diminish cricket's popularity. A. G. Spalding, described in the Baseball Hall of Fame as the 'organizational genius of baseball's pioneer days,' was typical. 'I have declared cricket is a genteel game,' he mocked in 'America's National Game,' his 1911 best seller. 'It is. Our British cricketer, having finished his day's labor at noon, may don his negligee shirt, his white trousers, his gorgeous hosiery and his canvas shoes, and sally forth to the field of sport, with his sweetheart on one arm and his cricket bat under the other, knowing that he may engage in his national pastime without soiling his linen or neglecting his lady.' Baseball, in contrast, was sold as a rugged, fast-paced, masculine game, befitting a rugged, fast-paced economic power. Americans of all classes swallowed the chauvinistic line. It was also great business for Spalding. By inventing elaborate baseball gear and paraphernalia, he created a market for his new sporting-goods company. In the remaining British colonies, however, the opposite happened. In these rigidly unequal societies the colonial elites and their native allies never had any anxieties about their status, and the British actively promoted the game - first to native elites, then to the masses. In India, the wealthy Parsis first took up the game in emulation of their British masters. Soon, royalty throughout the subcontinent adopted it. English-style grammar schools were an important source of exposure to upwardly mobile native men. In the Caribbean, grammar schools made the imperial game a core feature of their education and made competition possible between different classes and ethnic groups without disrupting the social fabric. As C. L. R. James, the famed Trinidadian intellectual and cricket enthusiast, wrote in his memoir: 'I haven't the slightest doubt that the clash of race, caste and class did not retard but stimulated West Indian cricket.' Both colonizer and colonized developed a stake in the popularization of the game. To the British colonists, the 'imperial game' was the perfect vehicle for civilizing the colonial masses (as it had previously, they imagined, civilized generations of upwardly mobile British schoolboys). For elite members of the colonized, it was a way to curry favor. And for the masses, who quickly mastered the game, it was a symbolically powerful and clandestine form of political liberation as they soon learned to literally beat the British and their native surrogates at their own game. The game itself partly facilitated this process. Cricket requires no contact between players, and its strict and complex rules, dress code and officiating largely eliminate any risk of embarrassment in play with those of different ranks or castes. So did the careful allocation of positions; less glamorous roles like bowling and fielding were assigned to social inferiors while those of specialist batsmen and team captain were reserved for elites. Much the same was true of 19th-century Australia, at the time a highly stratified colony whose masses were descended from prisoners. Cricket helped antipodean elites cultivate their Englishness, but the size and isolation of their European settlements limited the extent to which they could be truly exclusive. North American-style upper-class appropriation of the game was out of the question. Cricket became a powerful unifying force, and prowess at the game, according to one cricket historian, was 'the mark of an amateur gentleman' from any class. As in the Caribbean, cricket was also a major element in the formation of Australian nationalism. The biennial matches with England solidified the link between colony and mother country even as it fostered Australian national pride when the Australians increasingly came to whip the British at their imperial game. WHAT broader lessons might the history of cricket have for the globalization of Western cultural practices? It shows that such practices can be promoted or discouraged from the top down; it is not necessarily a bottom-up process, as is commonly believed. Nor does such downward dissemination require the point of a gun. The passion for cricket in places like Pakistan and India also shows that a complex Western cultural practice can be adopted in its entirety by very different cultures, even when highly identified with its country of origin. Might the same be true of other Western cultural practices, like democracy? Orlando Patterson is a professor of sociology and Jason Kaufman is an associate professor of sociology at Harvard. Their paper on cricket appears in the next issue of The American Sociological Review.

Subject: The gladiators of Rome From: johnny5 To: Emma Date Posted: Sun, May 01, 2005 at 19:18:20 (EDT) Email Address: johnny5@yahoo.com Message: good article, with all the steroid use in sports it is timely too - we gave up refined rules and polietness for violent physical competition no? Thankfully NEO is bringing the matrix to the youth and I see internet gaming going up in places like IRAQ and afghanistan - more mental, less physcial - Mario and Zelda, Solitaire and Scrabble have replaced beating your child friend down till he bleeds - what great progress.

Subject: Vietnam, 30 Years Later From: Emma To: All Date Posted: Sun, May 01, 2005 at 09:30:33 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/01/international/asia/01saigon.html 30 Years Later, Cake and Credit Cards in Saigon By BERNARD WEINRAUB HO CHI MINH CITY, Vietnam - The beggars are mostly gone. So are the streetwalkers. Shops by Bulgari and Cartier are at the newly elegant Caravelle Hotel in the center of town. A Hyatt is opening soon only a few yards away. To the eyes of visitors here, including international journalists gathered for a reunion, the market economy and capitalism seem to be doing just fine in Ho Chi Minh City, formerly Saigon. But on Saturday, the 30th anniversary of the fall of Saigon, the mood in the pulsingly hot city was revolutionary - to a degree. Red flags with yellow stars were everywhere. The face of Ho Chi Minh, Vietnam's revolutionary leader, was on billboards around the city. Near the Presidential Palace - where North Vietnamese tanks smashed down the gates on April 30, 1975, leading President Duong Van Minh to surrender unconditionally - government workers and soldiers marched in a parade. The country's leaders, including the legendary war hero Gen. Vo Nguyen Giap, who also defeated the French at Dien Bien Phu, turned out to watch. But there were no tanks or missiles in the parade. Instead, a four-ton cake was rolled out, for the more than 1,000 people who were born on the country's 'Liberation Day' and were celebrating their 30th birthday. In fact, the parade seemed pointedly designed to depict a benign nation seeking friendship, notably with the United States, Hanoi's biggest trading partner. Some floats carried the logos of American credit card companies. Near the parade route, the Diamond department store, as upscale a department store as any in the United States, was open for business. And tight security left most people watching the parade on television, if at all. As if to underline Vietnam's openness, Prime Minister Phan Van Khai sent out a message on Friday reaching out to the nation's former enemies and those who fought on the side of the former South Vietnam, urging all sides to 'close the past, look to the future.' (While local newspapers and magazines happily depict the attack on the Presidential Palace 30 years ago, it is almost impossible to find anything about the assault on the American Embassy, which was several blocks away.) The anniversary of Saigon's fall, which ended a war that left 55,000 Americans dead and claimed as many as three million Vietnamese lives, also was the occasion for a return to the city of dozens of American, British and Australian journalists who covered the war from the mid-1960's until 1975. The informal five-day reunion was both a melancholy and an upbeat affair: many of the journalists had not seen each other since their 20's. Richard Pyle, the Saigon bureau chief for The Associated Press, said, 'This may be the last hurrah. Who knows? The next one may be held in our wheelchairs.' Certainly one of the more bittersweet reminders of changing times was the slide of the Continental Hotel, whose outdoor terrace used to be a bastion for the French, who came to drink, according to Somerset Maugham, 'sweet and sickly beverages' while talking politics. The terrace was a setting for Graham Greene's 'The Quiet American,' a locale for assignations and intrigue over Bombay Sapphire martinis. It was taken over by journalists in the 1960's. Now the terrace is gone, replaced by an Italian restaurant. Mr. Pyle said Vietnam was, for many journalists, an indefinable experience that altered their lives. 'Vietnam was a magnetic force - you can't define it,' Mr. Pyle said. 'It wasn't just the best story of our careers, it transcended that. We all moved on to other things, but we all have Vietnam in our systems forever. You never really get away from Vietnam. It's always there.' Authors as varied as Mr. Maugham and Mr. Greene have used similar words to describe a city that changes but doesn't really, a city thick with the scent of jasmine and spice and motor fuel, a city that seems mysterious even when it's not. The narrow street adjacent to the Continental and Caravelle Hotels in downtown Ho Chi Minh City reflects some of the city's transformation. The French knew the street as Rue Catinat, a street whose cafes and shops served as the center of colonial life for decades. After the French left in 1954, the South Vietnamese changed the street's name to Tu Do, or Freedom. The influx of American soldiers led to a flood of bars and prostitutes. After the war, the Vietnamese changed the street's name to Dong Khoi, or Uprising. In recent years, the street has mirrored the nation's economic confidence, with upscale shops and boutiques interspersed with more modest ones. The remnants of colonialism and the G.I.'s are gone. For some of the foreign journalists here, one attempted meeting was a visit to the home of Pham Xuan An. Mr. An was one of the more celebrated Vietnamese journalists working in Saigon in the 1960's and 1970's, a reporter for Reuters before joining Time Magazine, and especially popular with journalists for the larger newspapers and magazines, and visiting editors and columnists. Mr. An was elegant, candid and seemed highly informed about the inner workings of the South Vietnamese government. He was also an espionage agent for North Vietnam. According to an English-language paperback book purchased here, 'Pham Xuan An: a General of the Secret Service,' by Hoang Hao Van and Tan Tu, Mr. An was actually a retired major general and a top intelligence officer in the Vietnam People's Army. The book said Mr. An was trusted by the Central Intelligence Agency and extremely close to the Saigon government run by Nguyen Van Thieu. But how Mr. An operated as a journalist and intelligence agent and what he accomplished as a spy remains a mystery. By phone, Mr. An said he had emphysema and took ill at the moment to chat. 'I was born in 1927,' he said. 'I'm 78. I'm the same age as Fidel Castro. I'm two years older than Arafat, but he's gone now.'

Subject: Wealth Gap rising From: johnny5 To: Emma Date Posted: Sun, May 01, 2005 at 22:04:56 (EDT) Email Address: johnny5@yahoo.com Message: Credit Cards - too funny! http://www.siliconinvestor.com/readmsg.aspx?msgid=21283428 The point being your gubbment and my gubbment dip into each others business and pockets to seemingly exploit thier citizens for the benefits of the few politicos/megacorps - it is class warfare. I can accept that as a necessary evil to an extent - but it seems disparities are getting too great now and we need some kind of rebalancing. http://news.google.com/news?hl=en&ned=us&q=gap rich poor If you read some of the articles here about the increasing rich/poor gap - I read that we are worse off than in victorian times in some places - vietnam is doing worse - the UK gap is widening - argentina - it does not seem to matter where your country is located or wether 1st world or 3rd world economy - gaps are widening - certainly that is not the promise of increasing economic utility and specialization and technology - that the poor starve and die faster while the rich move further up into mt. olympus. This can only lead to greater social chaos as the have nots become more disenchanted with the have mores. Will the wizards up in the ivory towers do some risk analysis on this before the barbarians over run thier hallowed halls and destroy thier castles? The burning of the library in alexandria was a great set back no?

Subject: China and Taiwan Come Closer From: Emma To: All Date Posted: Sun, May 01, 2005 at 09:27:48 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/01/international/asia/01taiwan.html Taiwan President's Ally to Carry Message to China By KEITH BRADSHER TAIPEI, Taiwan - President Chen Shui-bian of Taiwan said Sunday morning that he had called another prominent Taiwanese politician, James Soong, on Saturday night and asked him to carry a message to China's leaders during Mr. Soong's visit to China beginning later this week. The president's decision to open any kind of dialogue with mainland China, even by sending messages through an informal intermediary, is another hint of possibly warming relations across the Taiwan Strait. President Chen provided only a broad outline of the message to reporters while flying to Guam on the first leg of a state visit to the Marshall Islands in the Pacific Ocean, the state-owned Central News Agency said here. He said China should respect the sovereignty of the Republic of China - this country's legal name - and should understand the 10-point consensus on cross-Strait relations and other issues he reached Feb. 24 with Mr. Soong, the chairman of the smaller People First Party. The People First Party ardently supports closer relations with Beijing, and Mr. Soong's broad political alliance in February surprised many here because the president's own Democratic Progressive Party leans toward greater independence. The February consensus between the two parties' chairmen was somewhat vague on how to seek an understanding with the mainland, and the alliance was widely viewed at the time as a way to isolate the Nationalist Party, the main opposition party and also an advocate of closer relations with the mainland. But President Chen's decision now to send a message raises the importance of a planned visit to the mainland beginning Thursday and lasting until May 12, with the last three days in Beijing, by Mr. Soong. 'James Soong understands the government's views and mine,' Mr. Chen said, according to the Central News Agency. A visit to Beijing by Lien Chan, the chairman of the Nationalists, seems to have increased public support here for improved relations with China, but may have also damaged the cooperation among political parties needed for an actual shift in policy. Separate polls published by three Taiwanese newspapers on Saturday showed that 51 to 60 percent of the population supported a trip by Mr. Lien, who met President Hu Jintao of China in Beijing on Friday. Interest in the trip has been so intense that Taiwanese television stations have even broadcast earnest discussions of the earrings and clothing that Mr. Lien's wife wore to the meeting, as though it were a royal wedding. Joseph Wu, the chairman of the Mainland Affairs Council, the cabinet-level agency here that handles relations with China, said late Saturday afternoon that the polls may have been tainted by methodological problems. The council hopes to finish its own broader, more in-depth poll by Friday. Mr. Wu, who has been a strong critic of the Nationalists' efforts to conduct their own diplomacy while in the opposition, predicted that Mr. Lien's trip would have little long-term effect on attitudes toward China, a subject on which most people here already have strong opinions that seldom change. Yet heavy media coverage of the trip may have produced at least some short-term public interest in working more closely with the mainland, he acknowledged. Mr. Wu said before making any policy decisions, the government would wait until after Mr. Soong's trip. President Hu's remarks during Mr. Lien's visit were little more than rhetoric that repeated or rephrased previous statements by Beijing officials, and the government here wants to see if Communist leaders make more concrete proposals during Mr. Soong's visit, Mr. Wu said. 'So far, what we see is only rhetoric,' he added. But Mr. Wu said twice in a telephone interview that it was possible that the government here might formulate an initiative of its own after Mr. Soong's return. But Mr. Lien's effusive praise for mainland Chinese leaders while in Beijing, and his strong criticism of independence supporters in Taiwan, have infuriated independence advocates here, and they may limit Mr. Chen's flexibility, said Hsiao Bi-khim, a senior Democratic Progressive Party lawmaker.

Subject: Economic Forecasting - Laugh it up Pete From: johnny5 To: All Date Posted: Sun, May 01, 2005 at 08:14:34 (EDT) Email Address: johnny5@yahoo.com Message: The only function of economic forecasting is to make astrology look respectable. -- John Kenneth Galbraith http://www.andyfoulds.co.uk/amusement/economists.htm http://www.andyfoulds.co.uk/amusement/economists.htm www.andyfoulds.co.uk/amusement/economists.htm

Subject: Funny From: Pete Weis To: johnny5 Date Posted: Sun, May 01, 2005 at 11:58:13 (EDT) Email Address: Not Provided Message:

Subject: Long Term Short Term Interest From: Terri To: All Date Posted: Sun, May 01, 2005 at 07:18:13 (EDT) Email Address: Not Provided Message: The prime immediate concern would be a rise in long term interest rates. Low long term rates allow the Federal reserve to continue the short term tightening cycle with a sense that the economy will slow gently. What of a spike in long term rates while the Fed tightens? What of falling long term bond prices? There is my worry.

Subject: American Saving From: Terri To: All Date Posted: Sun, May 01, 2005 at 06:32:44 (EDT) Email Address: Not Provided Message: Investing internationally is simply gauging where there is relative value. Warren Buffett for several years has found more value in several foreign currencies than in the dollar. The reason is not difficult to understand. We have a minimal level of household saving and a fierce and growing government deficit. So, we have a fierce and growing trade deficit that requires more than 2 billion dollars in international capital inports a day to support. We are exporting dollars, and the dollar has already declined significantly for several years against the Euro and several other currencies. Since there is no reason to believe American fiscal policy will soon limit the growth of government deficit, nor is household saving soon likely to markedly increase, there is every reason to expect the trade deficit to grow faster than the economy. There is no reason to expect the dollar will strengthen against a basket of international currencies for more than limited periods. Warren Buffett's hedges against the dollar have been successful these last years, and are prudent investments for Berkshire Hathaway shareholders. The hedges are also a warning that we are weakening our long term economic health by borrowing enough that we are paying more in investment income abroad than we are collecting in income. We have a long term saving problem, and little prospect of beginning a resolution. There is reason for concern.

Subject: Oracle down for the count - but not out From: johnny5 To: All Date Posted: Sat, Apr 30, 2005 at 19:19:02 (EDT) Email Address: johnny5@yahoo.com Message: Berkshire Loses Currency Bet Sat Apr 30, 2005 05:38 PM ET By Jonathan Stempel OMAHA, Neb. (Reuters) - Warren Buffett's Berkshire Hathaway Inc. (BRKa.N: Quote, Profile, Research) (BRKb.N: Quote, Profile, Research) lost $310 million in the first quarter from betting against the U.S. dollar, but has nevertheless maintained its roughly $21 billion stake against the greenback, the billionaire said on Saturday. At Berkshire's annual shareholder meeting, Buffett said Berkshire expects 'in the next few weeks' to announce an insurance acquisition worth less than $1 billion, which is barely 2 percent of the company's $44 billion cash stake. He also said first-quarter pretax operating profit was 'up $400 million, or a little more' from a year earlier. Separately, Buffett resisted shareholder attempts to make him provide more information about the involvement of Berkshire insurance units in regulatory probes. Omaha-based Berkshire's stake in foreign currency contracts total 'a little more than $21 billion,' compared with $21.4 billion spread among 12 currencies at year end, Buffett said. That bet backfired in the first quarter, and even now it costs about 5 percent fewer dollars to buy euros than on Dec. 31. Berkshire's currency bets had in the fourth quarter generated a $1.63 billion gain. Some traders recently speculated that Berkshire cut its bet against the dollar. But Buffett remains worried that U.S. policies are causing trade and budget deficits to spiral higher, and might cause non-U.S. investors to pull money from the country. Last year, the U.S. trade deficit rose 24 percent to a record $617.7 billion. 'The world has demonstrated a diminishing enthusiasm for dollars over the last few years as they get flooded with them,' Buffett said. 'Does that lead to some tipping point at some point? Who knows? I have a hard time thinking about any outcome from this that involves an appreciating dollar.' Berkshire's 'Class A' shares have fallen 4 percent this year, and closed on Friday at $84,350 on the New York Stock Exchange. The share price is high because Berkshire has few shares outstanding. INSURANCE PROBES Buffett appeared defensive at times as a handful of shareholders in the largely full 17,000-seat Omaha Center asked about U.S. and Australian probes involving Berkshire's General Re Corp. reinsurance unit. In one probe, U.S. regulators are examining a contract that helped giant insurer American International Group Inc. (AIG.N: Quote, Profile, Research) make its results look better. Regulators interviewed Buffett, and Berkshire has said Buffett was not briefed on the transaction's structure or any improper purpose. Former AIG chairman Maurice 'Hank' Greenberg wouldn't answer questions from regulators looking into AIG's accounting, citing his constitutional right against self-incrimination. 'To protect the integrity of any investigation like this, investigators do not want one witness talking with other witnesses, because people can tailor their stories,' Buffett said in his opening remarks. 'To talk in a public forum is a way of signaling people what you said.' Despite this admonition, Buffett fielded several insurance questions, and at times appeared to sputter as he responded. Asked at what point a reinsurer might bear responsibility for another company's improper activity, Buffett said, 'It really gets down to whether there is knowing participation.' He also said that 'reducing volatility is not bad at all. ... But you can also get into abuses of that.' Berkshire has several insurance holdings, including auto insurer Geico. Buffett declined to identify the pending acquisition, which he said 'is almost certain to go through.' Buffett also said Berkshire might in a couple of years consider paying its first dividend since 1967, though for now shareholders would benefit more without one. Berkshire's cash stake rose from $43.4 billion at year end, and Buffett said he still has trouble finding stocks to buy. 'At the moment we've got more money than brains,' he said. http://www.reuters.com/financeNewsArticle.jhtml?type=businessNews&storyID=8352659

Subject: Global Playing Field From: Emma To: All Date Posted: Sat, Apr 30, 2005 at 15:37:43 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/05/01/books/review/01ZAKARIA.html?pagewanted=all&position= Global Playing Field: More Level, but It Still Has Bumps By JOSEPH E. STIGLITZ THE WORLD IS FLAT: A Brief History of the 21st Century By Thomas L. Friedman. The world is flat, or at least becoming flatter very quickly, Thomas L. Friedman says in his exciting and very readable account of globalization. In this flat new world, there is a level (or at least more level) playing field in which countries like India and China, long marginalized in the global economy, are able to compete. And while Mr. Friedman, a Pulitzer Prize-winning columnist for The New York Times, celebrates the new vistas opening up for these countries, he describes forcefully the challenges globalization presents for the older industrialized nations - especially the United States. America is still the global leader in science and technology, but its dominance is eroding. As Mr. Friedman points out in 'The World Is Flat,' Asian countries now produce eight times as many bachelor's degrees in engineering as the United States; the proportion of foreign-born Ph.D.'s in the American science and engineering labor force has risen to 38 percent; and federal financing for research in physical and mathematical sciences and engineering as a share of gross domestic product declined by 37 percent from 1970 to 2004. About a third of 'The World Is Flat' is devoted to describing the forces of leveling - from the fall of the Berlin Wall, which eliminated the ideological divide separating much of the world, to the rise of the Internet and technological changes that have led to new models of production and collaboration, including outsourcing and offshore manufacturing. The rest of the book is devoted to exploring the implications of this flattening, both for the advanced industrial countries and the developing world. In truth, Mr. Friedman's major points would come across more strongly if his 488 pages were edited more tightly. But he provides a compelling case that something big is going on. I was in Bangalore, India, in January 2004 - just a month before Mr. Friedman - visiting Infosys, one of India's new leading high-technology companies. I, too, was bowled over by what I saw: 'campuses' more modern than anything I had seen on the West Coast, and business leaders as dynamic and thoughtful as anywhere in the world. It may be true that fears of outsourcing have been exaggerated: there are only a limited number of radiologists, software programmers and back-office people whose jobs can be performed at a distance. But I side with Mr. Friedman: the integration of some three billion people into the global economy is a big deal. Even if only a limited number of American jobs are lost, the new competition will have striking effects, particularly on the wages of unskilled workers. While free trade may ultimately make every country better off, not every individual will be better off. There are winners and there are losers; and while, in principle, the winners could compensate the losers, that typically does not happen. Among other things, a flatter world means a less flat America - more inequality. The playing field may be getting more level, but not everyone is equipped to play on it. On that same trip to India, I spent more than half my time in the countryside surrounding Bangalore, where traveling 10 miles was like traveling back 2,000 years. Peasants were farming as their ancestors must have. What has enabled Bangalore to become a high-tech success story is that companies like Infosys have removed themselves from what is going on nearby. They communicate directly by satellite with the United States, and in a place where local newspapers list the number of brownouts the previous day, these companies can have their own sources of power. And while new technologies may close the gap between parts of India and China and the advanced industrial countries, they will also increase the gap between those countries and Africa. Mr. Friedman is right that there are forces flattening the world, but there are other forces making it less flat. At issue is the balance between them. So is the world really much flatter than before? For instance, the new technologies that Mr. Friedman praises as levelers have also given rise to new opportunities for monopolization. Mr. Friedman praises Netscape's leveling role: its browser has really helped to put a world of knowledge and information at each person's doorstep (or computer). But Microsoft was able to use its own market power through control of computer operating systems to effectively replace Netscape with its own browser, Internet Explorer. While Microsoft speaks eloquently of the need to reward innovation, the real rewards are often not reaped by the innovators. In addition, the underlying research for major developments like the Internet and Web browsers is expensive. Large, rich countries can pay for it; poor, small ones cannot. Mr. Friedman notes, but does not emphasize as much as he might, the important role played by government in financing such research before allowing private entrepreneurs to bring the actual products to market - and make the profits. American companies have a distinct advantage in benefiting from government-financed research, even though there are crumbs (some quite large) that those around the world can pick up. Meanwhile, the new 'rules of the game' that were part of the last round of global trade negotiations - notably intellectual property regulations requiring all countries to adopt American-style patent and copyright laws - are almost surely making the playing field less level. They will make it easier for those who are ahead of the game to maintain their lead. One mark of a great book is that it makes you see things in a new way, and Mr. Friedman certainly succeeds in that goal. The world may not yet be flat, but there is no doubt that there are important forces - some leveling, some the opposite - that are changing its shape in critical ways. And in his provocative account, Mr. Friedman suggests what this brave new world will mean to all of us, in both the developed and the developing worlds. Joseph E. Stiglitz, university professor at Columbia University, won the Nobel Prize in Economics in 2001.

Subject: South Africa: A Would-Be Pilot From: Emma To: All Date Posted: Sat, Apr 30, 2005 at 11:52:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/30/international/africa/30africa.html?pagewanted=all&position= A Would-Be Pilot, Hitting Turbulence on the Ground By MICHAEL WINES MASJAING, South Africa IN a part of the world where so many young people never get off the ground, 17-year-old James Mokoena wants to be a pilot. He will fly a fighter jet, but not just to wage aerial battles. Africa is full of hungry people and people sick with malaria, he said. Many of them need a James Mokoena to bring them food and medicine. 'I haven't been in a plane,' he said, but dismissively. 'I want to be in a plane for four, five years, and to know that I am in that plane - me. That I, James, am driving it.' He is standing outside his cement-stuccoed house, a four-room box on a dirt road in this township of about 30,000 on the Lesotho border. Inside is a single bed for him, three brothers and a sister. His mother is ill. His father never got past the sixth grade. Everything here fairly shouts that James's dream is folly. Except James himself. Two years ago, having completed his elementary years at the township primary school, he walked the mile from Masjaing to Fouriesburg, the far wealthier town on the other side of the highway. There, he announced that he wanted a better education than he could get at Masjaing's uninspiring local high school, from which few students ever graduate, and that he wished to enroll in the eighth grade. 'I asked him whether he realized there were school fees to be paid, and he said his father would pay them,' said Irina Grice, the principal at Fouriesburg Intermediate School. 'His father came, but oh, his clothes were torn, and he was very, very poor. 'But the father said, 'The child chose, and he wants to be in this school.' ' One in three of South Africa's 37 million blacks live in townships like Masjaing, slums built to keep them away from white people when they were not mining whites' coal or cleaning whites' houses. Of those township dwellers over age 15, well over half are jobless. Of those with jobs, about 6 in 10 earn less than $250 a month. The townships are economic and social sinkholes, poverty traps in a nation where the rich-poor gap is among the widest on earth. JEREMANE MOKOENA - he calls himself James, he said, because he dislikes his first name - wants out of Masjaing. He wants out of the underclass that apartheid created and into the world of opportunity that apartheid's demise has opened up for other, luckier youths. Few of his friends here - boys idling on the dusty soccer pitch and clustered on gravel street corners, clueless about how impending manhood will shut off their escape route - have the pluck for the journey James so clearly craves. For those who do try, success is rare. Failure, and consignment to a life in society's cellar, is crushing. Slim, with a shy, if broad smile and a tendency to look away when talking, James resembles anything but a pioneer. But nobody should underestimate his grit. 'My father, he works,' James said. 'He keeps on telling me that life is very strong, like a rock. You have to push it forward. You have to stand for yourself, not just wait to have somebody come and say, 'James, go forward.' ' His father, 44-year-old Petrus Mokoena, is James's unlikely inspiration. A gaunt man in threadbare blue coveralls and a fluorescent red jacket, he works a split shift for the Masjaing (pronounced mush-a-ENG) sanitation department, collecting trash in the predawn hours, catching some sleep, then collecting more trash in the afternoon. For this, Mr. Mokoena earns under $300 a month. Fouriesburg Intermediate wanted $40 for tuition. Mr. Mokoena paid it. Apartheid, he said, kept him an indentured and ignorant laborer on a white-owned farm his entire youth. 'I want James to see that not to go to school is a bad thing,' said Mr. Mokoena, speaking in Sotho, his only language. 'I want him to speak English and to write English.' Forty dollars is no small sacrifice. Ms. Grice said she once asked James why he was doing poorly in one subject. 'He said, 'I can't finish off the work before it's dark, and we don't have electricity,' ' she said. 'So I said to him, 'It's possible to study by candlelight.' And he said, 'We don't have any candles.' ' It is James, the one with a shot at a future, who has become the family's center of gravity. Petrus Mokoena passes many evenings drinking Lesotho beer. His wife MaDibeo, silent and vacant-eyed in her mysterious illness, has left a hole in the household and a gnawing fear in her children's bellies. Tiny 7-year-old Mampho and her 9-year-old brother Thabiso now demand James's attention instead of hers. So do the cleaning and cooking. James's handsome older brother Dibeo, 19, spent four straight years in the ninth grade at Ypokaleng High, the school James escaped. That leaves 13-year-old Joseph, as charismatic and quick-witted as James is quiet and deliberative, as perhaps his brother's closest companion. There are girls, of course, and James said he was somewhat interested. But 'if I had a girlfriend, I couldn't think as well,' he said. 'I don't have a girlfriend so that I can focus.' In truth, James has few close friends. Awkward and shy, he is in transit between worlds, and not really comfortable in either. Some evenings, Mr. Mokoena frets over the cost of his son's schooling and how James, now the household's most educated member, is moving beyond his rough-hewn father. 'My father told me that since I was in this school, I was beginning to lose my culture,' James said. 'That I am becoming a white person. That I don't eat with my hand; I eat with a fork.' But each weekday night for the last two years, as Mr. Mokoena left to collect trash, he took a pen with him to mark his time sheet. And when he returned about 6 a.m., just as James began to stir in his crowded bed, he gave his son the pen to use that day at school. Then James donned his Fouriesburg uniform and walked the mile to his other world. RIGIDLY Afrikaner and all-white under apartheid a decade ago, the Fouriesburg school has since become almost all black. Most white students stampeded to prep schools when apartheid ended; the current student body consists mostly of better-off blacks and a few whites who cannot afford private schooling. James was neither. 'He has the worst situation, in that the children tend to look down on him and see him as really poor,' said Mick Andrew, a 67-year-old English literature teacher and the closest thing James has to a mentor. James made a show of sloughing off their ostracism. 'Most of the time, at school, I don't do things for fun,' he said. 'I come, I do what I have to do, and I go home.' At home, he studied. When he first came to the school, in January 2003, his grades were abysmal, in part because of his poor English. In his first term, he failed five subjects. In his second, he failed only English. Fouriesburg classes end at the ninth grade. As the December end of term loomed last year, James made elaborate plans to enroll in the 10th grade at a private school in Tweeling, 75 miles to the north. James said his father would pay tuition. He could help, he said, by selling candy and drinks. 'I chose this school because I wanted to be far away,' he said. 'This place is away, but it's not far. Tweeling is far away.' But his dream exceeded his grasp: what James really needed was a scholarship, and his grades did not merit one. When the new term began in January, James attended Breda High School some 10 miles from Fouriesburg. It was the only school James could afford that would take him in. 'Very often, the bright ones can get out in some way,' Mr. Andrew said. 'Someone will see they have a future. James hasn't progressed very well at school, and that makes it even more difficult for him.' Ismail, another Masjaing ninth grader who was James's best friend at the Fouriesburg school, agreed. 'I told him,' he said, ' 'If you're going to be a pilot, you're going to have to study harder.' '

Subject: Re: South Africa: A Would-Be Pilot From: Gary Walther To: Emma Date Posted: Fri, May 06, 2005 at 17:25:09 (EDT) Email Address: gary.walther@spafinder.com Message: http://www.nytimes.com/2005/04/30/international/africa/30africa.html?pagewanted=all&position= A Would-Be Pilot, Hitting Turbulence on the Ground By MICHAEL WINES MASJAING, South Africa IN a part of the world where so many young people never get off the ground, 17-year-old James Mokoena wants to be a pilot. He will fly a fighter jet, but not just to wage aerial battles. Africa is full of hungry people and people sick with malaria, he said. Many of them need a James Mokoena to bring them food and medicine. 'I haven't been in a plane,' he said, but dismissively. 'I want to be in a plane for four, five years, and to know that I am in that plane - me. That I, James, am driving it.' He is standing outside his cement-stuccoed house, a four-room box on a dirt road in this township of about 30,000 on the Lesotho border. Inside is a single bed for him, three brothers and a sister. His mother is ill. His father never got past the sixth grade. Everything here fairly shouts that James's dream is folly. Except James himself. Two years ago, having completed his elementary years at the township primary school, he walked the mile from Masjaing to Fouriesburg, the far wealthier town on the other side of the highway. There, he announced that he wanted a better education than he could get at Masjaing's uninspiring local high school, from which few students ever graduate, and that he wished to enroll in the eighth grade. 'I asked him whether he realized there were school fees to be paid, and he said his father would pay them,' said Irina Grice, the principal at Fouriesburg Intermediate School. 'His father came, but oh, his clothes were torn, and he was very, very poor. 'But the father said, 'The child chose, and he wants to be in this school.' ' One in three of South Africa's 37 million blacks live in townships like Masjaing, slums built to keep them away from white people when they were not mining whites' coal or cleaning whites' houses. Of those township dwellers over age 15, well over half are jobless. Of those with jobs, about 6 in 10 earn less than $250 a month. The townships are economic and social sinkholes, poverty traps in a nation where the rich-poor gap is among the widest on earth. JEREMANE MOKOENA - he calls himself James, he said, because he dislikes his first name - wants out of Masjaing. He wants out of the underclass that apartheid created and into the world of opportunity that apartheid's demise has opened up for other, luckier youths. Few of his friends here - boys idling on the dusty soccer pitch and clustered on gravel street corners, clueless about how impending manhood will shut off their escape route - have the pluck for the journey James so clearly craves. For those who do try, success is rare. Failure, and consignment to a life in society's cellar, is crushing. Slim, with a shy, if broad smile and a tendency to look away when talking, James resembles anything but a pioneer. But nobody should underestimate his grit. 'My father, he works,' James said. 'He keeps on telling me that life is very strong, like a rock. You have to push it forward. You have to stand for yourself, not just wait to have somebody come and say, 'James, go forward.' ' His father, 44-year-old Petrus Mokoena, is James's unlikely inspiration. A gaunt man in threadbare blue coveralls and a fluorescent red jacket, he works a split shift for the Masjaing (pronounced mush-a-ENG) sanitation department, collecting trash in the predawn hours, catching some sleep, then collecting more trash in the afternoon. For this, Mr. Mokoena earns under $300 a month. Fouriesburg Intermediate wanted $40 for tuition. Mr. Mokoena paid it. Apartheid, he said, kept him an indentured and ignorant laborer on a white-owned farm his entire youth. 'I want James to see that not to go to school is a bad thing,' said Mr. Mokoena, speaking in Sotho, his only language. 'I want him to speak English and to write English.' Forty dollars is no small sacrifice. Ms. Grice said she once asked James why he was doing poorly in one subject. 'He said, 'I can't finish off the work before it's dark, and we don't have electricity,' ' she said. 'So I said to him, 'It's possible to study by candlelight.' And he said, 'We don't have any candles.' ' It is James, the one with a shot at a future, who has become the family's center of gravity. Petrus Mokoena passes many evenings drinking Lesotho beer. His wife MaDibeo, silent and vacant-eyed in her mysterious illness, has left a hole in the household and a gnawing fear in her children's bellies. Tiny 7-year-old Mampho and her 9-year-old brother Thabiso now demand James's attention instead of hers. So do the cleaning and cooking. James's handsome older brother Dibeo, 19, spent four straight years in the ninth grade at Ypokaleng High, the school James escaped. That leaves 13-year-old Joseph, as charismatic and quick-witted as James is quiet and deliberative, as perhaps his brother's closest companion. There are girls, of course, and James said he was somewhat interested. But 'if I had a girlfriend, I couldn't think as well,' he said. 'I don't have a girlfriend so that I can focus.' In truth, James has few close friends. Awkward and shy, he is in transit between worlds, and not really comfortable in either. Some evenings, Mr. Mokoena frets over the cost of his son's schooling and how James, now the household's most educated member, is moving beyond his rough-hewn father. 'My father told me that since I was in this school, I was beginning to lose my culture,' James said. 'That I am becoming a white person. That I don't eat with my hand; I eat with a fork.' But each weekday night for the last two years, as Mr. Mokoena left to collect trash, he took a pen with him to mark his time sheet. And when he returned about 6 a.m., just as James began to stir in his crowded bed, he gave his son the pen to use that day at school. Then James donned his Fouriesburg uniform and walked the mile to his other world. RIGIDLY Afrikaner and all-white under apartheid a decade ago, the Fouriesburg school has since become almost all black. Most white students stampeded to prep schools when apartheid ended; the current student body consists mostly of better-off blacks and a few whites who cannot afford private schooling. James was neither. 'He has the worst situation, in that the children tend to look down on him and see him as really poor,' said Mick Andrew, a 67-year-old English literature teacher and the closest thing James has to a mentor. James made a show of sloughing off their ostracism. 'Most of the time, at school, I don't do things for fun,' he said. 'I come, I do what I have to do, and I go home.' At home, he studied. When he first came to the school, in January 2003, his grades were abysmal, in part because of his poor English. In his first term, he failed five subjects. In his second, he failed only English. Fouriesburg classes end at the ninth grade. As the December end of term loomed last year, James made elaborate plans to enroll in the 10th grade at a private school in Tweeling, 75 miles to the north. James said his father would pay tuition. He could help, he said, by selling candy and drinks. 'I chose this school because I wanted to be far away,' he said. 'This place is away, but it's not far. Tweeling is far away.' But his dream exceeded his grasp: what James really needed was a scholarship, and his grades did not merit one. When the new term began in January, James attended Breda High School some 10 miles from Fouriesburg. It was the only school James could afford that would take him in. 'Very often, the bright ones can get out in some way,' Mr. Andrew said. 'Someone will see they have a future. James hasn't progressed very well at school, and that makes it even more difficult for him.' Ismail, another Masjaing ninth grader who was James's best friend at the Fouriesburg school, agreed. 'I told him,' he said, ' 'If you're going to be a pilot, you're going to have to study harder.' ' --- Do you have an e-mail address for Irina Grice, the principal at the Fouriesburg Intermediate School?

Subject: Reaganomics lives on From: Pete Weis To: All Date Posted: Sat, Apr 30, 2005 at 11:00:01 (EDT) Email Address: Not Provided Message: April 30, 2005 CNBC's Kudlow Needs a Refresher Course in Econ 101 by Peter Schiff I hate to be so critical of CNBC, especially since they were gracious enough to have me on as a guest on Monday, but when they present such an easy target, I just can't resist. Such was the case yesterday, when Larry Kudlow, host of 'Kudlow & Co.,' and one of that network's more colorful 'economic' commentators, demonstrated his needs to return to Princeton for a refresher course in basic economics. I write this because, yesterday, when commenting on the release of disappointing first quarter GDP numbers, his ridiculous argument in favor of changing the way GDP is calculated, revealed a lack of understanding of what this basic economic statistic is attempting to measure. Besides further supporting my stagflation warning (the deflator rose at an annual rate of 3.2%,) yesterday's report revealed that first quarter GDP grew at a less than stellar 3.1% rate; its slowest pace in two years, and well below Kudlow's typically far more optimistic forecast. But rather than admitting to being wrong, Kudlow, much like a golfer blaming a poor shot on a defective club, instead attributed the weaker performance to what he perceived to be a flaw in the methodology used to calculate the index. Since imports subtracted 2.19% from GDP, Kudlow proposed adding that value back in. In his words, 'imports are not a bad thing' so why subtract them from GDP. As a result of his recalculation, Kudlow argued, with a straight face I might add, that the real growth rate of the U.S. GDP during the first quarter was in fact a far more robust 5.29% While it may be true that imports per se are not bad, it is also true that they have absolutely nothing to do with GDP which is precisely why their value is subtracted from the calculation in the first place. The concept of GDP is to measure the value of goods and services produced by a nation. Since all goods and services produced are ultimately consumed, the index is calculated by totaling the expenditures made by individuals, corporations, and governments, (I C G). However, since goods produced for export are not consumed domestically, the value of exports is, therefore, added to GDP. If this adjustment were not made, the value of such production would go unmeasured. However, since expenditures on imports do not reflect domestic production, the value of imports is therefore subtracted from the calculation. The net result is GDP, or Gross Domestic Product. So, contrary to Mr. Kudlow's claims, U.S. GDP was not reduced because Americans imported too much, it was reduced because we produced too little. By adding the value of imports back into GDP, what Kudlow, in fact, proposed measuring was something entirely different, perhaps a new indicator which more accurately might be called GDC, or Gross Domestic Consumption. While such a ridiculous concept may in fact seem appropriate given the current state of the highly imbalanced U.S. economy, it should not be confused with GDP, which at least attempts to measure the value of what a nation produces, not what it consumes. I do agree with Mr. Kudlow on one point. This GDP report does in fact present a distorted measure of the real output of the U.S. economy. By failing to capture the true rate of inflation, the deflator results in GDP being considerably higher than would otherwise be the case were a more honest measure of inflation used. Also, as GDP includes goods and services which do not necessarily reflect higher standards of living, such as excessive legal or medical expenditures, increased outlays necessary to deter rising criminal or terrorist threats, or mere restoration of property damaged by natural disaster, it often exaggerates true economic growth. In a world where government officials routinely change the way economic statistics are calculated, for the specific purpose of engineering a false sense of prosperity, Kudlow's suggestion seems par for the course. However, such a biased manipulation would be far more 'appropriate' were Kudlow still working on the federal payroll, where such propaganda would at least be expected, rather than as a supposedly objective commentator, where unsuspecting viewers might confuse his economic cheerleading with legitimate insight, to the detriment of their financial well being. Peter Schiff C.E.O. and Chief Global Strategist Euro Pacific Capital, Inc.

Subject: China and Taiwan From: Emma To: All Date Posted: Sat, Apr 30, 2005 at 10:15:22 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/30/international/asia/30taiwan.html?pagewanted=all&position= 60 Years Later, China Enemies End Their War By JOSEPH KAHN BEIJING - The leaders of China's Communist Party and of Taiwan's opposition Nationalist Party, the two sides that fought China's civil war, formally ended six decades of hostility on Friday with a nationally televised handshake and pledged to work together to undermine Taiwan's independence movement. During an elaborate ceremony at the Great Hall of the People, broadcast in China and Taiwan, Hu Jintao, the Chinese Communist leader, hailed a weeklong visit to the mainland from Taiwan by Lien Chan, the Nationalist leader, as a historic reconciliation. The Nationalists, who fled to the island in 1949 after losing the civil war, ruled Taiwan until 2000 and still control its legislature. The meeting is the first between the leaders of the two parties in 60 years; the last was in the wartime redoubt of Chongqing, when Chiang Kai-shek and Mao Zedong made a final, failed bid to reach a cease-fire. Both sides pointedly used the trip to try to isolate Taiwan's president, Chen Shui-bian, who has twice won election on a platform leaning toward independence. He now faces an unusual alliance between the opposition party and China's Communist leadership, which the Taiwan government still calls the enemy. Mr. Hu offered to lower import duties, open a military dialogue and grant Taiwan enhanced diplomatic status. But those measures would take effect only if the Taiwanese president accepted the terms of their agreement or if the Nationalists returned to power in future elections. Taiwan's government rejected the accord, calling it a blatant attempt to divide Taiwan's political parties and undermine its elected government. 'China's military still threatens the lives of the Taiwanese people,' said Joseph Wu, chairman of the Mainland Affairs Council, 'and it spares no efforts isolating Taiwan in the international community.' China has passed an antisecession law that codified Beijing's longstanding threat to use 'nonpeaceful means' if Taiwan moves toward formal independence. That move sharply raised tensions in the region, and the cross-strait overtures are intended to soften the backlash against the law in Taiwan and overseas by opening new channels of communication with the island's politicians. But China has had poor results in the past when it has tried to influence Taiwan's democratic and sometimes volatile political system. 'This is a historic meeting between the leaders of our two parties,' Mr. Hu said after he and Mr. Lien shook hands before the television audience. 'As long as both sides place importance on the interests of the Chinese nation, on the common prosperity of the compatriots on both sides of the strait, we will be able to overcome our differences.' Mr. Lien said the two parties had paved the way for peace and challenged President Chen, who beat Mr. Lien in two consecutive elections, to seize the opportunity. 'I believe the door has been opened,' Mr. Lien told reporters. 'How to walk towards a new future, towards a new outlook - I think the ruling party must shoulder this responsibility.' Mr. Hu and Mr. Lien said they favored reviving a thwarted rapprochement between Taiwan and China that began in 1992. At that time, China and the then-ruling Nationalists worked out a formula for beginning negotiations that papered over their differing interpretations of Taiwan's sovereignty. 'The parties reached a common understanding on upholding the '92 consensus, opposing Taiwanese independence and striving for peace and stability in the Taiwan Sea,' the two sides said Friday in a joint communiqué. The communiqué said the two sides would work to open China's market more broadly to Taiwanese goods, sign a formal peace agreement, establish military-to-military ties and allow Taiwan to join some international bodies, like the World Health Organization. China offered similar incentives to Taiwan late last year if it accepted the mainland's claim of sovereignty, which Beijing refers to as its 'one China' policy. The significance of Friday's accord was that the Nationalists, who have never claimed that Taiwan and China are separate countries, worked with the Communists to outline benefits that would ensue if Taiwan and China would stop arguing about sovereignty. The Communists and Nationalists also embraced the idea of formally burying their rivalry, which spanned World War II and the cold war. Mr. Hu began courting Mr. Lien in early March, shortly after China passed the antisecession law. Mr. Lien, who is 69, has said that he plans to retire this year as Nationalist chairman. Another opposition politician, James Soong of the smaller People First Party, will visit China next week, also at Mr. Hu's invitation. Mr. Lien's eight-day visit began Tuesday in Nanjing, the old Nationalist capital, and will continue in Xian, Mr. Lien's birthplace, and Shanghai. He has been given a reception that exceeds that granted most state leaders. Chinese media lavishly recorded his meetings and public comments. Editors said the powerful Propaganda Department ordered newspapers to exclude any negative commentary on Mr. Lien and to quote him accurately, dropping the usual practice of massaging or excising remarks that contradict official policy. Officials removed scores of red five-star Chinese flags that usually flutter from eaves around Tiananmen Square so Mr. Lien would not be photographed against the Communist standard. A giant picture of Sun Yat-Sen, whom both the Communists and Nationalists regard as a Chinese hero, was placed prominently in the square, facing the portrait of Mao. Mr. Lien did not disappoint his hosts. He repeatedly emphasized the common interests of China and Taiwan in 'achieving peace and reconciliation.' During an uncensored televised address to the Chinese people from a packed hall at Beijing University, Mr. Lien lightly prodded China to open its political system. But he otherwise advocated a 'win-win' strategy for preserving the status quo in cross-strait relations and fighting Taiwan's independence movement. He saved his sharpest comments for President Chen, whom he has accused of stirring up ethnic hatred between native Taiwanese and mainland-born residents of Taiwan, like himself. The United States, which is Taiwan's sole major ally and has long acted as an arbiter of cross-strait relations, welcomed Mr. Lien's trip in principle, but urged China to open talks with Mr. Chen. 'We hope this is the start of Beijing finding new ways to reach out to President Chen and his cabinet, because any long-term solution can only be found if Beijing negotiates with the duly elected leadership in Taiwan,' the White House spokesman, Scott McClellan, said Wednesday. Even so, Chinese analysts hailed the trip as a breakthrough and predicted that Mr. Chen would face pressure to reconcile with Beijing. 'Lien Chan's whole visit will create a lot of pressure on Chen Shui-bian,' said Shi Yinhong, an international relations expert at People's University in Beijing. 'Public opinion has been shifting against him, and this will put him further on the back foot.' The impact of Mr. Lien's trip on Taiwan's politics is hard to gauge. Most Taiwanese say they favor the status quo, Mr. Lien's basic position. The Nationalists managed to hold onto their legislative majority in elections last December, and they are now clearly positioning themselves as the party that can deliver immediate benefits if they take back the presidency in 2008. But most voters also say they regard themselves as Taiwanese, not Chinese, and few express any interest in reunifying with China. The Nationalists run some risks by linking their political fortunes to the mainland, some Taiwan analysts said. 'The ultimate effect of Lien's trip may be limited,' said Pan His-Tang, an expert on cross-strait negotiations at Tamkang University in Taipei. 'It may open dialogue between the two parties, but not between the two sides of the Strait.'

Subject: China: A Currency Afloat From: Emma To: All Date Posted: Sat, Apr 30, 2005 at 10:14:03 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/30/business/worldbusiness/30yuan.html?ei=5094&en=d45751ec00918579&hp=&ex=1114920000&partner=homepage&pagewanted=all&position= A Currency Afloat (for All of 20 Minutes) By KEITH BRADSHER HONG KONG - The Bush administration has been pressing the Chinese government for years to allow its currency, which is pegged to the dollar, to trade more freely. It got its wish on Friday - but only for 20 minutes. A freely trading Chinese yuan would probably rise in value against the dollar, making Chinese exports to the United States more costly. That, in turn, would give relief to American manufacturers battered by low-priced Chinese goods as the American trade deficit has been growing faster with China than with any other country. It would also be a political victory for the Bush administration. Until this afternoon, China had ignored the demands. But as traders drifted back to their desks from lunch in Asian financial capitals on Friday, the yuan suddenly broke out of its prescribed trading range. No one knows for sure if the move was deliberate or a result of a technical glitch. But regardless of whether it was a Chinese test of their ability to manage a rising yuan or simply a case of the Chinese central bank briefly failing to buy enough dollars to keep supporting the American currency, traders noticed it and the prices for many other currencies began to shift in response. The yuan climbed until it took 8.270 of them to buy a dollar instead of the usual 8.276. That difference, of only six thousandths of a yuan, might not seem like much of a change. But it came on the eve of a weeklong holiday in China and at a time of intense speculation that a Chinese revaluation of the currency, which has been fixed by Beijing against the dollar for years, might be imminent. The brief appreciation, a hint of further rises if the yuan were to float, was enough to roil currency markets around the world. The dollar fell and the euro, yen and gold rose as investors placed bets that if China let the yuan rise against the dollar, other countries would also permit their currencies to appreciate against the dollar because their exporters would no longer be so fearful of being undercut by Chinese rivals. Economists said it was almost impossible to discern from the swirl of rumors on Friday whether China was on the verge of finally allowing the tidal wave of investment flowing into the country to push up the value of the yuan. 'I wouldn't be surprised if we woke up to an announcement this weekend; I wouldn't be surprised if they waited until this summer,' said Jonathan Anderson, an economist at UBS. Traders used to seeing a flat line on their screens day after day for the value of the yuan were especially transfixed by the brief surge because it came the same day that a state-run newspaper, The China Securities Journal, ran an article on its front page that seemed to depart from previous government statements ruling out any shift in currency policy soon. The article asserted that China's financial system and currency regime were finally ready for the yuan to rise, provided that the rise was only a few percentage points. The People's Bank of China, the central bank, issued a public denial by midafternoon that it had received any formal instructions from the country's political authorities to push the yuan to a new level. But the brief movement of the yuan prompted some economists to say that China may have been testing its ability to manage a small fluctuation in the value of its currency, as a possible preparation for managing an eventual change in the yuan's value. Some currency traders said a more likely explanation was that a mistake was made by a Chinese employee, who may have typed a wrong number onto the government's official currency posting. 'We interpret it as a technical glitch, rather than an imminent revaluation,' said Steven Englander, a currency strategist at Barclays Capital in New York. Frank Gong, an economist at J. P. Morgan, said that the central bank had tolerated tiny spurts in the yuan's value to 8.275 for a few minutes over the last decade. But he said it was highly unlikely that Chinese authorities accidentally let such a large spike in value occur on Friday, especially at a time of intense speculation about the future value of the yuan. 'They chose that timing to test the market,' he said, adding that he thought China might revalue during the coming holiday week. Beijing authorities pegged the currency at 8.3 to the dollar toward the end of the Asian financial crisis in 1998 and have since kept it in a tight trading range around that level. China's foreign exchange reserves soared by $200 billion last year alone as the People's Bank of China intervened heavily in currency markets, issuing yuan and buying dollars to keep the yuan from breaching the top of the narrow trading range, 8.276 to the dollar. The Bush administration has been calling with increasing outspokenness in recent weeks for China to let the currency rise, which would make imports cheaper in China as well as make China's exports less competitive in the United States and other overseas markets. European and Japanese officials have supported Washington's position but have been less vocal. Many economists within China, including some government economists, have been warning that the country risks serious inflation if it continues printing ever more yuan and exchanging them for dollars in an effort to hold down the value of the yuan in currency markets. The Chinese government has tried a variety of measures, with mixed success, to buy back the yuan that it is issuing in its currency market interventions, most notably by selling bonds to the public and by reducing credit to the banking sector. But political leaders in China have been leery of moving too quickly to permit an appreciation of the currency, known either as the yuan or the renminbi. They fear that a swift rise might lead to layoffs at export-oriented factories and job losses in the countryside as cheap food from the United States and elsewhere would flood in. In interviews at the Canton Trade Fair in Guangzhou on Thursday, executives from companies across China said that a higher yuan would cut into their profit margins. But they differed, depending on their industry, as to whether a stronger yuan would prompt overseas buyers to shift their purchases to other countries. Ma Jilin, the general manager of the Zibo Shuangfeng Ceramics Company in Shandong Province in northeastern China, said that a 10 percent rise in the value of the yuan - larger than most economists expect - would cause many restaurants and other customers to stop buying brightly colored ceramic plates and mugs from his factory and take their business to Malaysia or South Korea. Wages for factory workers have risen 15 percent in the last year because of labor shortages, electricity prices are rising, shipping costs are climbing and high-quality clay is in short supply, he added. 'If the renminbi rises, that will make it very difficult for a lot of factories,' Mr. Ma said. But Yan Jun, the general manager of the Jinxiang Bristles Industrial Company in Hunan Province in southern China, said that a rising yuan might not have that much effect on overseas demand for his company's pig bristles, used for paint brushes. In a country where pork is practically a staple, pig bristles are so plentiful and inexpensive that any threat comes not from other countries' pig bristles but from synthetic bristles. The synthetic bristles cost one-eighth as much as even the Chinese bristles, and the main issue in the industry is whether buyers will decide to accept the inferior quality of the synthetic materials, in which case the value of the yuan will be irrelevant, Mr. Yan said. Even before Friday's brief rise in the yuan, The China Securities Journal report prompted a rise in the value of the euro and especially the yen, with the yen climbing 1.16 percent, to 104.83 to the dollar in New York trading. The State Administration of Foreign Exchange, which manages the country's currency reserves, issued a statement on Friday, outlining some administrative changes in the handling of foreign currency transactions within China and saying that it wanted to 'provide better conditions in the foreign exchange market.' The statement gave no specific clues about the value of the yuan.

Subject: 'What, Me Worry?' From: Emma To: All Date Posted: Sat, Apr 30, 2005 at 10:00:55 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/29/opinion/29friedman.html?incamp=article_popular_1 'What, Me Worry?' By THOMAS L. FRIEDMAN One of America's most important entrepreneurs recently gave a remarkable speech at a summit meeting of our nation's governors. Bill Gates minced no words. 'American high schools are obsolete,' he told the governors. 'By obsolete, I don't just mean that our high schools are broken, flawed and underfunded. ... By obsolete, I mean that our high schools - even when they are working exactly as designed - cannot teach our kids what they need to know today. 'Training the work force of tomorrow with the high schools of today is like trying to teach kids about today's computers on a 50-year-old mainframe. ... Our high schools were designed 50 years ago to meet the needs of another age. Until we design them to meet the needs of the 21st century, we will keep limiting - even ruining - the lives of millions of Americans every year.' Let me translate Mr. Gates's words: 'If we don't fix American education, I will not be able to hire your kids.' I consider that, well, kind of important. Alas, the media squeezed a few mentions of it between breaks in the Michael Jackson trial. But neither Tom DeLay nor Bill Frist called a late-night session of Congress - or even a daytime one - to discuss what Mr. Gates was saying. They were too busy pandering to those Americans who don't even believe in evolution. And the president stayed fixated on privatizing Social Security. It's no wonder that the second Bush term is shaping up as 'The Great Waste of Time.' On foreign policy, President Bush has offered a big idea: the expansion of freedom, particularly in the Arab-Muslim world, where its absence was one of the forces propelling 9/11. That is a big, bold and compelling idea - worthy of a presidency and America's long-term interests. But on the home front, this team has no big idea - certainly none that relates to the biggest challenge and opportunity facing us today: the flattening of the global economic playing field in a way that is allowing more people from more places to compete and collaborate with your kids and mine than ever before. 'For the first time in our history, we are going to face competition from low-wage, high-human-capital communities, embedded within India, China and Asia,' President Lawrence Summers of Harvard told me. In order to thrive, 'it will not be enough for us to just leave no child behind. We also have to make sure that many more young Americans can get as far ahead as their potential will take them. How we meet this challenge is what will define our nation's political economy for the next several decades.' Indeed, we can't rely on importing the talent we need anymore - not in a flat world where people can now innovate without having to emigrate. In Silicon Valley today, 'B to B' and 'B to C' stand for 'back to Bangalore' and 'back to China,' which is where a lot of our foreign talent is moving. Meeting this challenge requires a set of big ideas. If you want to grasp some of what is required, check out a smart new book by the strategists John Hagel III and John Seely Brown entitled 'The Only Sustainable Edge.' They argue that comparative advantage today is moving faster than ever from structural factors, like natural resources, to how quickly a country builds its distinctive talents for innovation and entrepreneurship - the only sustainable edge. Economics is not like war. It can always be win-win. 'But some win more than others,' Mr. Hagel said, and today it will be those countries that are best and fastest at building, attracting and holding talent. There is a real sense of urgency in India and China about 'catching up' in talent-building. America, by contrast, has become rather complacent. 'People go to Shanghai or Bangalore and they look around and say, 'They're still way behind us,' ' Mr. Hagel said. 'But it's not just about current capabilities. It's about the relative pace and trajectories of capability-building. 'You have to look at where Shanghai was just three years ago, see where it is today and then extrapolate forward. Compare the pace and trajectory of talent-building within their population and businesses and the pace and trajectory here.' India and China know they can't just depend on low wages, so they are racing us to the top, not the bottom. Producing a comprehensive U.S. response - encompassing immigration, intellectual property law and educational policy - to focus on developing our talent in a flat world is a big idea worthy of a presidency. But it would also require Mr. Bush to do something he has never done: ask Americans to do something hard.

Subject: Norway: The $6.66-a-Gallon Solution From: Emma To: All Date Posted: Sat, Apr 30, 2005 at 09:38:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/30/business/worldbusiness/30norway.html?pagewanted=all&position= The $6.66-a-Gallon Solution By SIMON ROMERO OSLO - Car owners in the United States may grumble as the price of gasoline hovers around $2.25 a gallon. Here in Norway, home to perhaps the world's most expensive gasoline, drivers greeted higher pump prices of $6.66 a gallon with little more than a shrug. Yes, there was a protest from the Norwegian Automobile Association, which said, 'Enough is enough. ' And a right-wing party in Parliament, the Progress Party, once again called for a cut in gasoline taxes, which account for about 67 percent of the price. But 'those critics are but voices in the wilderness,' said Torgald Sorli, a radio announcer with the Norwegian Broadcasting Corporation who often discusses transportation issues. 'We Norwegians are resigned to expensive gasoline. There is no political will to change the system.' Norway, the world's third-largest oil exporter, behind Saudi Arabia and Russia, has been made wealthy by oil. Last year alone, oil export revenue surged 19 percent, to $38 billion. But no other major oil exporter has tried to reel in its own fuel consumption with as much zeal as Norway. These policies have resulted in Norwegians consuming much less oil per capita than Americans - 1.9 gallons a day versus almost 3 gallons a day in the United States- and low car ownership rates. On city streets and rural roads, fuel-efficient Volkswagens and Peugeots far outnumber big sport utility vehicles. [Norway's gasoline policies stand in contrast to those in the United States, where President Bush made cheaper gasoline a priority during his discussion of energy policy at his news conference on Thursday.] Gasoline, of course, is not the only expensive commodity in Norway, a traditionally frugal and highly taxed nation. At a pub in Oslo, for instance, a pint of beer might cost the equivalent of $12 and an individual frozen pizza $16. But expensive gasoline is rare among large oil-producing countries that often subsidize fuel for their citizens. Gasoline prices in Norway - with a currency, the krone, strong in comparison with the dollar - have climbed 30 percent since 1998, outpacing a 15 percent increase in the consumer price index in that period, the national statistics bureau said. Having the world's highest gasoline prices is just one strategy to combat greenhouse gases in this redoubt of welfare capitalism and strict environmental laws. Overall energy consumption, especially of electricity, is quite high, however, with Norway blessed with not just oil but ample hydropower resources. Norway not only taxes its gasoline. Norwegians also pay automobile taxes as high as $395 a year for each vehicle, and in Oslo there is even a 'studded-tire' fee of about $160 for vehicles with all-terrain tires that tear up asphalt more quickly in the winter. Then there are the taxes on new passenger vehicles that can increase the price of imported automobiles. Norway has no auto manufacturing industry aside from an experiment to produce electric cars, and economists have suggested that that has made it easier to limit automobile use in Norway because there is no domestic industry to lobby against such decisions as in neighboring Sweden, home of Saab and Volvo. Norway designed the duties to make large-engine sport utility vehicles much costlier than compact cars. For instance, a high-end Toyota Land Cruiser that costs $60,000 in the United States might run as much as $100,000 in Norway. Economists argue that gasoline prices and other auto taxes in Norway are not so expensive when measured against the annual incomes of Norwegians, among the world's highest at about $51,700 a person, or the shorter workweek of about 37.5 hours that is the norm here. (Norwegians also get five weeks of vacation a year.) The government frequently makes such arguments when responding to criticism over high fuel prices. 'We do not want such a system,' Per-Kristian Foss, the finance minister, said in a curt response to the calls for lower gasoline taxes this month in Parliament. Other European countries have also placed high taxes on gasoline, and some like Britain and the Netherlands have gasoline prices that rival or at times surpass Norway's. In Oslo, as in other European capitals, there is ample public transportation, including an express airport train that whisks travelers to the international airport from downtown in 20 minutes. Yet Norway, with a population of just 4.6 million, differs from much of Europe in its breadth, with an extensive network of roads, tunnels and bridges spread over an area slightly larger than New Mexico. 'Rural areas without good public transportation alternatives are hit a little harder,' said Knut Sandberg Eriksen, a senior research economist at the Institute of Transport Economics here who estimates the government collects about $2.4 billion in fuel taxes alone each year, or about $519 for every Norwegian. Some of the revenue supports Norway's social benefits. 'Our government has been grateful to use the automobile as a supreme tax object,' Mr. Eriksen said. 'The car is its milking cow.' Perhaps as a result of such policies, Norway has lower levels of car ownership than other European countries, with 427 cars per 1,000 people in 2003 compared with more than 500 cars per 1,000 people in both France and Germany, according to the Economist Intelligence Unit. The United States has more than 700 cars per 1,000 people. The average age of a passenger car in Norway is 18 years when it is scrapped, though this might be changing in a strong economy with the lowest interest rates in 50 years. Registrations of new passenger cars last year climbed 29 percent from 2003. But the frugality of some Norwegians, even in rural areas, suggests older cars will remain at many households. 'Personally I have no need for a new vehicle; I'm proud to hold on to my own for as long as I can,' said Johannes Rode, 69, a retired art and music teacher and owner of a 29-year-old red Volkswagen Beetle in Ramberg, a coastal town in northern Norway. 'To do otherwise would be wasteful and play into the oil industry's hands.' Caution about oil's risks is common in Norway. The government created the Petroleum Fund more than a decade ago as a repository for most of the royalties it receives from oil production. The $165 billion fund, overseen by the central bank, is intended for the day when oil resources in the North Sea start to dry up. Meanwhile, unlike other large oil producers like Saudi Arabia, Iran or Venezuela, Norway has done little to encourage domestic petroleum consumption. In part because high gasoline prices deter such a luxury, Norway consumes little more than 200,000 barrels a day of oil while exporting nearly its entire production of 3.3 million barrels a day. This confounds some Norwegians. 'Norway is a rich, oil-producing country with no foreign debt,' said Egil Otter, a spokesman for the Norwegian Automobile Association, a sister organization to AAA. 'We think that Norway, with its enormous and complicated geography and distances, deserves pump prices at an average European level. Motorists find it very difficult to be taxed into these extremes.' Such opinions contrast with the quick defense of high gasoline prices often voiced around Norway, which is celebrating its 100th year of independence from neighboring Sweden and so far has opted out of joining the European Union. Sverre Lodgaard, director of the Norwegian Institute of International Affairs, said Norway had a responsibility to manage its oil resources soberly because of its support of worldwide limitations on greenhouse-gas emissions. 'We are engaged on this front,' Mr. Lodgaard said. 'It is difficult for us to view the example of the United States, which is overconsuming to an incredible extent.' The United States, which uses about a quarter of the world's daily oil consumption, had the cheapest gasoline prices of the 27 industrial countries measured by the International Energy Agency in its most recent analysis of fuel prices. Taxes accounted on average for just 20 percent of the price of gasoline in the United States, the agency said. Even amid Norway's bluster on gasoline prices, however, environmentalists suggest the nation could do more to achieve greater energy efficiency. One sore point is the consumption of electricity, traditionally generated by hydropower but soon to depend more on a fossil fuel, natural gas. Producing oil for export in Norway requires large amounts of electricity, and homes in the country, with much of its territory above the Arctic Circle, use electricity for heating, creating much higher electricity consumption levels than elsewhere in Europe. It is not uncommon to drive on well-lighted roads even in remote areas. 'There are areas in which we have done O.K.,' said Dag Nagoda, a coordinator in the Oslo office of the WWF, formerly known as the World Wildlife Fund. 'And there are areas in which we can do better.'

Subject: Vanguard Sector Indexes From: Terri To: All Date Posted: Fri, Apr 29, 2005 at 21:02:53 (EDT) Email Address: Not Provided Message: http://flagship2.vanguard.com/VGApp/hnw/FundsVIPERByName Sector Indexes 12/31/04 - 4/22/05 Energy 10.3 Financials -6.6 Health Care 2.3 Info Tech -11.8 Materials -6.3 REITs -1.9 Telecoms -7.2 Utilities 6.7

Subject: Vanguard Fund Returns From: Terri To: Terri Date Posted: Fri, Apr 29, 2005 at 21:15:46 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName Vanguard Returns 12/31/04 to 4/29/05 S&P Index is -4.0 Large Cap Growth Index is -5.6 Large Cap Value Index is -1.8 Mid Cap Index is -3.5 Small Cap Index is -8.2 Small Cap Value Index is -7.1 Europe Index is -1.6 Pacific Index is -3.6 Energy is 9..6 Health Care is 3.2 REIT Index is -2.0 High Yield Corporate Bond Fund is -2.3 Long Term Corporate Bond Fund is 3.5

Subject: The Natural and the Sacred in China From: Emma To: All Date Posted: Fri, Apr 29, 2005 at 12:58:24 (EDT) Email Address: Not Provided Message: http://travel2.nytimes.com/2005/04/24/travel/24yunnan.html?pagewanted=all&position= The Natural and the Sacred in China By CONNIE ROGERS AT Tiger Leaping Gorge in the Yunnan Province of China, you can hear two forces of nature collide. The Yangtse, with the accumulated might of a 16,000-foot drop from its start on the Tibetan Plateau, hurls millions of tons of water from hundreds of tributaries between the Jade Dragon and Haba Snow Mountains. Squeezing through a geological weak point just 100 feet wide, it produces an ominous, bone-chilling roar. This is the doorway to northwestern Yunnan and the Three Parallel Rivers National Park, a World Heritage Site created by Unesco in 2003. The headwaters of the Yangtse, the Mekong and the Salween run side by side in deep canyons coming within 55 miles of one another. With its abrupt changes in altitude and unique mix of climates, the park has an astonishing 7,000 plant species and is among the most diverse temperate regions on earth, according to the Nature Conservancy. Near the region's center is Kawagebo, one of the most sacred mountains of Tibetan Buddhism in China and the place I was headed to on a recent visit. Originally I had planned to trek in Tiger Leaping Gorge, a spectacular two-mile-deep canyon with an old miners' trail clinging to one of its nearly vertical slopes. The trail was temporarily closed last August when a trekker was swept away in a landslide. So I drove to a different entrance and walked to the rapids on a paved road that the government had recently built. I was far from alone. Crowds of urban Chinese, many dressed in business suits, walked alongside me. They were among the tens of thousands of visitors, mainly Chinese, coming to see the gorge. Like me, they were keenly aware that the view may disappear in the relatively near future. A dam is under development in the Tiger Leaping Gorge area - one of dozens of hydroelectric projects planned in the power-starved region. Construction may start as early as 2007. According to the Chinese government, 100,000 Naxi and other minority peoples will be displaced from their farms in the valley behind the dam if it is built. 'We worshiped the river when I was growing up,' said Angela Cun, the young Naxi woman who accompanied me on the two-day drive from the gorge north to Deqin, the jumping-off point for Mount Kawagebo. While we chatted, we passed mud brick villages and Yi women in the fields wearing bright yellow pleated skirts and black headdresses as big as kites. News accounts about the dam have called the valley behind the gorge Shangri-La, after the fictional paradise in James Hilton's 1933 novel, 'Lost Horizon,' but it was in another place, two hours farther along that we drove past a sign announcing Shangri-La County. In 1997, the Yunnan Economy and Technology Research Center declared that definitive proof had been found that Deqin County, where I would spend a week, was the real location of Shangri-La. The booming tourism this campaign encouraged is bringing eddies of change all the way to the foot of Mount Kawagebo. We met up with Ma Jianzhong, a powerfully built Tibetan who heads the Nature Conservancy's office in Deqin. Ma is working with the Yubeng villagers on managing the growing number of visitors - 20,000 Buddhist pilgrims and several hundred backpackers this year - and on buttressing the ethic of land conservation. The road to Yubeng is narrow and steep, and at least one bus a year comes to grief in a landslide. We rose to the top of one of the five parallel mountain ranges that crest like giant limestone waves created when India collided with Asia 50 million years ago. I got out at the pass to burn cedar branches with Ma at the flag-clad stupas and to steal a look north into the luminous Tibetan Plateau. More than a mile beneath us, the thin Mekong River created a silver seam. The valley was stony gray except for a few green patches of Tibetan villages glued to its vertical slopes. As we headed into the valley, Baima, our Tibetan driver, removed his hat and said a prayer for safe travel. He slowed only once to squeeze by a large, blue truck that had missed a turn on the road above and had rolled down to lie on its side in our path. I kept my eyes firmly fixed on the far side of the valley. The Meili Snow Mountains, which surround Kawagebo, are wrapped in clouds most of the year, but the day was stunningly clear and the peak of Kawagebo shone like a beacon. The Mingyong Glacier hung from it like a frostbitten hand reaching toward the verdant banks of the river where the temperature reaches 90 degrees in the summer. An hour later the river flashed by, lined with vineyards, orange trees, walnut groves and farmhouses swathed in magenta bougainvillea, red geraniums and yellow sunflowers. We didn't stop until the road ended at the pilgrims' path halfway up the other side. At the beginning of our hike, the path seemed to go straight up, climbing 5,000 feet to a high mountain pass, from which it drops 2,000 feet into a valley at the foot of Kawagebo. By way of encouragement, Ma told me that pilgrims take this trip to earn a better life when they are reborn. When we arrived at the pass, masses of colorful Tibetan prayer flags flapped in communal celebration. Several Chinese backpackers were resting in a primitive teahouse drinking yak butter tea around the fire. We fell naturally into a group. I couldn't understand a word of the lively chatter as we began the descent. But we fell into a communal quiet with an occasional appreciative whistle at the dizzying diversity of plants as the path led us from arid scrub to evergreen oak forest to pine groves draped in lime green lichen, through towering rhododendron and fir trees and ending in a chaotic mix of hemlock, bamboo and fern. Thirty families live in this valley, where they grow barley, herd yaks and gather a highly prized mushroom for export. They used to sell wood as well until logging was outlawed by the government after catastrophic floods in 1998. Today they look to tourism for replacement income. WE stayed at a farmhouse where the owner and his wife were urging their yaks and pigs into the basement for the night. They showed us to the newly built dorm room in their attic, where barley and root vegetables used to be stored. The sun set and the temperature dropped into the 30's. I offered to trade film and cashews for blankets, which broke the ice between me and the young Chinese. I learned the next day that they were suspicious of a Westerner who would come to a place so poverty-stricken. It didn't feel poor as we walked to the sacred waterfall the next morning. The song of a yak herder filled every nook in the valley. We walked past cities of miniature houses built out of pebbles by pilgrims so their souls would have homes in the next world. Ma stopped to splash water from a stream on his head, eyes and mouth. This would ensure bright thought, clear sight and fluent speech, he told us, and we all followed suit. The path ended in an alpine meadow at the foot of Kawagebo. A glacier in front of us released a diamond shower full of rainbows into the air. It was noon, and the light reflecting off the snow was blinding. By now, we had all become pilgrims. When Ma began to walk clockwise through the frigid spray, I followed. I wasn't alone in courting pneumonia. Nina Jin, a software specialist, and her physics professor boyfriend from Beijing were drenched while retrieving pebbles from the base of the waterfall. Two Shanghai teachers circled through the downpour the requisite three times wearing their yellow rain jackets. Ma told us a cable car has been proposed to bring visitors here and the government was planning to build a road to the village. But then he turned to the mountain and said it has never been climbed. Some geologists think that the glaciers here, influenced by warm air currents from the Bay of Bengal, are constantly shifting. The treacherous surface and bad weather they suggest may be the reason why Kawagebo, at more than 22,241 feet, is one of the highest unclimbed peaks in the world. Or maybe, as Tibetans believe, it's because man shouldn't walk in the house of a god.

Subject: Cut Medicaid, Cut Taxes, Repeat From: Emma To: All Date Posted: Fri, Apr 29, 2005 at 12:09:28 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/29/politics/29budget.html?pagewanted=all&position= Congress Passes Budget With Cuts in Medicaid and in Taxes By SHERYL GAY STOLBERG WASHINGTON - The House and Senate broke a lengthy impasse over federal spending Thursday night, narrowly adopting a $2.56 trillion federal budget for 2006 that aims to trim the growth of Medicaid by $10 billion over five years, add $106 billion in tax cuts and clear the way for oil drilling in an Alaskan wildlife refuge.... The passage came just hours after House and Senate negotiators reached a budget deal, resolving differences that revolved largely around Medicaid, the government insurance program for the poor. The budget resolution instructs lawmakers to freeze spending in most domestic programs, but not for the military and for domestic security....

Subject: Bond Funds are Faring Well From: Terri To: All Date Posted: Fri, Apr 29, 2005 at 11:57:00 (EDT) Email Address: Not Provided Message: Notice how well Vanguard bond funds are faring in this market. The long term Treasury yield is down to 4.15%. There simply does not seem to be concern that inflation will be a long term problem, rather slow growth evidently has the attention of bond investors. The Long Term Bond Index has gained 3.3%, while the GNMA has gained 1.14%.

Subject: Mystery of India's Poverty From: Emma To: All Date Posted: Fri, Apr 29, 2005 at 10:52:33 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/29/international/asia/29letter.html?pagewanted=all&position= Mystery of India's Poverty: Can the State Break Its Grip? By AMY WALDMAN BARADPUR, India - In torn clothes, the boys, mostly low-caste children of laborers, held out their plates to be served from a steaming vat of gruel. The image was Dickensian, but it represented not 19th-century England's abdication of responsibility toward the poor but 21st-century India's seeming embrace of it. The children are beneficiaries of an acclaimed program mandated in 2001 by India's Supreme Court to provide cooked lunches to all primary schoolchildren. The program is the signature success of a movement in India that is working to create for the poor an entitlements-based social welfare system much like Europe's. But this is India, home to the world's largest concentration of poor, where some 350 million people still live on less than a dollar a day. So the effort has inevitably raised questions as enormous as the challenge: not least, can poor nations have a social safety net, too? Such questions have divided economists, policymakers and advocates here in recent months, reflecting the uncertain science of poverty reduction, the political and financial pressures tugging at this democracy of more than a billion people, and an India conflicted about the face it wants to present to the world. Welfare and workfare programs are today taken for granted to assist the needy in otherwise prosperous Western industrialized societies. But they took centuries of effort and upheaval to take shape. How much more staggering the task, then, for India. The country ranks 127th out of 177 countries on the United Nations Human Development Index, which measures life span, education and living standard. Nearly half its children are undernourished, a level worse than sub-Saharan Africa. As the social welfare movement expands its goals, debate is expanding, too, over the obligations of the state toward the poor, what India's government can do, and whether betterment can or should be left to economic growth alone. For example, the movement's latest effort - to get a law guaranteeing the rural poor jobs on public works projects - has proved deeply controversial. As originally envisioned, the employment law would have guaranteed one member of any rural household 100 days' minimum-wage employment a year on a public works project near home. Resisting the costs, the Congress-led coalition government has since substantially pared back the bill. Advocates for the poor say the later version would leave vulnerable most of the more than 90 percent of India's labor force that has no unemployment insurance or pension enrollment. The weaker version is close to enactment now. The competing visions for the law reflect a similarly deep divide among economists. One school of thought argues that simply unleashing the economy - by allowing more foreign investment, selling off unprofitable state-owned companies and cutting red tape - will reduce poverty more than a new government program. They point to government estimates that the proportion of people living in poverty dropped from 36 percent to 26 percent of the population in the first decade after economic reforms, which began in 1991. 'Where energy and policy should go is how to accelerate the growth, and not be distracted by these old slogans that really made sense 40 years ago,' said Surjit S. Bhalla, an economist who opposes the employment law. The finance minister, Palaniappan Chidambaram, made a similar argument in an interview, saying that while an employment guarantee could 'keep the pot boiling once a day,' it would not end poverty. That could be done, he said, only through 7 to 8 percent annual growth and 'real jobs.' The counterargument is made by Jean Dreze, an economist of Belgian origin who is now an Indian citizen, and the employment guarantee's most vocal champion. Mr. Dreze says that even if the poverty-reduction figures are valid, which many economists dispute, the economy would have to grow at a much faster rate than even the most optimistic estimates if it were to truly improve the lot of the poor. 'The way we're going now it is going to take forever to get people to an acceptable living standard,' he said. Even 1 percent of gross domestic product - the expected price tag for the employment law - was a small price to pay for easing hunger, stemming seasonal migration and reducing child labor, he argued. A national employment guarantee would absorb and supplant much of the patchwork quilt of antipoverty programs that the government has financed over the decades. Most of them offer food for labor on public works projects. In many places, those programs have become essential buffers against drought and landlessness. But they also have been plagued by waste and corruption, a record cited by those who argue that a nationwide employment program would funnel more money not to the poor but rather to corrupt politicians, bureaucrats and local power brokers. Mr. Dreze concedes there are abuses and waste, but says remedies could be made available - a strong right to information law, for example - that could allow local communities to monitor how public funds are used. He was among those responsible for India's most significant social welfare expansion in recent years, the midday meal program, which resulted from a suit that challenged the government to use its vast stores of rice and wheat to alleviate hunger. In response, the Supreme Court ordered the government to provide cooked lunches in all of the country's schools. The program has so far reached only about 55 percent of Indian children because several large states have lagged in putting it in place. But where it has gone into effect, it has had a discernible impact. Teachers at the government primary school for boys in this town near Delhi say the lunch - usually a bolstering mix of lentils and rice - has brought to school some 50 or 60 children who were otherwise regularly absent. A study by the Center for Social Equity in New Delhi said the program had especially helped retain girls, who are often the first denied schooling in poor families; improved child nutrition; and encouraged mixing among castes. But even some advocates for the poor question adding a new entitlement, like the proposed employment law, when many current ones, notably public health, are so badly administered. Public education too is in disarray, and while any schooling is better than none, it still seems odd to ask teachers here how much the midday meal program has improved learning, given how little learning is going on. One building is crumbling so badly that it has not been used for five or six years. In the other, newly built, all but one classroom is used to lock away benches and tables that the teachers say would be stolen if left outside. So on a recent day, three classes of rambunctious boys sat on the sandy ground. The teachers, earning about $230 a month, are decently paid by Indian standards. But on the day a reporter visited, only 5 of 11 teachers were present; the rest had taken early leave for coming holidays. For some children, then, the meal has taken on more value than their education. The boys are supposed to bring their own plates, but many are too poor to do so. So they line up with their miniblackboards, notebooks or schoolbooks held out. The gruel is slopped on to their learning from the day.

Subject: It's not about your time horizon...... From: Pete Weis To: All Date Posted: Fri, Apr 29, 2005 at 10:33:27 (EDT) Email Address: Not Provided Message: it's much more about what years your time horizon spans. Comstock Partners, Inc. What You Think You Know That Isn't So April 28, 2005 In the late 1990s we wrote a lengthy report with the above title at a time when investment advisors, strategists and economists were exclaiming that all one had to do was ignore the stock market fluctuations, invest in stocks at any time, and watch your nest egg return an average of 10% per year. We pointed out that although there was a kernel of truth in the argument, investors were actually running great risks in buying stocks at excessive valuations near the end of secular bull markets. Although valuations are somewhat lower than the ridiculous heights reached in early 2000, the cyclical bull market since October 2002 has once again put the market in a position where the risks of losing money--or at least not making any—are once again very high. The kernel of truth in the long-run thesis is that U.S. stocks really have returned about 10% a year on average over the very long term. There are two factors, however, that proponents often overlook when promoting this view. First, of the 10% overall return, about 4% has historically been accounted for by dividends, leaving about 6% attributable to the gain in the stock index alone. Since we know that the current dividend yield is only about 1.8%, the historic 10% return is not applicable to the current situation. Second, and more importantly, there have been many long periods where the market not only did not return 10%, but actually declined. Here are some examples covering different periods of time using the Dow Jones Industrials, which goes back the 1880s in real time. In each instance we show the starting date the ending date, the decline in the Dow, and the number of years. August 1886 to November 1903—minus 16% (17 years) September 1899 to July 1932—minus 27% (33 years) January 1906 to August 1921—minus 15% (15 years) November 1919 to April 1942—minus 22% (23 years) September 1929 to January 1950—minus 50% (21 Years) August 1959 to December 1974—minus 17% (15 years) February 1966 to August 1982—minus 23% (16 years) Furthermore, since 1903 there have been 26 different years where at some point that year the Dow was lower than at another point 15 or more years before. This comprises a full 25% of the total number of years within that span. It is therefore extremely misleading to conclude that investors can enter the market at any point in time and be reasonably assured of a 10% return. Peaks of secular bull markets have generally been characterized by high valuations and an optimistic view of stocks, while bottoms have occurred at a time of low valuations and a view of stocks as being too risky for most investors. We believe that the long and powerful secular bull market of 1982 to 2000 has given way to a potentially lengthy secular bear market such as the periods outlined above. Given the current excessive valuations and the major economic and financial structural imbalances we have discussed repeatedly in prior comments, it is likely that positive returns from current levels will be exceedingly difficult to achieve for years to come

Subject: Re: It's not about your time horizon...... From: Terri To: Pete Weis Date Posted: Fri, Apr 29, 2005 at 11:22:20 (EDT) Email Address: Not Provided Message: A useful caution. Proper valuation, or understanding value risks when we take them, means everything in buying assets.

Subject: Europe is and is Not Working From: Emma To: All Date Posted: Fri, Apr 29, 2005 at 09:48:06 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/29/business/worldbusiness/29norris.html Europe Isn't Working, but Investors Are Not as Worried as Politicians PARIS CHICKEN LITTLE would feel at home listening to the political class in Europe as the French prepare to vote on the proposed European constitution. A no vote on May 29 would create a 'political cataclysm,' said Jacques Delors, a former president of the European Commission. Romano Prodi, the commission's president when the constitution was written, made Mr. Delors sound sanguine, saying, 'The problem won't be just a catastrophe for France, but the fall of Europe.' But while the politicians fret, the financial markets go on about their business. Since March 18, when the first poll indicated a defeat was likely, European stock markets have done a little worse than those in the United States, but better than the Japanese market. The euro has lost a little ground, but remains high. In 2005, European shareholders have lost less than American or Japanese investors. Some point to widening interest rate spreads between Germany and Greece as a sign of growing alarm, but you need a magnifying glass to find the evidence. Germany, still viewed as the safest euro credit despite budget problems and chronic high unemployment, now has 10-year bonds yielding 26 basis points, or about a quarter of a percentage point, less than Greek bonds. That spread is up six basis points since the French poll results. If investors thought Mr. Prodi was right, the gap would be far larger. The reality is that Europe isn't working, at least not the way it was supposed to when politicians were campaigning for ratification of the Maastricht Treaty, which led to the adoption of the euro in much of the Continent. Some thought the euro would force economic reform, but the pace of change has been slow at best. Instead, there are signs that the inability to adjust exchange rates within the euro zone is making some areas, notably Italy, less competitive relative to Germany, which itself is facing economic stagnation. The news within many a European country is of various groups and unions fighting to preserve and expand their benefits, with no regard for the country's overall competitive position, let alone that of the Continent. In Greece, the newspaper Kathimerini counted eight demonstrations and job actions announced in advance last week. Shop employees were upset over planned changes in working hours. Music teachers wanted better working conditions. Judges and prosecutors staged a work stoppage to protest transfers of court officials. Accountants marched to demand bonuses for preparing balance sheets. During the same week, Greece's Parliament ratified the European constitution without consulting the voters. It is not that French voters are really upset about what is in the proposed constitution. It would establish a method for making decisions in the European Union that would please Rube Goldberg, even though it is said to simplify the process. Its defeat would leave things as they are, with a possible paralysis of decision making in Brussels. That prospect may alarm politicians more than voters. Instead, Western European voters seem united in opposition to whatever party is in office and in fear of new competition, whether it is from Chinese textiles or from workers from the Eastern European countries that joined the European Union a year ago. Jacques Chirac, the French president, does not appear to have won over undecided voters with his claim that the constitution would protect French workers from low-wage competition. The dream of the European Union was to make Europe a strong world player, able to compete with Japan and the United States, with its national governments not needing to do much to promote the process. Europe may do better if that dream is downsized, leaving each country with the responsibility to put its own house in order.

Subject: Saving and Investing From: Terri To: All Date Posted: Fri, Apr 29, 2005 at 08:20:54 (EDT) Email Address: Not Provided Message: The decline in household saving is especially worrisome on a long term basis for an aging country. We are sacrificing future income to immediate consumption.

Subject: China and America From: Terri To: All Date Posted: Fri, Apr 29, 2005 at 08:17:33 (EDT) Email Address: Not Provided Message: The hope and sense is that because China has been continually flexible in economic policy for these 25 years, there will be flexibility still. I believe there will be a movement to limit the accumulation of dollar reserves, for can be no question of the growing problem they represent. Chinese leaders understand this, so I expect change stepwise to a higher valued Yuan against the dollar.

Subject: Savings From: Terri To: All Date Posted: Fri, Apr 29, 2005 at 06:31:46 (EDT) Email Address: Not Provided Message: A saving proportion of 0.6% of GDP is quite worrisome, for the structural government budget deficit is assured, so there will be a further deterioration in our trade account.

Subject: Social Security From: Terri To: All Date Posted: Fri, Apr 29, 2005 at 06:17:54 (EDT) Email Address: Not Provided Message: The Republican plans, all the Republican plans, would cut Social Security benefits and add needlessly to risks and costs in our prime social insurance program. I am much discouraged. Social Security and Medicare must be protected. Medicaid is increasingly threatened, with severe cuts proposed on federal and state levels.

Subject: Slowing Growth From: Terri To: All Date Posted: Fri, Apr 29, 2005 at 05:58:53 (EDT) Email Address: Not Provided Message: Notice also in the report on slowing economic growth the further decline in saving, much below 1%. The bond market did not respond to the prospect of increasing prices, but the interest rate on the long term Treasury fell to 4.17%. This was not an encouraging report, and in a period of high technology growth offers far too little support for the labor market.

Subject: Bush kisses the saud From: johnny5 To: Terri Date Posted: Fri, Apr 29, 2005 at 17:51:13 (EDT) Email Address: johnny5@yahoo.com Message: Phil Grandie said bush needed to pacify the sauds and japanese and keep those bond prices low - greenspan manipulating them. My redneck friend wrote me about bush, he said what good does it do to give better retirement to POORER workers if you don't work at ALL and are unemployed like he is???

Subject: Our President seems to be....... From: Pete Weis To: All Date Posted: Thurs, Apr 28, 2005 at 23:43:54 (EDT) Email Address: Not Provided Message: one of the few who thinks there is 'spare capacity' out there to reduce the cost of oil. Apparently his years spent in the oil business didn't provide much of an education. Perhaps it's no wonder he had such a difficult time succeeding in the oil business. It's amazing to me why none of the press asked him about conservation measures (or the lack thereof) in 'his' energy bill! Oh, I rememember - Dick Cheney stated the 'government has no business sponsoring energy conservation'. That's rather strange because aggressive energy conservation is the one immediate step which would have an effect on the price of oil - everything else will take time.

Subject: Energy Conservation and Efficiency From: Terri To: Pete Weis Date Posted: Fri, Apr 29, 2005 at 05:46:55 (EDT) Email Address: Not Provided Message: Conservation is seemingly forgotten, and energy efficiency almost forgotten.

Subject: Slow Growth and Low Inflation From: Terri To: All Date Posted: Thurs, Apr 28, 2005 at 14:25:10 (EDT) Email Address: Not Provided Message: The lack of a measurable increase in broad prices is all that I find encouraging in the slowing growth of 3.1% for last quarter. The 1.6% inflation rate shows no gain from the quarter before and remains quite moderate allowing, I hope, the Federal Reserve to raise short term interest rates slowly slowly. Notice the long term Treasury yield is 4.2%.

Subject: Monetary and Fiscal Policy From: Terri To: All Date Posted: Thurs, Apr 28, 2005 at 13:11:34 (EDT) Email Address: Not Provided Message: What went wrong? Though we might have argued for an even more rapid reduction in short term interest rates as the recession began in 2001, I think the Federal Reserve reacted well. Lowering rates quickly and keeping them low allowed for enough growth in the housing market, in furnishings and appliances, in vehicle sales, to keep the recession short and shallow and bring a sustained recovery. The problem appears to have been with a fiscal policy stimulus that severely cut government revenue while having fairly little employment impact. The economy is obviously going through a restructuring as trade patterns change, and there has been need to expressly cushion workers who are adversely effected and spur employment. Too little has been done. However, the recovery spurred by the Fed coupled with commodity price increases as international demand has increased has made the Fed wary enough about inflation to reverse policy 11 months ago and begin to rasie short term rates. Monetary policy worked, but where was fiscal policy through this time of transition?

Subject: Low-Tech Businesses Are Booming From: Emma To: All Date Posted: Thurs, Apr 28, 2005 at 11:58:12 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/28/business/28sbiz.html?pagewanted=all&position= They May Be Mundane, but Low-Tech Businesses Are Booming By ELIZABETH OLSON Forget Web sites and molecular imaging. The biggest fields of opportunity for aspiring entrepreneurs are the same mundane ventures that have been kicking around for decades. Think landscaping companies, child-care providers, janitorial services and nail and hair salons. In a generally buoyant market for low-technology businesses, those are four of the biggest winners by far. Altogether, sole proprietorships in the United States, a rough measure of the size of the small-business low-technology sector, grew by nearly 4 percent in 2002, the latest year with statistics available, to 17.6 million, and their combined revenue increased by 5.5 percent, to $770 billion. The figures come from the Census Bureau's Economic Census, a snapshot of the American economy that is taken every five years. And the trends that drove the increases in low-tech businesses have only accelerated, the bureau's economists say, as the nation's economy has rebounded and employment has recovered. Growth in housing has increased demand for lawn care, the office construction boom has created a need for cleaning crews, more families than ever have two working spouses and need child care, and more women are treating themselves to trips to the beauty parlor, the economists say. That reflects a truth about American entrepreneurship that is often lost in the breathless news coverage of the latest Silicon Valley start-up or biotechnology wonder: most of the growth involves tried-and-true undertakings that are unlikely to yield overnight riches but are open to anyone with tenacity and grit. Landscaping experienced the most growth in the Census Bureau's survey. The number of sole proprietorships that create and care for people's gardens and lawns surged by 21.5 percent in 2002, to 210,000, and their combined revenue increased by 11.6 percent, to $4.8 billion. Hilary Finn, who runs HomeGrown, a landscaping company in Brooklyn, helps explain the profession's popularity. Ms. Finn, 46, spent a decade as a personal trainer, but after giving birth to a second daughter in 2002, decided to switch occupations, for the flexible hours and the chance to express her artistic impulses. 'Since I was a child, I had been creating gardens,' she said. 'I had graduated having studied painting and sculpture, but not design, at Empire State College. But I loved spaces and moving things around and creating spaces outside.' Ms. Finn enrolled in the New York Botanical Garden design program in the Bronx, and started constructing gardens in containers and window boxes. 'Then I realized that Brooklyn backyards are like a container,' she said, and she began to work with a fellow designer to design plots that are often no bigger than 25 feet by 50 feet. Demand for her work spread quickly by word of mouth. 'My business has doubled every year,' she said, although she noted that her revenue is not yet a living. Paula Turpin, a former school bus driver, took a different route, borrowing a few thousand dollars from the federal government to launch her hair salon, Truly Blessed Styles, in the Long Island town of Shirley, N.Y., five years ago, primarily because she wanted to run her own show. She joined a thriving trade. The number of hair salons with the same person as owner and stylist grew 5.6 percent in 2002, the Census Bureau says, and the total number of establishments, including ones with paid staff, surpassed 400,000, with $8.4 billion in annual revenue. Nail salons, which cater to the same clientele, grew even faster, up 8.7 percent to nearly 90,000, with annual revenue of $1.9 billion, the bureau says. Ms. Turpin, drawing on her experience at other hair salons, set up hers in a strip shopping center in April 2000. She styles, cuts and colors hair for her clients by herself. Ms. Turpin's retired mother helps her schedule appointments and keep the books. Her daughter, a college student, pitches in when she can to braid clients' hair. 'Now I have my own business, and I'm able to have flexibility,' said Ms. Turpin, 36. 'And I definitely have plans to expand. I want to add a barber shop in the back, and a place to sell beauty supplies in the front of the store.' Ms. Finn and Ms. Turpin share two distinguishing characteristics of single-owner businesses: pride of ownership and desire to take control of their lives, said Erin Fuller, executive director of the National Association of Women Business Owners. 'Often, these owners do not want their business to become super large,' she said. 'They take pride in their craft and, by keeping small, they can control that.' Ann Bolf, 36, is a good example of that. After divorcing her husband, she opened a hair salon in her home in Stow, Ohio, in September 2002. She sends her three children, 19, 16 and 12, off to school each morning and then cooks their dinner before her first appointment each day. That way, she can easily put the evening meal on the table. And she has fun in between. 'When it's one chair, one stylist and one client, the relationship takes a different turn,' she said. 'It's a lot more personal, you can experiment more and I like it much better.' Most important, Ms. Bolf says she can set her own hours and go on a school field trip or take care of a sick child whenever the need arises. A continuing increase in the number of women in the workplace has helped spur a 5.9 percent rise in the number of child-care providers in 2002, to 619,000 with revenues of more than $7 billion. Many were run in the owner's home. Cleaning companies are in great demand, too. The number of janitorial services without paid employees soared by 20.4 percent in 2002, to 427,600, with almost $6 billion in revenue, the bureau says. One reason, according to a bureau analyst, was the decline in payroll jobs during the 2001 recession, which encouraged or forced many laid-off workers to branch out on their own. The same dynamic was at work in the explosion of landscaping businesses, he said. Greg Littlefield started a lot earlier than that, abandoning his job in office equipment sales and management in 1990 to set up a cleaning company in Montgomery, Ala. But his reason for choosing that career is still valid today: it will never lack customers. 'I knew that I did not want to start a high-tech business,' he said, 'because I had seen several companies built upon a certain technology go out of business overnight when a new technology emerged.' His experience is proof that lack of expertise is no barrier to success. 'The early days were rough,' said Mr. Littlefield, because he had no clue how to clean. So he sold copiers part time and worked at a small moving company, learning the janitorial business by cleaning buildings at night. His company, Professional Facilities Management, eventually grew into a $15 million-a-year business, taking advantage of an increasing number of office buildings that needed cleaning. Mr. Littlefield is also president of the cleaning industry's association, the Building Service Contractors Association International, The industry has been helped by schools, hospitals and government agencies that traditionally had in-house janitorial staffs but are now using contractors for the work, said Marketdata Enterprises, a independent research firm based in Tampa, Fla., that studies service industries. The commercial cleaning industry rolled unscathed through the 2001 recession, according to Marketdata, with revenue growing 5.5 percent in 2002 and 5.9 percent in 2003, to $94.5 billion. John LaRosa, a spokesman for Marketdata, said his firm estimated that growth last year was 6.3 percent and that total receipts could exceed $128 billion by 2008. 'This is a low-tech business that's easy to enter, and many do,' he said, with some entrepreneurs finding lucrative niches like damage restoration, mold remediation or maid services. That was Mr. Littlefield's experience. He figured that to thrive in an industry where two out of three firms lose their contracts within a few years, his company had to become what he called a total facilities service provider. So he began developing a package of services, including housekeeping, landscaping, labor, minor maintenance and security services. That meant eventually expanding to 900 employees, a far cry from the single-employee businesses that are proliferating now. But Mr. Littlefield said that he stayed true to his initial goal of maintaining control and flexibility by paring clients when they were not working out, providing extensive staff training and adopting company policies that were family-friendly.

Subject: Why Bubbles May Happen From: Emma To: All Date Posted: Thurs, Apr 28, 2005 at 10:24:29 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/28/business/28scene.html?pagewanted=all&position= Economists Try to Explain Why Bubbles Happen By ALAN B. KRUEGER JONATHAN Swift is credited with affixing the label 'bubble' to a stock price that far exceeded its economic value in a poem written in December 1720, just after the stock price of the South Sea Company tumbled. The last stanza read: 'The Nation too, too late will find/ Computing all their Cost and Trouble/ Directors Promises but Wind/ South Sea at best a mighty Bubble.' Perhaps it is a tad late, but economists are rediscovering bubbles. Before the prices of Internet stocks crashed in April 2000, most financial economists believed that stock prices closely matched their fundamental economic value. Indeed, a survey of 110 financial economists by Ivo Welch of Yale in 1997 found that fewer than one in 10 disagreed with the statement, 'By and large, public securities market prices are efficient.' In an efficient market, all relevant public information is reflected in the price of an asset. Prices cannot be too high or too low; they must be just right. Bubbles were considered a theoretical impossibility. If a stock's price exceeded its fundamental value, rational investors would sell the shares they own as well as sell the stock short - betting that the price will fall - therefore putting pressure on the price to fall. As long as knowledgeable, rational investors had enough funds to 'attack' a bubble by short selling, even the presence of irrational investors would not permit prices to stray from their fundamental values for long. Experience can be a powerful teacher. The rise and fall of Internet stocks - which created and then destroyed $8 trillion of shareholder wealth - has led a new generation of economists to acknowledge that bubbles can occur. What is wrong with the logic that bubbles should be attacked by knowledgeable investors? Economists now have an abundance of theories to explain why arbitrage behavior, the practice of exploiting the mispricing of assets to make a profit, does not inoculate us from bubbles. One theory posits that smart investors, like mutual funds and hedge funds, are reluctant to bet against overpriced stocks because they would lose clients if they did not go along with others and the price continued (for a time) to rise. Another says that investors who recognize that a stock is overvalued still pour money into it because they cannot tell when others will sell the stock short, and they would forgo profitable opportunities if they pulled out too soon. If everyone is looking for the exits right away, then the strategy is clear - but no one wants to be the first to leave a good party, even if everyone knows the party is overrated. According to this theory, investors face a 'synchronization risk' because many investors must attack a bubble at once for it to burst. Yet others peg the problem on regulation. Two intriguing recent papers look closely at knowledgeable investors' behavior to sort out these explanations, and both point to synchronization problems. Peter Temin of the Massachusetts Institute of Technology and Hans-Joachim Voth of the Universitat Pompeu Fabra in Barcelona, Spain, revisit the South Sea bubble of 1720, examining the daily trading positions taken by Hoare's Bank, a niche private bank in London. The advantage of looking at this historic event, Mr. Temin said, is that 'we can look at the actual records at a time when we don't have complications of modern life, such as regulation.' The South Sea bubble involved a British company with monopoly trading rights over South America. Despite dazzling investors with the promise of riches from Spanish America, the South Sea Company ran a type of Ponzi scheme, exchanging shares in the company for privately held government debt. The price of South Sea's stock increased more than eightfold from January to July of 1720, and then fell by 88 percent in the fall of 1720. Jonathan Swift, Isaac Newton and other lay investors lost substantial sums in the South Sea bubble, but what about sophisticated investors? Hoare's Bank, which is still in business, opened its archives to the professors. They discovered that Hoare's was a cautious, sophisticated investor that undoubtedly recognized that South Sea's price was unsustainable. Yet the bank decided to 'ride' the bubble, investing its own funds after it thought the stock was overpriced. In the end, the bank made a tidy profit because it invested early and sold some of its stock as the price fell. The most plausible explanation for this behavior, the economists concluded, is that the bank did not know when other sophisticated investors would stop buying the stock, so the lack of coordination allowed the bubble to grow. Looking at the Internet bubble 280 years later, Markus K. Brunnermeier of Princeton and Stefan Nagel of Stanford provide the first detailed study of the trading positions of hedge funds. Extracting quarterly information from Form 13F filings, which are required of large institutional investors, they are able to peek at the stock holdings of 53 hedge fund managers, encompassing hundreds of major funds, including Soros, Tiger and Tudor. Like Hoare's Bank, hedge funds continued to invest in highly priced Internet stocks deep into the bubble. At the peak of the market, in March 2000, hedge funds held 31 percent of their stock portfolios in companies with the highest price-to-sales ratios, while such companies attracted 21 percent of the market over all. Hedge funds reduced their holdings of Internet stocks when the price fell, but their portfolios were still weighted more heavily toward highly priced stocks than other investors'. Although hedge funds pursued diverse strategies, Professors Brunnermeier and Nagel found 'no evidence that hedge funds as a whole exerted a correcting force on prices during the technology bubble.' Riding the bubble and timing sales of individual stocks also paid off: hedge funds' investments in the technology sector outperformed market benchmarks. Hoare's Bank and the hedge funds may have been lucky - indeed, there is no evidence that the hedge funds outperformed the market outside the technology sector - but their strategies still indicate that at least some highly skilled investors were riding bubbles instead of attacking them. Bubbles create many problems. Investors gain a false sense of wealth and security, and capital can be misallocated. What should we do about them? Professor Brunnermeier has a modest proposal: more disclosure. For example, he points out that it is inadequate for Form 13F to require investors to disclose stocks that they own but not ones that they have shorted. Greater disclosure could help to synchronize attacks on bubbles, and thus prevent them from inflating in the first place. Alan B. Krueger is the Bendheim professor of economics and public affairs at Princeton University.

Subject: The present looks more & more like past From: Pete Weis To: All Date Posted: Thurs, Apr 28, 2005 at 09:33:55 (EDT) Email Address: Not Provided Message: U.S. and China on a collision course Philip Bowring International Herald Tribune WEDNESDAY, APRIL 27, 2005 HONG KONG Hubris and myopia on both sides are pushing China and the United States toward a confrontation over trade from which the rest of the world will be an equal loser. The issue may be less the stuff of headlines than the China's furor over Japan's past and future roles in Asia. But that is an issue which, at least in the short run, can be turned on or off. The trade problems go deeper - to the heart of politically driven economic policy misconceptions. As a result both countries' economies are, for now, growing at rates that are unsustainable and are storing ever bigger problems for the future. Let no one mistake the dangers when both parties in the U.S. Congress take aim at China trade in a way that could threaten the whole WTO structure and when China makes the issue of its currency value into a matter of national dignity. China has consistently failed to grasp the currency nettle despite years of promising a more flexible policy and after more than two years of growing international disquiet about global imbalances arising in part from currency misalignments of which the yuan is the most significant. China's success has blinded it to the dangers of international reaction against its trade and currency policies. There has been a mix of reasons for China's failure to change: bureaucratic inertia, an indecisive new leadership, fear of the impact on employment and the financial system. But the most important factor now seems to be reaction against U.S. pressure. Nationalism has been on the rise as China's pride has been swelled by foreign adulation. Unfortunately for China there is now no way that it can continue on a course of reliance on a U.S. export market which, one way or another, is likely to be cut back to bring the trade gap down to sustainable levels. China too must recognize that while its exports have helped power remarkable economic growth, they have built up domestic as well as international problems. The fixed exchange rate and gargantuan surplus have propelled excessive monetary growth and a level of fixed asset investment that exceeds that in southeast Asia before the 1997 crisis. The massive industrial and infrastructure overcapacity now being built seems sure to produce a collapse in profits, another surge in nonperforming loans and a sharp decline in investment and growth. These could hit just at the time when China is finding severe headwinds, if not outright barriers, in the United States. As for the United States, its assumption that it can have continuous 3 percent GDP growth based almost entirely on other nations' savings is even more remarkable. The buyers of U.S. debt - mostly Asian central banks - have helped sustain U.S. illusions about its economic prowess. More the fool they. But the United States itself is mainly to blame for abusing the role of the dollar to buy growth. China is right that the trade deficit is a U.S. problem that will not be solved by a yuan revaluation. Indeed it could make it worse and create inflation, not jobs, in the United States. Nothing but a rise in savings - which means a sharp fall in consumption - can solve the deficit problem. In other words, the United States must face up to the necessity of a recession or prolonged minimal growth if balance is to be restored. Policies under Bush/Greenspan have delayed the day of reckoning. But it is coming. This is not just politically unpalatable at home. U.S. attitudes to its foreign partners are either not-so-benign neglect, or assume that the United States is doing the world a favor by sustaining its consumption binge. In fact the imbalances are now threatening the trade system and dollar dominance which have been such successful ingredients of U.S. policy for 40 years.

Subject: Bogle 70% bond funds - worried about economy From: johnny5 To: All Date Posted: Thurs, Apr 28, 2005 at 09:24:53 (EDT) Email Address: johnny5@yahoo.com Message: Making Maria Batoromo's cowlicks flip!! BOGLE SLAMMING USA! Deficits - Dollars - Grasso Scandal!! Specialists SCANDAL! Go Bogle! hehe

Subject: Re: Bogle 70% bond funds - worried about economy From: Ari To: johnny5 Date Posted: Thurs, Apr 28, 2005 at 09:44:47 (EDT) Email Address: Not Provided Message: So, Bogle likes bonds for protection. This is interesting.

Subject: Re: Bogle 70% bond funds - worried about economy From: David E.. To: Ari Date Posted: Thurs, Apr 28, 2005 at 21:07:09 (EDT) Email Address: Not Provided Message: Bogle has always said - Your bond % and your age should be about the same.

Subject: Re: Bogle 70% bond funds - worried about economy From: Terri To: David E.. Date Posted: Thurs, Apr 28, 2005 at 21:54:53 (EDT) Email Address: Not Provided Message: What is your sense of the markets now?

Subject: European Integration From: Terri To: All Date Posted: Thurs, Apr 28, 2005 at 08:52:16 (EDT) Email Address: Not Provided Message: Though it is possible even likely that France will not vote in favor of the European Constitution, there is no reason to think this will set baack integration. A constitution will simply be drafted again. European integration is strong and the union will continue to expand.

Subject: Re: European Integration From: Setanta To: Terri Date Posted: Thurs, Apr 28, 2005 at 11:37:21 (EDT) Email Address: Not Provided Message: unfortunately terri i agree. i am very pro europe and see its benefits every day. i think we do feel an affinity with citizens of all other member states (bar england for some strange reason!!!) however, ireland voted against ratification of the nice treaty and the govt apologised to the eu and held another referendum. some say it was an anti-govt vote and the treaty's neck was on the block as apposed to the govts! also we got further concessions re neutrality and abortion. however, democracy in action, it wasn't. i don;t know whether the benefit of the passing of the treaty was lost in the harm caused by the govt setting aside the will of the people and re-referenduming (if such a word exists) till they got the required result. i think the eu is greater than the sum of its parts. that economics, bon homie and a sense of fraternity are the glue that holds it together (not T52s or AK47s as in the case of the USSR). vive l'EU! viva EU! EU uber alles! God save the EU! Top of the EU to you, mine's a Guinness! because of my gigantic plunge into the property pool i am obsessed with all things that affect it. as a result, a fall in interest rates greatly benefits me as the price of my house will probably soar. however the auditor/economist/patriot in me is wondering whether this will be a good thing for the irish economy already awash with cheap money, my greedy accountant side though is salivating at the prospect of my paper worth skyrocketing.

Subject: Greenspan Confidant sees America = Argentina From: johnny5 To: All Date Posted: Thurs, Apr 28, 2005 at 08:31:23 (EDT) Email Address: johnny5@yahoo.com Message: Greenspan confidant sees some parallels between US and Argentina U.S. Shows Some Parallels With Argentina of '90s: John M. Berry April 28 (Bloomberg) -- The U.S. is not Argentina. Certainly not. Real wages in this country aren't 20 percent lower than they were seven years ago, goods imported from Europe don't cost more than four times as they did then and 40 percent of the population isn't living in poverty. Still, there are some disturbing parallels between the U.S. of today and the Argentina of the 1990s when the country was living well beyond its means, borrowing abroad to finance large budget and current account deficits, while government leaders ignored the urgent need for more prudent fiscal policies. And in the final pages of a new book that tells in exquisite and chilling detail the Argentine story of borrowing, boom and bust, Washington Post financial reporter Paul Blustein notes some of those parallels in terms of large foreign borrowing and the possibility of a shock associated with a reduction in such flows ``It could happen here,'' Blustein writes in ``And the Money Kept Rolling In (And Out)'' (published by Public Affairs). ``Americans who give Argentina's story fair consideration and conclude otherwise are deluding themselves. The risks are much lower for the United States than they were for Argentina, but they are unacceptably high. ``The words of Miguel Kiguel, Argentina's former finance undersecretary, are apropos: `Once you know the markets are there, and there is financing, you behave as if financing will be there forever.' Same `Cavalier' Attitude ``The United States has shown every sign of having adopted that same cavalier, incautious attitude in the first few years of the twenty-first century,'' Blustein says. Argentina had its spree and since the end of 2001 has paid a horrendous price for its folly. It had borrowed in dollars and hadn't nearly enough to repay its exploding debt when foreign investors shut off the flow of new money. There has been no similar day of reckoning yet for the U.S., and the eventual price to be paid is unknown. It shouldn't be on a scale vaguely comparable with that of Argentina's, though it may be uncomfortably large. The U.S. economy is far larger than Argentina's of the '90s, and thus better able to sustain even a large shock. More importantly, this country's foreign debt is also denominated in dollars, which the Federal Reserve can create at will -- though last week Fed Governor Donald L. Kohn warned there is a distinct limit to that will. Sharing the Blame The book by Blustein, a former colleague of mine at the Post, is a fascinating, well written international tale, as the subtitle indicates: ``Wall Street, the IMF, and the Bankrupting of Argentina.'' Some key U.S. government officials also played a role and hardly covered themselves with glory. Everyone gets a share of the blame. Argentine politicians who would not curb deficit spending so long as foreign financing was available, International Monetary Fund officials who foolishly helped the country defend an ultimately unsustainable currency peg of one peso to $1, and investment bankers who made tens of millions of dollars in underwriting and trading fees on Argentine government bonds while issuing misleading research reports on the country's prospects. Blustein, a meticulous reporter, quotes liberally from previously unpublished internal IMF staff memos that called for taking a tougher line with the Argentine government as its debts mounted. When only a miracle could have allowed Argentina to maintain its currency peg and avoid defaulting on its debt, top IMF officials temporized, partly to avoid having the IMF blamed for triggering a default. Current Account Deficit The delay in recognizing reality made the eventual cost of changing policies far greater. For one thing, the government forced banks to buy large quantities of government debt, which in the end all but destroyed the Argentine banking system. In the process, the savings of many ordinary citizens were wiped out. In his speech on April 22 at Bard College in Annandale-on- Hudson, New York, Kohn said the burgeoning U.S. current account deficit, which is predicted to be close to 6 percent of GDP this year, is unsustainable. Eventually there will have to be an adjustment, he said. ``In all likelihood, adjustments toward reduced imbalances in the United States and globally will be handled well by markets, without, by themselves, disrupting the good, overall performance of the U.S. economy -- provided, of course, that the Federal Reserve reacts appropriately to foster price and economic stability,'' Kohn said. Restoring Fiscal Discipline On the other hand, likelihood is not certainty. ``Complacency would be ill-advised,'' he cautioned. ``Although the odds seem favorable for an orderly adjustment, the current imbalances are large and -- importantly for gauging risks -- unusual from a historical perspective.'' While it isn't clear the shift from federal budget surpluses in the late '90s to today's large and continuing deficits has played a large role in making the current account deficits worse, a better fiscal balance going forward could help when they begin to shrink, as the eventually must. ``A permanent correction to the spending imbalances must involve the restoration of fiscal discipline and long-run solutions to the financing problems of Social Security, Medicare and Medicaid,'' Kohn said. ``Achieving these objectives are important in any event, but they take on added weight to the extent that we cannot count on an ever-increasing flow of global savings coming into the United States. The Need for Listening Up ``Without a resolution of these fiscal problems, the balancing of aggregate production and spending would be much more difficult and would result in intensified pressures on interest rates,'' Kohn said. And he concluded by saying that no one should assume that monetary policy could necessarily offset those pressures on interest rates if cutting rates would jeopardize price stability. Indeed, if inflation threatened, the Fed should not ``hesitate to raise rates because higher rates mean higher debt-servicing burdens for the current account, the fiscal authority or households,'' Kohn said. Yes, the Fed could provide a plentiful supply of dollars when the foreign capital inflow slows down, only it won't if the cost is a surge in inflation. The fiscal authority -- that is, President George W. Bush and Congress -- ought to listen up.

Subject: Re: Greenspan Confidant sees America = Argentina From: Terri To: johnny5 Date Posted: Thurs, Apr 28, 2005 at 10:15:28 (EDT) Email Address: Not Provided Message: John Berry, who retired after many years reporting on the Federal Reserve for the Washington Post, is most skilled at Fed policy analysis. Always worth considering.

Subject: Japanese Growth From: Terri To: All Date Posted: Thurs, Apr 28, 2005 at 06:15:02 (EDT) Email Address: Not Provided Message: The Japanese Central Bank has wished to raise short term interest rates for years, but growth in Japan continues to be anemic and there continues to be deflation. There is no choice for the bank other than the extreme low rates that prevail. As Paul Krugman explained, the Japanese made policy mistake on mistake as the economy began to slow from 1990. The global economy needs stronger growth from Europe and Japan, but whether that will come is not the least bit clear to me.

Subject: Europe as a Whole From: Terri To: All Date Posted: Thurs, Apr 28, 2005 at 06:03:54 (EDT) Email Address: Not Provided Message: The question in Europe is whether to think of the Euro lands as a whole or as separate lands. Should fast growth in Ireland or Spain be more important the slow growth in Europe as a whole? If Europe as a whole is considered, then short term interest rates may stay low until growth as a whole increases in Europe.

Subject: Johnny's Ukraine Friends From: johnny5 To: Terri Date Posted: Thurs, Apr 28, 2005 at 08:34:20 (EDT) Email Address: johnny5@yahoo.com Message: in college hated being considered russian, they all wanted independent identity - russia couldn't hold it together, maybe europe won't be able too either eh? Too many differences - france vote will be interesting - maybe america with all the cultural inpouring won't be able to hold it together either long term no? Hard for me to feel friendly to mexico boy in walmart when we can't talk to each others language. Great commercial being put out by AG Edwards where guy is trying to get therapy and the doctor talks to him in a foreign language - interesing times we live in.

Subject: European Growth is Slowing From: Terri To: All Date Posted: Thurs, Apr 28, 2005 at 05:57:59 (EDT) Email Address: Not Provided Message: Germany may well be in a recession at present, while growth in France is faltering. Growth in the European community as a whole is weakening. At the same time, the weak growth and strong Euro limit inflation. There is thus reason to believe that the European Central Bank will at least not raise interest rates in the coming several months. There is no mistake by analysts, simply a further understanding that growth has weakened and inflation has been contained. Since fiscal policy will be hard to use to stimulate Germany and France because of deficit limits, the Central Bank will at least be cautious before tightening.

Subject: Bogle on CNBC squawk BOX this morning From: johnny5 To: All Date Posted: Thurs, Apr 28, 2005 at 05:43:33 (EDT) Email Address: johnny5@yahoo.com Message: http://moneycentral.msn.com/Content/CNBCTV/TV_Info/GuestList.asp Squawk Box 7:00 AM - 10:00 AM ET George David United Technologies Chairman & CEO Howard Penney Friedman, Billings, Ramsey Restaurant Analyst Eugene Peroni Claymore Advisors Senior Managing Director of Equity Research Samuel Bodman Energy Secretary Bob Iaccino Spike Trading Senior Vice President Brendan Barnicle Pacific Crest Securities Senior Research Analyst John Bogle Vanguard Group

Subject: ECB interest rates From: Setanta To: All Date Posted: Thurs, Apr 28, 2005 at 04:16:47 (EDT) Email Address: Not Provided Message: anyone any info on the morgan stanley report stating that they expect the ECB Base Rate (currently at 2%) to fall. the smart money was on a rise in the interest rate sometime in the near future. in fact the national central banks in the ECB (as advised to me by someone in the know) have structured their portfolios to reflect the fact that they were at the bottom of the interest rate cycle. another question is how this would affect the performance of the portfolio and how it could affect the economy (these are the bankers' banks). thirdly, if this MS report is true, how can some of the best and brightest economists with access to better information than everyone else, could call it so wrong and affect the performance of their nation's portfolio.

Subject: the 6 trillion dollar question From: johnny5 To: Setanta Date Posted: Thurs, Apr 28, 2005 at 05:11:13 (EDT) Email Address: johnny5@yahoo.com Message: I will answer you how they got it wrong, when you answer me how those smart japanese got it wrong??

Subject: Voter Eligible Population From: johnny5 To: All Date Posted: Thurs, Apr 28, 2005 at 00:36:18 (EDT) Email Address: johnny5@yahoo.com Message: http://elections.gmu.edu/turnout_rates_graph.htm The next few elections will be interesting Terri, in the past when people really wanted change - how much did eligible voter turnout increase? Notice after bush 1 all those blues came out from nowhere to swing it for slick willie. As my redneck friends more and more get the screws put to them - I see a lot of apathetic people who didn't vote recently coming out of the woodwork to overturn the current government. What was the VEP in iraq when a lot of people desperately wanted some input into thier future? The career politicos and richies may find a lot of new blood coming for them in the next few elections. You read my friends email - no more elephants - hehe. They should have let the sleeping bear lie - once he wakes up who knows what will happen - maybe you are right and he won't wake up and the status quo won't change. I have more hope for our citizens than to let us continue down this path - please stay positive and believe in the base to come together and make a change when it is really needed.

Subject: Prothonotary Warbler Taking a Drink From: Emma To: All Date Posted: Wed, Apr 27, 2005 at 21:25:59 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5286&exhibition=7&u=17|42|... Prothonotary Warbler Taking a Drink New York City-Central Park Lake.

Subject: Buget Arguments From: Terri To: All Date Posted: Wed, Apr 27, 2005 at 18:50:07 (EDT) Email Address: Not Provided Message: I understand the argument for a gradual tax increase, but I think I also understand politics. Republicans have made tax cutting a prime cause for several decades; a cause that has been successful. There will be no change in attitudes to taxes this year, and the coming year there is an election and there will again be no change. The budget framework will be set in a matter of hours or days, and there are only provisions for extending and enlarging the tax cuts and cutting what is possible from social benefit programs that are not supported by powerful blocs. There is no cynicism to these words, nor optimism or pessimism. I am trying to be realistic, and I always wish to be hopeful. We have a budget deficit that appears increasingly troublesome, but I do not project a ready change in policy to strengthen revenues. Alas.

Subject: Re: Buget Arguments From: David E.. To: Terri Date Posted: Wed, Apr 27, 2005 at 20:26:06 (EDT) Email Address: Not Provided Message: I think the republicans have a nice limb to stand on. Remember, the tax cuts were proposed as TEMPORARY. Even though President Bush didn't mean it, the TEMPORARY label was necessary to get the votes. Obviously the tax cuts have not worked, not enough steam was generated to create jobs. Plus the deficits are a drag on our economy. I can't think of anybody that can honestly say they worked other than the Coors family and a few others. The cuts haven't worked and more and more people even Republicans are starting to feel guilty about the problem we are giving to the next generation. The changes in attitute is happening. However, I must admit I don't know when the tipping point will be reached. It would be very nice if it tips before the next presidential election. Cheers David

Subject: Budget Projections From: Terri To: David E.. Date Posted: Wed, Apr 27, 2005 at 20:39:43 (EDT) Email Address: Not Provided Message: There has been an important advantage in keeping the tax cuts temporary as long as possible, just as in fixing the Alternative Minimum Tax year by year. The budget projections are made assuming higher taxes than will be the case, so there is less of a sense of constraint. We should recognize how difficult raising taxes has been on state and federal levels.

Subject: Budget Arguments From: Terri To: Terri Date Posted: Wed, Apr 27, 2005 at 18:51:06 (EDT) Email Address: Not Provided Message: 'Budget, budget budget.'

Subject: Politics to the redneck From: johnny5 To: All Date Posted: Wed, Apr 27, 2005 at 18:22:28 (EDT) Email Address: johnny5@yahoo.com Message: Terri this is one of my blue friend who recently voted red - read his email - I will try to edit the bad parts. I asked why he voted for bush who has been PROVEN now not to be for the little guy: 'Oh i knew he was never for the little guy, see the elephants has been that way for years. I knew that kerry was a pu**y & a lier and would let the ragheads fu** us more. I have always voted for the jackass, but this time we had no jackass that would do any better that Bush so better to keep wild elephant that's mad, that a jackass that slow and set on his ass and lies Kerry has homes all over the world and business, not in the good old USA like he said.....his wife Hains kectup is overseas also. Let me go ahead and tell you, next time around, don't care who running, we need some new jackass's in wash real fast are the poor man will be doom.......I'm voteding all dem's next time, no matter whos running

Subject: The point is Terri From: johnny5 To: johnny5 Date Posted: Wed, Apr 27, 2005 at 18:24:05 (EDT) Email Address: johnny5@yahoo.com Message: Unless the repubs do something to FIX what they have done to the little guy - I see a LOT of people from the middle to lower class that DID vote bush who WILL vote blue no matter what - so if the repubs want to stay in the seat - they better decide what is more important to them - money they are getting now - or political power in the next elections.

Subject: In Ethiopian Hills From: Emma To: All Date Posted: Wed, Apr 27, 2005 at 15:53:07 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/27/opinion/27wed3.html In Ethiopian Hills, Five Years to Create Something Out of Nothing By HELENE COOPER KORARO, Ethiopia For seventh graders here, class is held under the shade of a ficus tree because there are only six rooms in the village school. On a recent day, students sat and listened as a visitor from Addis Ababa, hundreds of miles away, asked which of them expected to go on to the eighth grade. Twenty-nine hands went up - the entire class. Their Addis Ababa visitor, Hailay Teklehaimanot, looked at them with frustration. 'How will you get there?' he asked gently. Seventh grade is the highest class offered at the Koraro Primary School, and the nearest eighth grade is nearly 20 miles away. That's a good six-hour walk because the village has no car. For a while, no one answered, and most students looked down at the dirt. Then Kahsay Gebneslasie, 14, spoke up. 'We heard maybe they might open an eighth grade here,' he said. The school's principal, Gidey Haileslassie, was standing nearby and gave a barely perceptible shake of his head. A year ago, Koraro villagers scraped together the money to pay for a seventh-grade teacher, then put the class under the tree since there was no room in the school. Paying for an eighth grade is beyond the village's means at this point. If the rich world is actually going to deliver on its promise to halve global poverty by 2015, then it has to start somewhere. It may as well be here in this village, deep in Ethiopia's northern Tigray Province, where food is scarce and water even scarcer, but 14-year-olds still cling to the hope that they will be able to go to eighth grade. Koraro, which was recently chosen to be a United Nations test case in the fight against poverty, is where the rubber meets the road. It is one of the poorest and most isolated villages in the poorest and most isolated province of one of the world's poorest and most isolated countries. If poverty can be whipped here in Koraro, it can be whipped anywhere. The place has nothing. Some 5,000 villagers live their short lives - life expectancy here is about 40 years - out here in the red dust and rocks, eking out a subsistence living. There is no topsoil and the land is eroded, so farming is an uphill battle. Half of Koraro's children - and there are some 1,500 of them - are underweight and malnourished. Only 34 families out of 1,500 have access to clean drinking water. The rest walk four miles round-trip to haul buckets of dirty water, and the water-borne illnesses they carry, into their homes for drinking, cooking and washing up. There's no electricity, no doctor, no industry, no market, nothing. But Koraro is drop-dead beautiful, with jagged red cliffs that look like skyscrapers towering over wide expanses of drylands. The centuries-old churches, most carved deep into the cliffs, testify to how long villagers have been here, in one of the world's oldest cultures. Indeed, while it would appear easy for Koraro residents to decamp to a more hospitable site closer to the regional capital, Mekele, most of the villagers refuse to leave. Zafu Tsegabu, who is 18, watched with her 2-month-old daughter as her husband moved to a bigger town about 25 miles away, and refused to join him. 'This is my home here,' she said simply. As soon as the people here were told that they had been singled out to be one of the United Nations' test villages on poverty reduction, they organized themselves into committees to figure out how to get the job done. There's a water committee and a school committee, an energy committee and a health committee. The United Nations plan, spearheaded by the economist Jeffrey Sachs, calls for the participation of foreign donors, the Ethiopian government and the village of Koraro. Since Koraro has no money to offer, the villagers are supplying the labor and local materials. On a recent day, some 1,500 villagers - just about every able-bodied man, woman and teenager, were hacking rocks out of the earth and moving them into piles. The rocks will eventually be transferred to the site where they hope to build a village clinic. Mr. Sachs's proposal allots Koraro $250,000 a year for the next five years to turn itself around. The government of Ethiopia will kick in technical expertise, including help to build a proper road to link Koraro with the rest of the world. The list of what the money will buy is as basic as it comes: five metal doors for the clinic, one diesel generator to provide occasional electricity to the village, three windows for the school, one grinding mill so villagers can turn their cereal crops into food, and a village truck that could serve a variety of needs. But there is no eighth grade on the list. There are too many other basic necessities that have to come first. Still, Koraro, if it works, can become a model for scaling up this type of development for villagers all over Africa - provided the rich world makes good on its promise to donate 0.7 percent of G.D.P. to foreign aid. The Group of 7 summit meeting in July, when leaders of rich countries will get together in Scotland, will probably provide critical answers to that question. Britain, Germany and France have all provided timetables to ramp up their aid money to 0.7 percent by 2015. But the United States has yet to do the same. In the meantime, the people in Koraro continue to hope and make plans. In the twilight of her life at age 30, Kidan Hagos, a mother of seven, leaned against a shady tree as she took a break from hacking rocks for the new clinic. Her youngest child, Haregeweini, 9 months old, was propped against her, nursing. Mrs. Hagos, for her part, took a moment to dream big. Asked what she would ask for if she could have anything in the world, she spent a good three minutes carefully considering her answer. 'A food market close by,' she said, 'and a well with good water.'

Subject: Filibuster From: Ken To: All Date Posted: Wed, Apr 27, 2005 at 14:16:13 (EDT) Email Address: kl05pdx@comcast.net Message: The largest newspaper in Oregon, The Oregonian, editorialized on April 25, 2005 against the nuclear option stating 'The filibuster is a quaint and sometimes-abused tactic, but it plays a valuable role, even on judicial nominations.'

Subject: By Cheese Possessed From: Emma To: All Date Posted: Wed, Apr 27, 2005 at 12:27:52 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/27/dining/27chee.html?ei=5070&en=9c98fb00763add59&ex=1114747200&pagewanted=all&position= By Cheese Possessed By DANA BOWEN DIANE STEMPLE is a clinical psychologist. But each Thursday she steps away from her practice in Port Washington, N.Y., to work at the counter at Murray's Cheese shop in Greenwich Village. When the restaurant Artisanal opened four years ago with a list of 200 cheeses, Dr. Stemple worked there as an intern. 'I was the weird woman from the suburbs who wanted to work in cheese,' she said. Dr. Stemple, who said she became enchanted with cheese when she sampled varieties she had never tasted while on her European honeymoon in 1985, once dragged her family on a 12-day trip to Scotland, where she made cheese. She also has taught cheese classes for her local school district. 'It's not normal,' she said of her cheese obsession. Increasingly, though, it's not that unusual. As the variety and quality of American cheeses have blossomed in recent years, the passion of American cheese lovers has intensified. The American Cheese Society, a trade organization, has more than doubled in membership, to about 1,000, in four years, but only 25 percent make cheese. So who are the rest? People like Dr. Stemple. They treat good cheese stores like temples. They visit cheese makers. They take classes in cheese appreciation, cheese making and affinage, the art of maturing cheese, which some practice at home. They seek out unusual, even illegal cheeses. 'I think there's a lot of similarities to where wine was 30 years ago,' said Terrance Brennan, owner of the restaurants Artisanal and Picholine, and of the Artisanal Cheese Center, where more than 1,700 students have studied subjects as varied as cheese-plate arranging and cheese aging since it opened two years ago. With places like Murray's, Artisanal and the Bedford Cheese Shop in Brooklyn, and with scores of cheese makers within a day's drive, New York City is a center of cheese enthusiasm. Ken Liss left his wife and two young sons in Minneapolis earlier this year for a three-month, 20-hour-a-week unpaid internship at the Artisanal Cheese Center on West 37th Street, a leading center of affinage and cheese education. Mr. Liss quit his job as an academic adviser at the University of Minnesota and is thinking of opening a bed-and-breakfast, but he said he is working at Artisanal to pursue his love. 'I'm still learning how to taste the cheese,' he said. One recent morning, Mr. Liss transferred Fleur-de-Lis, a triple cream from Louisiana that looks like a large white Hershey's Kiss with the top lopped off, onto racks in one of five Artisanal's aging caves, which are like walk-in coolers with a funky aroma. In the caves, Mr. Liss and other interns and workers ready the cheese for sale in stores and at Mr. Brennan's restaurants by rotating and flipping them to age evenly over periods of 10 days to 3 months. They spray some with brines and bathe others with brandies to finish what the cheese makers started in their own caves. With its varied allures, cheese feeds a variety of obsessions. For some it provides a connection to the land. Kate Brady, a marketing consultant who lives on the Upper West Side, visits farms on her days off. Tim Tonjes, a second-generation dairy farmer, sells his robust Welsh-style Caerphilly at the Union Square Greenmarket alongside pictures of his farm in Callicoon, N.Y., and his Holsteins. 'There are those that are very interested in the fact that it's a small farm,' he said. Anne Saxelby, a part-time painter who works behind the counter at Murray's, helped out at Cato Corner Farm, a Connecticut cheese maker, last year. In her kitchen hangs a painting she did of the milking barn. 'That's Greta,' she said, pointing to a pretty Jersey heifer. Paintings of cheese she helped make at Cato Corner - a Muenster-style Hooligan and a somber portrait of Swiss-style Vivaces - hang in a classroom at Murray's. In the last decade women in particular have been dropping their day jobs to devote their lives to cheese. Diana Pittet, now working on a dissertation about American cheddars at New York University, quit teaching Latin to work at Neal's Yard Dairy, London's foremost cheese store. Lori van Handel was a full-time art conservator in Williamstown, Mass., who became a freelance to free up time to take cheese classes in Manhattan and Vermont. Daphne Zepos was a restaurant cook before becoming director of affinage at the Artisanal Cheese Center and one of the most respected voices in the field of American cheese. Rob Kaufelt, the owner of Murray's, one of the top cheese shops in New York, said the women behind his counter are part of a 'new guard': effusive, knowledgeable and nice. The 'old guard,' he said, was made up of 'the kind of guys you'd find in a butcher shop.' Now about 75 percent of his staff members are women. 'Well educated, reasonably well dressed,' he said with a laugh. 'It used to be a little bit combative,' Liz Thorpe, director of wholesale operations for Murray's, recalled. 'You didn't go to Murray's and not be on your toes.' There's a bond behind the counter and among the many facets of cheese work. 'All in all it's a very small community,' Ms. Zepos said. Even those who leave Murray's counter for other jobs stay in touch. Last week Ms. Saxelby had several co-workers and former co-workers from Murray's over to her apartment for a weekly dinner where they chat and sometimes dish about cheese. The kitchen was packed. The guests swapped tasting notes on an intensely anticipated washed-rind cow's milk cheese, 'Winnamere,'' to be released by Mateo Kehler of Jasper Hill Farm in Vermont. Heidi Exline, who left Murray's to make cheese in Vermont, mixed fourme d'Ambert into a batch of blue cheese brownies. They dipped knives in an Époisses-style cheese from Lazy Lady Farm, which Ms. Saxelby had washed periodically with brine after getting it at the farm in Vermont. While there she took a day trip to Montreal and sneaked back some young raw-milk cheeses that are prized by fans. (The Food and Drug Administration bans the sale or import of cheese aged less than 60 days because government scientists say it takes that long for cheese to develop acids and salts that prevent pathogens.) 'I was so paranoid,' Ms. Saxelby said. David Arnold, a database designer on the Lower East Side who organized an exhibition about country ham at the Javits Convention Center last year, said he brings back raw-milk cheese every time he travels abroad. 'As soon as the plane hits the ground I'm in a cheese shop,' he said, buying as much cheese as his wife will allow. He said he sets up a salt bath in the bottom of a wine refrigerator to store the cheese at the proper humidity. Another cheese lover, Frederic W. Melendez, the chief executive of the Garden State Fund, a hedge fund in Wyckoff, N.J., said he is thinking of installing cheese caves next to the 750-bottle wine cellar in his basement. 'It would be a cheese closet, not a cave,' he said, and it would keep the $100 worth of cheese he buys weekly from soaking up flavors of other foods in his refrigerator. Efforts to find unusual specimens can lead to a competitive craving. Heather Ramsdell, a copywriter who lives in Prospect Heights, Brooklyn, argued with an acquaintance at a dinner party recently when he cold-shouldered the goat cheese chevrot and questioned her taste when she said she didn't like Humboldt Fog, a goat cheese from Cypress Grove in California. 'He needed to enforce his tiny little cheese wisdom on us all,' she said. Mr. Arnold, whose latest obsessions include herbaceous cheeses made with thistle rennet like Azeitão from Portugal, said his friends don't even try to compete. 'No one brings cheese to my house,' he said. Hard-core enthusiasts may seek out formaggio di fossa, an Italian sheep's milk cheese that is aged in the ground, but few would go as far as Cielo Peralta, a worker at Murray's since 1995 who has had one buried in his backyard in Bushwick, Brooklyn, for a year. He lovingly slathers pumpkinseed oil on its mottled surface every few months. Along with the humble obsessives, the cheese world also has its stars, and its stargazers. They meet at cheese blogs like cheesediaries.com, which has as many as 600 daily visitors, according to its founder, Anne Pinckard. And, of course, they meet in person. Recently about a dozen people gathered at Spuyten Duyvil, a beer bar in Williamsburg, Brooklyn. They included a red-haired woman in a retro dress, a man in a suit and the rest in T-shirts and jeans. They awaited the night's guest of honor, a Swiss affinage expert named Rolf Beeler. The bar reeked of his work: a cheese platter that included the rare soft-ripened Stanser Röteli. 'I joke with my friends that I have a crush on Rolf Beeler,' said Rachel Vessey, development director at St. Mark the Evangelist School in Harlem, who volunteers as a class assistant at Murray's Cheese in exchange for cheese. 'Is that him?' one woman asked as the door swung open. It was not. It turned out that Williamsburg, that hipster pocket of Brooklyn, had lost out to fancier precincts. Mr. Beeler was dining at Café Gray at the Time Warner Center in Manhattan and couldn't get to Brooklyn in time. Devoted as they are to people like Mr. Beeler, the cheese-obsessed recognize how difficult it is to achieve the ultimate goal: making cheese. Greg Blais, the manager at Bedford, has worked in cheese shops since college and has managed many of the New York City's better cheese counters. Ultimately, though, he would like to make cheese. But he said: 'I don't think I've learned enough to make cheese. I think I'd have to live somewhere for a couple of years and get the lay of the land, see how the seasons change.' Even so, for now, like so many people who live and breathe cheese, he's just happy to be around it. 'It's nice to work with my hands and work with the cheese,' he said. 'That puts me in a very good place, mentally.'

Subject: Well, I Like Cheese From: Emma To: Emma Date Posted: Wed, Apr 27, 2005 at 12:43:06 (EDT) Email Address: Not Provided Message: Hmmm...

Subject: The Hapless British Tories From: Emma To: All Date Posted: Wed, Apr 27, 2005 at 12:12:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/27/international/europe/27tories.html?pagewanted=all&position= Social Issues That Bolster Bush Fail the Hapless British Tories By ADAM NAGOURNEY LONDON - At a time when American conservatives are ascendant, the British Conservative Party is adrift, troubled by internal feuding, casting about for a defining theme and struggling to defeat a relatively unpopular incumbent, Prime Minister Tony Blair, in an election nine days away. Most polls and analysts say the Conservative Party, led by Michael Howard, is heading for a historic third consecutive defeat against Labor on May 5. This prospect is all the more noteworthy given how vulnerable Mr. Blair is on issues of trust and leadership after his insistent assertions that prohibited weapons would be found in Iraq in the American-led war that he so strongly supported and that remains unpopular in Britain. The political situation underlines what analysts describe as a growing divergence between the conservative movements here and in the United States, a decade and a half after the end of the era of Margaret Thatcher and Ronald Reagan. It reflects fundamental differences between the political makeup of Britain and the United States, but also the success of Mr. Blair on the left - and President Bush on the right - in realigning their political landscape, analysts say. The social issues that have proved crucial to Mr. Bush's success in the United States have little resonance in this country. Unlike Mr. Bush, Mr. Howard has not been able to use abortion and gay marriage to transcend economic matters in appealing to voters, and he voted in Parliament in support of the war in Iraq, the issue on which Labor officials judge Mr. Blair most vulnerable. 'Tony Blair has repositioned the Labor Party as a centrist, catch-all political party,' said Anthony King, a professor of government at Essex University. 'And one of Michael Howard's difficulties is that neither he nor any Conservative Party figure has a clear perception of precisely what the Conservative Party should stand for. After a decade, the party still has not worked out what it wants to say.' Irwin M. Stelzer, a conservative scholar with the Hudson Institute in Washington and a columnist for The Sunday Times of London, said: 'There is no reason to vote for the Tories. They're not offering anything different on tax policy. They are not offering anything different on crime policy.' 'What the Tories have been unable to do - partly because Blair has been so successful at stealing their clothes - is to come up with a distinctively different policy,' Mr. Stelzer said. At a Monday morning news conference, Mr. Blair taunted Mr. Howard with the memory of Mrs. Thatcher, asserting that this Conservative Party had yet to lay out an agenda that offered voters a sharp contrast with Labor. At his own break-of-day news conference at his campaign headquarters up the street from Mr. Blair's campaign offices, Mr. Howard grimaced when Andrew Marr, the political editor of the BBC, asked him if his statement that Britain was about to 'sleepwalk its way to another five years of Labor' were the words of 'someone who thinks they are losing the election campaign.' 'That is absolutely not what I think,' responded Mr. Howard, who, as the face of the Conservative Party in this fast-paced campaign, has provided a notably colorless alternative to the ever-energetic and telegenic Mr. Blair. In many ways, the Conservative Party in its post-Thatcher era is like the Democratic Party in the post-Clinton era. Each is struggling to find a new defining theme in the face of an ideologically changing electorate and declining support. Since Mr. Reagan and Mrs. Thatcher reinvigorated political conservatism on both sides of the Atlantic in the 1980's, their movements have headed in notably different directions. Americans combined a free-market philosophy with a religious appeal and an emphasis on social issues. But British conservatives, having remade what was essential European social democracy, complete with government ownership of industry, have since stalled, providing an opening for Mr. Blair. Mr. Blair has seized the center on issues including taxes, crime, immigration and Iraq, leaving Mr. Howard little room to maneuver as he tries to persuade voters to oust Labor next week. Any effort he might make to exploit the Iraq war is complicated by his vote, and those of many other Conservatives, to support it. More fundamentally, as became clear since the departure of Mrs. Thatcher, there is a much stronger appetite here than in the United States for governmental social programs, constraining what would traditionally be a bedrock conservative call to cut government spending and taxes. As a result, Mr. Howard has been as apt in recent days to talk about increasing spending - at a World Poverty event on Sunday, he called for a £700 million ($1.3 billion) increase in British foreign aid - as he has been to cut government spending and taxes. Tony Travers, a political analyst at the London School of Economics, noted that Conservatives had proposed shaving just £4 billion off the £450 billion budget proposed by Labor - a difference that The Sun, a conservative newspaper, described as 'pathetic.' 'One of the abiding problems that Blair has presented the Conservatives is that he has managed to position himself just to the right of the British political center - in a party that tends to be to the left of the political center,' Mr. Travers said. 'It's not like Bush and Kerry where you had a massive gap in terms of their outlook of the world.' Mr. Travers argued that the Tories had been unable to keep pace with the social changes that have swept Britain over the past 30 years, as it evolved from a 'rather repressed society' to a decidedly more socially liberal one. 'The Conservative Party still finds it quite difficult to operate in this kind of world,' he said. So it is that Mr. Howard raised abortion for just a flicker of a moment - and only to the extent of suggesting that the time period where abortion should be permitted should be cut from 24 weeks to 20 weeks. And when Mr. Howard appeared in the pulpit at the Tabernacle Christian Center on the outskirts of London on Sunday, he did not mention God or religion once in the course of a 20-minute speech, an omission that would have been unthinkable for Mr. Bush or John Kerry, the former Democratic presidential candidate. The social issue that Mr. Howard has used to try to drive up support - a strongly worded call for tough immigration restrictions - has inspired a backlash even among some of his own supporters as well as critics, who suggest that his appeal, encapsulated in the campaign motto, 'Are you thinking what we're thinking?' was at the very least ham-handed. 'You can't ride the conservative tide from America here,' said Stanley Greenberg, a Democratic pollster from the United States who is advising Mr. Blair. 'You have the leader of the free world being a self-conscious conservative, but based on ideas that seem foreign in Britain.' In a sign of the woes bedeviling the party, The Sun, owned by Rupert Murdoch, endorsed Mr. Blair last week in what was widely seen here as an example of Mr. Murdoch's placing pragmatism (he has a history of going with a winner) over ideology. 'When the Tories start acting like Conservatives, they might deserve our support,' the paper said. While it is hard to walk through Labor Party headquarters without spotting some familiar Democratic Party face who has flown over to help out - Bill Clinton appeared by satellite hookup to speak in support of Mr. Blair at a rally on Sunday - there are few if any American Republicans helping out the Conservatives. Mr. Bush, grateful for Mr. Blair's unwavering support on Iraq, has kept out of the contest. Mr. Howard appeared exasperated Monday when he was asked what American president was supporting his campaign. 'I'm more interested in the backing of the British people than the backing of American presidents,' he said.

Subject: On Income Taxes From: Terri To: All Date Posted: Wed, Apr 27, 2005 at 10:40:49 (EDT) Email Address: Not Provided Message: An income tax increase will cost the Republican Party Congressional control. There is no chance. Spending is not the problem, and we need spending more on social programs. The problem is taxes, but lowering taxes has given the Republicans Congress and there will be no change in Republican policy before 2007. The poll struck me as meaningless, Americans do not wish higher taxes at this point and an election is only 18 months away. Every proposal in Congress that has nay chance of passing is designed not even to maintain but to lower taxes. In addition, the Alternative Minimum Tax is thoroughly harmful and most be set aside.

Subject: Positive Thinking From: johnny5 To: Terri Date Posted: Wed, Apr 27, 2005 at 18:11:27 (EDT) Email Address: johnny5@yahoo.com Message: I know the report on affluent said 66% support deficit reduction. For all the negative thinking you think I do - hehe - I fundamentally believe most people want to do good things - if their government says ask NOT what your country can do for you, but what you can do for your country - why do you think they would be so selfish? If bush and the repbubs went to the base and said we need some help guys - why are YOU so negative in thinking that is possible? I agree we need more spending on social and less on wars and bombs - and although YOU could point out Lee Raymond - head of XOM not giving 5K to kids with cancer when asked after a 37 billion dollar bonus or warren buffet only giving 12 million when bill gates just spent the day with BONO after giving 40 billion - I think they are the exception - if I came to you, or jennifers or emma's door and asked for some money to help my redneck friend get some prozac would you slam it in my face terri or help him out?

Subject: Re: On Income Taxes From: Terri To: Terri Date Posted: Wed, Apr 27, 2005 at 11:07:03 (EDT) Email Address: Not Provided Message: Democrats have been completely unsuccessful when they have supported tax increases, and it would be politically foolish indeed for them to push the issue now. So, the initiative must come from Republicans but with this Congress and Administration I can not imagine this happening.

Subject: Less income tax - more wealth tax From: johnny5 To: Terri Date Posted: Wed, Apr 27, 2005 at 18:12:53 (EDT) Email Address: johnny5@yahoo.com Message: Would you and emma and jennifer who have BIG accounts and make big money on dividends and capital gains object to LOWERING the taxes on my working redneck buddy at walmart while the repubs raise them on dividends and capital gains?

Subject: Re: Less income tax - more wealth tax From: jimsum To: johnny5 Date Posted: Wed, Apr 27, 2005 at 22:31:15 (EDT) Email Address: jim.summers@rogers.com Message: Taxes have to go up for everyone, hopefully more for the rich than for the majority. The deficit is over $400 billion; the entire budget is not much more than $2 trillion. That means taxes have to go up around 20-25% just to pay for current spending.

Subject: The approaching energy gap From: Pete Weis To: All Date Posted: Wed, Apr 27, 2005 at 10:16:40 (EDT) Email Address: Not Provided Message: Falling oil production will change the world Oil production could peak next year, so it is time for people in many countries to start preparing for major adjustments in lifestyle By John Vidal THE GUARDIAN , LONDON Wednesday, Apr 27, 2005,Page 9 The one thing that international bankers don't want to hear is that the second Great Depression may be round the corner. But earlier this month, a group of ultra-conservative Swiss financiers asked a retired English petroleum geologist living in Ireland to tell them about the beginning of the end of the oil age. They called Colin Campbell, who helped to found the London-based Oil Depletion Analysis Center because he is an industry man through and through, has no financial agenda and has spent most of a lifetime on the front line of oil exploration on three continents. He was chief geologist for Amoco, a vice-president of Fina and has worked for BP, Texaco, Shell, ChevronTexaco and Exxon in a dozen different countries. 'Don't worry about oil running out; it won't for very many years,' Campbell told the bankers in a message that he has repeated to businessmen, academics and investment analysts at a conference in Edinburgh this week. 'The issue is the long downward slope that opens on the other side of peak production. Oil and gas dominate our lives, and their decline will change the world in radical and unpredictable ways,' said Campbell, who holds a doctorate from Oxford. Campbell reckons global peak production of conventional oil -- the kind associated with gushing oil wells -- is approaching fast, perhaps even next year. His calculations are based on historical and present production data, published reserves and discoveries of companies and governments, estimates of reserves lodged with the US Securities and Exchange Commission, speeches by oil chiefs and a deep knowledge of how the industry works. 'About 944 billion barrels of oil has so far been extracted, some 764 billion remains extractable in known fields, or reserves, and a further 142 billion of reserves are classed as `yet-to-find,' meaning what oil is expected to be discovered. If this is so, then the overall oil peak arrives next year,' he said. If he is correct, then global oil production can be expected to decline steadily at about 2 percent to 3 percent a year and the cost of everything from travel, heating, agriculture, trade and anything made of plastic rises. And the scramble to control oil resources intensifies. As one US analyst said last week: 'Just kiss your lifestyle goodbye.' But the Campbell analysis is way off the much more optimistic official figures. The US Geological Survey (USGS) states that reserves in 2000 (its latest figures) of recoverable oil were about 3 trillion barrels and that peak production will not come for about 30 years. The International Energy Agency (IEA) believes that oil will peak between '2013 and 2037' and Saudi Arabia, Kuwait, Iraq and Iran, four countries with much of the world's known reserves, report little if any depletion of reserves. Meanwhile, the oil companies -- which do not make public estimates of their own 'peak oil' -- say there is no shortage of oil and gas for the long term. 'The world holds enough proved reserves for 40 years of supply and at least 60 years of gas supply at current consumption rates,' BP said last week. Indeed, almost every year for 150 years, the oil industry has produced more than it did the year before, and predictions of oil running out or peaking have always been proved wrong. Today, the industry is producing about 83 million barrels a day, with big new fields in Azerbaijan, Angola, Algeria, the deep waters of the Gulf of Mexico and elsewhere soon expected on stream. But the business of estimating oil reserves is contentious and political. According to Campbell, companies seldom report their true findings for commercial reasons, and governments -- which own 90 percent of the reserves -- often lie. Most official figures, he says, are grossly unreliable. 'Estimating reserves is a scientific business. There is a range of uncertainty but it is not impossible to get a good idea of what a field contains. Reporting [reserves], however, is a political act,' he said. According to Campbell and other oil industry sources, the two most widely used estimates of world oil reserves, drawn up by the Oil and Gas Journal and the BP Statistical Review, both rely on reserve estimates provided to them by governments and industry and do not question their accuracy. Companies, Campbell said, 'under-report their discoveries to comply with strict US stock exchange rules, but then revise them upwards over time,' partly to boost their share prices with 'good news' results. 'I do not think that I ever told the truth about the size of a prospect. That was not the game we were in,' he said. 'As we were competing for funds with other subsidiaries around the world, we had to exaggerate.' Most serious of all, he and other oil depletion analysts and petroleum geologists, most of whom have been in the industry for years, accuse the US of using questionable statistical probability models to calculate global reserves and OPEC countries of drastically revising upwards their reserves in the 1980s. 'The estimates for the OPEC countries were systematically exaggerated in the late 1980s to win a greater slice of the allocation cake. Middle East official reserves jumped 43 percent in just three years despite no new major finds,' he said. The study of 'peak oil' -- the point at which half the total oil known to have existed in a field or a country has been consumed, beyond which extraction goes into irreversible decline -- used to be back-of-the envelope guesswork. It was not taken seriously by business or governments, mainly because oil has always been cheap and plentiful. In the wake of the Iraq war, the rapid economic rise of China, global warming and recent record oil prices, the debate has shifted from 'if' there is a global peak to 'when.' The US government knows that conventional oil is running out fast. According to a report on oil shales and unconventional oil supplies prepared by the US Office of Petroleum Reserves last year, 'world oil reserves are being depleted three times as fast as they are being discovered. Oil is being produced from past discoveries, but the reserves are not being fully replaced. Remaining oil reserves of individual oil companies must continue to shrink.' 'The disparity between increasing production and declining discoveries can only have one outcome: a practical supply limit will be reached and future supply to meet conventional oil demand will not be available,' the report said. 'Although there is no agreement about the date that world oil production will peak, forecasts presented by USGS geologist Les Magoon, the Oil and Gas Journal and others expect the peak will occur between 2003 and 2020. What is notable ... is that none extend beyond the year 2020, suggesting that the world may be facing shortfalls much sooner than expected,' the report said. According to Bill Powers, editor of the Canadian Energy Viewpoint investment journal, there is a growing belief among geologists who study world oil supply that production 'is soon headed into an irreversible decline ... The US government does not want to admit the reality of the situation.' 'Campbell's thesis, and those of others like him, are becoming the mainstream,' Powers said. In the absence of reliable official figures, geologists and analysts are turning to the grandfather of oil depletion analysis, M. King Hubbert, a Shell geologist who in 1956 showed mathematically that exploitation of any oilfield follows a predictable 'bell curve' trend, which is slow to take off, rises steeply, flattens and then descends again steeply. The biggest and easiest exploited oilfields were always found early in the history of exploration, while smaller ones were developed as production from the big fields declined. He accurately predicted that US oil production would peak around 1970, 40 years after the period of peak discovery around 1930. Many oil analysts now take the 'Hubbert peak' model seriously, and the USGS, national and oil company figures with a large dose of salt. Similar patterns of peak discovery and production have been found throughout all the world's main oilfields. The first North Sea discovery was in 1969, discoveries peaked in 1973 and the UK passed its production peak in 1999. The UK portion of the basin is now in serious decline and the Norwegian sector has levelled off. Other analysts are also questioning afresh the oil companies' data. US Wall street energy group Herold last month compared the stated reserves of the world's leading oil companies with their quoted discoveries, and production levels. Herold predicts that the seven largest will all begin seeing production declines within four years. Deutsche Bank reports that global oil production will peak in 2014. According to Chris Skrebowski, editor of Petroleum Review, a monthly magazine published by the Energy Institute in London, conventional oil reserves are now declining about 4 percent to 6 percent a year worldwide. He said 18 large oil-producing countries, including Britain, and 32 smaller ones, have declining production; and he expects Denmark, Malaysia, Brunei, China, Mexico and India all to reach their peak in the next few years. 'We should be worried. Time is short and we are not even at the point where we admit we have a problem,' Skrebowski said. 'Governments are always excessively optimistic. The problem is that the peak, which I think is 2008, is tomorrow in planning terms,' he said. On the other hand, Equatorial Guinea, Sao Tome, Chad and Angola are are all expected to grow strongly. What is agreed is that world oil demand is surging. The IEA, which collates national figures and predicts demand, has said developing countries could push demand up 47 percent to 121 million barrels a day by 2030, and that oil companies and oil-producing nations must spend about US$100 billion a year to develop new supplies to keep pace. According to the IEA, demand rose faster last year than in any year since 1976. China's oil consumption, which accounted for a third of extra global demand last year, grew 17 percent and is expected to double over 15 years to more than 10 million barrels a day -- half the US's present demand. India's consumption is expected to rise by nearly 30 percent in the next five years. If world demand continues to grow at 2 percent a year, then almost 160 million barrels a day will need to be extracted in 2035, twice as much as today. That, say most geologists is almost inconceivable. According to industry consultants IHS Energy, 90 percent of all known reserves are now in production, suggesting that few major discoveries remain to be made. Shell said its reserves fell last year because it only found enough oil to replace 15 percent to 25 percent of what the company produced. BP told the US stock exchange that it replaced only 89 percent of its production last year. Moreover, oil supply is increasingly limited to a few giant fields, with 10 percent of all production coming from just four fields and 80 percent from fields discovered before 1970. Even finding a field the size of Ghawar in Saudi Arabia, by far the world's largest and said to have another 125 billion barrels, would only meet world demand for about 10 years. 'All the major discoveries were in the 1960s, since when they have been declining gradually over time, give or take the occasional spike and trough,' Campbell said. 'The whole world has now been seismically searched and picked over. Geological knowledge has improved enormously in the past 30 years and it is almost inconceivable now that major fields remain to be found.' He accepts there may be a big field or two left in Russia, and more in Africa, but these would have little bearing on world supplies. Unconventional deposits like tar sands and shale may only slow the production decline. 'The first half of the oil age now closes,' Campbell said. 'It lasted 150 years and saw the rapid expansion of industry, transport, trade, agriculture and financial capital, allowing the population to expand six-fold. The second half now dawns, and will be marked by the decline of oil and all that depends on it, including financial capital.' So did the Swiss bankers comprehend the seriousness of the situation when he talked to them? 'There is no company on the stock exchange that doesn't make a tacit assumption about the availability of energy,' he said. 'It is almost impossible for bankers to accept it. It is so out of their mindset.' Alternatives 'Unconventional' petroleum reserves, which are not included in some totals of reserves, include: 1. Heavy oils These can be pumped just like conventional petroleum except that they are much thicker, more polluting, and require more extensive refining. They are found in more than 30 countries, but about 90 percent of estimated reserves are in the Orinoco 'heavy oil belt' of Venezuela, which has an estimated 1.2 trillion barrels. About one-third of the oil is potentially recoverable using current technology. 2. Tar sands These are found in sedimentary rocks and must be dug out and crushed in giant opencast mines. But it takes five to 10 times the energy, area and water to mine, process and upgrade the tars that it does to process conventional oil. The Athabasca deposits in Alberta, Canada are the world's largest resource, with estimated reserves of 1.8 trillion barrels, of which about 280 billion to 300 billion barrels may be recoverable. Production now accounts for about 20 percent of Canada's oil supply. 3. Oil shales These are seen as the US government's energy stopgap. They exist in large quantities in ecologically sensitive parts of Colorado, Wyoming and Utah at varying depths, but the industrial process needed to extract the oil demands hot water, making it much more expensive and less energy-efficient than conventional oil. The mining operation is extremely damaging to the environment. Shell, Exxon and other oil companies are investing billions of dollars in this expensive oil production method.

Subject: Fears Mount That Germany Faces Recession From: Emma To: All Date Posted: Wed, Apr 27, 2005 at 10:11:15 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/27/business/worldbusiness/27germany.html Fears Mount That Germany Faces Recession By MARK LANDLER FRANKFURT - Six influential German economic institutes have cut their growth forecast for this year in half, prompting a new rash of fears that the German economy is on the brink of recession. After four years of lackluster growth, the downward revision - to 0.7 percent from 1.5 percent - illustrates that economic forecasting in Germany has become mostly an exercise in finding ever-more-precise ways to measure stagnation, economists say. In their semiannual report on the German economy, submitted Tuesday, the six institutes said: 'Almost no other country in the European Union has had a development in recent years that was so unfavorable. Obviously, the German economy is suffering from fundamental weakness.' Given such weak underpinnings, economists said it was quite possible that the German economy, Europe's largest and an engine for much of the Continent, could fall into a recession - classically defined as two consecutive quarters of contraction. But this, they said, would scarcely be different from the current state of affairs. 'Trend growth in Germany is now so low that you can easily meet the technical definition of recession,' said Thomas Mayer, the chief European economist at Deutsche Bank in London. In fact, Mr. Mayer said, he viewed the forecast as optimistic because it assumes that Germany will keep growing, despite the spike in oil prices and the softening of the global economy. 'If oil prices keep going up, Germany won't even hold on to the 0.7 percent number,' he said. 'You would end up with stagnation, and more importantly, there would be no recovery next year.' Even without rising oil prices, there is no shortage of grim news in the report. The institutes, which generally anticipate the government's own forecast, predict that growth will be only 1.5 percent in 2006, less than in 2004, which was 1.6 percent. With a growth rate this anemic, economists say, Germany cannot generate new jobs. The current unemployment rate of 12 percent is a record in the post-World War II period, and poses a mounting political threat to Chancellor Gerhard Schröder. He faces a difficult state election next month in North Rhine-Westphalia, Germany's depleted industrial heartland. 'We had hoped that domestic growth would pick up, but there is no sign of that happening,' said Bert Rürup, the head of Mr. Schröder's council of economic advisers. Germany needs to grow from 1.5 percent to 2 percent a year, Mr. Rürup said, to generate significant new jobs. While it has been able to increase exports, even with the handicap of a strong euro, it has not found a way to encourage consumer spending, a critical factor for reviving its moribund domestic economy. 'Germany has no short-term competitiveness problem,' Mr. Rürup said. 'It has a long-term growth problem.' Some private economists take a more positive view. Consumer confidence, they note, rose slightly in a recent survey by the GfK Group, a market research firm in Nuremberg. And the damping effects of the euro may have passed. Jörg Krämer , the chief economist at the HVB Group in Munich, said that if oil prices remained steady, growth in Germany should bounce back in the second half of 2005. This, he admits, is a big if. The Ifo Institute in Munich, one of the six institutes that lowered the growth forecast, released a separate business survey on Monday showing the third consecutive monthly decline in corporate confidence in April. Oil prices, economists say, are the main culprit for this, since Germany is one of the world's leading importers. The effect of high oil prices is being felt throughout Europe, and is one reason the European Central Bank has been reluctant to start raising interest rates, despite its stated desire to do so. On Tuesday, the bank's vice president, Lucas Papademos, said there was little evidence that growth was picking up in the 12-nation euro zone. His comments suggest no imminent change in the bank's monetary policy. Indeed, some economists say rates could remain as they are until 2006. The German government, meanwhile, seems at a loss for a quick fix. It has begun to overhaul the labor market, through a package of measures known as the Hartz reforms. Mr. Rürup said that if Germany had a more flexible labor market, it could create jobs with a lower growth rate. Critics say these measures, while helpful, are only a half step. They make it easier for employers to hire temporary workers and create entry-level jobs for people who have been out of work. But they do not attack the job-protection rules that make it hard to lay off workers. 'They need to face down the unions,' Mr. Mayer at Deutsche Bank said. 'But they won't - neither the government nor the opposition.'

Subject: Deficits and Taxes From: Terri To: All Date Posted: Wed, Apr 27, 2005 at 08:40:40 (EDT) Email Address: Not Provided Message: The American corporate and personal income tax base is being steadily eroded. We have, as a result, a structural deficit that can only worsen unless there is revenue change. Adding revenue through a gradual increase in taxes is simply not going to happen in the near future.

Subject: Why do you believe this? From: johnny5 To: Terri Date Posted: Wed, Apr 27, 2005 at 10:17:50 (EDT) Email Address: johnny5@yahoo.com Message: Terri I agree with you totally that we need change, more taxes, less spending - but the latest report on the affluent said they would not mind taxes if it fixed our deficits 2 out of 3 66% said that - so why do you feel this is not going to happen? If the 'base' say its ok why would the politicians find this unacceptable? Bush 1 said no new taxes in better times and we seemed to forgive him - certainly you and me and pete can all agree if we want a good country some of us richies are gonna have to come off some of the wealth no?

Subject: REITs and Treasuries From: Terri To: All Date Posted: Wed, Apr 27, 2005 at 08:02:01 (EDT) Email Address: Not Provided Message: Vanguard's REIT Index offers an adjusted dividend of 4.26%, where the yield on the long term Treasury is 4.27%. Tax implications are about the same for dividend and yield. Unless I believed the price of the index was inflated enough to mean no capital gains for the coming decade, I can not imagine buying the Treasury over the REIT Index as a long term investment. There are puzzling comparisons like this through the American and European markets. Long term Treasuries are oddly priced and have been so.

Subject: Re: REITs and Treasuries From: David E.. To: Terri Date Posted: Wed, Apr 27, 2005 at 12:00:39 (EDT) Email Address: Not Provided Message: The biggest oddity is that 'long term' is only 10 years. President Carter got squeezed terribly with that play. As I recall, interest expense shot up to almost 25% of the budget.

Subject: Private Pensions in Chile From: Emma To: All Date Posted: Wed, Apr 27, 2005 at 06:28:21 (EDT) Email Address: Not Provided Message: http://cep.cl/Cenda/Cen_Documentos/Pub_MR/Articulos/Varios/Pensiones_USA_1.html December 2004 Private Pensions in Chile, a Quarter Century On By Manuel Riesco Santiago, Chile The privatization of pensions in Chile during the Pinochet dictatorship has been hailed worldwide as a success story, and President Bush recently said that it was 'a great example' for Social Security reform in the United States. Its champions continue to repeat the arguments on which it has been presented since its inception. Some of these arguments are strictly ideological: It is a better system because it depends on property, free choice, and personal responsibility; and it links individual contributions with benefits, personal effort with their reward. Other arguments were based in financial and actuarial calculations, which proved that, at 4% yearly rates of return, saving 10% of salaries throughout active lifetime would afford pensions in the order of 70% of salaries at retirement. The cost of transition—due to the fact that social security contributions are funnelled into the new system, while the state continues to provide financing for old the pay-as-you-go system—was to be financed by privatizations, long-term public debt, extra economic growth due to the optimized investment of pension funds by the private administrators, and a 'residual' tax on wages. Recent arguments have been added, that seem tailored specifically for U.S. consumption, such as the fact that the new system entitles the worker to his pension savings, even though he may be an immigrant who returns home at retirement. Nevertheless, the Chilean private pension system has not been able to keep these bright promises, a quarter century on. In Chile today there is a wide consensus among experts that the Chilean private pension system will provide pensions on its own only to the upper income minority of the affiliates to the system. Even for them, it seems highly unsatisfactory, mainly because of the high fees charged by private pension administrators. These, in turn, are six companies that have become the most profitable Chilean industry, one that proved immune to the recent recession, as it reaped an average return on assets of over 50% a year from 1999 to 2003. Meanwhile, a sizable majority of the workforce will not receive minimum pensions out of their savings in the system, and are not entitled either to the complementary public social security 'safety net.' Recent studies by the State regulator of the private pension administrators, Superintendencia de Administradoras de Fondos de Pensiones (AFP) have concluded that over half of the affiliates to the new system will never be able to save enough in their pension accounts at retirement, to fund even the 'minimum pension,' which is set presently in the order of 100 US dollars a month. A parallel study by the AFP Association—that is, the private pension administration industry—came to exactly the same conclusions. In the latter case, though, those who will never save enough funds are divided in two groups, one of which comprises fully one-third of affiliates and is simply left out of the calculation, on the grounds that they will never contribute more than ten years into the system. Two different studies by the State administrator of the public pension system, Instituto de Normalización Previsional, concluded that those who would be unable to save enough for the minimum pension, amount to about two-thirds of affiliates. All of the above studies agree as well that the State guarantee of 'minimum pension' is almost completely ineffective, because very few affiliates in need of that guarantee will comply with its pre requisite of 20 years contributions into the system. On the other hand, most affiliates do not apply for the non-contributive 'assistance pension' offered by the State, which presently amounts to about 50 US dollars a month, because it is subject to quotas, and targeted to the extremely poor. The above leaves most of the Chilean workforce with no entitlement at all regarding pensions—except withdrawing the meager funds accumulated in their individual pension accounts. These results have been confirmed by none other than the World Bank itself, an institution that during the past decades championed Chilean-style pension reforms all over the world. In a recent book, suggestively entitled Keeping the Promise, the Bank acknowledges that private pension systems are not able to provide income security for old age for sizable portions of the workforce, and suggests that the State should provide some kind of basic pension entitlement that is not subject to any sort of quotas. In the Chilean case, the above-described situation is not an eventuality for the future, but the crude reality that most affiliates to the new system who are reaching retirement age are confronting today. They have very little money in their individual accounts; they are not entitled to the State guarantee of a minimum pension because they have contributed less than 20 years, and they are not extremely poor, for which reason they are not entitled, either, to the State-provided, non-contributive 'assistance pensions.' In their case, however, they have been subject, as well, to what is widely known in Chile today as 'pension damage.' 'Pension damage' affects the cohort who joined in 1981—that is, all those who were working at the time the pension reform was implemented, and changed to the new system, and who comprise about one-sixth of all affiliates. Most of the Chilean workforce was, in fact, forced to join the new system, including all those workers hired since 1981, who were given no choice at all. Those who were working under a formal contract at the time were given the one-time choice to change or stay in the old pay-as-you-go system. In practice, however, most were forcibly induced to change to the new system by their employers, and by a huge propaganda campaign implemented by the dictatorship that promised better wages today and better pensions tomorrow for those who changed. Transition arrangements for those who changed to the new system specified that the State would contribute to their new pension accounts with an amount called 'recognition bond,' with the equivalent of their past contributions to the old system. Nevertheless, the amount of 'recognition bonds' was calculated as the average of wages earned in 1978, 1979, and 1980, which happened to be years when wages were still very depressed after the slashing of roughly half their buying power in the wake of the 1973 coup. Furthermore, contributions into the system during the 1980s were also meager, because wages were again depressed, and unemployment reached levels of 30% of the workforce, during the severe economic crisis that affected Chile in 1982 and lasted four or five years. In addition, for State employees, contributions into the pension accounts were further depressed during the 1980s, because they were calculated over only a part of their salaries. As a result, if two work colleagues reach retirement age in Chile today, both with the same salary and the same number of years contributing to social security, one of them who remained in the old pay-as-you-go and the other who changed to the AFP system back in 1981, the latter will receive less than one-half of the pension of the former. This huge difference has been documented in hundreds of thousands of individual cases by the Association of Employees with Previsional Damage, and their demand for a reparation has been heard by parliament, where a group of members of Congress belonging to all political parties presented the problem to the government, which has since started negotiations with the affected workers. The above not withstanding, the privatization of pensions may have been a mixed blessing for the Chilean workforce. On the one hand, as all Chilean workers own individual pension accounts that are reviewed monthly, they provide excellent statistics of their crude labor reality. The numbers indicate that the modern Chilean workforce is composed mainly by a huge mass of persons who permanently move in and out of short-term salaried jobs, half of which last less than 4 months, and in most cases less than a year. While they are not working for a salary, Chileans survive working on their own—when they are able to do so; because at present, for example, around 10% of the workforce is unemployed, even according to government figures that are widely considered underestimating the real joblessness rate. As a result, 70% of the workforce contributes less than six months each year into their pension accounts, and over half of the workforce contributes less than 4 months each year. These figures show a huge bias for the worse in the case of women and the poorest. On the other hand, in their enthusiasm to grab pension contributions, the promoters of the system did not pay much attention to the public purse. To their personal benefit as well, as the boards of AFP companies are full of ex-cabinet members of the Pinochet government. While the old pay-as-you-go system produced a yearly surplus—as is the case with the present US system, for example—the fiscal consequence of the Chilean pension reform was, on the contrary, a huge pension deficit, which has been paid out of regular government revenues. The public expenditure in pensions has remained consistently in the order of 6% of Chilean GDP since 1981. It has absorbed almost one-third of the overall government budget, and over 42% of public social expenditures. Chile spends more public funds in the pension deficit than it does in education and health, put together. The current pension deficit, naturally, is occasioned mostly by the fact that most social security contributions are funneled to the new system, while the current pensions continued to be paid by the State. Almost three-fifths of the public expenditures in social security are dedicated to pay for the remaining pay-as-you-go system, and for the 'recognition bonds' transferred to the new system. Another fifth is to dedicated to pay the pensions of the military, who took good care of avoiding, themselves, the system they imposed on the rest of the citizenry. As both these expenditures end up in a large portion in the pockets of the upper income segment of the Chilean population, they manage to upset the redistributive effect of all the rest of public social expense, even though it is highly targeted to the poor. An additional fifth of public expenditures in pensions go to the non-contributive 'assistance pensions.' Nevertheless, on the other hand, public expenditure is so high—it is the equivalent of about 250 US dollars a month for each Chilean over retirement age, which is 60 years for women and 65 for men—that just keeping it at present levels as a proportion of GDP may well finance a decent universal basic pension for retirees. Of course, most of the above-listed expense items will diminish in time, and even the military should sometime be made to join the rest of Chileans in a universal system. On the other hand, Chilean GDP is growing much faster than the population over retirement age. The savings in the AFP system—duly reformed to impose serious competition and lower costs—may conform to a good, complementary, second tier in a Chilean pension system that in the end will be recognized not as a private one, but a mixed public-private one. Most certainly, in the future as it is today, most Chileans will continue to receive most of their pensions out of the public pension system. The author is External Research Coordinator (on social policy matters) for the United Nations Research Institute for Social Development.

Subject: Re: Private Pensions in Chile From: David E.. To: Emma Date Posted: Wed, Apr 27, 2005 at 11:59:14 (EDT) Email Address: Not Provided Message: This article and PK columns are plenty for now. If JOHN TIERNEY of the NY Times releases a spreadsheet to show how he got his outlier numbers (Three times bigger pensions than social security) we will get a chance to examine his math.

Subject: Private Pensions in Texas From: David E.. To: David E.. Date Posted: Wed, Apr 27, 2005 at 15:33:32 (EDT) Email Address: Not Provided Message: We don't have to go to Chile to discover how private pensions work. 3 counties in Texas have them. The problems are 1. Children are not covered. 2. Unlike social security, benefits are better the higher you are paid. (Its justice that the people who need it the most get the most the way SS does it) 3. The pensions are not inflation adjusted, so in a short time, even the highest paid are worse off on a private pension. The Galveston pensions are funded by interest paying annuities. Performance of this type of asset from 1983 to 2003 has been terrific, maybe even better than stocks. But for the poor folks unlucky enough to retire in the present trough in interest rates will get little. Annuities are an interesting choice, the consultant who designed the Galveston plan just happens to sell annuities. I know the consultant has done well, he collects his commission whether prices are up or down. Cheers David

Subject: Re: Private Pensions in Texas From: Emma To: David E.. Date Posted: Wed, Apr 27, 2005 at 15:50:08 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/03/18/politics/18texas.html?ei=5070&en=55ee03e8bad32003&ex=1115265600&pagewanted=all&position= The insurance company, rather than the plan's participants, pays a management fee of less than 1 percent of the plan's assets. First Financial Benefits of Houston, the creator and administrator of Galveston's plan, estimates that the plan has earned an average of 6.5 percent in annual returns since its inception, though that figure was influenced by the relatively high interest rates of the 1980's. The plan currently returns about 4 percent a year.

Subject: Re: Private Pensions in Texas From: David E.. To: Emma Date Posted: Wed, Apr 27, 2005 at 16:21:16 (EDT) Email Address: Not Provided Message: I don't know why the NY Times is called a liberal newspaper. What does this mean 'The insurance company, rather than the plan's participants, pays a management fee of less than 1 percent of the plan's assets.' Does it mean that the participants get a free ride? I don't think so, parsing the statement, I think it means that the insurance company deducts at least 1% and maybe more. I think more because the statement does not by itself exclude more. The average rate of 6.5% might be the rate received by the plan participants. I am thinking an average rate of 8.5% would cover 1983 through 2003. (Estimated from page 75 of 'trimumph of the Optimists) So I am wondering where 2% went.

Subject: Re: Private Pensions in Texas From: Emma To: David E.. Date Posted: Wed, Apr 27, 2005 at 16:47:50 (EDT) Email Address: Not Provided Message: There are many questions about the Galveston pension program that are not precisely answered in the article. The contribution to the plan in total is higher than for Social Security, but the benefits appear less. I can not tell why. I cannot tell why the returns to annuity holders are not higher from 1981 on.

Subject: Re: Private Pensions in Texas From: Emma To: Emma Date Posted: Wed, Apr 27, 2005 at 17:02:54 (EDT) Email Address: Not Provided Message: Whether in England, Chile, or Texas privatization of public pension programs has proven a poor choice. What is happening in Sweden is not clear, but those who oppose Social Security do not use Sweden as a case for privatization. I wish we understood more specifically why the returns are so disappointing however.

Subject: Chile: The Proof's in the Pension From: Emma To: All Date Posted: Tues, Apr 26, 2005 at 18:06:07 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/26/opinion/26tierney.html?hp The Proof's in the Pension By JOHN TIERNEY SANTIAGO, Chile I made a pilgrimage to Santiago seeking to resolve the Social Security debate with a simple question: What would Pablo Serra do? I wanted to compare our pensions to see the results of an accidental experiment that began in 1961, when he and I were friends in second grade at a school in Chile. He remained in Chile and became the test subject; I returned to America as the control group. By the time we finished college, both of our countries' pension systems were going broke. Chile responded by pioneering a system of private accounts in 1981. America rescued its traditional system in the early 1980's by cutting benefits and raising taxes, with the promise that the extra money would go into a trust to finance the baby boomers' retirement. As it happened, our countries have required our employers to set aside roughly the same portion of our income, a little over 12 percent, which pays for disability insurance as well as the pension program. It also covers, in Pablo's case, the fees charged by the mutual-fund company managing his money. I visited Pablo, who grew up to become an economist, at his office at the University of Chile and showed him my most recent letter from the Social Security Administration listing my history of earnings and projected pension. Pablo called up his account on his computer and studied the projected retirement options for him, which assume that he'll keep working until age 65 and that the fund will get an annual return of 5 percent (which is lower than its historical average). After comparing our relative payments to our pension systems (since salaries are higher in America, I had contributed more), we extrapolated what would have happened if I'd put my money into Pablo's mutual fund instead of the Social Security trust fund. We came up with three projections for my old age, each one offering a pension that, like Social Security's, would be indexed to compensate for inflation: (1) Retire in 10 years, at age 62, with an annual pension of $55,000. That would be more than triple the $18,000 I can expect from Social Security at that age. (2) Retire at age 65 with an annual pension of $70,000. That would be almost triple the $25,000 pension promised by Social Security starting a year later, at age 66. (3)Retire at age 65 with an annual pension of $53,000 and a one-time cash payment of $223,000. You may suspect that Pablo has prospered only because he's a sophisticated investor, but he simply put his money into one of the most popular mutual funds. He has more money in it than most Chileans because his salary is above average, but lower-paid workers who contributed to that fund for the same period of time would be in relatively good shape, too, because their projected pension would amount to more than 90 percent of their salaries. By contrast, Social Security replaces less than 60 percent of your salary - and that's only if you were a low-income worker. Typical recipients get back less than half of their salaries. The biggest problem in Chile is that many workers don't contribute regularly to their pensions because they're unemployed or working off the books. That's a common situation in the developing world, no matter what the pension system is. But if you contribute for at least 20 years, Chile guarantees you a minimum pension that, relative to the median salary, is actually more generous than the median Social Security check. Still, you may argue, Chileans may someday long for a system like Social Security if the stock market crashes and takes their pensions down with it. The relative risks of the Chilean and American systems are a question for another column. But I can tell you that Pablo is an economist who appreciates the risks of stocks and has no doubt about where he wants to keep putting his money. 'I'm very happy with my account,' he said to me after comparing our pensions. He was kind enough not to gloat. When I enviously suggested that he could expect not only a much heftier pension than mine, but also enough cash to buy himself a vacation home at the shore or in the country, he reassured me that it would pay for only a modest place. I'm not sure how much consolation that is, but I'm trying to look at the bright side. Maybe my Social Security check will cover the airfare to visit him.

Subject: Re: Chile: The Proof's in the Pension From: David E.. To: Emma Date Posted: Tues, Apr 26, 2005 at 19:24:29 (EDT) Email Address: Not Provided Message: WOW- The Chilean market took off like a rocket. Too bad we weren't invested in the Chilean 500. Something is wrong here. It doesnt pass the smell test. How could the Chilean economy for that period do so much better than the United States? So here is my 'The Proof Is In The Pension' story. Another true story. Two weeks ago I withdrew my social security claim and refiled. I originally retired at 63 and refiled to receive the full amount due at 65. The amount paid back was $42,741. $42,741 spent buying an ordinary life annuity with no balance on death - just like social security would buy me a non-adjusted pension annual increase of $3,384. By investing in social security I got a CPI adjusted pension annual increase of $4260. That is 25% more. If social security is a rip-off I don't see it. In my example what I am doing is buying a pension. And the pension I can buy from Social Security is way better than the pension I can buy from an insurance company. There are other financial considerations that make this an even better deal for me than this, including tax deductions and opportunity costs. In three months I will have final numbers and if anybody is interested I will show them.

Subject: Re: Chile: The Proof's in the Pension From: Emma To: David E.. Date Posted: Tues, Apr 26, 2005 at 19:56:39 (EDT) Email Address: Not Provided Message: David, I am much indebted to you. This column bothered me, and still does, but why? I agree with you, and there must still be other problems with the column. I posted the colum in hopes someone would attack it.

Subject: Re: Chile: The Proof's in the Pension From: jimsum To: Emma Date Posted: Tues, Apr 26, 2005 at 21:12:53 (EDT) Email Address: jim.summers@rogers.com Message: Paul Krugman attacked it back on December 17: Privatizers who laud the Chilean system never mention that it has yet to deliver on its promise to reduce government spending. More than 20 years after the system was created, the government is still pouring in money. Why? Because, as a Federal Reserve study puts it, the Chilean government must 'provide subsidies for workers failing to accumulate enough capital to provide a minimum pension.' In other words, privatization would have condemned many retirees to dire poverty, and the government stepped back in to save them.

Subject: Re: Chile: The Proof's in the Pension From: Emma To: jimsum Date Posted: Tues, Apr 26, 2005 at 22:10:45 (EDT) Email Address: Not Provided Message: Jim, did you notice the summary of the Canadian health care system Terri posed down the thread?

Subject: Re: Chile: The Proof's in the Pension From: jimsum To: Emma Date Posted: Wed, Apr 27, 2005 at 21:41:45 (EDT) Email Address: jim.summers@rogers.com Message: Yes I did; and it was pretty accurate. I thought it was great to hear about how other countries do it; I never thought there were so many different ways to get it wrong :-) There's plenty of complaining about the health care system in Canada, so it's refreshing to read about the strengths of the system. Although it does seem a little socialistic to aim for a system where everyone, rich or poor, waits in the same lines. I don't think any of the other systems are that much better. I think it is clear that health care costs are just going to increase for the foreseeable future; we have to face up to it and pay up in increased taxes. As I see it, in the long term, the government can't be any more generous than the taxpayer.

Subject: Re: Chile: The Proof's in the Pension From: David E.. To: jimsum Date Posted: Tues, Apr 26, 2005 at 21:21:25 (EDT) Email Address: Not Provided Message: And from Chile folks are very unhappy about costs both of the private sector and the government sector. The 6 companies that handle the money run a 50% profit - and the government sector payroll is loaded with deadwood.

Subject: Re: Chile: The Proof's in the Pension From: Emma To: David E.. Date Posted: Tues, Apr 26, 2005 at 22:12:48 (EDT) Email Address: Not Provided Message: There are times we are bothered by an article, but it takes thought to know why. Thank you, David, and yes the more information on Social Security from a personal perspective the better. We will learn more this way.

Subject: Re: Chile: The Proof's in the Pension From: Emma To: David E.. Date Posted: Tues, Apr 26, 2005 at 21:42:00 (EDT) Email Address: Not Provided Message: Excellent. This is just what we needed! I thank you so very much.

Subject: Venezuela and America From: Emma To: All Date Posted: Tues, Apr 26, 2005 at 16:25:50 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/26/international/americas/26venezuela.html?pagewanted=all&position= U.S. Considers Toughening Stance Toward Venezuela By JUAN FORERO As President Hugo Chávez of Venezuela veers toward greater confrontation with Washington, the Bush administration is weighing a tougher approach, including funneling more money to foundations and business and political groups opposed to his leftist government, American officials say. The Bush administration has already begun to urge Venezuela's neighbors to distance themselves from Mr. Chávez and to raise concerns about press freedoms, judicial independence and the Venezuelan government's affinity for leftist groups abroad, including Colombian guerrillas. But it has found no allies so far in its attempts to isolate the Venezuelan leader, and it has grown more and more frustrated by Mr. Chávez's strident anti-American outbursts and policies that seem intended to fly in the face of Washington. On Sunday, Mr. Chávez ended a 35-year military cooperation agreement and ordered out four American military instructors he accused of fomenting unrest. The accusation, which American officials denied, was the latest blow to relations that had been bitter since the United States tacitly supported a coup that briefly ousted Mr. Chávez in April 2002. Since then his strength has grown. He won a recall election last August, and record high oil prices have left his government flush with money as it provides 15 percent of American oil imports. American officials, who had chosen to ignore Mr. Chávez through much of last year, now recognize the need for a longer-term strategy to deal with a leader who is poised to win a second six-year term in elections next year. A multiagency task force in Washington has been working on shaping a new approach, one that high-ranking American policy makers say would most likely veer toward a harder line. United States support for groups that Chávez supporters say oppose the government has been a source of tension in the past. Under the plans being considered, American officials said, that support may increase. 'The conclusion that is increasingly being drawn in Washington is that a realistic, pragmatic relationship, in which we can agree to disagree on some issues but make progress on others, does not seem to be in the cards,' said an American official who helps guide policy in Latin America. The official added, 'We offered them a more pragmatic relationship, but obviously if they do not want it, we can move to a more confrontational approach.' Already counternarcotics programs have suffered, American officials noted, and meetings among high-ranking officials from the two countries are minimal. 'What's happening here is they realize this thing is deteriorating rapidly and it's going to require some more attention,' said a high-ranking Republican aide on Capitol Hill who works on Latin America policy. 'The current look-the-other-way policy is not working.' The United States, he said, is particularly concerned because Venezuela is one of four top providers of foreign oil to the United States. 'You can't write him off,' the aide said of Mr. Chávez. 'He's sitting on an energy source that's critical to us.' A main problem for the United States is that Washington has little, if any, influence over Caracas. The high price of oil has left Venezuela with no need for the loans or other aid that the United States could use as leverage. Nor does the Bush administration have much support in Latin America, where left-leaning leaders now govern two-thirds of the continent. Secretary of State Condoleezza Rice is expected to raise concerns about Venezuela in a four-country tour through the region this week. Political analysts say she will have a hard time finding support. Defense Secretary Donald H. Rumsfeld, on a recent trip to Brazil, publicly raised concerns about Mr. Chávez. Days later, President Luiz Inácio Lula da Silva of Brazil, in a meeting in Venezuela with Mr. Chávez and the leaders of Colombia and Argentina, pointedly said, 'We don't accept defamation and insinuations against a compañero,' meaning a close friend. 'Venezuela has the right to be a sovereign country, to make its own decisions,' he added. For his part, Mr. Chávez, who is famous for his rambling, often outrageous speeches, has grown more belligerent, using his anti-American posturing to bolster his popular support. He has accused the United States of planning an invasion, prompting a threat to cut oil sales, and has hurled sexually tinged insults at Secretary Rice. While other Venezuelan officials stress that oil sales to the United States would never cease, Venezuela's new energy ties with China have worried Washington, as did Mr. Chávez's recent meeting with President Mohammad Khatami of Iran, which he declared 'has every right' to develop its atomic energy program. Mr. Chávez is also forming a popular militia that he says will eventually have two million members and has plans to buy 100,000 AK-47 assault rifles from Russia and fighter jets from Brazil. 'All governments recognize the democratic character of the Venezuelan government, its peaceful vocation, and they want to establish relations with Venezuela, with just one exception, the United States,' Alí Rodríguez, the Venezuelan foreign minister, said in an interview. 'It has gone to great lengths to isolate Venezuela, but no government is playing along. It has failed, and that's because there is no reason to isolate Venezuela.' Indeed, many of Latin America's largest countries see little benefit in colliding with Mr. Chávez, nor do they support the isolation of Cuba. Venezuela provides oil at below-market prices and has numerous lucrative economic agreements with dozens of nations. Many also do not want to antagonize their own leftist constituencies, who are partial to Mr. Chávez. 'The other countries don't want to be drawn into a polemic between Venezuela and the United States,' said Jennifer L. McCoy, a Venezuela expert at Georgia State University who headed the Carter Center's election observer mission in Caracas last year. 'It's a counterproductive strategy that could result in a negative Latin American reaction if they're forced to take sides.' Many influential Democrats in Congress also oppose a more aggressive approach. 'I think it creates further estrangement,' said Representative Bill Delahunt, a Massachusetts Democrat and a member of the House International Relations Committee who has met many times with Mr. Chávez. 'One cannot get around the fact that Hugo Chávez is a democratically elected president.' But Bush administration policy planners say that efforts to patch up relations with Venezuela have largely failed. The American ambassador, William Brownfield, who took over in Caracas in September, spent fruitless months before getting a meeting with Mr. Rodríguez. Requests for meetings with other ministers and even midlevel officials are routinely ignored, and Venezuela has canceled dozens of routine exchange programs with the United States. The one option that administration officials increasingly believe they have is to respond much more assertively and publicly to Venezuelan policies the United States does not like, ideally with the help of other countries and respected institutions like the Inter-American Commission on Human Rights. 'We shouldn't be afraid to say when he's taking away liberties, not at all,' Robert B. Zoellick, now the deputy secretary of state, told the Senate Foreign Relations Committee in February. Venezuelan Foreign Ministry officials say they still hold out hope that relations will improve. 'There is one condition for us to have healthy relations with the United States,' said Vice Minister Mari Pili Hernández, who handles relations with Washington. 'It's called respect.'

Subject: Bush gives muslim friends Pork sandwich!! From: johnny5 To: All Date Posted: Tues, Apr 26, 2005 at 12:51:15 (EDT) Email Address: johnny5@yahoo.com Message: http://medianalysis.typepad.com/louisxiv/2005/04/bush_ignorance_.html Bush Ignorance of Reality Strikes Again: Saudis No Longer Control Oil Prices http://www.nytimes.com/2005/04/26/international/middleeast/26prexy.html?hp&ex=1114574400&en=707584f1f0905a2e&ei=5094&partner=homepage NYTimes, April 26, 2005 -- Bush and Saudi Prince Discuss High Oil Prices in Ranch Meeting by Richard Stevenson As we have pointed out many times before -- http://medianalysis.typepad.com/louisxiv/2005/02/saudis_no_longe.html -- the emergence of China and India as major economic powers, with already huge and ever-increasing appetites for oil, has created epochal changes in the global oil industry akin to those of the 1960s that made possible the 1973 OPEC revolution -- Political Economy Lecture 16, The Age of OPEC, 1973 - 1982. The most politically significant of these changes is that they have deprived Saudi Arabia of its once unique role of being able to act as the 'price setter' in OPEC. They were able to do this because of their favorable 'proven reserves / population' ratio -- with their small population and large supplies, they had a luxury no other oil state did: being able to adjust production levels more or less according to their political wishes. If they wanted to punish the West, they could turn off the spigots without having to worry about a radical drop-off in revenues that could create social unrest -- if they wanted to help the West, they could increase production so that prices would decrease, again, without having to contend with subjects worried about falling living standards. It was this crucial ability to manipulate price levels that gave the Saudis their crucial leverage with the West, above all with the United States, with whom they shared an intense commitment to anti-Communism during the Cold War. Unfortunately for the Saudis, tho, the emergence of China and India as major consumers of oil has ended the structural conditions of the global oil market that enabled them to act simultaneously as price makers AND breakers. Put simply, there is now a high floor under world oil demand that means the Saudis can no longer set the prices by manipulating their supply levels -- there is now such a constant need for oil throughout the world that it simply no longer matters how much, or how little, the Saudis produce: until either China or India hit a recession -- which is possible, but, for various reasons we can't explore here, not likely anytime soon -- they are simply going to be needing higher and higher amounts of oil to consume -- which means that prices now depend not on Saudi wishes but Chinese and Indian economic conditions. This could not, of course, come at a worse time for the Saudi royal family -- just at the moment when they need ever more amounts of money to spread around, both at home and abroad, AND when they need support from Western governments to help them handle the very serious challenge to their rule posed by political Islam -- they find their previously unparalleled leverage over the world oil market has more or less disappeared ... meaning that they are MUCH less valuable to their Western pals than they have EVER been since huge oil deposits were discovered in their country in the post-WWI era. This, then, is the context of the meeting of Prince Abdullah and George Bush in beautiful Crawford, Texas. Because no matter how much Bush may try to push the Saudis -- and no matter how much they may want to go along -- the fact is that the Saudis no longer can set price levels in the world oil market, which puts both them and their Texas oil buddies like Bush in a situation none of them have previously encountered. And while the Bushies excel in coming up with creative ways to manipulate the American people, the new realities of the world oil market are not going to prove quite so easy to handle. Some interesting tidbits of the latest NYTimes article on this: The officials said the Saudis used the meeting to detail for Mr. Bush the steps they intended to take to cushion the global market from future increases in demand from fast-growing economies like China and India, and from the United States and other industrial nations. Saudi Arabia's plan, which it began discussing publicly weeks ago, calls for spending up to $50 billion to increase its maximum sustainable production capacity to 12.5 million barrels a day by 2009, and to 15 million in the subsequent decade, from about 10.8 million barrels now. The Saudis are currently pumping about 9.5 million barrels a day. Asked whether that plan would have any effect soon on gasoline prices in the United States, Stephen J. Hadley, Mr. Bush's national security adviser, told reporters, 'It's hard to say.' Mr. Hadley added that increasing capacity 'can't help but have a positive downward effect on prices and deal with some of the volatility in the market by assuring people that supply will be available as the economies grow.' Of course, the Saudis want to make sure they they not seen as having even the most minimal responsibility for the one issue that Bush fears actually could create problems for him, even tho, at the moment, he once again appears to be weaseling away from any political damage: high gasoline prices. A Saudi official said that Mr. Bush had not requested a short-term production increase and that such an increase would not have any effect on gasoline prices in the United States in any case. The high price of gasoline in the United States, the Saudi official said, was mostly a result of a lack of refining capacity here. 'It will not make a difference if Saudi Arabia ships an extra million or two million barrels of crude oil to the United States,' said the official, Adel al-Jubeir, a senior adviser to the crown prince. 'If you cannot refine it, it will not turn into gasoline, and that will not turn into lower prices.' ... Saudi Arabia's plans to increase production capacity are politically and geologically sensitive. In the Middle East, the Saudis have been criticized for increasing production to help the United States; the most extreme of those critics has been Osama bin Laden. Some experts, including past and present officials of Saudi Aramco, the state-owned oil company, have said the plan may be too optimistic because of geological complexities in the oil fields and challenges in finding enough technology and labor. Nevertheless, Bush does have to be careful, even tho his 'judges and circuses' strategy has been successful so far in keeping Americans distracted from the ever-spiralling prices at the gas pump: The national average price for a gallon of regular unleaded gasoline last week was just under $2.24, up 43 cents from a year earlier. Crude oil prices on Monday were about $54 a barrel, up from $37 a year ago. Of course, the really crucial issue is not how much it costs Americans to get back and forth to work every day, but the OUTRAGEOUS insistence of gay, liberal Democrats in giving the President the 'judges of faith' he MUST have.

Subject: About the Oceans, Attention Must Be Paid From: Emma To: All Date Posted: Tues, Apr 26, 2005 at 12:19:53 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/26/science/earth/26prof.html?pagewanted=all&position= About the Oceans, He Says Firmly, Attention Must Be Paid By CORNELIA DEAN BOCAS DEL TORO, Panama - Dr. Jeremy Jackson is in an open boat, speeding across the waters of Laguna de Chiriquí, on the Caribbean coast of Panama. His graying red pony tail is frizzing and flapping in the wind, and he is gesticulating wildly, waving his long arms, his lanky frame twisted toward his fellow passengers. Shouting above the engine's roar, he is explaining how the ancient geology of the Panamanian isthmus helps explain its environment today. Just then two Guaymi Indians emerge from behind a mangrove-fringed island, paddling a small canoe carved from a tree trunk. Dr. Jackson's listeners turn to follow the men's progress. 'Hey!' he shouts, clapping his hands. 'Pay attention!' Getting people to pay attention is Dr. Jackson's mission. In scientific journals, in talks at places as diverse as Unesco headquarters and the Monterey Bay Aquarium, Dr. Jackson is telling everyone around about a world slipping into ecological degradation. From the Scripps Institution of Oceanography in San Diego, where he directs the Geosciences Research Division, and the Smithsonian Tropical Research Institute in Panama, or STRI, where he has a part-time appointment, Dr. Jackson has deplored declines in coral reefs, the virtual disappearance of large marine fish and losses of coastal and marine ecosystems. He helped create a Web site, shiftingbaselines.org, to point out that the changes people saw in their 20th-century lifetimes were just small snapshots in a larger picture of environmental decline that has been accelerating for 200 years. In March, he and colleagues published a call to arms in the journal Science on behalf of the world's corals. In many areas, they say, 'degraded reefs are little more than rubble, seaweed and slime.' They called on scientists to stop arguing about the relative importance of overfishing, pollution, climate change and other causes of coral death and instead to work together to turn things around. And they told them how to do it, in an accompanying list of recommended actions. It is unusual for academic researchers to offer this kind of aggressive scolding. Generally, they steer clear of the messy realms of politics and policy, but that is Dr. Jackson's milieu these days. 'He is a rock star,' said Daniel P. Schrag, director of the Harvard Center for the Environment, who said he stopped eating farm-raised salmon after hearing Dr. Jackson thoroughly denounce aquaculture. 'This is someone who has deep insight into food webs and physical and biological ocean processes and marine ecology, and a deep understanding of geological time,' Dr. Schrag said. 'He looks at the modern record and the last few centuries of spectacular and terrifying decline with deep understanding.' Hearing Dr. Jackson describe the problems of the oceans made Dr. Schrag think about ways to tell people about climate, his own area of specialty. 'His ability to communicate what's going on inspired me,' Dr. Schrag said. 'He's my hero.' Dr. Jackson started down this road after Hurricane Allen struck Jamaica in 1980. By then he had worked his way through George Washington University, earned a doctorate in geology at Yale and achieved a tenured professorship at Johns Hopkins. After the hurricane, he was among experts who went to Jamaica to study its effects on corals. 'We wrote a quite well-known paper that was published in Science,' he recalled. 'Everybody loved it. We predicted how the reef would recover, and we got it 100 percent wrong. It became obvious there were things going on that we did not understand.' A few years after that, working at STRI (rhymes with try), he found himself leading a study of the effects of an oil spill. Corals in the spill area were dying, he said, but corals elsewhere were dying, too. Again, he said, 'There was something going on.' That something, he decided, was 'the cumulative impact of people.' He elaborated at a scientific meeting in 1993 in Miami, saying he feared the world's corals could not survive humanity's collective assaults. 'I got this supernegative reaction,' he said, 'that I was a Cassandra.' So he and his wife, Dr. Nancy Knowlton, who now directs the Center for Marine Biodiversity and Conservation at Scripps but was then at STRI, organized a conference where Dr. Jackson challenged the scientists in his audience to think of what the reefs of the Caribbean had been like when Columbus saw them, and to compare that vision with what they were seeing. 'I swear, you could have heard a pin drop,' he said. But delivering this kind of message to scientists was not enough, he decided, after he published a paper on catastrophic declines in fish populations. The paper was celebrated in scientific circles, he said, but his daughter brought him down to earth. 'She said, 'You know, Papa, no one at my school has ever heard of the problem of overfishing.' ' That was what inspired him to help organize shiftingbaselines.org. Its aim, he said, is to convey important information with humor - because 'people have only so much tolerance for dead fish.' The site includes short films, a blog, links to studies and news articles, information on events relating to marine ecology and even a photo, produced by the site's co-founder Randy Olsen, showing what Mount Rushmore would look like if it represented the Jackson Five - Jesse, Michael, Andrew, Shoeless Joe and Jeremy. Perhaps it was inevitable that if Jeremy Bradford Cook Jackson were a scientist, he would be a scientist with panache. He was born in 1942 in Louisville, Ky., and his parents separated shortly after his birth. He and his mother moved to Gramercy Park in New York, and she went to work in advertising. His biological father died at an early age and young Jeremy did not see much of his paternal relations, the Cooks, who trace the family from the Mayflower pilgrim William Bradford. Instead, he recalls childhood days with his mother's family, descendants of German and Russian Jewish immigrants. They were a quarrelsome and eccentric bunch, as Dr. Jackson describes them, artists and writers always ready to try something new. When he was still a boy, his mother married Melvin Jackson and the family settled in Miami, where his new father earned a doctorate in history and became a professor at the University of Miami. They lived among the writers and artists of Coconut Grove. 'That's where I first met Marjory Stoneman Douglas,' Dr. Jackson related, the naturalist most famous for 'The Everglades: River of Grass,' her paean to the vast wilderness. 'I used to go to her birthday parties. She would escape from the crowd, and we would go for little walks. I remember her as this feisty, independent woman, really a mountain of information.' The description fits Dr. Jackson today. For example, when some researchers questioned the conclusions of the recent corals paper, he urged them to write sharp letters challenging it, seemingly relishing the fight. Colleagues say it is not easy to work with a person with such enthusiasm for argument, and such a robust ego. They describe him as 'difficult,' or 'a cantankerous collaborator,' or 'impossible,' if not 'absolutely impossible.' Once he gets involved in something, they say, he pushes it relentlessly, urging that his projects be given precedence over the claims of others. Dr. Jackson is a highly proficient scientist who 'tends to be intolerant of colleagues who don't see things the way he does,' said Dr. Ira Rubinoff, who brought Dr. Jackson and Dr. Knowlton to STRI. 'His big ego can be very hard to take,' said Dr. Eldredge Bermingham, an evolutionary biologist who is deputy director of STRI, 'but I admire his research, I admire his passion and I admire his willingness to speak out.' Dr. Jackson says he does not encounter the criticism meted out to many other scientists who speak out, in part because he continues to publish findings from the Panama Paleontology Project, which he co-founded in 1986, and which brought him to Laguna de Chiriquí, en route to an outcrop of fossil corals at Caya Agua, a remote island. In the last five years, Dr. Jackson has undergone arduous treatment for prostate cancer and for a melanoma that he said he diagnosed himself. He said he was considering retiring, in part because he would like to return to New York City, where his son from his first marriage is a chef, but also to spend more time 'writing and synthesizing.' But then, he said, he teaches a class or gives a talk and is buoyed by his reception. 'People say, 'What can I do?' ' he said. 'I tell them, 'Become an informed citizen.' ' Progress is slow, he added, but 'the fact that more attention is being paid to the oceans is good.'

Subject: Fed comforted by sluggish wages? From: Pete Weis To: All Date Posted: Tues, Apr 26, 2005 at 10:33:49 (EDT) Email Address: Not Provided Message: 'Federal Reserve officials, faced with oil prices that have risen 50 percent on the New York Mercantile Exchange in the past 12 months, have taken comfort in benign wage gains.'!!!!! Is this merely more BS from the Fed - more of the kind of stuff Stephen Roach is talking about? How idiotic is this statement? The PROBLEM is poor wage growth in the face of record personal DEBT!!!! DEBT has been replacing a lack of wage growth!!!! We were supposed to see an increase in capital expenditure with more jobs and higher wages in response to all this liquidity!!!! The spin coming out of the Fed is absurd!!! Let's face it the Fed will be fighting deflation in the coming years - not inflation!!! The problem is not wages going up too fast but sinking wages, lost jobs in a housing slowdown/meltdown, world record personal DEBT and dropping consumption!!! With these kind of statements, the Fed might as well take out a full page in the nation's newspapers and declare 'we are totally helpless in the face of our present economic difficulties - so bend over and stick your head....'!!!!! Rocky Mountain News http://www.rockymountainnews.com/drmn/business/article/0,1299,DRMN_4_3729221,00.html Fed comforted by sluggish wages More firms to hand out raises, but board says inflation at bay By Will Edwards, Bloomberg News April 26, 2005 The highest percentage of U.S. companies in almost five years said they raised wages in the first quarter, a sign labor costs may be starting to accelerate, according to a survey of corporate economists. Thirty-six of the 103 economists polled - or 35 percent - by the National Association for Business Economics reported higher wages and salaries in the year's first three months, up from 28 percent in the fourth quarter. The reading was the highest since the second quarter of 2000. The rest reported no change. Federal Reserve officials, faced with oil prices that have risen 50 percent on the New York Mercantile Exchange in the past 12 months, have taken comfort in benign wage gains. Fed officials want to guard against a sustained gain because wages account for two-thirds of the cost of goods and services. The Fed may continue raising interest rates if wages continue to rise. 'At the very least, there's a yellow light signal with regard to inflationary pressures on the economy,' said James Meil, chief economist at Eaton Corp., the world's second-largest maker of hydraulic equipment, in an interview. Meil helped conduct analysis of the association's survey. 'If you take a look at what they say in prices, wages and costs, things seem to be picking up, heating up on the inflationary front.' The percentage of companies raising prices in the quarter rose to 34 percent from 33 percent, the association said. More companies also added workers in the quarter. The percentage of companies with rising employment levels rose to 29 percent from 27 percent, according to the survey. The U.S. economy added an average of 159,000 jobs in the first three months of the year. Workers' average hourly earnings rose 0.3 percent in March after a 0.1 percent rise in February. The Federal Reserve's Open Market Committee, which sets the Fed's benchmark interest rate, saw higher inflation risks at its March 22 meeting. The committee debated whether to jettison language favoring a 'measured' pace of rate increases, records released on April 12 showed. While concluding that price risks were 'now tilted a little to the upside,' Fed officials also saw signs of slack in the U.S. economy, notably in labor markets. 'Pressures on prices stemming from labor costs seemed well contained and were expected to remain damped in coming quarters,' the minutes said. 'If wage increases were to start picking up on a sustained basis, they would be very concerned about inflation because that immediately hits services prices,' which cover about 60 percent of the consumer price index, Roger Kubarych, a senior economic adviser at HVB America Inc. and a former economist at the Federal Reserve, said in an interview.

Subject: Less wages = less stock purchasers no? From: johnny5 To: Pete Weis Date Posted: Tues, Apr 26, 2005 at 12:32:58 (EDT) Email Address: johnny5@yahoo.com Message: Who will buy all these US equities now? The starving chinese who got all our jobs from the spending we did? I thought they were struggling just to buy a closet with a washing machine in it. http://DELONG.typepad.com/sdj/ But who is going to begin it with the Bushies in charge? And it's not the most fiscally irresponsible U.S. administration since World War II. It's the most fiscally irresponsible U.S. administration since before Alexander Hamilton rammed Revolutionary War debt assumption through Congress.

Subject: Re: Fed comforted by sluggish wages? From: Terri To: Pete Weis Date Posted: Tues, Apr 26, 2005 at 12:01:17 (EDT) Email Address: Not Provided Message: The only way out of the trap is with better fiscal policy, with more revenue from taxes the Fed can afford to be easier in policy. We are in a trap we have set with excessive tax cuts.

Subject: Fiscal and Monetary Policy From: Terri To: All Date Posted: Tues, Apr 26, 2005 at 10:28:58 (EDT) Email Address: Not Provided Message: Again, the problem we have is political. This Congress is not going to begin a gradual series of tax increases. This year, would make Republicans a mockery. Next year, there is an election. Spending restraint would have to shred social benefit programs, and other than Medicaid and housing this is fortunately politically too dangerous. A gradual tax increase with effects muted by the Federal Reserve could be terrific policy. But, where is the chance? So there must be an increase in value for the Yuan, but how to have this without economic distruption?

Subject: Richies like taxes - new study on afflient From: johnny5 To: Terri Date Posted: Tues, Apr 26, 2005 at 13:30:11 (EDT) Email Address: johnny5@yahoo.com Message: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/04-25-2005/0003482921&EDATE= The Deficit The affluent are increasingly concerned about the national budget deficit, with 85 percent of respondents viewing the deficit as a problem and 57 percent seeing it as a 'very serious' problem. In fact, concerns over the deficit are high enough that more than two-thirds (68 percent) say they would rather the government reduce the deficit than cut taxes. This represents more than twice the number of respondents who say they would prefer tax cuts (29 percent). Legeay continued, 'We believe that this willingness to sacrifice tax savings for the budget reveals more long-term concerns over the deficit, and its potential economic impact.'

Subject: Richies like taxes - new study on afflient From: johnny5 To: Terri Date Posted: Tues, Apr 26, 2005 at 13:30:07 (EDT) Email Address: johnny5@yahoo.com Message: http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=109&STORY=/www/story/04-25-2005/0003482921&EDATE= The Deficit The affluent are increasingly concerned about the national budget deficit, with 85 percent of respondents viewing the deficit as a problem and 57 percent seeing it as a 'very serious' problem. In fact, concerns over the deficit are high enough that more than two-thirds (68 percent) say they would rather the government reduce the deficit than cut taxes. This represents more than twice the number of respondents who say they would prefer tax cuts (29 percent). Legeay continued, 'We believe that this willingness to sacrifice tax savings for the budget reveals more long-term concerns over the deficit, and its potential economic impact.'

Subject: Export Taxes From: Terri To: Terri Date Posted: Tues, Apr 26, 2005 at 11:33:03 (EDT) Email Address: Not Provided Message: Export taxes levied by China can be a short term solution at best, since neither China nor America will be forced to adjust policies. China needs to build domestic demand, and America needs to pare the domestic deficit to take pressure off the international accounts. The proposal is interesting for a short while, so there is use for a short whole.

Subject: Read 'A(C)C/D(C)C' From: Pete Weis To: Terri Date Posted: Tues, Apr 26, 2005 at 11:07:59 (EDT) Email Address: Not Provided Message:

Subject: China and Efforts to Restore Quotas From: Emma To: All Date Posted: Tues, Apr 26, 2005 at 10:02:02 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/26/business/worldbusiness/26textile.html China Will Fight Efforts to Restore Quotas By CHRIS BUCKLEY and JAMES KANTER China will 'resolutely oppose' any moves to restore quotas on its textile exports to Europe and the United States, a Chinese Ministry of Commerce official said on the ministry's Web site yesterday. Yi Xiaozhun, one of China's four assistant commerce ministers, said in a Web posting that China was willing to ensure a 'steady transition' to a new era of free trade in textiles, acknowledging the surge in Chinese exports. 'But we will resolutely oppose any developed countries attempting to reapply restrictions on garments to limit our exports,' he said. The ministry's Web site said Mr. Yi made his remarks at a meeting over the weekend, apparently in anticipation of a European Union warning on Sunday of possible restrictions on Chinese textiles. The top European Union trade official, Peter Mandelson, said Sunday that he would open a formal two-month inquiry into the flood of Chinese textiles into Europe, and warned of possible sanctions on Chinese textiles by summer. Yesterday, Nicolas Schmit, the deputy foreign minister of Luxembourg, whose country holds the European Union presidency, said in a statement that all 25 trade ministers had backed the investigation, but for some, the two-month inquiry might take too long given the severity of the situation, and those countries might demand faster action. 'The countries most affected - a dozen member states - have insisted on this degree of urgency,' Mr. Schmit said. On the Chinese Commerce Ministry Web site, however, Mr. Yi, the assistant minister, said: 'Adopting the administrative measures of the era of classification quotas is unfair to China. It's turning back to the past.' China's textile exports have long been harmed by 'long-term distortions of the textile trade system,' Mr. Yi said. 'At a time when the garment quota system has just been abolished, it's only natural that China's export volumes would rise.' China is aware that some developing countries have 'encountered hardships' because of the surge in China's garment exports, he said, adding that Beijing is working to overcome those problems. The European investigation comes as French and Italian clothing makers, in particular, are pressuring Mr. Mandelson to limit imports from China, which is making huge gains after a 40-year-old quota system on its textile exports ended last year. Getting tough with China, Europe's second-biggest trading partner after the United States, is a delicate matter because European officials want to keep good relations to smooth the way for sales of Western technologies like nuclear power stations, high-speed trains and aerospace equipment to China. Mr. Mandelson's spokeswoman, Claude Véron-Réville, warned yesterday that the European Union should not act hastily, or risk litigation at the World Trade Organization. 'We are waiting for this formal request for emergency measures from those member states who said they would make such a request,' she said in Brussels. 'We are determined to act expeditiously with our investigation.'

Subject: The REIT Index From: Terri To: All Date Posted: Tues, Apr 26, 2005 at 06:16:32 (EDT) Email Address: Not Provided Message: Notice that REITs have held stock prices well as long term interest rates have held at low levels. The Vanguard REIT Index is down little more than 3% for the year so far. A minor correction in stock prices. The question is whether real estate value in general can hold if long term Treasury interest rates stay below 5%? The rate is remarkably about 4.25% now. Am I surprised? Yes, and I am pleased with such interest rate stability.

Subject: Greenspan has critics - From: David E.. To: All Date Posted: Mon, Apr 25, 2005 at 23:19:13 (EDT) Email Address: Not Provided Message: Well it is no surprise that Steven Roach has written a column about asset inflation and Mr Greenspan. But I am surprised to find this < A HREF='http://www.time.com/time/magazine/printout/0,8816,1053652,00.html '>surprise Time article. So many years of good service that end with a 'party hack' label.

Subject: typo From: David E.. To: David E.. Date Posted: Mon, Apr 25, 2005 at 23:21:29 (EDT) Email Address: Not Provided Message: But I am surprised to find this Time article.

Subject: General Ralph Landry From: johnny5 To: David E.. Date Posted: Tues, Apr 26, 2005 at 03:15:47 (EDT) Email Address: johnny5@yahoo.com Message: http://www.amazon.com/exec/obidos/tg/detail/-/B00007ELF2/103-4750702-6355007?v=glance&vi=quotes-trivia General Ralph Landry: You know, when they forced Khruschev out, he sat down and wrote two letters to his successor. He said - 'When you get yourself into a situation you can't get out of, open the first letter, and you'll be safe. When you get yourself into another situation you can't get out of, open the second letter'. Soon enough, he gets into a tight situation, and he opens the first letter. It says - 'Blame it all on me'. So he blames it all on the old guy, and it worked like a charm. When he got himself into a second situation, he opened the second letter. It said - 'Sit down, and write two letters'.

Subject: Hu's strangling grip From: johnny5 To: All Date Posted: Mon, Apr 25, 2005 at 21:47:37 (EDT) Email Address: johnny5@yahoo.com Message: Hu Tightens Party's Grip On Power Chinese Leader Seen As Limiting Freedoms By Philip P. Pan Washington Post Foreign Service Sunday, April 24, 2005; Page A01 BEIJING -- More than two years after taking office amid uncertainty about his political views, Chinese President Hu Jintao is emerging as an unyielding leader determined to preserve the Communist Party's monopoly on power and willing to impose new limits on speech and other civil liberties to do it, according to party officials, journalists and analysts. http://www.siliconinvestor.com/readmsg.aspx?msgid=21259873&srchtxt=china

Subject: Teach them to buy 600 dollar jeans! From: johnny5 To: All Date Posted: Mon, Apr 25, 2005 at 20:50:29 (EDT) Email Address: johnny5@yahoo.com Message: Afghan Beauty School A new school teaches Afghan women the latest beauty techniques. Channel: Discovery TIMES Future airings of Afghan Beauty School: • Tue 4/26 3:00 PM 135 DTIMES (Satellite)

Subject: Vanguard and demutualization From: David E.. To: All Date Posted: Mon, Apr 25, 2005 at 19:47:08 (EDT) Email Address: Not Provided Message: On the Morningstar Diehards forum, Taylor Larimore found an analysis/estimate of Vanguard's expenses. Here is my thanks to Mr Larimore for his find. 'Thank You Mr Larimore - For finding the answer to my question. My question came about when I was explaining to a friend what a good deal Vanguard was. And he asked me- how long will it last? My fear was that Vanguard would be soon be de-mutualized. That the low costs could disappear. The estimated finances in the article show that the low-costs result in a very profitable organization. That can well afford to advertise. The author also thinks the de-mutualization could happen. Here are three important paragraphs from the article. 'It is not inconceivable that Vanguard will one day change its stripes and become a for profit organization, transforming itself into a corporation. The process would be similar to a mutual insurance firm “de-mutual-izing” itself. In this hypothetical process the firm allocates stock to employees (especially key employees) and customers (fund shareholders), raises capital through the capital markets and begins life as a public for profit fund giant. Such an event could clearly be rationalized on the grounds that Vanguard will need to raise capital to compete in the competitive financial services industry while maintaining a position as the low cost provider. Such a move may not be in the near future, but we’d be surprised if it didn’t happen at some point. The advantages to the organization, key employees and even the then current shareholders would be too great. And, with the great economies of scale the firm would still be the lowest cost provider of index funds and at the low end (profitably) of actively managed funds.' So my fears of demutualization were correct. But I never imagined that the low-costs were so profitable. Plus Vanguard's low costs constitute a huge marketing advantage that won't be tossed so easily away. Plus- for those who want boutique high expense funds, Vanguard can always add more to their stable. So I don't think demutualization is on the immediate horizon as I feared. '

Subject: Mutual Status is Secure From: Terri To: David E.. Date Posted: Tues, Apr 26, 2005 at 05:59:56 (EDT) Email Address: Not Provided Message: Fine discussion. I am convinced there is no sense at Vanguard that the company is constrained by the mutual status, and there is no prospect of Vanguard turning to corporate status in the near term. Capital needs are easily being met, and the managers and directors appear to support mutual status completely. Asset level are about 800 billion dollars.

Subject: From: To: Date Posted: Email Address: Message:

Subject: www.blog.com From: Pancho Villa To: All Date Posted: Mon, Apr 25, 2005 at 17:54:44 (EDT) Email Address: nma@hotmail.com Message: RONALD BROWNSTEIN The net could create another political power The internet is a levelling force. It diffuses power and empowers new competitors to challenge old arrangements. Elite newspapers and magazines, for instance, dominate their markets partly because it costs so much to build conventional hard-copy competitors. But the web has also allowed tens of thousands of new voices to find audiences at little cost. Some of the same effect is already evident in US politics. Once it took years of heavy spending on direct mail and other recruitment methods to build a national membership organisation, MoveOn.org, the online liberal advocacy group, acquired half a million names with virtually no investment just months after posting an internet petition opposing former US president Bill Clinton's impeachment in 1998. MoveOn, and groups like it on the left and right, chisel away at the power of the main political parties by providing an alternative source of campaign funds and volunteers. But otherwise, the two parties that have defined American political life since the 1850s have been largely immune from the centrifugal current of the internet era. Joe Trippi, a principal architect of Howard Dean's breakthrough internet strategy in the 2004 Democratic presidential campaign, is one of many analysts who believe that may soon change. The internet, he says, could ignite a serious third party presidential bid in 2008. 'This is a very disruptive technology,' he says. The internet could allow an independent candidate to identify more easily an audience and financial base, just as it has allowed blogs such as the liberal Daily Kos or conservative Instapundit to find like-minded readers. More precisely, the internet has allowed readers to find those blogs. And because the audience mostly finds the product, rather than the other way around, the cost of entering the market is radically reduced. Mr Trippi believes an independent presidential candidate could organise support through the internet just as inexpensively. If he struck a chord, such a candidate could raise as much as $200m over the internet 'in the blink of an eye'. Mr Trippi predicts. It might not be quite that simple. But the two parties are pursuing strategies that create an opening in the centre of the electorate, even as the internet makes it easier for new competitors to fill it. Influenced partly by Ross Perot's strong showing in the 1992 presidential race, Mr Clinton argued that capturing the middle was the key to electoral success. After an initial lurch left, he doggedly pursued centrist voters by breaking from liberal orthodoxy on welfare, trade and other issues. By contrast, George W. Bush, the US president, has been more willing to risk alienating moderate and independent voters to advance ideas that energise his base. He won re-election largely by increasing turnout among Republicans and conservatives. More and more Democrats see their future in Mr Bush's model, not Mr Clinton's. Mr Trippi argues that Democrats are more likely to win back the White House by increasing turnout among their own supporters with a pointedly partisan message, as did Mr Bush. Not only have liberals such as Mr Trippi drawn this conclusion; so too have some centrists such as Simon Rosenberg, founder of the New Democrat Network. Mr Bush's success in 2004, says Mr Rosenberg, has rejected 'for all time' the idea that the only way to win the White House is to win the centre. This argument among Democrats is far from settled. But a tilt in Mr Trippi's direction is evident in the surprisingly unified Democratic congressional opposition to Mr Bush's priorities. The result is that both parties today are offering policies and messages aimed primarily at their core supporters. Even strategists such as Mr Trippi, however, acknowledge that by ceding the centre, both parties may be vulnerable to a new force. The hurdles for an independent presidential candidate remain formidable. Even one with a competitive share of the popular vote may have trouble with the US electoral college vote system. Yet if the two parties continue on their trajectory, the backdrop for the 2008 election could he massive federal budget deficits, gridlock on problems such as healthcare costs, fights over ethics and poisonous clashes over social issues and Supreme Court appointments. In such an environment, imagine the options for John McCain, the Republican senator from Arizona, if he does not win the 2008 Republican nomination, and former Democratic senator Bob Kerrey of Nebraska, now that he has dropped the idea of running for mayor of New York. If the two Vietnam veterans joined in an independent ticket, they might inspire a gold rush of online support, making the two national parties the latest example of the internet's ability to threaten seemingly impregnable institutions. The writer is a columnist for the Los Angeles Times FT Monday April 25 2005

Subject: A(C)C/D(C)C From: Pancho Villa To: All Date Posted: Mon, Apr 25, 2005 at 17:17:05 (EDT) Email Address: nma@hotmail.com Message: LAWRENCE LAU and JOSEPH STIGLITZ China's alternative to revaluation Western pressure has been mounting on China to revalue the renminbi, from hardening rhetoric in the US Congress to recent calls by the Group of Seven leading industrialised nations for more flexibility from China. However, there is currently no credible evidence that the renminbi is significantly undervalued, and an adjustment in its exchange rate at this time is neither warranted nor in the best interests of China or global economic stability. The two symptoms of undervaluation are a large multilateral trade surplus or high inflation. China's measured trade balance has been in slight surplus (a surplus no doubt exaggerated by over- invoicing of exports and under-invoicing of imports); but with the volatility of oil prices and the international economy more generally, this could quickly be reversed. And while China's trade surplus has grown, China's multilateral surplus is far from the world's largest. America blames China for the bilateral trade deficit; but America's trade deficits are a result of its huge fiscal deficits and the fact that Americans do not save. America's defence that it is doing the world a service by consuming vastly beyond its means is self-serving and rings hollow: US fiscal policies and low savings have become the fundamenlal source of global imbalances. China has experienced large capital inflows (beyond foreign direct investment), but these are symptoms of speculative pressures that have been so destabilising throughout the developing world. It would be a mistake; and only a temporary palliative to reward the speculators by appreciating the currency. Some in China would revalue the currency not because they believe there is a fundamental economic problem, but to get the Bush administration off their backs. But currency appreciation is not likely to reduce significantly the US balance of payments deficit with China or the world. Because the prices China pays for imports would be lowered, and because of the high import content of China's exports to America as much as 70-80 per cent even a 10 per cent revaluation would have miniscule effects. Moreover, China should receive some comfort from having joined the World Trade Organisation: there; are the beginnings of an international rule of law. A unilateral imposition by the US of import duties would most likely contravene WTO rules; it is hard to call a country that has adopted a fixed exchange rate system a currency manipulator. If China were to contemplate a revaluation, it should consider as an alternative the imposition of a tax on its exports. Export taxes are generally permitted under WTO rules. Indeed, China has already moved in a limited way in this direction on textiles. There are several reasons voluntary imposition of a tax on its exports may be preferable to a renminbi revaluation. Both would have similar effects on Chinese exports they would make them appear more expensive to the rest of the world. Because of this similarity, an export tax would provide an empirical answer to the question of whether a revaluation would work. But it would do this without some of the significant costs attendant on revaluation. One of the advantages of an export tax is that, unlike a revaluation, it would not lead to financial losses for Chinese holders of dollar-denominated assets, such as the People's Bank of China or commercial banks and enterprises. China's central bank currently holds about $640bn in foreign exchange reserves. Assume that only 75 per cent is held in dollar-denominated assets. A renminbi revaluation of 10 per cent would result in a loss of $48bn or about 400bm yuan for the central bank. Another cost of revaluation would be possible further deterioration in the distribution of income, including increasing the already large rural urban wage gap. Revaluation would put downward pressure on domestic Chinese agricultural prices; an export tax would not. An export tax, by contrast, would have a beneficial side effect: it could generate substantial government revenue for China. Given the high import content of Chinese exports to the US, a 5 per cent export duty would be equivalent to a currency revaluation of some 15-25 per cent, generating about $30bn-$42bn a year. Finally, an export tax would not reward currency speculators. It may even discourage the speculation that has complicated macro-economic management of China's economy. If potential speculators can be convinced that China would rather impose an export tax than revalue, less 'hot money' will flow into China. By contrast, nothing encourages speculators more than a 'victory', especially where, as here, it is likely to do little to correct the underlying problems. An export tax can be easily lifted if and when Chinese balance of payments conditions so warrant. It could be stipulated that the tax would be reduced or lifted if the Chinese current account balance turned significantly negative. America's China policy has been driven more by domestic politics than hard economic reasoning or thoughtful, quiet diplomatic initiatives. It would be better for the world if the international rule of law prevailed and within those rules, China could unilaterally impose an export tax, while it is dubious whether America could impose an import duty. Most importantly, we should not let bad polities drive out good economics. Lawrence Lau is professor of economic development at Stanford University and vice-chancellor at the Chinese University of Hong Kong; Joseph Stiglitz is University Professor at Columbia University and Nobel laureate in economies FT Monday April 25 2005

Subject: The sane solution..... From: Pete Weis To: Pancho Villa Date Posted: Mon, Apr 25, 2005 at 17:55:08 (EDT) Email Address: Not Provided Message: Who needs to sell the Chinese that this would be in their interest? Why isn't this more obvious to everyone with the power to make it happen?

Subject: Thank You From: Emma To: Pete Weis Date Posted: Mon, Apr 25, 2005 at 17:59:35 (EDT) Email Address: Not Provided Message: Thank you guys for these important posts.

Subject: Man the barricades! From: Pete Weis To: All Date Posted: Mon, Apr 25, 2005 at 15:06:16 (EDT) Email Address: Not Provided Message: Putting up the barricades Apr 25th 2005 From The Economist Global Agenda America's Congress is taking a harsher line on trade, particularly with China. The Bush administration is also getting into the act, with the treasury secretary and even the newly nominated trade representative talking tough. Is America turning protectionist? THESE are not happy times for the dwindling band of free-traders in Washington, DC. Trade sceptics are on the move on two fronts: raising the barricades against the Chinese and refusing to lower them for the Central Americans. Politicians blame China and its fixed exchange-rate regime for America's trade deficit. But Congress is also sceptical about the Central American Free Trade Agreement. Although CAFTA is small beans in economic terms, failure to get it through would spell ill for any global trade deal at the World Trade Organisation (WTO). China-bashing has captured the headlines. On April 6th, 67 senators voted against dumping a bill proposed by Charles Schumer, a Democrat from New York, that would impose a 27.5% tariff on all goods from China unless Beijing adjusted its currency—which is fixed to the dollar at an artificially low exchange rate—within six months. Not only is the legislation utterly against WTO rules, it would cause havoc for the American economy. But Mr Schumer has been promised a vote by July, and his bill may well pass the Senate. The Schumer bill's success, which has surprised even its sponsor, is accelerating other measures. Two more senators, Susan Collins and Evan Bayh, are touting the Stopping Overseas Subsidies Act, which would allow American firms to get countervailing duties to make up for Chinese subsidies, including a subsidised exchange rate. China is not currently subject to America's anti-subsidy law as it is deemed a “non-market economy” (which makes it easier for American firms to file anti-dumping cases against it). But declaring China a market economy for the purposes of subsidies, and a non-market economy for the purposes of anti-dumping, is against WTO rules. Nobody in Congress, alas, seems to care about breaking WTO rules. The aim is to be seen to be bashing China loudly. Mr Bayh is holding up the confirmation of Rob Portman, the Ohio congressman whom George Bush has nominated for US trade representative, until his bill is voted on. Meanwhile, in the House of Representatives, Duncan Hunter, a conservative Republican, and Tim Ryan, a Democrat, have cooked up a law that allows American companies to use “exchange-rate manipulation” as a reason for demanding protection under America's trade laws. And the Congressional China Currency Action Coalition has filed a Section 301 petition asking the Bush administration to file a formal case to the WTO complaining about the yuan. In the 1980s, a rising trade deficit—at that time with Japan—fuelled protectionist pressure in Congress. Ronald Reagan introduced the notorious “voluntary export restraints” on Japanese steel and cars. The Reagan team also abandoned its laisser-faire attitude to currency markets and, through the Plaza Agreement, engineered a sharp drop in the dollar. The current bout of China-bashing is not a replay of the 1980s. Back then, large American firms, particularly the Detroit car giants, led the clamour for protection. Now big business, which relies heavily on Chinese inputs, is quieter. The shouting comes from smaller American suppliers. And even the noisier business groups, such as the National Association of Manufacturers, are relatively nuanced. Though the NAM wants Beijing to revalue the yuan, it does not support the Schumer bill. Less encouragingly, the political and economic risks are bigger this time round. In the 1980s Japan, for all its faults, was always viewed as a democratic ally in Asia. By contrast, China is now seen as a nasty communist regime and a dangerous rival. In the mid-1980s, America's current-account deficit was smaller, 3.5% of GDP in 1985 compared with 6.3% today, and its debt stock lower. Today, America is the world's biggest debtor, with China as an important creditor. A sharp reversal in China's appetite for American Treasury bonds could send interest rates soaring. This might come sooner rather than later, according to Alan Greenspan, the chairman of the Federal Reserve. In testimony before the Senate budget committee last week, he stated that the Chinese government’s massive exchange-rate interventions were causing growing imbalances in the domestic economy that will force China to abandon its currency peg. Over the weekend, the head of China's central bank also gave a speech indicating that the yuan could be revalued in the near future (though he blamed international pressure, rather than internal imbalances). Once this happens, the People's Bank of China can stop stockpiling dollar reserves—meaning its demand for American government securities will also dry up. Critics wonder if Congress, which has made little effort to curb America’s soaring budget deficits, has quite thought things through. For now, the Bush administration seems to be trying to muddle along. It has increased its rhetoric about the need for China to fix its exchange rate. It said this at the G7 meeting of finance ministers on April 16th, and, when the Treasury issues its twice-yearly report on currencies later this month, it is likely to come close to calling China a “currency manipulator”—a term last applied to Beijing in 1994. Even Mr Portman, an ardent free-trader, sounded a harsh note on China during an appearance before the Senate finance committee on April 21st. Saying that the Chinese “do not always play by the rules”, he promised to take a firmer stance than his predecessor, Robert Zoellick. This seems to have garnered approval on both sides of the aisle—though not from Mr Bayh, who said that words were no substitute for action. The Bush team hopes to keep this sort of grandstanding to a minimum. But the China-bashing in Congress presents a danger. At worst, this frenzy could result in a series of illegal (in WTO terms at least) protectionist bills becoming law. Even if things do not get that far, the China effect will complicate an already tough struggle to get CAFTA through. Aside from a handful of passionate free-traders, Democrats are solidly opposed to the Central American trade deal, thanks largely to a massive lobbying campaign by the unions. The unions believe (correctly) that if CAFTA is defeated, Mr Bush's trade agenda will lie in tatters. In the face of determined union opposition, Mr Bush is already having trouble persuading many Democrats. Alarmist news about imports from China makes this task much harder. Another set of CAFTA sceptics—the textile lobby—ought to be brought on board by fears of China. The Central American agreement is in part a way of staving off Chinese textile imports, which have surged since the quota regime ended this January. Without CAFTA, Central America's textile industry is likely to be decimated by Chinese competition. With the special duty-free access that CAFTA grants, Central American textile firms—and the American companies that supply them with material—may survive. The Bush team is busy making this argument to textile groups. But the opposition against free trade of any sort in hard-hit textile states like the Carolinas is considerable (see article). The White House is thus getting more overt with its bribes, such as its decision to consider safeguard quotas against Chinese imports for several textile products. (The European Union said on April 22nd that it is mulling similar restrictions.) Another powerful southern lobby, the sugar industry, is proving even harder to placate. Outrageous import quotas keep the domestic price of sugar at double that of the world price. CAFTA would allow more imports in from Central American countries, but still less than 2% of US sugar production. For the sugar lobby—and the 15 or so Republican politicians who follow its bidding—that is still too much. The betting is that, with enough presidential involvement and vote-buying, Mr Bush may get CAFTA through in the next couple of months. Until he does, there will be little appetite in the White House to give the China-bashing in Congress the cold shoulder that it deserves.

Subject: Microsoft and Chinese Technical Skill From: Emma To: All Date Posted: Mon, Apr 25, 2005 at 14:17:38 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/25/technology/25phone.html?pagewanted=all&position= At Microsoft, a Smart Guy Has His Hands Full With the Smart Phone Business By JOHN MARKOFF REDMOND, Wash. - With Windows-powered mobile devices lagging behind the Palms and BlackBerrys of the world, the Microsoft Corporation has brought an electrical engineer from China - a master of the strategy game Go - to put them back in the race. He is Ya-Qin Zhang (pronounced yah-CHEEN jong), 39, an experienced computer systems researcher who helped start Microsoft's Beijing research laboratory in 1999. He was tapped in January 2004 to come to Redmond, where Microsoft is based, to lead the turnaround of the Windows Mobile software business, which has hemorrhaged money for years. Microsoft's chief executive, Steven A. Ballmer, first discussed the job with Dr. Zhang while he was on a trip to China in 2003 and the two men were in the anteroom of the state guesthouse, waiting for a meeting with the Chinese prime minister, Wen Jiabao. 'This is really important to the company,' Mr. Ballmer said, as Dr. Zhang recalls it. Now the first results of Dr. Zhang's efforts are scheduled to be unveiled at a conference May 9-10 in Las Vegas at which Microsoft plans to introduce the next version of its Windows Mobile software, code-named Magneto, with new productivity and multimedia features. Industry speculation is that Microsoft has been fashioning the software as a ' RIM-killer,' a reference to Research In Motion, the Canadian company that dominates the corporate hand-held computing market with its BlackBerry. That claim elicits a polite demurral from Dr. Zhang, a onetime math prodigy who entered college in China at 12 and graduated first in his class before coming to the United States to get his doctorate. Magneto will test what Dr. Zhang said was his attempt to create a new focus on quality software - a break from the Microsoft practice of emphasizing a cascade of new features in each successive product release. 'Now the first thing is quality,' he said, adding that his second priority is building partnerships for the Windows Mobile business, which has so far failed to replicate Microsoft's impact in the desktop computer world. To his task he brings the mind of an inveterate player of Go, the ancient Chinese board game, in which he can hold his own against professionals. Far more complex than chess, it is a game that requires patience, the weighing of trade-offs, and the ability to make moves that are startlingly indirect. He will need all the skills at his disposal if Microsoft is to prevail in the mobile software arena. Although revenue from its mobile and embedded software - that is, software for devices other than PC's - increased last year by 58 percent, to $247 million, over 2003, Microsoft nonetheless lost $224 million in the category last year. That was the third consecutive year of losses. Microsoft has made inroads into the software market for hand-held devices and more limited progress in finding customers to use its software in so-called smart phones. They include Motorola and Samsung, along with some lower-profile handset makers that allow cellular carriers to brand their own phones. But Microsoft faces challenges in trying to replicate the PC business model in the world of mobile devices. It must contend with cellular telephone operators who control sales channels as well as technical specifications for products. And it is coming late to the software market for smart phones - cellphones with PC functions like e-mail, multimedia, Web browsing, instant messaging and games. On that front, it faces powerful competitors like Symbian, owned by a consortium of cellular handset makers, and PalmOne and PalmSource, the scrappy Silicon Valley companies behind the hit cellphone organizer called the Treo. Symbian, whose partners include Nokia and Sony Ericsson, had 80.7 percent of the smart phone software market in the third quarter of last year, compared with 8.4 percent for PalmSource and 7.3 percent for Microsoft, according to the market research firm Gartner Dataquest. (Most of Symbian's market share comes from the Nokia Series 60 phone, which is more phone than organizer.) Moreover, Microsoft's strong suit - software - has yet to prove that it is the defining factor in consumer preferences for mobile devices, particularly cellphones. In contrast to personal computers - which by and large were simply beige boxes, not fashion statements, when Microsoft came to dominate the PC industry - cellphones are seen as an extension of the consumer's personality. 'I haven't seen anything out of Microsoft that makes me believe that they're going to have any magic sauce,' said Andrew M. Seybold, a veteran industry wireless and mobile consultant who publishes Outlook 4Mobility, a newsletter. Several industry executives said that even if Microsoft did everything right, its fate in mobile phone software might be largely beyond its control. Consider the plight of Nokia, which failed to anticipate consumer tastes in 2004. Caught without a clamshell cellphone, the company issued a profit warning last April. 'In the cellphone industry, success has more to do with market structure than technology,' said Michael Kleeman, a telecommunications industry consultant who is a policy researcher at the University of California, San Diego. Yet others argue that despite the fact that Microsoft has made only limited progress so far, the industry is now changing and becoming more open and increasingly similar to the PC world, a shift that should play to the software firm's favor. 'Microsoft will bring an army of information technology people into this game,' said Paul Mercer, a software designer at Iventor, a firm in Palo Alto, Calif., that develops mobile software applications. 'They are the guys who have the muscle.' Microsoft, of course, also has a reputation of continuing to invest in a business or technology until it becomes a force in the market, frequently long after other companies would have backed away from a money-losing effort. Asked to compare the company's cellphone software to the evolution of its Windows operating system, Dr. Zhang said he saw his group at a stage comparable to Windows 95 in the evolution of PC software - far from the starting point, but with much room for improvement. 'This is going to be a turning point,' he said. The choice of Dr. Zhang is also an intriguing window into the strategy and values of Mr. Ballmer and Bill Gates, Microsoft's chairman. In contrast to many of its competitors, Microsoft is a company that values I.Q. points over years on the job. 'We're more likely to take a chance on someone who is really smart rather than someone who is an experienced manager,' said Richard F. Rashid, Microsoft's senior vice president for research. And there is no doubt that Dr. Zhang is a brilliant computer researcher. 'Ya-Qin is a certifiable smart guy by any measure,' said Curtis R. Carlson, the chief executive for SRI International of Menlo Park, Calif., the consulting firm for which Mr. Zhang worked as a researcher, at Sarnoff Labs, before joining Microsoft. 'He's also a really solid human being. He has all the right qualities, and he's savvy.' While at Sarnoff, Dr. Zhang worked on a range of advanced video compression technologies, including the MPEG-2 standard, now used in wide range of computing applications and television set-top boxes. He joined Microsoft in January 1999 when another well-known Microsoft researcher, Kai-Fu Lee, tapped him to help establish a research laboratory in Beijing. In 2002, he took command of the laboratory after Dr. Lee returned to the United States. Several Microsoft employees who work with Dr. Zhang said that after he arrived in Redmond last year, he had to be gently reminded that staff meetings that carried on well into the evening interfered with the ability of his co-workers to get home to dinner with their families. He has since taken those considerations into account. And in his own home, he says, phones powered by the new Microsoft software have received favorable reviews from an influential tester: his wife. 'When my wife uses the phone, my life is a little better,' he said, with his usual penchant for understatement. 'I get better meals.'

Subject: China and Quotas on Textiles From: Emma To: All Date Posted: Mon, Apr 25, 2005 at 12:37:18 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/25/business/worldbusiness/25cnd-text.html China Warns Europe and U.S. Against New Quotas on Textiles By CHRIS BUCKLEY and JAMES KANTER China will 'resolutely oppose' any effort to reimpose quotas on the country's textile exports to Europe and the United States, according to a posting today on the Web site of China's Ministry of Commerce. The statement was made at a weekend meeting by an assistant minister of commerce, Yi Xiazhun, apparently in anticipation of an announcement from the European Union about possible restrictions on Chinese textiles. The top European Union trade official, Peter Mandelson, said on Sunday that he would open a formal two-month investigation on the flood of Chinese textiles into European markets. Speaking at a news conference, Commissioner Mandelson also warned of possible sanctions on Chinese textiles by the summer, along with swifter measures that could allow Europe to impose limits within weeks on a range of Chinese-made items, like T-shirts and brassieres. 'Europe cannot stand by and watch its industry disappear,' Mr. Mandelson said. He cited a 534 percent rise in imports of sweaters and a 413 percent rise in imports of men's trousers during the first three months of 2005, compared with a year earlier, as examples of why an inquiry was needed. The European Commission will examine evidence of surging imports in nine product categories, including blouses, women's overcoats and flax and yarn products. European Union trade ministers today backed the full investigation, The Associated Press reported from Brussels. The deputy foreign minister of Luxembourg, Nicolas Schmit, whose country holds the European Union presidency, said that all 25 trade ministers had agreed to a 60-day investigation by the European Commission to see whether the cheap imports were disruptive. 'We have to deal with this urgently; we don't exclude safeguard measures,' Mr. Schmit said. The investigation comes as French and Italian clothing manufacturers in particular are pressing Commissioner Mandelson to limit imports from China, which is making huge gains after a 40-year quota system limiting Chinese textile imports ended at the beginning of this year. 'Adopting the administrative measures of the era of classification quotas is unfair to China,' Mr. Yi said in the statement on the Chinese Commerce Ministry Web site. 'It's turning back to the past.' China's textile exports have long been harmed by 'long-term distortions of the textile trade system,' Mr. Yi added. 'At a time when the garment quota system has just been abolished, it's only natural that China's export volumes would rise.' Mr. Yi said that the Chinese government was aware that some developing countries had 'encountered hardships' because of China's surge in garment exports. Beijing is working with those countries to overcome those problems, he added. China is also willing to ensure a 'steady transition' to the new era of free trade in textiles, Mr. Yi said, 'but we will resolutely oppose any developed countries attempting to reapply restrictions on garments to limit our exports.' Despite the investigation announced by Mr. Mandelson, getting tough with China, Europe's second-biggest trading partner after the United States, is a sensitive matter. Mr. Mandelson emphasized that Europe's choice to move forward with an inquiry should not sour commercial relations with Beijing. 'Nothing I do or say is going to jeopardize or imperil China's international trading position or that vitally important trading relationship between China and Europe,' he said.

Subject: 'They all fudge don't they' From: Pete Weis To: All Date Posted: Mon, Apr 25, 2005 at 10:41:51 (EDT) Email Address: Not Provided Message: Dear CEOs: Stop fudging your numbers advertisement Note to Corporate America: Cheating to meet an earnings estimate hurts more than an honest miss. Note to SEC: Make them stop. By Bill Fleckenstein It used to be that highly respected corporate chieftains were focused on building their businesses with an eye toward the future, and weren't overly concerned with the next 90 days' results. However, since the stock-options era of the mid-1990s, what has often appeared to matter most to those in charge is the business of managing their companies' stock price. Not surprisingly, there is ultimately a consequence to getting one's priorities wrong. Beat the number, damage the business Throughout the mania and since, I have written about how companies generically, in an attempt to beat the number -- i.e., the analysts' earnings estimates -- frequently wind up damaging their businesses, sometimes disastrously, as Enron and WorldCom did. I think that Fannie Mae (FNM, news, msgs) will probably emerge as a classic example of this, as might American International Group (AIG, news, msgs), to cite two financial companies recently in the news. Just last week, AIG was forced to admit that certain transactions 'appear to have been structured for the sole purpose or primary purpose of accomplishing a desired accounting effect,' that is, to beat its number. Financial institutions are perfect for managing earnings because they are essentially black boxes. Their accounting is specifically set up so that they can report whatever numbers they want. They can choose to hold an asset for sale or hold it to maturity. Then they can buy or write derivatives against them, and they can change their mind on the accounting for both. This is why I do not like financial stocks as investments -- though many people have made fortunes on these much-loved black boxes during Greenspan's tenure at the Fed. It's also why I tend to avoid them as shorts, because the accounting is what it is -- making it very difficult to find a catalyst that will cause people to re-evaluate their opinions. A flogging in financial-stocks' future? Now, however, it seems to me that there is no shortage of catalysts: Interest rates are rising. There is a black cloud hanging over Fannie Mae, forcing it to be less aggressive in feeding the housing ATM. Corporate spreads are widening, thanks to General Motors' (GM, news, msgs) problems. (Ford Motor Co. (F, news, msgs) should probably be included here as well.) There is also a black cloud over AIG, which may potentially impact the derivatives industry, since AIG is the big cog in the derivatives wheel. If additional problems are revealed at AIG, GM or Fannie Mae and if the psychology changes, it will exert a negative influence on how these stocks are valued beyond whatever damage is done to the businesses themselves. Of course, due to the size and influence of the trio, the financial system itself might be negatively impacted. Meanwhile, I'm sure anyone with a pulse realizes that the ability to report whatever number a company chooses is not confined to financial institutions. In the technology arena, I think that lots of companies have also hurt themselves by trying to improve their short-term financial performances in order to keep their stock prices up. I have discussed this many times vis-a-vis Intel (INTC, news, msgs), as in my Oct. 18, 2004, column, 'Intel: All risk, no reward.' The chipmaker has attempted to keep margins and average selling prices up -- and therefore prop up the stock price -- as opposed to really focusing on how to innovate and incite end-market growth as best it could. (As an aside, this misplaced focus is what has allowed Advanced Micro Devices (AMD, news, msgs) to swoop past Intel with its Athlon and Opteron processors, a development Intel will pay dearly for one of these days.) They all fudge, don't they? Of course, financial and tech companies have no monopoly on the beat-the-number game. This is a gambit beloved of corporate chieftains at large. Indeed, a former HealthSouth (HLSH, news, msgs) CFO testified recently that company founder Richard Scrushy once told him: 'All public companies fudge' their numbers. While Scrushy's credibility is in question, given that he is on trial for accounting fraud, he is correct on this subject, and the fudging has been obvious for a long time. Complex businesses with multifaceted parts do not work in such a way as to constantly arrive at a predictable, prescribed number. For example, why is it that Berkshire Hathaway (BRK.A, news, msgs), unlike its peers, doesn't make its number each quarter? The answer: Berkshire Hathaway isn't reverse-engineering its results to hit precise targets, as so many others do. Wake up and smell the chicanery, SEC My belief is that any company that 'makes the number' more than twice in a row is probably cooking the books. What I want to know is: Why hasn't the SEC done more to uncover the management of earnings that has gone on? Fannie Mae was found out, in essence, by the Office of Federal Housing Enterprise Oversight. Nearly all of the other chicanery that we have learned about was discovered by New York Attorney General Eliot Spitzer. If the SEC needs more money to get to the bottom of all this, then it should get it. If the SEC doesn't need more money, the regulator should give us an explanation of why it can't seem to expose any of these fraudulent acts until well after they have occurred. If short-sellers can figure it out, why can't the SEC, when it has subpoena power?

Subject: A Hundred Cellphones Bloom in China From: Emma To: All Date Posted: Mon, Apr 25, 2005 at 10:32:39 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/25/international/asia/25china.html?pagewanted=all&position= A Hundred Cellphones Bloom, and Chinese Take to the Streets By JIM YARDLEY BEIJING - The thousands of people who poured onto the streets of China this month for the anti-Japanese protests that shook Asia were bound by nationalist anger but also by a more mundane fact: they are China's cellphone and computer generation. For several weeks as the protests grew larger and more unruly, China banned almost all coverage in the state media. It hardly mattered. An underground conversation was raging via e-mail, text message and instant online messaging that inflamed public opinion and served as an organizing tool for protesters. The underground noise grew so loud that last Friday the Chinese government moved to silence it by banning the use of text messages or e-mail to organize protests. It was part of a broader curb on the anti-Japanese movement but it also seemed the Communist Party had self-interest in mind. 'They are afraid the Chinese people will think, O.K., today we protest Japan; tomorrow, Japan,' said an Asian diplomat who has watched the protests closely. 'But the day after tomorrow, how about we protest against the government?' Nondemocratic governments elsewhere are already learning that lesson. Cellphone messaging is an important communications channel in nascent democracy movements in Lebanon and elsewhere in the Middle East. Ukraine's Orange Revolution used online forums and messaging to help topple a corrupt regime. Few countries censor information and communications as tightly as China, which has as many as 50,000 people policing the Internet. Yet China is also now the largest cellphone market, with nearly 350 million users, while the number of Internet users is roughly 100 million and growing at 30 percent a year. The result is a constant tension between a population hungry for freer communication and a government that regards information control as essential to its power. Anti-Japanese protesters have been able to spread information and loosely coordinate marches in a country where political organizing is illegal. 'That has to put the government on guard,' said Xiao Qiang, director of the China Internet Project at the University of California at Berkeley. He said the recent organizing effort was even more notable because no one had been able to identify any of its leaders. To be certain, these protests may not be a reliable predictor of any future popular movements. They basically endorse Communist Party policy, rather than challenge it. Public antipathy for Japan has made it easier to mobilize people. Perhaps most significant, the government sent signals for weeks that the public interpreted to mean that the marches were 'politically safe.' But the scale of the protests did seem to surprise the government. There is no doubt that underground chatter created momentum. 'Chain letter' e-mail and text messages urged people to boycott Japanese products or sign online petitions opposing Japanese ascension to the United Nations Security Council. Information about protests, including marching routes, was posted online or forwarded by e-mail. Banned video footage of protest violence in Shanghai could be downloaded off the Internet. 'Text messages, instant messaging and Internet bulletin boards have been the main channels for discussing this issue,' said Fang Xingdong, chairman of blogchina.com, a Web site for China's growing community of bloggers. 'Ten years ago, this would have been unthinkable.' In Shanghai, the local police even sent out a mass text message to cellphone users the day before that city's raucous protest. 'We ask people to express your patriotic passion through the right channel, following the laws and maintaining order,' the message said. Some marchers saw the message as a signal to proceed, while others took it as a warning. In early 2003, text messaging and the Internet played a major role in helping people pass reliable information - and also unfounded rumors - about the outbreak of SARS at a time when the government was covering up the disease. In the anti-Japan protests, people have sent old-fashioned chain letters to friends via e-mail or text message. Typical is a 23-year-old professional in Shanghai who asked to be identified for this article by her English name, Violet. She uses an instant messaging service on her work computer to communicate with 50 people on her 'contact list.' Before the Shanghai march, one person on Violet's contact list sent her links to vote 'no' in online polls about Japan joining the United Nations Security Council. Violet voted and then forwarded the links to more than a dozen other people on her list. She also received an instant message to join the Shanghai protest and recruit others. But she said the day before the protest, her cellphone buzzed with the mass message sent by the Shanghai Public Security Bureau. She decided not to march. The next day, though, friends on her contact list sent Internet links to photographs of the protest that were banned in newspapers. Even her boss took a look. 'He said, 'O.K., look at the pictures but do not forward this,' ' Violet said. 'My boss does not want to be involved in political issues.' Others in Shanghai learned of the march from an Internet posting that included a suggested route for the march and tips like bringing dry food and not bringing Japanese cameras. Some people wondered if the government had planted it online. In the past, the government has shown it can tighten monitoring of these technologies. Security officials are thought to be able to track a person's whereabouts by intercepting cellphone transmissions. The government began cracking down on people using these technologies to foment anti-Japanese protests more than a week ago, before the Shanghai march. According to an employee at a major Internet provider, the government on April 14 ordered all Chinese Web sites to begin filtering anti-Japanese content. Then last week, several anti-Japanese Web sites were shut down because they were trying to organize new protests in May. One Western analyst in Internet technology said the government has powerful filtering devices that can screen cellphone and e-mail messages. This filtering technology can separate messages with key words such as Falun Gong, the banned spiritual group, and then track the message to the person who sent it. Falun Gong, in fact, used cell phones to coordinate protests until the government deemed the group a threat and launched a crackdown. 'There are things the bureaucracy could do if it found this sort of communication truly threatening,' said the Internet technology analyst, who has studied China for more than a decade and asked not to be identified. Yet many analysts agree that screening the Internet and cellphones is far more difficult than the practice of simply ordering state-controlled newspapers or television stations to censor a subject. One reason is that a growing number of young Chinese have multiple e-mail accounts, including some with providers based outside China that are not filtered. In an informal test last week, the words 'anti-Japanese protest' were typed into an online messaging service. The response was: 'Your message contains sensitive or uncivilized words. It cannot be sent. We are sorry.' Similar problems arose with Chinese e-mail accounts. Yet the same phrase went uninterrupted via cellphone text messaging. About 27 percent of China's 1.3 billion people own a cellphone, a rate that is far higher in big cities, particularly among the young. Indeed, for upwardly mobile young urbanites, cellphones and the Internet are the primary means of communication. 'If people can mobilize in cyberspace in such a short time on this subject,' said Wenran Jiang, a scholar with a specialty in China-Japan relations, 'what prevents them from being mobilized on another topic, any topic, in the near future?'

Subject: A Tax Benefit for Big Donors From: Emma To: All Date Posted: Mon, Apr 25, 2005 at 10:21:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/25/business/25taxes.html?pagewanted=all&position= A Tax Benefit for Big Donors Often Bypasses Idea of Charity By STEPHANIE STROM George B. Kaiser, a publicity-shy oilman who built a fortune estimated at $4 billion by snapping up busted petroleum businesses in Oklahoma, set aside roughly $1 billion for charitable endeavors from 2000 to the end of last year. In exchange, he can now deflect taxes on much of his own income over the next several years. But it turns out that only $3.4 million of the money he set aside has gone to charities. The rest is sitting in an obscure philanthropic entity called a supporting organization, so named because it is created to support a specific charity or charities. Supporting organizations are attractive to donors because they offer the generous tax benefits associated with donating directly to charities and operate much like private foundations, but without a foundation's more onerous requirements. Donors get those perks because they agree to relinquish control over the money. But since they appoint the organization's board, they can retain a great deal of influence over it. Regulators and lawmakers suspect that many wealthy people have used these organizations more for tax planning than for any charitable aim and are pushing for tighter rules as part of a broader crackdown on charitable tax exemptions. 'I'm deeply disturbed that with a good number of supporting organizations, people are taking multimillion-dollar tax deductions for what they claim are contributions to charity, yet too often the result is a thimbleful of benefit to charity,' said Senator Charles E. Grassley, the Iowa Republican who is chairman of the Senate Finance Committee. The committee is examining several supporting organizations, including Mr. Kaiser's. An assistant to Mr. Kaiser referred calls about his supporting organization to Frederic Dorwart, his lawyer and a trustee of the organization. Mr. Dorwart said the organization had not been contacted by regulators and was operating within the law. Regulators are going after some supporting organizations and donors that they say have violated even the current lax rules. The Internal Revenue Service has revoked the tax exemption of one supporting organization, which is challenging the decision, and has brought two cases against people who claimed deductions for their gifts to such organizations. It is considering penalties on 15 promoters of these vehicles, examining three cases for possible criminal investigation, and is auditing about 100 supporting organizations and donors. 'We are treating it very seriously because we've seen so many abuses,' said Mark W. Everson, commissioner of the I.R.S. Among the concerns Mr. Everson has cited are donations to supporting organizations of assets held in offshore tax havens that find their way back into donors' pockets, and the challenge of determining whether the values donors are placing on unconventional gifts for tax purposes are valid. The philanthropists behind supporting organizations and their legal advisers say that their actions are legal, a point that critics acknowledge. 'It is legal, but it shouldn't be,' said Jeff Krehely, deputy director of the National Committee for Responsive Philanthropy, a nonprofit research group. 'You're supposed to get the tax breaks because you're providing some public benefits.' Supporting organizations have swelled to 34,000 from 24,000 in 1995. In 2001, the 400 largest controlled $76.7 billion in assets, according to the National Center for Charitable Statistics at the Urban Institute, a research group. The center found that one-quarter of those 400 organizations made no grants at all in 2001, and an additional 22 percent spent less than 3 percent of their assets on charity. Foundations, by contrast, are required to pay out, on average, 5 percent of assets a year; supporting organizations have no such requirement. Carl C. Icahn, the billionaire investor, has a supporting organization with $118 million in assets; it has spent $2.9 million since its creation in 1997 to underwrite a scholarship program at a private school and, more recently, the development of charter schools. It would have been required to pay out almost twice that much in a single year as a private foundation. Mr. Icahn, meanwhile, was able to claim a tax deduction of $115 million. That is the value he placed on the shares of a privately held company, American Railcar Industries, that he donated to the supporting organization. The supporting organization has little cash at its disposal. Because Mr. Icahn owns the rest of American Railcar, there is no public market for the stock, which produces no income. The supporting organization has few other assets and cannot readily sell the shares unless Mr. Icahn wants to buy them. Mr. Icahn could not donate American Railcar shares to his foundations without incurring taxes and penalties because foundations are prohibited from holding stakes in businesses that, combined with the holdings of their donors, donors' families and some others, exceed 20 percent. Supporting organizations have no such limits. But in return for that freedom, the organization is supposed to be outside Mr. Icahn's control. He says his supporting organization is independent. The seven members of the board are Mr. Icahn, his wife, his uncle and four others who lead nonprofit organizations that receive money from Mr. Icahn. Mr. Icahn said that he had expected the value of the American Railcar shares to increase over time and that he now planned to sell them to a third party or buy them back himself. 'It was not the intent not to give the money out,' Mr. Icahn said. 'We'd like to do more and are working on giving out another $10 million for four more charter schools.' Mr. Kaiser, known around Tulsa for driving used cars and living in a modest house, has protected his wealth by being savvy about taxes - when he pays them at all. During a stretch of the late 1980's and early 1990's, he paid just $2,688 in federal income taxes, claiming negative income in six out of seven years. When the I.R.S. sought $49 million in back taxes and penalties, he fought and wound up paying only $11,000 more. In the same period, he assembled a fortune by snapping up failed petroleum businesses in Oklahoma and one of their biggest lenders, the Bank of Oklahoma. He then used those businesses' operating losses and a keen understanding of tax law to keep virtually all the profits. His tight-fisted approach to taxes did not extend to charity. For years, the Betty and George Kaiser Foundation, a private foundation established by Mr. Kaiser and his late wife, made the required payout to dozens of charities, including the Tulsa Area United Way and Harvard University, his alma mater. In 1999, he created a supporting organization and stopped giving to the foundation. Shuttling his money to the supporting organization gave him a bigger tax break and reduced the amount of excise taxes the foundation would have had to pay on the additional investment income. His foundation continued to make its required payout, mostly by making grants to his supporting organization, a practice known among tax experts as 'round-tripping.' In 2003, 95 percent of his foundation's donations went to the supporting organization. Of the $16.6 million that the Betty and George Kaiser Foundation gave away that year, charities received $915,000, down from $2.8 million in the year the supporting organization was formed. The supporting organization, which had about $1 billion in assets at the end of last year, now dwarfs the foundation. Were it a foundation, nonprofit accounting experts and officials from other foundations estimated, it would have had to pay out $20 million to $35 million more than the $3.4 million it had given away by the end of last year. Mr. Dorwart said Mr. Kaiser had big plans for his organization, noting that it had committed an additional $28 million to various community programs, though the money had not yet been disbursed. 'Just the fact that money gets given out doesn't mean that's the wise or prudent thing to do,' Mr. Dorwart said. Mr. Kaiser has promised the bulk of his fortune to charity, Mr. Dorwart said; his primary objectives are to help pay for a safety net for the needy in northeast Oklahoma, a beautification program for Tulsa and an early education program for disadvantaged children. Mr. Kaiser set up his supporting organization to benefit the Tulsa Community Foundation, which he helped found the same year and which has received $876,000 in grants from the organization. When asked why the Betty and George Kaiser Foundation could not make grants directly to the Tulsa foundation, Mr. Dorwart said Mr. Kaiser wanted to encourage others to create supporting organizations for the Tulsa community. 'There's also the value of creating the community foundation and an organization to support it,' Mr. Dorwart said, 'which I would see as an offset to whether a lot of money gets handed out.' By law, the Tulsa foundation controls Mr. Kaiser's supporting organization, which is supposed to be independent of him and his family. Some experts, though, questioned that independence. Two of the supporting organization's trustees, Mr. Dorwart and Phil Frohlich, sit on the board of the Tulsa foundation, and the third, Phil Lakin, is its executive director. Mr. Dorwart is Mr. Kaiser's longtime legal adviser, and Mr. Kaiser is the chairman of the Tulsa foundation's board, which is populated by many of his friends and business associates. 'There is arguably a semblance of control by the supported organization, but in fact, it's not operationally independent of the donor,' said William Josephson, a former assistant attorney general in New York in charge of charities. Mr. Dorwart said he was confident of his own independence. 'If you knew me, you'd understand why I say that,' he said. 'And to suggest that Mr. Kaiser controls the board of the Tulsa Community Foundation is kind of wide of the mark.'

Subject: Fiscal Growth in Latin Lands Fails From: Emma To: All Date Posted: Mon, Apr 25, 2005 at 10:14:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/25/international/americas/25latin.html Fiscal Growth in Latin Lands Fails to Fill Social Needs By JUAN FORERO QUITO, Ecuador - Last year, Ecuador's economy grew at an astounding 6.6 percent, its inflation rate was the lowest in 30 years, and foreign investment surged. Wall Street celebrated, with a New York-based analyst of Latin American economies, LatinSource, praising Ecuador for 'outperforming even the most optimistic scenarios.' But those rosy numbers did not translate into better lives for Ecuador's poor or political support for Lucio Gutiérrez, who took power 28 months ago, was removed from power by Ecuador's Congress on Wednesday and left Sunday for asylum in Brazil. Though his interference with the judiciary was ostensibly the reason for his fall, many Ecuadoreans had become deeply disillusioned with his government, saying little had changed despite promises of more jobs, better schools and health care. At the shabby, 57-year-old Baca Ortiz public hospital in Quito, considered the country's leading children's hospital, patients have to bring their own medicine, and doctors say they lack clean facilities, decent living wages and even the most rudimentary equipment. 'The last thing the state cares about is education and health care,' said José Acosta, a staff doctor. 'If the state doesn't provide medicine, doesn't provide funding, how are we supposed to provide good care?' The discontent over a lack of state attention to basic social needs, despite increasingly positive macro-economic figures, is being played out across Latin America. Economic growth for the region hit 5.5 percent last year, the best in a generation, inflation is down, foreign reserves are growing, and credit ratings are solid. But the positive economic news has not translated into housing for the poor, more teachers, better hospitals or social peace. After years of fiscal prudence, privatizations and other market reforms prescribed by Washington, unjobless and poverty rates have hardly budged. Poverty remains pervasive, engulfing 44 percent of the population. 'The growth rate is not always an accurate benchmark for a country's authentic prosperity,' said Larry Birns, director of the Washington-based Council on Hemispheric Affairs, which tracks social and economic trends in Latin America. 'Expectations have risen, and they've risen faster than the growth rate.' The high price of oil and other commodities provided by these countries is fueling the solid economic growth across Latin America. Wall Street is particularly bullish about Peru, which has had strong long-term growth. The economy of Bolivia, one of the region's poorest countries, grew by nearly 4 percent last year, while Mexico topped 4 percent and Brazil, Latin America's largest economy, registered 5.2 percent growth. But Peru's president, Alejandro Toledo, remains the least popular leader in Latin America, and President Carlos Mesa in Bolivia has been battered by public protests. Vicente Fox's administration in Mexico is lacking popular support for its initiatives, and in Brazil many among the legions of poor believe they have been abandoned by President Luiz Inácio Lula da Silva, who embraced policies of fiscal restraint despite his leftist credentials. The reasons for the lack of gains are myriad, from corruption to ineptitude to poorly organized social systems. But many experts also say fiscal restraints, coupled with large public debts, are a chokehold on governments like Mr. Gutiérrez's. The public debt in many countries tops 40 percent of economic output. The cynicism among Latin Americans who feel shortchanged is palpable. Mónica Patiño, 44, and other parents at the 23 of May Elementary School in the poor southern part of Quito pool money to pay for blackboards, classroom benches, paint jobs and even the salaries of English and computer science teachers. Her son, Armando Estrella, 6, 'is beaten by a mile compared to a private school boy,' she said, noting that the poorly paid teachers deal with 45 children in a classroom. 'It's totally a mess.' An exception is Venezuela, where a boom in oil has generated the region's highest growth - 18 percent last year - providing billions of dollars that President Hugo Chávez has used to solidify his popularity by directing it into social programs. The new government here, well aware of how Mr. Gutiérrez was debilitated, is moving in another direction. The new president, Alfredo Palacio, 66, a cardiologist and former health minister, was Mr. Gutiérrez's vice president but had long ago broken with the president over the government's fiscal restraints. Indeed, Mr. Gutiérrez, who shifted from a critic of market reforms to a buttoned-down capitalist after he took office, had pledged to maintain fiscal discipline at all costs. He went so far as to cut subsidies for cooking fuel and food, enraging the poor. Mr. Palacio now offers a wholesale change. 'The country needs to invest in health, education, invest in the social,' he told the Quito newspaper El País. 'The 6.6 percent growth that is hyped is a farce.'

Subject: The Feng Shui Kingdom From: Emma To: All Date Posted: Mon, Apr 25, 2005 at 10:12:27 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/25/business/worldbusiness/25disney.html?pagewanted=all&position= The Feng Shui Kingdom By LAURA M. HOLSON When building the new entrance to Hong Kong Disneyland, Walt Disney executives decided to shift the angle of the front gate by 12 degrees. They did so after consulting a feng shui specialist, who said the change would ensure prosperity for the park. Disney also put a bend in the walkway from the train station to the gate, to make sure the flow of positive energy, or chi, did not slip past the entrance and out to the China Sea. Heeding the advice of a feng shui consultant is one of many steps Disney executives have taken at the park to reflect the local culture - and to make sure they do not repeat some mistakes of the past. When Disney opened Disneyland Paris in a former sugar beet field outside Paris in 1992, the company was roundly criticized for being culturally insensitive to its European guests. Now Disney burns incense ritually as each building is finished in Hong Kong, and has picked a lucky day (Sept. 12) for the opening. The financial stakes are high: international growth is a critical part of Disney's expansion efforts. In Asia, Mickey Mouse, Buzz Lightyear and Winnie-the-Pooh are hardly household names, and Disney wants to change that. Mainland China is expected to become one of the world's largest tourist destinations in the next 15 years, according to the World Tourism Organization, an international group that oversees policy issues. That trend bodes well for Disney, as Hong Kong itself is already in the top 15. 'It used to be Disney was exported on its own terms,' said Robert Thompson, a professor of popular culture at Syracuse University. 'But in the late 20th and early 21st century, America's cultural imperialism was tested. Now, instead of being the ugly Americans, which some foreigners used to find charming, we have to take off our shoes or belch after a meal.' Plans for Hong Kong Disneyland, Disney's 11th theme park and a replica of the original Disneyland, began in 1999 for the undeveloped Lantau Island, a 30-minute train ride from downtown Hong Kong. Built on Penny's Bay and flanked by mountains, the park is a venture with the Hong Kong government and the first of the parks that Disney wants to build in China, including one in Shanghai. Disney invested $316 million for a 43 percent equity stake in Hong Kong Disneyland; the rest is owned by the Hong Kong government, which contributed $419 million. (The park has $1.1 billion in debt.) Some of the dazzling visual effects and nods to cultural differences at Hong Kong Disneyland may seem like so much marketing. One of the park's main ballrooms, which will surely be used for Disney's popular wedding services, measures 888 square meters, because 8 is thought to be a number of fortune, said Wing Chao, who is the master planner of architecture and design at Walt Disney Imagineering. In Chinese, the number four is considered bad luck so there are no fourth-floor buttons in the elevators at the Hollywood Hotel or other hotels in the park. Cash registers are close to corners or along walls, where such placement is believed to increase prosperity. And in the park's upscale restaurant, Crystal Lotus, Disney installed a virtual koi pond where computer-animated fish dart away from guests who walk on a glass screen. The pond is one of five feng shui elements in the restaurant; the others are wood, earth, metal and fire, which glows on a screen behind bottles in the bar. 'We could not have real fire because of the fire code,' said Mr. Chao. After the mishaps at Euro Disney and, closer to home, problems with attendance at its California Adventure park in Anaheim, it is easy to understand why the company would take such pains. 'I don't know anything about fire and kitchens and where fire belongs and what doesn't,' said Jay Rasulo, president of Disney's theme parks and resorts division. 'But I certainly have learned that you need to respect people.' Tourists sniffed at California Adventure when it opened in 2001, saying it looked more like a shopping mall than a theme park. In recent years, Disney added, at considerable expense, the Tower of Terror thrill ride and an attraction based on the animated film 'A Bug's Life.' The French government recently helped bail out Euro Disney, the parent company of Disneyland Paris, offering loan concessions and investments to save it from bankruptcy. Though its finances have been restructured, Euro Disney is still about $2 billion in debt. And many in the entertainment industry considered the opening of Disneyland Paris a study in how not to open a theme park. Mr. Rasulo, who was president of Euro Disney from 1998 to 2000, said Disneyland Paris grew quickly as a tourist attraction in Europe, with 10 million visitors its first year. But he conceded the park was initially larger than it should have been, and was financed using too much debt. Profits at Euro Disney in recent years have been slim to nonexistent; the park has shown a net loss for the last three fiscal years, according to Disney. By contrast, Hong Kong Disneyland is being built in two smaller phases, and is carrying half the debt of its French sibling. Disneyland Paris got off to a bad start by not offering wine when it opened, a culinary faux pas among the French. After wine was later introduced, Disney hoped to placate parkgoers by offering more French food. 'Our guests told us, 'Guess what? That's not what we want,' ' Mr. Rasulo said. What they wanted, he said, was distinctly American corn bread and barbecued chicken. Disney also misunderstood how Europeans plan vacations. Unlike Americans, who often book their trips directly with Disney, Europeans rely more on travel agents. In 1992, Disney did not adequately train travel agents, leading to fewer bookings, said Mr. Rasulo. By contrast, Disney marketing executives in Asia have been training travel agents for months, mostly in China, where the company expects one-third of the park's business to come from. Teaching the Chinese about Disney may be critical to the park's success there. Disney merchandise and characters are little known in Asia outside of Japan, where the company has had a successful theme park for 22 years. China, in particular, has resisted the spread of Western culture. For Disney, analysts say, Hong Kong Disneyland is an opportunity to introduce new generations to princess costumes, Winnie-the-Pooh stuffed animals and Mickey Mouse T-shirts. Last year Disney hired the Chinese pop singer Jacky Cheung to host the 'Magical World of Disneyland,' a television show where classic animated films like 'Tarzan,' 'Dumbo' and 'Alice in Wonderland' are introduced to the Chinese. Based on the format developed and made popular by Walt Disney, Mr. Cheung gives a brief introduction of Disney and the theme park before the movie starts. Because of the diverse cultures in Asia, said Mr. Rasulo, Disney had to be flexible. Park employees will speak three languages: English, Cantonese and Mandarin. At a recent tasting of dishes to be served in the park's eight restaurants - everything from curry to noodles to sushi - Disney executives considered a hamburger prepared by a local chef. 'I've had curry before and I've had sushi before, but this was a hamburger that didn't taste like a hamburger that I knew,' said Tom Fitzgerald, a senior creative executive at Imagineering. (He said it tasted like pork meat loaf.) 'You don't want to say, 'Well, this is the way we make a hamburger in the States and so that's the way we're going make a hamburger here.' ' Disney went with the proposed burger. The park has a topiary garden where Minnie and Mickey Mouse and other characters will pose for photographs with guests, a favorite pastime with international parkgoers. One of the most anticipated attractions is the Jungle River Cruise. Unlike other parks with a similar attraction, Disney has created Cambodian ruins for guests to float past, and an unruly pack of hippos. 'Instead of the guns that scare off the hippos, we actually have our hippos in Hong Kong have bad breath and then they belch,' said Mr. Fitzgerald. While talk of feng shui may seem like overkill to those with Western sensibilities, Mr. Rasulo said that as a practice it was just common sense. Mr. Rasulo said Mr. Chao came to his office recently and suggested putting a mirror on the wall behind his computer. 'Now if my secretary wants to get my attention I can see her in the mirror,' said Mr. Rasulo, with a laugh. 'So it actually is an incredibly practical thing.'

Subject: A Fragile Success in Africa From: Emma To: All Date Posted: Mon, Apr 25, 2005 at 10:09:24 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/25/opinion/25mon1.html A Fragile Success in Africa Reetering on the verge of success, but with failure always threatening to knock at the door, Ghana has lately taken up the mantle of what passes for a success story in Africa. It is the new darling in the halls where donors like the World Bank, the International Monetary Fund, the United States and Britain talk about making sure foreign aid does not end up in the hands of corrupt regimes. What they have in mind are people like Kofi Asare, who labors mightily on his modest farm high in the hills near his village SamSam, carrying his ripe yellow pineapples on his head to get them from the fields to his truck. Dripping with sweat, the 28-year-old Mr. Asare is the very picture of Africa getting its act together. Last year, he made $10,000; enough to make the transition from mud hut to cement house. This year, with an eye warily on the future, he has planted 2,500 of a new 'low acid' pineapple pioneered by the Del Monte Foods Company that threatens to smoke the Ghana 'smooth cayenne' variety out of Europe's supermarkets. But Ghana is a good kid in a really bad neighborhood. Its West African neighbors, from Liberia to Sierra Leone to the Ivory Coast, have bred so much fighting in the last 10 years that they make Ghana seem like Iowa. Ghana does not have insurgents running around its hinterlands dressed in wedding gowns and wigs (like Liberia and Sierra Leone) or 8-year-old rebel soldiers toting machine guns (Liberia, Sierra Leone, Ivory Coast). It has had four successful elections since 1993, and has actually experienced a peaceful transfer of power between democratically elected governments, another rarity in the neighborhood. Indeed, it is becoming a haven for refugees who come not only from Ghana's unruly neighbors to the west, but also from other conflict zones in Africa. Last week, a group of refugees from Darfur, Sudan, showed up. It remains unclear how they made it across the continent, crossing the Togolese border from five countries away, but the Accra government is busy making plans to settle the Sudanese refugees. Ghanaians like to brag that they have passed the point of no return in making their humid patch of West Africa a functioning democracy with all the perks that brings: a free and vibrant press, steady though slow economic growth, tourism. There is even a shopping mall with a multiplex cinema going up in Accra. With such obvious payoffs for adopting good governance, many Ghanaians say it is inconceivable that the country will turn back to the failed-state practices that have taken so many other African countries down the drain. 'If anyone tried anything like a coup here, this place would immediately become ungovernable,' says Kweku Sakyi Addo, the host of one of Ghana's innumerable political talk shows. 'We've seen what happens in other African countries. There is no way people will put up with that here.' But for all the talk of what a model African country Ghana is, it is still, literally, dirt poor, a fact of life that demonstrates just how removed Africa is from the proverbial rising tide of the global economy that is supposed to be lifting all boats. Ghana has a per capita income of $421 a year; most people survive here on $300 to $400. Ten-year-old girls still run barefoot up to stopped cars in the sweltering midday heat trying to sell anything they think will bring in money - from oranges to cellphone batteries to toilet paper. Street children still sleep on the median separating highway lanes. And while the Ghanaian government appears to have a clear idea of exactly what steps it must take to try to alleviate the huge divide between Accra's growing middle class and the country's rural poor, some goals are already slipping. Child mortality rates, already high, increased in 2004; nobody seems to know why. A huge gender gap remains in primary-school education: far more boys make it to school than girls. Almost half of Ghana's national budget comes from foreign aid; Britain is its largest single-country donor. But the size of the country's budget, a scant $3 billion, supporting some 20 million people, is testament to just how far Ghana still has to go, and just how much more it still needs to climb out of poverty. British Prime Minister Tony Blair's proposal for rich countries to drastically increase their aid to Africa in a Marshall Plan approach would be a huge step toward helping to bring the continent back into the folds of the rest of the world. Ghana shows what a tough road this is going to be. But it also shows that bringing Africa back is eminently doable.

Subject: A Road Runs Through Tara From: Emma To: All Date Posted: Mon, Apr 25, 2005 at 10:08:25 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/04/25/opinion/25toibin.html A Road Runs Through Tara By COLM TOIBIN Dublin — The house is built now that I have been dreaming about for years. Every week I drive down from Dublin, due south through County Wicklow into County Wexford. I was born and brought up near there. This two-hour journey from Dublin to Wexford to the new house where I write belongs to memory. There are a few spots along that stretch of road that have all the resonance and flavor of childhood, but most of the road has changed beyond recognition. The narrow winding road to Dublin has become mostly motorway - anodyne, anonymous, flavorless. I love it. I wish I missed the old narrow, familiar road. But I do not. I love the efficiency, the modernity, the coolness of the new road. I love getting to Dublin in an hour and a half rather than two hours. I love driving freely in the outside lane, rather than being stuck forever behind a tractor or a cattle truck. Nonetheless, when, a number of years ago, they were widening the road that runs through a nature reserve called the Glen of the Downs, I supported the protesters, mainly young people who moved there and lived in the trees. I even stopped my car one day and gave them money to help them in their campaign against the road builders. I spoke in a television debate in their favor, pointing out that Irish governments since independence have seldom been willing to put our precious heritage before crude, quick development. They would, if the opportunity arose, run a motorway through the Hill of Tara, the most important ancient Irish site. Until recently, this idea might be useful in a heated debate as a worst case, impossible to contemplate, on a par with selling your granny. But this now is the prospect we face in Ireland. Despite protests from many distinguished archaeologists and historians, it seems likely that in the next few weeks, the government will announce that it is going ahead with plans to build a four-lane highway and a busy interchange close to the Hill of Tara. Tara, an hour's drive northwest of Dublin, was the seat of kings and remains the site of legends. It was, from prehistoric times, given a special status. It was where St. Patrick in the fifth century confronted the pagan kings and druids. It was the center of the universe in many of the ancient Irish sagas, the pinnacle of power. In the 19th century, as Irish nationalism looked to a past unsullied by the Danish or Norman or English invasions, it became a symbol of Ireland's former strength and glory. On Aug. 15, 1843, for example, Daniel O'Connell, the political leader, spoke at a momentous meeting against Ireland's union with England. He extolled the grandeur of the place where he stood: 'Tara has historical recollections that give it an importance, relatively, to other portions of the land, and deserves to be so considered by every person who comes to it for political purposes, and gives it an elevation and point of impression in the public mind that no other part of Ireland can possibly have.' Thus Tara became a symbol for the whole island. Emigrants from Ireland, like the O'Hara family in 'Gone With the Wind,' could conjure up the old country by calling their estate after its most sacred place. Indeed, so sacred became its reputation at the end of the 19th century, and so much mystery surrounded what was buried beneath, that a sect called the British Israelites began to dig there in search for the Ark of the Covenant. They were greeted with much indignation by Irish nationalists like Yeats, who believed that the Hill of Tara, where the remains of 30 or soprehistoric monuments are somewhat visible to this day, must have its mystery unraveled by the slow and painstaking work of archaeologists. I drove there on a Sunday afternoon under a low and threatening Irish sky. It is not a set of ruined castles and broken stones. Its grandeur lies in its commanding position and from hints and clues, like large mounds, some circles and earthworks, that help us imagine what this must have looked like when it was a set of great ceremonial buildings and sites. And its grandeur lies underneath the ground, where for centuries to come archaeologists will find not only treasure but also significant evidence about early Ireland. The proposed road will not cut through the actual hill, but it will run close, slicing through a landscape that was once integrated with Tara. The route of the road includes many important archaeological sites that will have to be excavated thoroughly before they are destroyed by the road builders. The National Roads Authority in Ireland has built up significant expertise in doing these rescue missions according to best possible practice. The interchange and the new road, however, will bring in their wake not only traffic, but development like warehouses and light industry. A rural idyll becomes an urban landscape. The beauty and isolation of the valley, which has Tara on one side and Skryne, another historical site of some importance, on the other, will effectively be destroyed. A place of myth and mystery will look like anywhere. It is called modernization. For commuters who drive each day to work in Dublin from towns and villages in County Meath, where Tara lies, it might cut 20 minutes off the journey. It will make them happy as the road to Wexford makes me happy. But it seems almost beyond belief that Ireland, awash with new money and enormous economic confidence, cannot find another route for the road and leave for generations to come a heritage that has been left to us. On one side of the argument there is a fierce pragmatism about the need to bring Irish infrastructure into the 21st century. On the other side there is a mixture of well-informed indignation and a lovely old dreaminess. When I asked one of the opponents of the new road why he minded the idea of powerful lights on it and the interchange, he replied, as though the answer were obvious, 'On a clear night Tara must be able to see the stars.'

Subject: Re: A Road Runs Through Tara From: Setanta To: Emma Date Posted: Tues, Apr 26, 2005 at 10:10:36 (EDT) Email Address: Not Provided Message: Emma, thank you as always for posting some articles of interest about my country. i wish i was able to contribute as much as before but with work demanding 15 hour days for the last 4 weeks i find it hard! as for tara, i agree with this article. tara is the seat of the high kings of ireland. it may only be shallow mounds now but the remnants of fortifications stretch for miles. it has been the centre of irish heritage for thousands of years and its a thundering disgrace to see the NRA decide to run a motorway to the side of it. granted, the current road runs closer to the site than the proposed road but the proposed road is of such size that it will permanently scar the landscape. its an issue on which the whole country is united, yet our beloved Taoiseach (prime minister) was dismissive of the significance of the site. sceptics say that the road is proposed because the ruling party (Fianna Fail) are desparate to hold onto the seats of the area which will benefit from this road. others say that it involves corruption of the highest order. the plan is to build a road which will be privatised at a cost to the privatiser of Eur350m up front for which the toll owners will have the right to toll Eur650m over 30 years. it sounds like something out of a made-for-tv children's movie with the baddies being so nefarious as to render the movie completely unbelievable. if the two possibilities are true then someone in the Irish Government is of the same moral hue as Ming the Merciless or Lex Luther!

Subject: PK channels Dr. Gonzo (Just for Terri) From: Paul G. Brown To: All Date Posted: Mon, Apr 25, 2005 at 02:29:59 (EDT) Email Address: paul_geoffrey_brown@yahoo.com Message: Airport bars in midwestern towns are pretty much all alike: florescent beer signs, black naugahyde and cheap aluminium bar-stools, a meth dealer working the weekend commuter traffic from a stall in the corner. I found myself in one for a few hours after a sweaty Texas banker went beserk and savagely beat some minimum wage high school dropout working off a bar tab by waving a wand over passengers in the name of transport safety and national security. They closed the airport for a few hours and threw the torquise encrusted monster in the tan until his lawyer nephew shows up with bail and hush money. But this wasn't just any airport bar, no Sir! I'm there five minutes and who should slide up next to me, order a double Southern and Coke, and start crying quietly but John Snow, the Treasury secretary. I take a good look at him. He stares bleary eyed, straight ahead at the mirror behind the rows of over-priced grain alchohol in cut-glass bottles, his silver hair immaculate as conception. 'S'up?' I says. 'Sweet.', he replies. And then softer, to himself, 'Sweet.' Almost a sob. 'Sweet?', I says. 'Mr Secretary of the Treasury, in case you haven't noticed, it's actually pretty fuckin' shitty out here.' He sits up suddenly and as he turns towards me you can see the brainwashing kick in. Neural synapses fried and fused into knots of gnarly, muscular ganglia. 'Not at all.' The ganglia speaks. 'Corporate profits have rarely been better, growing at an annual rate of 14.5 percent after inflation, the fastest growth since World War II, GDP growth surging to the fastest rate in twenty years...' He keeps on going like this, but he's got nothing to say. He's not actually sayin anything. Somewhere in my mind an image is formed. John Snow and Dick Cheney. Alone together, in a dark room, in an undisclosed location. 'Big Time' Dick's got his coat off, his sleeves rolled up. Snow's strapped in a chair. You can tell by the way his head's lolling at the neck that he's been awake for days. Weeks, maybe. And that big bat-shit crazy man has some kid of prod in his hand, and there are wires running out the cuffs of John's pants. 'Please..' says the thing that won't be John Snow much longer. 'Please, what?' says Cheney. Voice a little tired. Schoolteacher tired, at about 2:40 on a Friday, knowing the end is near. Knowing there's a martini in it if he can only get through the thing. 'Alright. You win. Deficits don't matter.' says John. 'That's better.' says Cheney. Then he leans forward, his voice drops, almost tender. 'I think we're going to get along just fine.' Then the image fades. Now all I'm left with is a broken, crippled man who just happens to be nominally in charge of economic policy for the current administration. He was still going on. '... and have you seen those productivity numbers! Leaves anything we've seen before for dead. And it's all due, of course, to the way we've put so much money back into the pockets of decent, hardworking Americans like Paris Hilton, and corporate boardrooms.' All I could do was look at him in pity. 'You poor bastard.' I said. And then, glancing at the TV facing us from the corner. 'You like the Sox again this year?' The mask fell. Snow went back to sobbing quietly. 'Hopeless.' he gasped. 'Pedro?' Then a long pause, and 'Why?', was the last word I heard him speak. My plane was leaving. His already had.

Subject: Missing articles on NYT From: Bambitroll To: All Date Posted: Mon, Apr 25, 2005 at 01:59:36 (EDT) Email Address: Not Provided Message: Hello! I noticed that some articles available here are not on the NYT page http://www.nytimes.com/top/opinion/editorialsandoped/oped/columnists/paulkrugman/. Is there an explanation for that? I am especially puzzled by the fact that the recent column called 'Passing the buck' was put on the NYT site, but is bot there anymore (unless I have problem with my cache...) Thanks! BT.

Subject: Re: Missing articles on NYT From: Bambitroll To: Bambitroll Date Posted: Mon, Apr 25, 2005 at 09:16:59 (EDT) Email Address: Not Provided Message: I don't quite understand.... now 'Passing the buck' is back on the NYT page...

Subject: Re: Missing articles on NYT From: Emma To: Bambitroll Date Posted: Mon, Apr 25, 2005 at 10:03:06 (EDT) Email Address: Not Provided Message: The New York Times keeps all articles available for at least 7 days. During that period articles are keep in the appropriate folder as in the 'Opinion' folder for Paul Krugman's columns. Should the column not appear just use the 'Search.' Paul Krugman's columns are stored here. Writings that are not marked New York Times were either done for other publications before PK joined the Times, or are personal notes. The Google Search on this stie is excellent.

Subject: One Nation Under Therapy Cspn2 - 6am From: johnny5 To: All Date Posted: Mon, Apr 25, 2005 at 00:34:04 (EDT) Email Address: johnny5@yahoo.com Message: My redneck friend sent me this link a few days back and said he can't believe these are important issues to americans while he goes broke and his mom and dad can't pay for all thier medicines - it is about red markers: http://abcnews.go.com/US/wireStory?id=638910 And then we have this on c-span this morning: 06:46 AM EDT 1:10 (est.) Forum One Nation Under Therapy American Enterprise Institute Christopher DeMuth , American Enterprise Institute Christina Hoff Sommers , American Enterprise Institute Forum One Nation Under Therapy American Enterprise Institute Washington, District of Columbia (United States) ID: 186357 - 04/16/2005 - 1:10 - $29.95 DeMuth, Christopher, President, American Enterprise Institute Sommers, Christina Hoff, Resident Scholar, American Enterprise Institute Satel, Sally M.D., Resident Scholar, American Enterprise Institute, Health Policy Salley Satel and Christina Hoff Sommers talk about their book One Nation Under Therapy: How the Helping Culture is Eroding Self-Reliance, published by St. Martin's Press. They discuss what they call the modern ethos of 'therapism'-the attitude that human beings are weak, dependent, and never altogether responsible for what they do. They cite as examples the idea that Americans need grief counselors, traumatologists, emotional intelligence coaches, and other experts to guide them through the trials of life and that children at risk of psychic harm from strict teachers and competitive games such as tag and dodge ball. The authors refute these claims and offer what they consider a more realistic picture of the national psyche.

Subject: Health Care, Energy, Precious Metals From: Terri To: All Date Posted: Sun, Apr 24, 2005 at 19:35:05 (EDT) Email Address: Not Provided Message: Precious metals stocks have served well as short term investment, but have been among the very poorest of classes of long term investment for decades. A difficult long term investment class.

Subject: Very true Terri From: Pete Weis To: Terri Date Posted: Sun, Apr 24, 2005 at 19:57:53 (EDT) Email Address: Not Provided Message:

Subject: Aging Investors From: Terri To: All Date Posted: Sun, Apr 24, 2005 at 18:54:10 (EDT) Email Address: Not Provided Message: The possible reduction of investment returns for assets as the country ages and retirees begin to sell assets will occur quite slowly, for the country will age slowly, if it should occur. I do not know of any way to take account of such a possibility other than to save more now in preparation for lower investment returns, but we should try to save as much as possible in any event if we are concerned with retirement. We might also think more about investments that will suit an aging population. But, the effects will be slowly slowly experiencd.

Subject: Best time to invest...... From: Pete Weis To: Terri Date Posted: Sun, Apr 24, 2005 at 20:18:19 (EDT) Email Address: Not Provided Message: is when no one else is interested. That goes for real estate as well as stock. Invest in promising assets after they have truely tanked and nearly everyone is convinced they are bad investments. Sell when everyone is bullish and you understand that the reasons for the bullishness is founded on bologna. The tanking process is still ongoing - bargains will come for those who are patient. We would do well to forget about this baby-boomers-are-getting-ready-to-retire issue since it is a distraction from the real issue. How about the consumers-under-a-mountain-of-debt-401k's-eroding-end-of-housing-boom-energy-soaring-airlines-automakers-going-bankrupt-current-account-budget-deficit issue. How about that one!

Subject: Bear issues From: johnny5 To: Pete Weis Date Posted: Sun, Apr 24, 2005 at 23:47:09 (EDT) Email Address: johnny5@yahoo.com Message: http://www.cfr.org/pub7959/james_p_grant_stephen_roach_ethan_harris/whither_the_dollar.php To add to your excellent list Pete - the panel here said france's vote on the EU and the ability of the EURO or any currency for that matter to replace or compete with the dollar as world reserve currency. long term - don't the most productive societies making the most goods and services have the reserve currencies - in the future to be china or india? With no new industries to spur productivity gains or employment. We need another computer revolution - where is the next big thing? Nanotech? Will the small cap nanotechs be the microsoft of yesteryear soaring to the heavens no matter the macro issues? http://www.museumofhoaxes.com/photos/microsoft.html When you look at this picture Pete - would you have really invested in the company back then? How about the sector as a whole? Richard Feynman before he died said the nanotech revolution would be the next big thing once we got the tools to work down at that level on a mass scale. http://screening.nasdaq.com/heatmaps/heatmap_ETF.asp When looking at the ETF heatmap - it seems tech is not doing so HOT - hehe - but foreign countries - energy and utilities and even real estate are OK. Is there an ETF or I share that tracks the nanotech sector?

Subject: Health Care Comparisons From: Terri To: All Date Posted: Sun, Apr 24, 2005 at 18:23:07 (EDT) Email Address: Not Provided Message: We need our international readers to contribute thoughts on their health care systems which we can compare with ours. The more developed country systems we look to the better.

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