Subject: First Flight From: Terri To: All Date Posted: Sun, Jul 03, 2005 at 21:43:49 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=4529&u=182|144|... Adult Baltimore Oriole Looks on as Chick Takes First Flight New York City--Central Park, North Woods.

Subject: A Livable Shade of Green From: Emma To: All Date Posted: Sun, Jul 03, 2005 at 19:47:12 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/opinion/03kristof.html?incamp=article_popular_1 A Livable Shade of Green By NICHOLAS D. KRISTOF PORTLAND, Ore. When President Bush travels to the Group of 8 summit meeting this week, he'll stiff Tony Blair and other leaders who are appealing for firm action on global warming. 'Kyoto would have wrecked our economy,' Mr. Bush told a Danish interviewer recently, referring to the accord to curb carbon emissions. Maybe that was a plausible argument a few years ago, but now the city of Portland is proving it flat wrong. Newly released data show that Portland, America's environmental laboratory, has achieved stunning reductions in carbon emissions. It has reduced emissions below the levels of 1990, the benchmark for the Kyoto accord, while booming economically. What's more, officials in Portland insist that the campaign to cut carbon emissions has entailed no significant economic price, and on the contrary has brought the city huge benefits: less tax money spent on energy, more convenient transportation, a greener city, and expertise in energy efficiency that is helping local businesses win contracts worldwide. 'People have looked at it the wrong way, as a drain,' said Mayor Tom Potter, who himself drives a Prius hybrid. 'Actually it's something that attracts people. ... It's economical; it makes sense in dollars.' I've been torn about what to do about global warming. But the evidence is growing that climate change is a real threat: I was bowled over when I visited the Arctic and talked to Eskimos who described sea ice disappearing, permafrost melting and visits by robins, for which they have no word in the local language. In the past, economic models tended to discourage aggressive action on greenhouse gases, because they indicated that the cost of curbing carbon emissions could be extraordinarily high, amounting to perhaps 3 percent of G.N.P. That's where Portland's experience is so crucial. It confirms the suggestions of some economists that we can take initial steps against global warming without economic disruptions. Then in a decade or two, we can decide whether to proceed with other, costlier steps. In 1993, Portland became the first local government in the United States to adopt a strategy to deal with climate change. The latest data, released a few weeks ago, show the results: Greenhouse gas emissions last year in Multnomah County, which includes Portland, dropped below the level of 1990, and per capita emissions were down 13 percent. This was achieved partly by a major increase in public transit, including two light rail lines and a streetcar system. The city has also built 750 miles of bicycle paths, and the number of people commuting by foot or on bicycle has increased 10 percent. Portland offers all city employees either a $25-per-month bus pass or car pool parking. Private businesses are told that if they provide employees with subsidized parking, they should also subsidize bus commutes. The city has also offered financial incentives and technical assistance to anyone constructing a 'green building' with built-in energy efficiency. Then there are innumerable little steps, such as encouraging people to weatherize their homes. Portland also replaced the bulbs in the city's traffic lights with light-emitting diodes, which reduce electricity use by 80 percent and save the city almost $500,000 a year. 'Portland's efforts refute the thesis that you can't make progress without huge economic harm,' says Erik Sten, a city commissioner. 'It actually goes all the other way - to the extent Portland has been successful, the things that we were doing that happened to reduce emissions were the things that made our city livable and hence desirable.' Mr. Sten added that Portland's officials were able to curb carbon emissions only because the steps they took were intrinsically popular and cheap, serving other purposes like reducing traffic congestion or saving on electrical costs. 'I haven't seen that much willingness even among our environmentalists,' he said, 'to do huge masochistic things to save the planet.' So as he heads to the summit meeting, Mr. Bush should get a briefing on Portland's experience (a full report is at www.sustainableportland.org) and accept that we don't need to surrender to global warming. Perhaps eventually we will face hard trade-offs. But for now Portland shows that we can help our planet without 'wrecking' our economy - indeed, at no significant cost at all. At the Group of 8, that should be a no-brainer.

Subject: Note for Dear Bobby From: Terri To: All Date Posted: Sun, Jul 03, 2005 at 19:42:59 (EDT) Email Address: Not Provided Message: Dear Bobby, Please try to leave the last 50 or so posts for us when you clean the message board. Thank you so much.

Subject: A Cautious Outlook From: Terri To: All Date Posted: Sun, Jul 03, 2005 at 19:40:55 (EDT) Email Address: Not Provided Message: This theme for me these coming months will be increasing caution for the year has gone well so far, but we can not know whether to expect a slowing is economic growth now that the Federal Reserve has been raising short term interest rates for a full year. There is no other major central bank that is raising rates and several are lowering. The most important aspect then of growth will be low long term interest rates. The danger as everyone knows, would be a failing housing market. The idea then is a cautious value emphasis, and a watch on bonds. The most positive aspect is that every major stock market but our is positive in domestic currency for the year so far, many making fine gains. As for the Vanguard GNMA Bond Fund as a defense, remember as I finally understand the duration will increase if long term interest rates increase but this will not happen with other investment-grade bond funds.

Subject: 'Three Billion New Capitalists' From: Emma To: All Date Posted: Sun, Jul 03, 2005 at 19:21:55 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/books/review/03BLODGET.html?pagewanted=all 'Three Billion New Capitalists': Consider the Outsource By HENRY BLODGET IF you've managed to ignore the alarm bells on the outlook for American economic leadership -- and you enjoy dreaming -- don't read Clyde Prestowitz's ''Three Billion New Capitalists: The Great Shift of Wealth and Power to the East.'' It argues that the United States faces such serious fiscal and competitive challenges that we may be headed not only for a declining standard of living but for a 1930's-style depression with a capital D. Here's the story. In the golden age, 1950-73, we had it all -- low-cost manufacturing, rising wages, technological dominance, a highly educated and motivated work force, a trade surplus. Until 1971, our reserve currency was backed by gold, forcing us to be responsible. We had control over our economic destiny. Since then, bit by bit, we've lost much of our strength and are in danger of losing the rest. Our first problem is the surge in competitiveness on the part of the rest of the world, especially China and India, a trend Thomas L. Friedman analyzes in detail in ''The World Is Flat.'' Even if the playing field were level -- which it isn't -- we would not be able to compete with the combination of low-cost labor, talent and fire in the belly of these two behemoths. Our second problem is that we still think we're living in the golden age. In fact, we suffer from a misguided sense of superiority, profligate spending habits, a weak education system, mammoth debts, a ballooning trade deficit and a religious devotion to free-trade theories developed before the Industrial Revolution. Each of these issues could consume a book, but Prestowitz, president of the Economic Strategy Institute and a trade negotiator in the Reagan administration, packs them into one. The heart of the question, as he sees it, is that we are not defending the jewel in our economic crown -- our technology and manufacturing capabilities -- but are instead waxing poetic about the virtues of free trade while more practical countries walk off with our loot. This, he contends, will lead to the gutting of our economy, with well-paid skilled jobs replaced by low-paid menial ones, and an America in hock to the world's next economic leaders. Globalization, of course, is nothing new. The ''hollowing out'' debate hinges on whether the United States can replace the jobs it loses with equal or better ones. Capitalism is fueled by Schumpeter's creative destruction -- new forever displacing old -- and this country has thrived through transitions from agriculture to manufacturing to automation to outsourcing to services. Free-trade advocates argue that globalization is just the latest phase of a continuing evolution. Trade hawks like Prestowitz argue that now is different because of the sheer size of India and China and our inadequate response to the new situation. Globalization has always been a touchy subject (after all, Americans lose jobs when companies move production and services overseas) -- so touchy that most popular discussion of it is inflammatory or inane or both. Last year, John Kerry branded corporations and executives who send jobs offshore ''Benedict Arnold companies and C.E.O.'s,'' and a White House adviser, N. Gregory Mankiw, provoked many a storm by suggesting that offshoring was actually beneficial because, among other things, it lowers prices and makes labor available for new opportunities. Mankiw may have been impolitic, but Kerry was just pandering. If the choice is go offshore or go out of business, a chief executive doesn't have a choice. Prestowitz acknowledges that many companies can't survive today without offshoring, but argues that we often abandon industries we could continue to dominate and so lose the ability to lead the next wave of innovation. He lays the blame on government, not the private sector. ''Whether it recognizes the fact or not,'' he declares, ''the United States has a de facto economic strategy, and right now it is to send the country's most important industries overseas.'' He observes, moreover, that the benefits of offshoring go beyond cost: ''You do save money,'' a senior manager at the semiconductor equipment maker KLA-Tencor says about sending work to India. ''But pretty soon, you realize the work is getting done faster and better, and you start sending more and more of it. You also start sending more advanced work and then have to figure out what, if anything, you really don't want to send.'' The work is getting done faster and better, Prestowitz argues, because Indians are not only hungrier than we are, but better educated. China, India, Japan and Europe all churn out more science and engineering degrees than we do. Worse -- and downright embarrassing -- is the state of American education. Globally, our 12th-graders rank only in the 10th percentile in math (that's 10th percentile, not 10th). Our students also rank first in their assessment of their own performance: we're not only poorly prepared, we have delusions of grandeur. One common argument against the hollowing-out theory is that we can afford to lose jobs in low-tech manufacturing because we retain our high-tech design and manufacturing capabilities. Prestowitz counters that China's and India's incentives and resources are so compelling that the high-tech work is leaving, too. Another argument is that a revaluation of the yuan will curb imports and stimulate exports, thus repairing the trade deficit. In fact, Prestowitz asserts, our manufacturing capacity has been so gutted that we can't export our way out, even if the dollar's value drops to zero. The only path is to cut spending. But Prestowitz risks sounding like Chicken Little when he pronounces the globalization of today more than just another ''gale of creative destruction'' to which our economy will eventually adapt. Manufacturing has long been declining as a percentage of the United States economy, but the jobs lost have been more than offset by growth in services (in health care, financial services, law, retailing, and so on). Prestowitz points out that services are now being offshored, too, but not (yet) at a rate threatening our main growth industries. The McKinsey Global Institute, for example, reports that while 24 million Americans switch jobs each year, only 3 million jobs are estimated to go offshore by 2015. The critical question, still to be satisfactorily answered, is whether offshoring produces net economic gain or loss. Prestowitz deconstructs an oft-cited McKinsey study concluding that each $1 of spending sent offshore results in an overall gain in the gross domestic product of $1.12 to $1.14. He points out the study relies on data suggesting that 69 percent of displaced workers found jobs at an average of 97 percent of their former pay. This leaves 31 percent who didn't find new jobs. Not only that, ''if employers took McKinsey's advice to increase their offshoring,'' he says, the gain would quickly become a loss. In America's boom time, government-business cooperation was considered anathema to free-market principles -- ''Politicians shouldn't pick winners and losers!'' In Prestowitz's view, the laissez-faire trade theories of the 19th century have no place in 2005; since he holds that many of our successes have resulted from public-private collaboration, most of his proposals for maintaining American competitiveness boil down to government taking a more active role. Pay teachers more. Help workers move between jobs by offering wage insurance and portable health coverage. Reduce oil consumption by providing incentives for efficient cars (and include S.U.V.'s in mileage regulations). Tax spending, not saving. Help strategic industries with federal loan guarantees and grants. Call ''a new Bretton Woods Conference'' to set steps for reducing the role of the dollar in the world economy and so defuse the trade-deficit bomb. Whatever you think about offshoring, most of these ideas are no-brainers.

Subject: Blockbuster Drugs Are So Last Century From: Emma To: All Date Posted: Sun, Jul 03, 2005 at 16:57:47 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/business/yourmoney/03drug.html?pagewanted=all Blockbuster Drugs Are So Last Century By ALEX BERENSON INDIANAPOLIS DRUG companies do an awful job of finding new medicines. They rely too much on billion-dollar blockbuster drugs that are both overmarketed and overprescribed. And they have been too slow to disclose side effects of popular medicines. Typical complaints from drug industry critics, right? Well, yes. Only this time they come from executives at Eli Lilly, the sixth-largest American drug maker and the company that invented Prozac. From this placid Midwestern city, well removed from the Boston-to-Washington corridor that is the core of the pharmaceutical industry, Lilly is ambitiously rethinking the way drugs are discovered and sold. In a speech to shareholders in April, Sidney Taurel, Lilly's chief executive, presented the company's new strategy in a pithy phrase: 'the right dose of the right drug to the right patient at the right time.' In other words, Lilly sees its future not in blockbuster medicines like Prozac that are meant for tens of millions of patients, but rather in drugs that are aimed at smaller groups and can be developed more quickly and cheaply, possibly with fewer side effects. There is no guarantee, of course, that Lilly will succeed. And some Wall Street analysts complain about the recent track record of the company, saying that it has habitually overpromised the potential of its drugs and taken one-time charges that distort its reported profits. In the last year, Lilly's stock has fallen 21 percent, while shares in the average big drug maker have been flat. Still, since late 2001, Lilly's labs have produced five truly new drugs, including treatments for osteoporosis, depression and lung cancer. The total exceeds that of many of its much-larger competitors. And at a time when the drug industry seems adrift, that Lilly has any vision at all for the future is striking. 'The challenge for us as an industry, as a company, is to move more from a blockbuster model to a targeted model,' Mr. Taurel said at Lilly's headquarters here recently. 'We need a better value proposition than today.' For five years, drug companies have struggled to bring new medicines to market. But Lilly executives say they believe that the drought is not permanent. Advances in understanding the ways that cells and genes work will soon lead to important new drugs, said Peter Johnson, executive director of corporate strategy. Moreover, Lilly expects that drug makers without breakthrough medicines that are either the first or the best in their categories will face increasing pressure from insurers to cut prices or lose coverage. If that vision is correct, the industry's winners will be companies that invest heavily in research and differentiate themselves by focusing on a few diseases instead of on building size and cutting costs through mergers, as Pfizer has done. Lilly, which spends nearly 20 percent of its sales on research, compared with about 16 percent for the average drug company, may be well positioned for the future. 'We do not believe that size pays off for anybody, especially size acquired in an acquisition,' Mr. Taurel said. But if Lilly is wrong about the industry's direction, or if its research efforts fail, it could wind up like Merck, the third-biggest American drug company, which has also adamantly opposed mergers and bet instead on its labs. After its own eight-year drought of major new drugs, Merck has had a 65 percent decline in its stock price since 2000, and its chief executive was forced out in May. Mr. Johnson acknowledges that Lilly's strategy is risky. 'You can't make a discovery operation invent what you want them to invent,' he said. So Lilly is seeking to improve its odds and to cut research costs by changing the way it develops drugs, said Dr. Steven M. Paul, president of the company's laboratories. Bringing a drug to market cost more than $900 million on average in 2003, compared with $230 million in 1987, according to estimates from Lilly and industry groups. But the public's willingness to accept side effects is shrinking, and some drug-safety experts and lawmakers want even larger and longer clinical trials for new drugs, increasing development costs. If nothing changes, Lilly expects that by 2010, the cost of finding a single new drug may reach $2 billion by 2010, an unsustainable amount, Dr. Paul said. 'We've got to do something to reduce the costs,' he added. The biggest expense in drug development comes not from early-stage research, he said, but from the failure of drugs after they have left the labs and been tested in humans. A drug that has moved into first-stage human clinical trials now has only about an 8 percent chance of reaching the market. Even in late-stage trials, about half of all drugs fail, often because they do not prove better than existing treatments. To change that, Lilly is focusing its research efforts on finding biomarkers - genes or other cellular signals that will indicate which patients are most likely to respond to a given drug. Other drug makers are also searching for biomarkers, but Lilly executives are the most vocal in expressing their belief that this area of research will fundamentally change the way drugs are developed. Using biomarkers should make drugs more effective and reduce side effects, Dr. Paul said. If all goes as planned, the company will know sooner whether its drugs are working, and will develop fewer drugs that fail in clinical trials. The company may even be able to use shorter, smaller clinical trials because its drugs will demonstrate their effectiveness more quickly. To improve its chances further, Lilly has focused its research efforts on four types of diseases: diabetes, cancer, mental illness and some heart ailments. In each category, it has had a history of successful drugs. The company hopes to reduce the cost of new development to about $700 million a drug by 2010. Because Lilly now spends about $2.7 billion annually on research, that figure would imply that the company could develop as many as four new drugs a year, compared with just one a year if current trends do not change. Among the company's most promising drugs in development are ruboxistaurin, for diabetes complications; arzoxifene, for the prevention of osteoporosis and breast cancer; and enzastaurin, for brain tumors and other cancers. The flip side of Lilly's plan is that drugs it develops may be used more narrowly than current treatments. For example, the company may find that a diabetes drug works best in patients under 40 with a specific genetic marker, and enroll only those patients in its clinical trials. While doctors can legally prescribe any medicine for any reason once it is on the market, insurers would probably balk at covering the drug for diabetics over 40 or for patients without the genetic marker. 'The old model was, one size fits a whole lot of people,' said Mr. Johnson, Lilly's strategist. Last month, Lilly's vision of targeted therapies gained some ground - albeit at another company. The Food and Drug Administration approved BiDil, a heart drug from NitroMed that is intended for use by African-Americans. The approval, based on a clinical trial that enrolled only black patients, was the first ever for a drug meant for one racial group. While race can be a crude characterization of groups, it can serve as an effective biomarker, scientists said. Lilly's road map may look appealing. But some analysts question whether the company is as different from the rest of the industry as it would like to believe. While it professes to see a future of narrowly marketed medicines, Lilly is more dependent than any other major drug maker on a single blockbuster drug: Zyprexa, its treatment for schizophrenia and manic depression. Zyprexa accounted for about $4.4 billion in sales last year, 30 percent of the company's total sales. And while Lilly executives say they want to avoid marketing its drugs too heavily or in anything less than a forthright way, federal prosecutors in Philadelphia are investigating its marketing practices for Zyprexa and Prozac. Last month, Lilly said it would pay $690 million to settle 8,000 lawsuits that contended that Zyprexa could cause obesity and diabetes and that the company had not properly disclosed that risk. Lilly says that it acted properly in marketing Zyprexa and that is cooperating with the federal investigation. Still, the controversy has hurt Zyprexa sales, which fell 8 percent in the United States last year. Some of Lilly's newest drugs have been commercial disappointments. The company and analysts hoped that annual sales of Xigris, a treatment introduced in late 2001 for a blood infection called sepsis, could reach $1 billion; Xigris's sales were $200 million last year. Sales of Strattera, for attention deficit disorder, slowed after a report in December that the drug can cause a rare but serious form of liver damage. Michael Krensavage, an analyst at Raymond James & Associates who rates Lilly shares as underperform, said that Lilly's emphasis on targeted therapies might be a defensive response to the industry's recent inability to produce blockbusters. Rather than targeted treatments, 'drug companies would hope to produce a medicine that works for everybody,' Mr. Krensavage said. 'That's certainly the goal.' Mr. Krensavage also criticized Lilly's accounting, noting that the company has taken one-time charges in each of the last three years that have muddied its financial results. Lilly said its accounting complied with all federal rules. Despite the company's recent stumbles with Zyprexa, other analysts say Lilly is well positioned, and they praise Mr. Taurel for looking for innovative ways to lower the cost of drug development. 'Sidney has a better concept of what's happening outside his four walls and is far better in reflecting that in how the company runs on a day-to-day basis than any of his peers,' said Richard Evans, an analyst at Sanford C. Bernstein & Company. Mr. Taurel acknowledged Lilly's dependence on Zyprexa and the fact that some new drugs had not met expectations. But he said the transition to targeted therapies would take years, if not decades. With earnings last year of $3.1 billion, before one-time charges, and no major patent expirations before 2011, Lilly can afford to make long-term bets, he said. 'Our model needs to evolve,' he said. 'For the industry and for Lilly.'

Subject: A Stock Market Riddle From: Emma To: All Date Posted: Sun, Jul 03, 2005 at 14:51:58 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/business/yourmoney/03stra.html A Stock Market Riddle May Have an Easy Answer By MARK HULBERT IT is hard to argue with the notion that investors often price some stocks too high and others too low. But if new research is correct, this seemingly banal truth may also explain a long-running mystery: why small-capitalization value stocks tend to beat large-cap growth stocks. There is a long record of such outperformance. Since 1926, researchers have found, the closer a stock is to the small end of the size spectrum, the better its performance, on average. The same is true for stocks on the value end of the value-versus-growth spectrum, as measured by the ratio of price to book value. For years, researchers haven't been able to agree on why these factors have had such a big effect on returns. Some theorists argue that small-cap stocks and value stocks must be riskier than large-cap and growth shares. The greater risk, they say, accounts for the long-term outperformance. Others find this argument hard to swallow, saying the typical value stock is less risky than the typical growth issue. Still others say the performance differences are essentially accidental - so there is nothing to explain. The debate should be of interest to investors outside the academic world. After all, unless the basis for the long-term advantages of small-cap and value stocks is clear, investing in them may be especially dangerous. Those involved in the new research say they have found at least a partial answer to the puzzle in something so basic that past studies all but overlooked it. All that is needed for the size and value advantages to exist, they contend, is for some stocks to be overpriced and others to be priced too cheaply. Several researchers have been involved in this line of study. One is Robert D. Arnott, editor of the Financial Analysts Journal and chairman of Research Affiliates, a research and asset management firm based in Pasadena, Calif. An article by Mr. Arnott outlining this research appeared in the March-April issue of that journal. His argument is based largely on simple logic: By definition, an overvalued stock has a larger market capitalization than would otherwise be the case. Its price-to-book ratio is also higher, and thus it is closer to the growth end of the growth-value spectrum. Portfolios of large growth stocks will contain a disproportionate number of overvalued issues, and should, on average, lag behind the market. The opposite is the case for undervalued stocks. So small-cap value portfolios will have more than their share of them and should beat the market in the long term. Notice that this argument does not depend on anyone being able to identify the particular undervalued or overvalued companies. Nor does it depend on a specific definition of fair value. All that is required is that some stocks are overvalued and some undervalued. Only the most diehard believer in market efficiency would deny this precondition. In addition to showing that investors should favor small-cap and value stocks, this new research also suggests that index funds could improve long-term performance by changing the ways they divide their assets. Currently, almost all index funds use an allocation method known as cap weighting, in which a stock's weight in an index is a function of its market capitalization. The Standard & Poor's 500-stock index, for example, uses such a system. According to Jack Treynor, a father of modern portfolio theory and a veteran of more than two dozen mutual fund families' boards, 'an index fund that is cap-weighted inherently invests more money in overpriced stocks than it does in underpriced stocks.' That, in turn, cuts long-term returns. So how should an index fund divide its assets? One way is to give equal weight to each stock. Consider again the S.& P. 500. According to S.& P. data, an equal-weighted 500 index would have outperformed the cap-weighted version by 1.3 percentage points a year, on average, since the beginning of 1990. One index fund that uses the equal-weighted system is Rydex S.& P. Equal Weight, an exchange-traded fund. Mr. Arnott has created a method that, in back testing, has performed even better than equal weighting. In this approach, called fundamental indexing, a stock's weight is a function of variables like income, sales, dividends and book value. A new fund, Pimco Fundamental Index TR Plus, is based on one of Mr. Arnott's fundamental indexes. These alternative weighting methods have their detractors. One is George U. Sauter, chief investment officer at the Vanguard Group. He contends that if the market is defined as the total value of all stocks, only a cap-weighted index can be a true reflection of it, and equal-weighted and fundamental indexes will be skewed toward the small-cap and value ends of the spectrum. And that, he said, could lead the performance of such indexes to diverge significantly from the market as a whole, a problem often called tracking error. Mr. Arnott says the tracking-error argument isn't a good reason to avoid fundamental indexes. Because 'cap-weighted indexes have significantly lower returns than they should,' he said, investors may welcome a method that achieves better results From his perspective, 'tracking error relative to cap-weighted indexes is a good thing.'

Subject: Moonlighting Sure Pays Off at A.I.G. From: Emma To: All Date Posted: Sun, Jul 03, 2005 at 14:50:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/business/yourmoney/03gret.html Moonlighting Sure Pays Off at A.I.G. By Gretchen Morgenson EVEN the most jaded observer of outsized executive pay may have been amazed when the American International Group, the embattled insurance giant, drew back the curtain on what its top managers received from their association with C. V. Starr, a private offshore company that sells insurance policies for A.I.G. And all that, mind you, came on top of what they were paid for their A.I.G. day jobs. C. V. Starr mostly sells and services policies underwritten by A.I.G. It began operations in 1970 when what is now A.I.G. decided to place several small, not very profitable insurance agencies into a separate company. A.I.G. pays commissions to C. V. Starr for placing business with it, and over the years the little agency has grown into a profit machine. More recently, however, the company has become a governance nightmare for A.I.G. That's because it has been run by a raft of A.I.G. executives who also invested in it, creating the potential for major conflicts. A.I.G. now says that it is unwinding relationships with C. V. Starr and Starr International, another offshore company set up by A.I.G., and that its executives are no longer officers or directors of the companies. Last week, investors learned for the first time just how big the benefits of the C. V. Starr association have been for A.I.G. executives. Maurice R. Greenberg, the former A.I.G. chief executive, received a salary of $380,000 and directors' fees of $100,000 in 2004 from C. V. Starr, and a bonus of $2.6 million, which was at least partially paid by C. V. Starr. He also received $2.8 million last year in cash dividends generated by his investment in C. V. Starr shares. That investment grew in value last year by $8.8 million; the total value of his stake in C. V. Starr was $121.4 million as of the end of 2004. He paid $1.2 million for this stake, according to the proxy. This was on top of what A.I.G. gave him: $9 million in salary and bonus, 375,000 stock options and perks valued at $300,000. And from Starr International last year, he received $10.1 million in long-term compensation and $50,000 in directors' fees. Altogether in 2004, he received a total of $34.1 million from A.I.G., C. V. Starr and Starr International. Almost half of that - 43 percent - was disclosed for the first time last week. Mr. Greenberg, through a spokesman, declined to comment. Other A.I.G. executives also received nice chunks of C. V. Starr change last year. Martin J. Sullivan, A.I.G.'s chief executive, received salary, bonus and long-term compensation of $5.8 million. Wearing his C. V. Starr hat, he earned as much as $300,000 in salary, bonus and directors' fees and $400,000 more in cash dividends. His C. V. Starr shares, for which he paid $337,500, rose in value by $2.5 million last year, to a total value of $10.1 million. Nice work if you can get it. And part time, apparently. The services to C. V. Starr and Starr International rendered by A.I.G. executives 'are not considered to detract materially from the business time of these individuals available for A.I.G. matters,' last year's proxy said. Brian Foley, a specialist in executive compensation in White Plains, said: 'Given that the individuals named were supposedly full time at A.I.G. and were in fact very well paid by A.I.G., one would have to conclude that with respect to the Starr entities, they had one of the best part-time gigs there's ever been.' Ed Matthews, president of C. V. Starr and a former vice chairman of A.I.G., said that C. V. Starr's results reflect earnings from its agency business (it booked revenue of approximately $400 million last year), gains and dividends on its 40 million A.I.G. shares and profits from a large portfolio that invests in hedge funds, real estate and private companies. He said the relationship with Starr was very profitable to A.I.G. Asked why the C. V. Starr pay to A.I.G. executives was not disclosed to shareholders, Mr. Matthews said it was not deemed material. 'It was a private investment company,' he said, 'and it was hard to segregate the exact amount that came from the insurance agency, from A.I.G. shares and from private investments.' Why did directors make so much money if they did so little? 'It wasn't always this way,' he said. C. V. Starr's relationship with A.I.G. is the subject of a lawsuit by the Louisiana pension fund contending that C. V. Starr and its investors and officers benefited from the company's affiliation with A.I.G. at the expense of A.I.G. shareholders. Current A.I.G. executives received salaries, bonuses and directors' fees from C. V. Starr of as much as $3.7 million last year. They also received $4.4 million in dividends from C. V. Starr and saw their stakes rise by $29 million, to a total value of $176 million at the end of 2004. WHILE investors are just learning about these numbers, A.I.G. said the compensation committee of its board was told about the pay in the past. Interestingly, A.I.G.'s outside directors earn base pay of $40,000 a year while most of the A.I.G. executives on the Starr boards received $150,000 in directors' fees last year. A.I.G. directors do earn an additional $1,500 for each meeting they attend. A.I.G.'s spokesman, Chris Winans, said shareholders were not hurt by the executives' association with C. V. Starr. In fact, the shareholders benefited, he said; the pay received by A.I.G. executives from the Starr companies did not cost A.I.G. anything. But now it will. Mr. Matthews said that he is in the process of selling C. V. Starr's agencies to A.I.G. and that C. V. Starr plans to buy A.I.G. executives' stakes. If it does not, A.I.G. has guaranteed that it will pay the value of those C. V. Starr stakes - $176 million at last count. Mr. Winans said that such a payout was unlikely. He also said A.I.G. would probably start paying these executives what C. V. Starr had been giving them - proving again how good it is to be king.

Subject: Profits, Not Jobs, on the Rebound From: Emma To: All Date Posted: Sun, Jul 03, 2005 at 13:31:35 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/business/03valley.html?pagewanted=all Profits, Not Jobs, on the Rebound in Silicon Valley By JOHN MARKOFF and MATT RICHTEL SAN JOSE, Calif. - Things are looking up at Wyse Technology, a venerable maker of computer terminals. Unless, that is, you happen to want to work for the company here in Silicon Valley. Responding to booming demand in Asia and in Europe, Wyse is adding new development teams in India and China and expanding its worldwide work force to about 380, from 260. Its profits are recorded here - but almost none of its new jobs. Amid widespread signs of economic recovery in the region, Wyse is emblematic of its economy, in which demand, sales and profits are rising quickly while job growth continues to stagnate. In the last three years, profits at the seven largest companies in Silicon Valley by market value have increased by an average of more than 500 percent while Santa Clara County employment has declined to 767,600, from 787,200. During the previous economic recovery, between 1995 and 1997, the county, which is the heart of Silicon Valley, added more than 82,800 jobs. Changes in technology and business strategy are raising fundamental questions about the future of the valley, the nation's high technology heartland. In part, the change is driven by the very automation that Silicon Valley has largely made possible, allowing companies to create more value with fewer workers. Some economists are wondering if a larger transformation is at work - accelerating a trend in which the region's big employers keep a brain trust of creative people and engineers here but hire workers for lower-level tasks elsewhere. 'What has changed is that Silicon Valley has continued to move up the value chain,' said AnnaLee Saxenian, dean of the School of Information Management and Systems and professor of city and regional planning at the University of California, Berkeley. That has meant that just as low-skilled manufacturing jobs fled the region starting in the 1970's, now software jobs are also leaving. The phenomenon is only the latest twist in the region's boom-and-bust history, marked by repeated cycles of innovation and renewal over the last five decades. Industries based on personal computing, hand-held devices and electronic commerce have emerged and thrived here, and each brought waves of new jobs. Now, almost everyone agrees that Silicon Valley is coming back, and employment there grew from March to May, but the area still has about 10,000 fewer jobs than there were a year ago. The increase in profits 'has been very dramatic, but there's no job growth,' said Doug Henton, president of Collaborative Economics, a regional consulting company. Some former technology workers have given up on the sector - or moved out of the Bay Area altogether. Catherine Haley, 32, went to work in 1997 as a project manager and a Web designer for technology companies in the area, but after quitting the consulting firm KPMG in 2002, she found it extremely difficult to find a full-time job. In 2004, after working in piecemeal assignments for two years, she gave up on the job market and nearly moved back to Boston. Instead, she decided to pursue her passion - art - and is now majority owner of a gallery in San Francisco. She does not miss fighting for work, she said, partly because the high-tech economy has lost its charm. 'Unfortunately, the number of interesting projects and companies out there has really come down,' she said. In some cases, as at Wyse, the job growth in the sector is taking place elsewhere - in lower-cost, higher-growth markets. A new management team, installed as part of a buyout of the company that was completed in April, is leading a restructuring that includes adding 100 workers in India and 35 in Beijing so far this year. At the start of the year the company had 90 percent of its work force in Silicon Valley; now the figure is 48 percent, and only 15 percent of its engineering talent remains here, largely because of the technology development teams it is building in India and China. 'It was pretty clear that growth was going to come first in Asia,' said John Kish, Wyse's chief executive. 'We had the desire to get engineering teams to those markets as quickly as we could.' Stephen Levy, director for the Center for the Continuing Study of the California Economy, said the growth of employment outside Silicon Valley was 'not a nefarious plot,' but a logical development. 'Companies are going where there are customers and, in some cases, where it's cheaper to produce,' he said. Hoping to keep costs low, Electronic Arts, the video game maker based just north of here in Redwood City, already has development studios in Vancouver, Montreal, London, Chicago and Orlando, Fla. It is debating how much of its work in the future it can move to lower-cost regions, said Jeff Brown, a company spokesman. 'We will always have a presence here because there is a core of talent,' he said. 'But there is strong pressure to figure out exactly which jobs it is essential to keep in California.' The issue is not just outsourcing, though, but also big leaps in productivity. Cisco, the behemoth maker of Internet equipment, now has annual sales of $680,000 per employee, compared to $480,000 in 2001. One key measure, known as value added per employee, rose 3.7 percent in 2004, to $222,000 in economic value per worker. That compares with $85,000 per worker in the rest of the country, according to data reported by Joint Venture Silicon Valley, a regional economic research group. By a number of other measures, companies are watching profits and sales rise. An analysis published in April by The San Jose Mercury News found that the top 100 public companies in the region had revenues of $336 billion in 2004, an increase of 14 percent from the previous year. Mr. Henton said that measure, while not entirely indicative of what is going on because it includes worldwide sales, gives a good sense of the growth here. 'It's a clear recovery,' Mr. Levy said. 'It's a high-productivity jobless recovery.' In the past, much of the job growth has come from investment by venture capitalists in start-up companies. That engine is starting to rev up again, with venture capitalists putting $7.4 billion into 724 Silicon Valley companies in 2004, according to the National Venture Capital Association. That is up 17 percent from 2003, but still far below the $34 billion invested in 2000, at the peak of the phenomenon. Also, newer start-ups are under pressure from their venture-capital investors to outsource work to lower-cost regions, said Cynthia Kroll, a senior regional economist at the Haas School of Business at the University of California, Berkeley. She added that the venture capitalists, burned as the last cycle turned downward, are much more closely watching how start-ups spend money, including how they hire. 'That would be slowing growth of employment,' Ms. Kroll said. The venture capitalists are being highly selective, said Margot Heiligman, 39, who is doing consulting work for technology companies but is in the market for a full-time job. Ms. Heiligman moved to San Francisco last November when her husband took a trumpeter position with the city's symphony orchestra. Ms. Heiligman previously oversaw the internal technology department for the New York law firm of Proskauer Rose and spent six years as director of business development for Swisscom, a telecommunications company in Bern, Switzerland. She is eager to find work at a start-up company, but has found that the venture backers of such companies are very selective, hiring acquaintances or people who have worked at companies they know well. 'I'm finding it pretty closed,' she said of the job market. 'It's making New York look like an easy place' to find a job.

Subject: Were the Good Old Days That Good? From: Emma To: All Date Posted: Sun, Jul 03, 2005 at 13:25:42 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/03/business/yourmoney/03standard.html?pagewanted=all Were the Good Old Days That Good? By LOUIS UCHITELLE TOM RATH, the protagonist in Sloan Wilson's 1955 novel, 'The Man in the Gray Flannel Suit,' certainly had his share of troubles: the stressful conformity, the constant striving for success, the superficial suburban friendships, the war experiences he kept hidden from his wife. It all ate away at him. But Tom, like most Americans in the first three decades after World War II, took a rising standard of living for granted. When he needed more income to make ends meet, he simply landed a better-paying job. Indeed, at parties throughout suburbia, Mr. Wilson wrote, 'the public celebration of increases in salary was common.' And Tom didn't fret about medical bills, job security or the quality of public schools for his three children. Fast forward to Tom and Marie DeSisto in 2005. They are real people in their early 50's, living in a three-bedroom condominium in Newton, Mass. Ask them if their standard of living is rising and they say yes, indeed, it is - but not in the Rath family's sense of the word. The DeSistos' income made a U-turn last year, but they manage to live within its limits, even eking out money for extras. And that success lifts their spirits. 'We are not really into boats and cars,' Mrs. DeSisto said, 'but we are traveling more.' Pushed into early retirement last year by his employer, Verizon, Mr. DeSisto's salary plummeted from more than $100,000 as a manager to $36,000 as a first-year math teacher at Newton High School. His wife, on the other hand, has just been promoted to director of nursing in the Framingham public schools. Her salary rose by nearly $4,000, to $67,000 a year, but she is also adding eight working days a year to handle the additional responsibilities. While the Raths moved up in income, home size and leisure time, the DeSistos sold their four-bedroom colonial home in Newton, pocketing a profit while cutting their property taxes and maintenance costs. 'We planned carefully,' Mrs. DeSisto said, 'and we downsized successfully.' So, did the Raths, that quintessential 1950's family, enjoy a higher standard of living than middle-class families like the DeSistos do today? In other words, can it be that living standards are actually slipping in America? No economist, demographer or historian would make that case. Living standards, after all, almost never go backward, at least not in a material sense. Indeed, the economy today is growing, consumer spending is plentiful and new technologies - from the Internet to laparoscopic surgery - make life better than ever, as they do in every generation. BUT for the DeSistos and their contemporaries, the trajectory is no longer the steadily upward line that the Rath family enjoyed. Instead, the line appears to be climbing erratically. That is certainly true of the traditional measures of standard of living. After 20 years of very small gains, the rate of improvement surged from 1995 to 2000 - only to fall back toward zero over the last four years, a reversal that puzzles analysts. 'When you talk about living standards, you have to focus on people in the middle,' said Robert Gordon, an economist at Northwestern University. 'A lot of the goodies that we think of as raising living standards have gone to the people at the top at the expense of the broad mass of Americans in the middle.' Kevin Hassett, director of economic policy studies at the American Enterprise Institute, argues that federal subsidies in the form of tax credits, mainly the earned income tax credit, are raising living standards for low-income families by more than many people realize. Those subsidies have risen by about $2,000 since President Bush took office in 2001, to just over $3,000 a year for a married couple with two children and a family income of $27,300, Mr. Hassett estimates. 'The standard income numbers don't capture what is happening to people at the bottom,' he said. 'So you have to look at their consumption, not their income, to gauge standard of living. And consumption has significantly outperformed income.' While income and consumption are the chief measures of a nation's standard of living, other, more subtle indicators also play an important role - and several of them are not doing so well. Life expectancy in the United States, while still rising, has fallen behind that in France, Germany and Japan. Home ownership is at a record high for the population as a whole, but it has dropped since the 1970's for some groups - working families with children, for example, according to the Center for Housing Policy. In overwhelming numbers, Americans say they are satisfied with their standard of living, a Gallup poll reports. But 25 percent of the nation's families also worry all or most of time that they won't be able to pay their bills. That is up from 21 percent in the late 1990's. And in many cases, public services are not holding their own. 'Thirty years ago a lot of public goods were free, and now they are fee-based,' said Michael Hout, a sociologist at the University of California, Berkeley. 'Even the Grand Canyon charges, and many public schools are engaged in fund-raising. So public goods that contribute to living standards are more dependent today on family income.' The good news for the nation is that productivity - a measure of output per worker that is the bedrock on which income and living standards are built - is rising. When it goes up, so does the revenue from the sale of the additional goods and services that each worker produces. In theory, some of that revenue feeds back into the income of the workers, financing improvements in their standard of living. That symbiotic relationship worked very well for Tom Rath. From the late 1940's through 1973, productivity grew at an annual rate of nearly 3 percent, and incomes rose almost as briskly. Then came a horrific slowdown: productivity fell back to an annual growth rate of less than 1.5 percent from the mid-1970's to the mid-90's, and median income hardly rose at all. The revival that started in 1995 brought productivity growth back to its old rate of increase, and for five years incomes also rose smartly. What happened next is tough for economists to explain. The productivity growth rate has stayed strong - rising at an average annual rate of just under 3 percent since 1995, according to the Bureau of Labor Statistics. But starting in 2000, median income, adjusted for inflation, has grown more slowly every year - and this year the increase is almost imperceptible. 'There is no question that a huge gap has opened up between productivity and living standards,' said Jared Bernstein, a senior labor economist at the Economic Policy Institute. Not since World War II have productivity and income diverged so sharply, yet that phenomenon barely registers in public opinion surveys. Nearly 9 in 10 people surveyed by Gallup say they are satisfied with their standard of living, a higher proportion than in the 1960's. In answering that question, however, those surveyed make no comparisons with the past, said Lydia Saad, a senior editor at Gallup, 'so they don't know whether they are falling behind on some treadmill of life.' Richard A. Easterlin, an economic historian at the University of Southern California, has a different take. Satisfaction is always relative, he says. If a family's debt rises, that is not a negative as long as other people's debt is increasing at roughly the same pace. The parity helps to explain why consumption has risen 40 percent faster than income since 2001, and why people are able to focus on the amenities they acquire - the cellphones, the bigger homes, the cars and the digital cameras - without feeling weighed down by rising debt or by income that is rising more slowly. TOM RATH'S generation, having experienced the Depression, expected more hard times after World War II. When the economy boomed instead, the aspirations of his generation rose and so, eventually, did their sense of well-being. All of that changed in the 1980's, when globalization infected public attitudes and people told pollsters that they expected their children's living standards to decline. That shift in expectations soon gave way to a new norm. In the age of layoffs, tens of thousands of families have done what the DeSistos have done: adjusted to a decline in income after a job loss. The DeSisto family's income is still more than twice the national median of nearly $53,000, and Mrs. DeSisto's eight additional days of work are not really eight additional days, as she sees it. 'I always worked those extra days,' she said. 'I just didn't get paid for them in my old job as supervisor of nurses.' While the glass may be half full in the eyes of many beholders, living standards certainly are not improving for everyone. Productivity, as it rises, throws off more and more income, which is then distributed to capital in the form of profits, and to labor in higher wages, more paid hours and benefits. Labor's share, which has historically represented 60 to 65 percent of the total, has fallen in the last five years to the low end of that range. But for Mr. Gordon at Northwestern, that is only part of the story. Capital's share, he says, has increasingly found its way to upper-income families as stock options, dividends, special bonuses and the like. 'We had much less income inequality in the first couple of decades after World War II because of strong unions, restricted trade and a decline in immigration,' Mr. Gordon said. 'Then all three reversed, which means that the income from productivity falls to the bottom line and for the time being stays there.' To him and others, living standards cannot be truly rising if the improvement is so unevenly distributed; in addition, they say, earning a living has become increasingly stressful. Job security, which Tom Rath took for granted, has deteriorated. 'People talk of the new economy and of reinventing themselves in the workplace, and in that sense most of us are less secure,' said Daniel Kahneman, a Princeton University economist who shared a Nobel in economics for his contributions to behavioral economics. People approaching the age of 65 face a different uncertainty: smaller retirement incomes than their parents enjoyed. That is happening as the nation shifts from a system of fixed monthly pensions to 401(k)-type accounts, in which people save what they can for their own retirement. In the process, retirement income is falling from 93 percent of preretirement pay for today's retirees to 80 percent, on average, for the next generation, according to an Urban Institute projection. Some retirees cannot afford the pension hit, and they continue to work. The portion of the 65-and-over population that is employed has risen to 14 percent from less than 12 percent in 1995, the Bureau of Labor Statistics reports. The option to retire is slipping away, and that damages living standards. 'People who have a choice experience a greater standard of living,' said Richard T. Curtin, director of the University of Michigan's Surveys of Consumers. 'They are not constrained from choosing what they prefer.' Choosing not to work is no longer an option for many families who need two incomes to pay what they consider basic expenses. Two of those expenses - health care and education - have risen faster than incomes, says Elizabeth Warren, a bankruptcy specialist at Harvard Law School and co-author of 'The Two-Income Trap.' 'Half of all people who file for personal bankruptcy do so in the aftermath of a serious medical problem,' she said, noting that the number of Americans without health insurance has increased in recent years. As for education, the rising cost is mostly in the purchase of expensive homes in upscale areas known to have good public schools. 'A generation ago,' Ms. Warren said, 'the majority of American parents believed they could buy whatever home they could afford and send their kids to a good school down the street.' There is a problem with this argument. The quality of public school education, measured by test scores, is in fact holding up quite well, on average. The National Assessment of Education Progress, a federally sponsored testing program that started in the 1960's, periodically measures the skills and achievements of students at the ages of 9, 13 and 17. Scores have risen slightly since the early 1980's, on average, but so, too, has the disparity in school performance. 'The variation is extraordinary across school districts and even across schools in the same district,' said Richard Murnane, an economist at Harvard's Graduate School of Education, 'so when you ask about how good the schools are, the measure of central tendency is less interesting than the variation around the average.' HEALTH problems also undermine living standards. Life expectancy at birth is one symptom. At 69.7 years in the late 1950's, life expectancy in the United States was slightly ahead of that of Germany and France, and well ahead of Japan's. Now Japan is far ahead at 80.5 years, compared with 78.5 in France, 77.5 in Germany and 76.5 in the United States. Infant mortality, at more than six deaths per thousand live births, similarly trails the rates in France, Germany and Japan, according to the Organization for Economic Cooperation and Development. Height, too, is no longer an American hallmark. Average height has been stuck at less than 6 feet for a decade or more while Europeans have grown passed that mark, suggesting that they are somehow healthier. Obesity is now a distinguishing feature. The percentage of obese American adults has doubled in the last 15 years, to 30 percent, said Kenneth E. Thorpe, chairman of the department of health policy management at Emory University's School of Public Health. The way we live makes that happen, he argues: the lack of exercise, the marketing of foods high in sugar and fat, the over-large portions. As a result, weight-related illnesses - diabetes, heart disease, hypertension, asthma - have risen sharply. 'Once you are sick, we are doing a better job in treatment,' Dr. Thorpe said. 'The pace of technological development has probably accelerated since 1980 more than in previous generations. That's the good news. The bad news is that we have larger shares of the population who are sick.' For Dr. Thorpe, the much better treatment is clearly a big improvement in standard of living - offset, however, by the big increase in the incidence of illness. He estimated that the additional health care cost resulting from the decline in healthiness would total $70 billion this year. 'You can't have a rising standard of living,' he said, 'if you have people getting less healthy.' The Rath family had no such misfortune. In Sloan Wilson's hands, the man in the gray flannel suit enjoyed an ever more prosperous life - a happy ending that many middle-class families can't seem to match today.

Subject: Interest rate increases From: Poyetas To: All Date Posted: Sun, Jul 03, 2005 at 11:17:17 (EDT) Email Address: Not Provided Message: How sensitive is the housing bubble to interest rate changes? If the fed keeps raising interest rates, when will the bubble burst? Bond yields are already being pushed lower due to liability matching on behalf of the credit institutions. Interest rate increases will push these yields even further down. If the housing bubble does not drop, there will be a double effect on bond yields.

Subject: Re: Interest rate increases From: Terri To: Poyetas Date Posted: Sun, Jul 03, 2005 at 12:38:53 (EDT) Email Address: Not Provided Message: The Federal Reserve will be most sensitive to the housing market and likely stop raising short term interest rates if housing prices show signs of a decline. But, obviously the Fed is not worried just now so rates are likely to slowly climb again. If long term rates continue to remain low however, there may be no danger to the housing market other than flat pricing for a time.

Subject: Sho Yano and nature v nurture From: Johnny5 To: All Date Posted: Sun, Jul 03, 2005 at 06:28:03 (EDT) Email Address: johnny5@yahoo.com Message: Chopin by age 3 - gives strong weight to nature. http://www.absoluteastronomy.com/encyclopedia/s/sh/sho_yano.htm Sho Yano (born c. 1990, is a Japanese American and Korean American boy who at the age of 12 held the title of world's highest recorded IQ with a figure so high that it was unmeasurable. He reportedly played Chopin on the piano at age 3. After scoring 1500 out of 1600 on the SAT at age 8, he entered Loyola University at age 9, graduating summa cum laude at age 12, and now attends the Pritzker School of Medicine at the University of Chicago in the MSTP (Medical Scientist Training Program) program designed to earn a combined MD and PhD.

Subject: How Marilyn Vos Savant Invests? From: Johnny5 To: All Date Posted: Sun, Jul 03, 2005 at 05:52:41 (EDT) Email Address: johnny5@yahoo.com Message: Now Terri, if she went from pennies to millions in five years trading stocks, she was not indexing but definitely market timing at very risky levels. Do you have any more information about her investment career or current financial investment decisions? http://www.bookrags.com/biography-marilyn-vos-savant/ Bored with college, vos Savant left Washington University after two years and launched a career in stocks, real estate, and investment. Her real interest had always been in becoming a writer, but she realized that she first needed to establish a financial base with which to support herself. Within five years her personal investments afforded her....

Subject: About Despair and Hope in South Africa From: Emma To: All Date Posted: Sat, Jul 02, 2005 at 15:44:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/02/movies/MoviesFeatures/02eber.html Film About Despair in South Africa, and School That Offers Hope By RICHARD SANDOMIR Charlie Ebersol's need to tell the story of the Ithuteng Trust school in Soweto - where traumatized and violent teenagers learn to overcome their young lives' horrors - began with a visit to the South African township two years ago and has produced a new documentary, 'Ithuteng (Never Stop Learning).' 'I have a great life, and I felt I had a responsibility to tell this story,' said Mr. Ebersol, 22, who was a film major at the University of Notre Dame and graduated in May. The documentary, which was honored in May as best humanitarian film at the MountainFilm festival in Telluride, Colo., is a raw but inspiring journey into the lives of teenagers ravaged by abuse, crime and AIDS. All were recruited by Jacqueline Maarohanye, a fiercely devoted teacher known as 'Mama Jackey' who set up the school in 1999. Although some students board there, most come from their own schools around Johannesburg for after-hours and Saturday programs that combine academics, culture, sports, peer counseling, therapeutic dramatizations of the teenagers' own lives and outings to a maximum-security prison. Mr. Ebersol, who now lives in Los Angeles and recently completed a stint as a production assistant on the film 'Yours, Mine and Ours,' produced the documentary with a friend, Kip Kroeger, also 22, with whom he had made music videos. They hired Mr. Ebersol's brother, Willie, 18 and a student at the University of Southern California, to direct a 17-day shooting schedule in the summer of 2003 because they admired a short student film he had made on a classmate's dating problems. 'I should have been intimidated, but I wasn't,' Willie Ebersol said. 'He came back from South Africa, gave me a blanket as a gift and asked me to direct.' The students provided brutally candid narratives of their lives to the young American filmmakers, none more than Lebo, a girl who described being raped twice and contracting H.I.V. 'They poured out their lives and didn't hold back,' Mr. Kroeger, a North Carolina State University graduate, said in a telephone interview. 'It sears right into you. Here's a girl you met two hours and ago she's telling us about being raped? How can she sit there and tell us that?' In another scene from the film, an orphan named Dineo, who is described as having been sexually abused by her foster father, the head of an anti-abuse charity, confronts an older girl whose behavior toward her had made her want to give up the program. 'I thought you were a bad person,' Dineo says to the older girl. 'I hated you so much, but now I'm going to be your mother and you're going to be my mother.' While they embraced, Mama Jackey tried to hold back her tears. 'Here are these kids, who are not taught about love, teaching each other to love,' Charlie Ebersol said in an interview. 'They will learn to love and share it because Mama said you have a chance now, you have a way to dream.' Although the film does not yet have a distributor, it is winning notice beyond the award. Oprah Winfrey had already known about Ithuteng (pronounced IT-uh-teng) and Mama Jackey, but it was watching a DVD of the documentary during a flight to Johannesburg in June that prompted her to donate a total of $1.14 million to the school, said Gayle King, editor at large of O, the Oprah Magazine. When Ms. King told Charlie Ebersol of the donation, she said: 'He was incoherent with joy. He said, 'Oh, my God, Gayle, I was just trying to raise $10,000 to keep Mama's electricity on.' 'Ms. Winfrey's gift was the largest to the school so far, but it has received support from numerous groups, including the National Basketball Association, which built a reading center there, and from Dikembe Mutombo, the Congolese player for the Houston Rockets, who donated $150,000 to build two dormitories. Kathy Behrens, a senior vice president of the N.B.A., said: 'I was with Charlie when he first showed the film to Mama. It was very emotional for her. It was very hard for her to watch Lebo, who had died of AIDS.' The lessons of Ithuteng resonated with unexpected power for the Ebersol brothers. Until last year, theirs had been a charmed life, as the older sons of Dick Ebersol, the chairman of NBC Universal Sports and the retired actress Susan Saint James. Dick Ebersol bankrolled the film for about $90,000, after Charlie Ebersol and Mr. Kroeger began raising money on their own. Their father gave them guidance on the documentary and helped find film veterans to help his sons in Soweto. Their mother helped edit the film. But last Nov. 28, a private jet carrying Dick, Charlie and the youngest Ebersol son, Teddy, crashed after takeoff in Montrose, Colo., near the family's winter home in Telluride. Teddy, 14, was killed; Charlie suffered a broken wrist, and eye and back injuries; Dick broke several ribs, his sternum, his pelvis, his coccyx and several vertebrae. 'I walked off the plane with my father in my arms, and my brother behind me,' Charlie Ebersol recalled. 'I said, 'Oh, God, how can I get through this without my father, and then I had to find Ted. In talking to God, I said: 'How can you empower me, and take away my father's power? I need him.' ' He said the openness of the students at Ithuteng helped him deal with his grief. 'Mama believes you must cry yourself dry,' he said of Ms. Maarohanye, 'and that people shouldn't prevent you from crying. Willie and I employed what Mama taught us in the context of real tragedy.' Willie Ebersol said: 'South Africa taught me that I can talk about what's eating me up inside. We learned from the kids that it's O.K. to be sad. If you've been raped, it's O.K. to say you've been raped. You don't bury your grief if you speak about it. You open up.' The film also underwent a transformation after the crash, becoming more overtly emotional with additional music to underscore the painful pasts and altered lives of the students. 'We had a fear of exploiting the emotion,' Mr. Kroeger said of their initial framing of the material. 'But after the crash, we realized we weren't tapping into our emotions. We had to make changes.' Now, Charlie Ebersol said, the film 'represents our trying to find hope in the face of loss.'

Subject: Oriole Gathering Material for Nest From: Terri To: All Date Posted: Sat, Jul 02, 2005 at 14:55:55 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5414&u=4|74|... Baltimore Oriole Gathering Material for Nest New York City--Central Park, Belvedere Castle.

Subject: The Next Heavyweight Champion of Banks From: Emma To: All Date Posted: Sat, Jul 02, 2005 at 13:54:34 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/02/business/02bank.html The Next Heavyweight Champion of Banks By JULIE CRESWELL This is a tale of two really, really big banks. Both are heavyweights in financial services with trillions of dollars in assets and billions in market capitalizations. Both offer a cornucopia of products and services to consumers and large corporate customers. Both have exhibited voracious appetites in recent years, gobbling up competitors to establish themselves as megabanks with coast-to-coast and even international reach. On the surface, the two financial giants, Citigroup and Bank of America, have business models that appear to be very similar. But there are significant differences. While Citigroup chased after the higher-fee businesses from corporations in the late 1990's, Bank of America focused on the more staid, boring business of serving retail customers. That bet seems to have paid off. Today, Bank of America's operating margins, return on capital and sales growth are all better than Citigroup's. Investors have taken notice, helping to send Bank of America's shares up 11.4 percent in the last year while Citigroup's shares have climbed 4 percent. While it is still the nation's largest bank with $1.48 trillion in assets and a $240 billion market value, Citigroup these days seems stuck. Since taking the reins in 2002, Citigroup's chief executive, Charles O. Prince, has spent a great deal of his time apologizing to regulators around the world and settling lawsuits relating to Citigroup's dealings with corporate highfliers like Enron and WorldCom. He is also undoing some of what his predecessor, the Wall Street swashbuckler Sanford I. Weill, cobbled together. This year, Citigroup sold its Travelers Life and Annuity business to MetLife for $11.5 billion, and last week, it unloaded its asset management unit to Legg Mason in an asset swap valued at $3.7 billion. Citigroup declined to comment for this article. Bank of America, from its base in North Carolina, is acting like the Citigroup of old. In the last week or so, it made a $2.5 billion investment to take a 9 percent stake in one of China's biggest banks and, on Thursday, further bolstered its retail presence by agreeing to buy the MBNA Corporation in a $35 billion deal that would make it the nation's largest issuer of credit cards. When the deal closes later this year, Bank of America's assets will top $1.27 trillion and its market cap could reach $213.6 billion. Some on Wall Street are fascinated by the role reversal. 'Citigroup has been so traumatized by the events of the last five years that it is no more the wild-eyed risk taker,' said Richard X. Bove, an analyst at Punk Ziegel & Company. 'We're seeing one company shrink while the other expands. It's only a matter of time before Bank of America is bigger than Citigroup.' The current woes at Citigroup can be attributed in part to the kill-or-be-killed culture it encouraged among its troops along with the strategic path it chose years ago. At no time was that culture more evident than when Mr. Weill orchestrated the $70 billion takeover of Citicorp in 1998 by the Travelers Group, well before the law preventing such a move was formally repealed. Without a doubt, Citigroup is a powerhouse in credit cards and home lending. But not so long ago, a great deal of its focus centered on bolstering growth by seeking closer relationships with large corporations. In exchange for cheap loans, Citigroup hoped to earn higher fees from companies for equity underwriting and advisory work. But in the aftermath of the stock market collapse in 2001, Citigroup, more so than any other bank, has faced greater regulatory scrutiny and investor wrath. It has agreed to the multibillion-dollar fines and settlements to end regulatory investigations and shareholder lawsuits. Even if Mr. Prince wanted to make an acquisition, he probably could not. Earlier this year the Federal Reserve warned the bank against deal-making until it institutes improved internal control systems. And even though Citigroup continues to win underwriting or advisory work, it is not as if investors are rewarding the bank. As its earnings momentum has slowed, its stock has lagged investment banks like Goldman Sachs as well as retail banks like Wachovia and Wells Fargo. 'The market has begun to recognize that Citigroup's business model as it was articulated under Sandy Weill simply doesn't do it,' said Roy Smith, a professor at the Stern School of Business at New York University. 'It exposes the bank to too much risk of litigation and prosecution and volatility in trading.' By contrast, Bank of America's focus on the retail customer is looking pretty smart these days. It, too, grew out of a series of acquisitions orchestrated by its strong-willed former chief executive, Hugh McColl Jr. Among the most notable was the $60 billion combination in 1998 of NationsBank and BankAmerica. Many analysts speculated that Mr. McColl's successor, Kenneth D. Lewis, would take the bank more in the direction of investment banking when he took over in 2001. Many thought he would go after Merrill Lynch, or more recently, Morgan Stanley. Instead, Mr. Lewis further entrenched the bank, making bigger and bigger bets on the consumer. In 2003, Bank of America bought FleetBoston for $47 billion, giving it a huge branch network in the Northeast. Mr. Lewis surprised investors again with Thursday's decision to buy MBNA, the big credit card company. In an interview after announcing the MBNA deal, Mr. Lewis noted that consumer and small-business activities would now make up about 55 percent of Bank of America's pretax earnings. 'But that's not to say we don't like the investment banking business either. Late last year we started to invest about $675 million to build up our global investment bank. The difference between us and others is that we're not acquiring an investment bank.' The MBNA deal will make Bank of America the largest credit card issuer with a 20 percent market share. The bank hopes to cross-sell other financial products like mortgages or home-equity lines to MBNA's customers. That is not to say that Bank of America does not face risks in growing on the backs of consumers. While home lending and credit cards have been highly profitable for banks in recent years, rising interest rates could start to curb investor appetite for debt. The battle between these behemoths is far from over. Certain Wall Street investment banking businesses are picking up nicely and a lean and mean Citigroup could certainly be in a position to take advantage of that. Once it finishes atoning for its past, Citigroup could yet come back swinging.

Subject: Schools That Train Real Estate Agents From: Emma To: All Date Posted: Sat, Jul 02, 2005 at 13:35:25 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/02/realestate/02school.html?pagewanted=all Schools That Train Real Estate Agents Are Booming, Too By LOUISE STORY The Institute of Florida Real Estate Careers, based in Orlando, has 11 centers around the state but has still had to place students on its waiting list this year. 'The numbers are off the charts because of the really aggressive real estate market,' the school's president, Richard Fryer, said. As the real estate market booms, there has been a parallel boom in the real estate education industry. Hundreds of thousands of people have entered real estate in the last four years, hoping to grab a share of the big money moving in the industry. All of them had to take real estate courses to obtain state licenses. About $800 million was spent last year on real estate education, estimated Stefan Swanepoel, chief executive of RealtyU, a private company that provides course materials for the schools. Although he did not have specific figures from prior years, he said spending on real estate courses had risen significantly in the last few years. 'It is one of the few industries out there where you can be almost guaranteed that if you pass the license exam, you'll get a job,' said Ginny Shipe, chief executive of the Council of Real Estate Brokerage Managers, an industry association based in Chicago. But even as the schools are making money, not all agents are finding real estate an easy path. While the number of properties on the market has soared, the most experienced brokers, with the deepest roots in their communities, are getting the majority of the listings. Many new agents drop out within a year of entering the field, state real estate commissioners said. In Florida, Mr. Fryer said, about half of all people who obtain their real estate licenses do not renew them. Mr. Fryer and officials at other schools say they warn their students that real estate requires long hours and hard work, often with low base salaries to start. New agents say they found they had much to learn about the practical aspects of selling a house once on the job. 'People think it's easy to sell real estate,' said Jone R. Sienkiewicz, executive director of the Real Estate Educators Association, a trade group of real estate schools. But, she said, 'You have to put a lot of time into it, and have a big Rolodex.' State real estate commissions report that they have been seeing steadily increasing numbers of people taking the license exams. In California, about 3,000 people a month took the sales agent license test from 1997 to 2000. Numbers began to climb in 2001, and, in May of this year, 14,662 people took the exam. Only about half of those who take the test pass it, said Tom Pool, a spokesman for the California Department of Real Estate. 'There's no indication that the trend's going to slow down,' Mr. Pool said. From May 2004 to this May, California data shows, the number of licensed agents climbed by 39,831. That is just over 3,300 a month. The Association of Real Estate License Law Officials, a group of officials from state real estate commissions, found that in 2004 there were at least 1.26 million sales agents, the typical starting position in real estate, with active licenses in the United States up from at least 980,000 four years ago. In New York State, there are currently about 80,000 active sales agents, up from about 57,000 in 2000, roughly a 42 percent increase, according to an annual survey by the licensing association. Rural states are also seeing a steep rise in real estate licenses. From 2000 to 2004, the number of active licensed sales agents in Idaho climbed about 46 percent. For schools that offer real estate classes, the upturn is good news. The sales agent courses at Mr. Fryer's schools in Florida cost $399, an amount typical for such classes. The course is 63 hours - the number of hours required by Florida - and covers basic real estate principles. Students can also take an additional exam-preparation course over a weekend for $169 and a math review for $49, the school's Web site says. Enrollment in prelicense courses is up 30 percent from last year, Mr. Fryer said, and the school is adding two more class locations to accommodate its 15,000 students. In many states, schools that did not already offer introductory real estate courses have applied for state licenses to teach the courses. In the last two years, California has licensed 34 additional schools to offer real estate classes, bringing the total to 115 programs, not including colleges and community colleges in the state, Mr. Poole said. Web sites for schools and online programs emphasize their pass rates for state exams, often offering money back if a student fails. Joe McClary, who manages online and correspondent course education certification for the real estate licensing association, said that the largest online real estate schools were increasing revenue by 40 percent to 60 percent a year. Real estate school officials said students only demand courses that meet the minimum requirement for hours set by the states. Some said state legislatures should make the requirements steeper. 'We only train what the requirements are,' Mr. Swanepoel of RealtyU said. 'The skill which an agent needs to sell a house is definitely much more than a license.' Several new sales agents agreed that their real estate courses should have been more in depth. The course 'does not teach you how to go to work,' said Kim Galloway, 47, a new sales agent in Winter Park, Fla., who took a course at a local real estate school. 'I didn't know how to write a contract, do the paperwork.' Some universities offer real estate courses as part of degree programs, as well as in continuing education programs. But those courses often center more on the practice of real estate than on the material needed to pass the state exams. 'The fact is that the licensing exam has virtually nothing to do with the practice of real estate,' said Susanne E. Cannon, an associate professor of finance and director of the Real Estate Center at DePaul University in Chicago. The exam, Ms. Cannon said, focuses on real estate laws and ethics rules. 'If you think about it from the state's perspective, this is the one chance they get to kind of put you on notice,' she said. 'The bad news is that they really aren't testing on all the things that might be useful in the business.' Some states have raised the standards for obtaining licenses. Connecticut doubled the length of required courses to 60 hours from 30 last fall, because a lot of students were not passing the licensing exam, said Richard M. Hurlburt, the director of the licensing division in the Connecticut Department of Consumer Protection. Vermont, the one state that traditionally has not required agents to take real estate courses, will require those entering the field to take 40 hours of classes, beginning next year. Many legislatures are hesitant to increase requirements because it could make it more difficult for minorities and less-wealthy people to enter real estate, said Wayne J. Thorburn, president of the licensing association and administrator of the Texas Real Estate Commission. Schools and real estate commissioners predicted that the number of new agents - and courses being offered - would fall when the housing market slows. 'When the market adjusts, the numbers are going to adjust,' Mr. Fryer said. 'The people who are on the bottom half of the earning scale are going to suffer, and they'll find something else to do. But that's a normal ebb and tide in our business.'

Subject: Flaws in Heart Devices Pose High Risks From: ///emma To: All Date Posted: Sat, Jul 02, 2005 at 11:57:00 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/02/business/02device.html F.D.A. Says Flaws in Heart Devices Pose High Risks By BARRY MEIER The Food and Drug Administration said yesterday that potential electrical flaws in some heart devices made by the Guidant Corporation, including one flaw that the company did not tell doctors about for years, posed a risk of serious injury or death to patients. In its announcement, the F.D.A. designated three models recently recalled by Guidant as 'Class I' actions, the highest risk level. It also designated eight other models as 'Class II' recalls, or those posing a less serious risk. F.D.A. officials also said the agency was continuing its investigation into how the company assessed and disclosed those product dangers. In the past, such inquiries have led, in some cases, to actions ranging from consent decrees to civil fines to criminal inquiries. Effectively, yesterday's decision by the F.D.A. is a rebuke to Guidant. The F.D.A.'s review of Guidant's actions will likely last several weeks, an agency official said. But the inquiry may inject another element of uncertainty into Johnson & Johnson's planned $25.4 billion merger with Guidant, the nation's second-largest maker of implantable heart devices. Yesterday, a spokesman for Johnson & Johnson, which is based in New Brunswick, N.J., said the company had nothing to add to a statement it had made two weeks ago about the Guidant merger. At that time, Johnson & Johnson said it planned to complete the deal in the third quarter but described the product problems reported by Guidant as 'serious matters.' In a statement, Guidant, based in Indianapolis, said it believed that F.D.A. actions to classify its previously announced recalls would help doctors and patients get more information about the affected devices. 'Guidant works diligently to create the most reliable products and services, enhance patient outcomes and limit adverse events to patients,' Ronald W. Dollens, the chief executive, said in a statement. In interviews in May, another Guidant executive had defended the company's decision not to alert physicians earlier that one defibrillator model could abruptly short-circuit, saying that Guidant had not viewed the risk as significant enough to merit such communication. In recent weeks, Guidant has recalled or issued alerts about 11 models of defibrillators, which are devices that emit an electrical shock intended to jolt a chaotically beating heart back into normal rhythm. In a Class I recall, there is a reasonable probability that a malfunctioning medical device will cause serious health consequences or death. In a Class II recall, the probability of a device's flaw causing a serious health risk is remote. The F.D.A. designated as Class I recalls recent Guidant actions involving three models - the Ventak Prizm 2 DR Model 1861, the Contak Renewal and the Contak Renewal 2. Some units, because of manufacturing flaws, have unexpectedly short-circuited, rendering them useless. In two known cases, patient deaths have been associated with the flaw. The affected Prizm 2 DR units are those made on or before April 16, 2002. The affected Contak Renewal and Contak Renewal 2 units are those made on or before August 26, 2004. In each case, Guidant made changes to correct the electrical flaw in newer units. But in the case of the Prizm 2 DR units, Guidant did not tell doctors for years that the unit had repeatedly short-circuited and kept selling potentially flawed units out of inventory after it had started selling an improved version. The agency did not issue recommendations about whether heart patients should undergo surgery to have devices replaced, but instead urged all patients who have not yet done so to contact their doctors to discuss the benefits and risks. 'Malfunctions in these devices can lead to serious consequences, and it's important for patients to call their doctor,' said Dr. Daniel G. Schultz, the director of the F.D.A.'s Center for Devices and Radiological Health, in a statement. 'However, it's also important to understand that in most cases, these defibrillators work well and save lives.' In trading on the New York Stock Exchange yesterday, Guidant closed at $65.73 a share, down $1.57, or 2.33 percent. From a practical standpoint, Guidant had already treated its recent recalls of the three models as a Class I action by issuing news releases about the problem and sending letters to doctors with lists of patients who received the device. A manufacturer conducting a Class I recall must attempt to alert as many affected parties as possible. But a former associate F.D.A. chief counsel in the 1970's, William W. Vodra, said that the agency's continuing review of how Guidant treated patient risks posed by devices like the Prizm 2 DR could have a far more significant impact than how a recall is classified. Such reviews can potentially lead to consent orders, fines or even criminal investigations, said Mr. Vodra, who is now a lawyer in private practice in Washington, D.C. A Guidant spokesman, Steven Tragash, declined to comment when asked whether Guidant had received any subpoenas or information requests from any governmental agency related to the company's defibrillators. Tim Ulatowski, the compliance director at the agency's device center, said yesterday that the F.D.A. is examining both the circumstances and timing surrounding Guidant's disclosures of flaws in the affected Prizm DR 2 and Contak Renewal units. He said the inquiry is likely to be completed in weeks rather than months. In March, a 21-year-old college student with a genetic heart disease died of cardiac arrest, and it was later determined that the Prizm 2 DR implanted in him had short-circuited at some point. His doctors subsequently learned from Guidant officials that the model had repeatedly failed. They said they were told by a top Guidant medical officer that the company did not plan to issue an alert. Guidant eventually issued that alert in late May as the device's problem was being publicized in other forums. The agency is also likely to look at how Guidant presented the risks posed by the device when it did so. Along with the three Class I recalls, the F.D.A. classified Guidant actions involving eight other company models as Class II recalls. The models affected by that action are Ventak Prizm AVT, the Vitality AVT, the Renewal AVT, the Contak Renewal 3, the Contak Renewal 4, the Renewal 3 AVT, the Renewal 4 AVT and the Renewal RF.

Subject: Drug Lobby Got a Victory in Trade Pact From: Emma To: All Date Posted: Sat, Jul 02, 2005 at 11:47:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/02/business/worldbusiness/02drug.html?pagewanted=all Drug Lobby Got a Victory in Trade Pact Vote By STEPHANIE SAUL The sidewalk between the drug industry's headquarters in Washington and the United States trade representative's office has been taking a pounding from the wingtips of industry lobbyists. The work of these drug industry courtiers, who represent what is arguably Washington's biggest and wealthiest lobby, appears to have succeeded in the Central American Free Trade Agreement. The agreement would extend the monopolies of drug makers and, critics say, lead to higher drug prices for the mostly impoverished people of the six Latin American countries it covers. The accord cleared the Senate on Thursday but faces a difficult floor vote in the House of Representatives this month. The agreement's pharmaceutical provisions are a sideshow in the Congressional debate, eclipsed by concerns of the textile and sugar industries and the labor unions that their interests would not be protected. In contrast, the agreement's pharmaceutical provisions, which provide five years of market exclusivity to brand-name drugs, have been front and center in Guatemala, where poor AIDS patients have marched in the streets to protest. The six countries affected by the pact 'understand that the net effect of these pharmaceutical provisions will be to raise the price of medicine,' said Frederick M. Abbott, a professor of international law at Florida State University. 'The way they have to view it is that they're getting something out of the agreement that will give them a net trade benefit.' The problem with such an analysis, Professor Abbott said, is that the textile employers and agricultural producers gain, but the economic benefits may never flow down to the people who cannot afford medicines. According to Representative Sherrod Brown, Democrat of Ohio, the trade agreement is an example of how the pharmaceutical lobby rarely loses on trade issues, often by quietly working behind the scenes. 'A voter walking down the street would never think of the pharmaceutical industry's influence in another country through the U.S. trade representative,' said Mr. Brown, who has criticized how the industry and other corporate interests shaped the trade accord. The Pharmaceutical Research and Manufacturers of America, the drug industry association, is the single biggest influence group at the trade office, according to a new analysis by the Center for Public Integrity, a government watchdog group. The analysis is based on the sheer number of reports, 59, filed by lobbyists for the group since 1998. The reports do not have to disclose how many individual contacts the lobbyists made. The industry's primary interest at the trade office is protecting its intellectual property, which Peter R. Dolan, the chief executive of Bristol-Myers Squibb, recently called the 'lifeblood' of the industry. Like movies and software, pharmaceuticals require a lot of time, money and creativity to develop, yet they are fairly simple to replicate. The industry association estimates that intellectual property infringement in 21 countries costs its members $7 billion a year. Therein lies the problem for drug makers, and the reason they are fighting a global war to protect their patents. In defending their efforts to extend intellectual property protection abroad, industry officials point out that pharmaceutical companies subsidize treatment for millions of people in developing countries. Bristol-Myers, for example, has invested $150 million to set up AIDS clinics and other charitable programs in Africa, a figure that does not include the low-cost drugs the company distributes there. The industry association also argues that extending its patent protections worldwide will result in greater access to medications by encouraging drug makers to enter those markets. 'It provides certainty for companies to be able to market and sell their medicines in those particular markets,' said Mark Grayson, a spokesman for the trade association. The certainty, according to Professor Abbott of Florida State, results from the agreement's 'highly restrictive market exclusivity rules which allow the originator companies to block any registration.' One of the most contentious provisions in the trade pact is a requirement that gives brand-name manufacturers market exclusivity for five years after a drug is registered in the countries, even if the 20-year patent has expired. A similar five-year period exists in the United States, but the trade agreement would require countries to enforce the five-year period even if the exclusivity period in the United States has already expired. During that period, manufacturers who ultimately wanted to register a generic equivalent to the drug in that country would be barred from using the animal and human test data submitted for the drug's approval, a provision that critics say could delay the approval of generics beyond the five-year period. By protecting marketing exclusivity, the industry says, the trade agreement would also spur innovation and encourage pharmaceutical companies to register drugs in the small countries, ultimately helping deliver those drugs to the needy. It is a philosophical argument that the United States trade representative's office has embraced. 'Trade rules that protect innovation and research foster a system that produces the types of medicines American health consumers and health consumers around the world use and need to fight diseases,' said Richard Mills, a spokesman for the trade office. Former Representative Rob Portman, an Ohio Republican, was sworn in to the cabinet-level trade post that runs the trade office in May. The issue of intellectual property protection for pharmaceuticals has been highlighted in the last week with the Brazilian government's threat to break Abbott Laboratories' patent for the AIDS drug Kaletra by authorizing one of its domestic drug manufacturers to make a copy at roughly half the cost. The Brazilian government currently buys Kaletra for about 180,000 citizens with AIDS. Abbott Laboratories charges Brazil $2,500 a patient annually. That represents a special price break from the company, which charges $6,000 to $7,000 for the drug in other developed countries, according to figures supplied by the company. Despite the special deal his government is getting, Brazil's president, Luiz Inácio Lula da Silva, wants the drug cheaper. If President Lula goes through with his threat, he would invoke rarely used 'compulsory licensing' provisions of a 1994 World Trade Organization agreement on intellectual property. The agreement forced countries to adopt American-style patent rules for pharmaceuticals, but allowed flexibility in cases of overriding public health issues by giving countries the right to order compulsory licenses. Citing the Brazilian example, Representative Pete Stark, a California Democrat, referring to the industry trade group, said, 'My guess is that Pharma's worry is that one of these countries will say, ' To hell with you,' and start making their own drugs.' Critics of the trade agreement say it sets up barriers to compulsory licensing in the countries it covers - the Dominican Republic as well as Nicaragua, Guatemala, El Salvador, Honduras and Costa Rica. The combined gross domestic product of the six countries amounts to a third of the annual revenues of major drug makers. The pharmaceutical industry has also been successful in influencing trade 'priority lists' and 'watch lists' issued by the trade representative in recent years, according to the Center for Public Integrity analysis, released this week. Inclusion on the trade watch lists constitutes the first salvo in a trade war. Last year, the pharmaceutical trade group requested action against 38 countries for infringing on American patents, producing counterfeit drugs and releasing confidential test data. Of those, 31 found their way onto some level of the trade watch list, according to the center's analysis. The report for 2005, released in May, again showed the extent of the industry's influence. Of 41 companies recommended for inclusion by the industry, 32 made it onto one of the trade lists, the center said. The trade representative's office disputes the analysis, however, saying the office complies with exact pharmaceutical industry requests involving the priority and watch lists only about half the time. The 59 reports filed by lobbyists for the pharmaceutical association do not count dozens of reports filed by individual companies. The analysis revealed that Pfizer lobbyists had filed reports about lobbying the trade office 32 times during the same period; Bristol-Myers, 27 times; and Wyeth, 19 times. Over all, the various representatives of the pharmaceutical association and its individual companies filed 289 reports of lobbying at the trade representative's office since 1998, making pharmaceuticals the fourth-largest lobbying interest group, behind miscellaneous manufacturing, business associations and agriculture, according to the center's analysis. Mr. Grayson said extensive lobbying efforts by his industry were a good sign. 'If we're not doing a lot, we're not doing our job,' Mr. Grayson said.

Subject: Bond Maven Consults His Crystal Ball From: Emma To: All Date Posted: Sat, Jul 02, 2005 at 10:20:23 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/02/business/02interview.html A Bond Maven Consults His Crystal Ball By RIVA D. ATLAS WILLIAM H. GROSS, the chief investment officer at the Pacific Investment Management Company, known as Pimco, is probably the biggest single influence on the direction of bond prices after Alan Greenspan, the Federal Reserve chairman. Mr. Gross manages the $85 billion Pimco Total Return bond fund, the third-largest mutual fund in America. He has a hand in investing more than $500 billion in bond portfolios managed by Pimco, which is based in Newport Beach, Calif. Mr. Gross had been bearish on the prospects for government bonds until March of this year, when he reversed course and started buying Treasuries after concluding that the growth of the economy was slowing. Even with the Federal Reserve's quarter-point increase in interest rates on Thursday, Mr. Gross said that he was convinced the Fed could begin lowering rates as early as next year. Last week, over breakfast at the Morningstar investment conference in Chicago, Mr. Gross discussed what a continuation of low interest rates means for investors. Following are excerpts from that conversation: Q. Your forecast is for yields on 10-year Treasury notes to be in the range of 3 percent to 4.5 percent. A. Believe it or not, that's a three-to-five-year forecast. We are expecting inflation at 1 to 2 percent, down from 2.8 percent. That ultimately is positive for bonds. There are two dominant reasons. Asian labor has been arbitraged by U.S. corporations hoping to contain wages here at home. The next big piece is the expectation that Asians will continue to buy into our markets. The Chinese and Japanese have been huge buyers of Treasuries and the demand from them is partly responsible for the artificially depressed yields we see today. Q. If your forecast is right, what would burst the housing bubble? A. If interest rates stay low, there's no reason there has to be a disaster in housing. But if housing prices stop going up, which would be my forecast, that makes a substantial difference. Individuals have banked on that appreciation every year. You should come to a point where owners of houses realize we're in never-never land and stop buying on a speculative basis. Markets many times fall of their own weight. That's what happened with the Nasdaq in 2000. Q. What does your forecast mean for investors? A. In this new world in which inflation is 1 to 2 percent, returns on all assets, from stocks to bonds to hedge funds and private equity, will be low. A lot of investors will throw up their hands and say, why are we pursuing this seemingly endless struggle to produce double-digit returns when it can't be done? We might as well buy Treasuries and sleep well. If yields are going lower, today's 4 percent rate on Treasuries will look attractive 12 months from now. Q: What is the outlook for corporate bonds? A: If inflation comes down it means that profits will come down, too, and corporate cash flow may not be as plentiful. That is not an ideal environment to own a corporate bond. That doesn't mean there can't be an attractive situation. In May we were buyers of three to four billion dollars of auto finance bonds. Q. You run the largest bond mutual fund. A. You pin a little badge of pride to your chest. Q. Is it a problem for you to invest that much money? A. It's not. The bond market is $24 trillion, so our $500 billion in total assets is about 2 percent of the whole pie. There have been innovations in derivatives. The mortgage market is so large, and then there's international markets. The European bond market is probably 4 to 5 times deeper than the U.S. Treasury market. I will say this. One reason why rates are doing what they are doing has to be in part self-reinforcing behavior on the part of Pimco. When Pimco at $500 billion turns from bearish to bullish, even if we move in a measured way, we probably move that market 10 basis points. You look in the mirror and say, Can that be true? Q. I hear you do yoga to relax from the pressures of managing money. A. I get in around 5:30. After three hours on the trading desk, I walk across the street and do an hour's worth of yoga. It's not a meditative thing, but more of an exercise thing. It does clear the cobwebs, and that's what you need in this business.

Subject: Black-throated Blue Warbler From: Terri To: All Date Posted: Fri, Jul 01, 2005 at 21:58:45 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=4785&u=133|11|... Black-throated Blue Warbler New York City--Central Park, Hallet Sanctuary.

Subject: Baltimore Oriole Perching From: Terri To: All Date Posted: Fri, Jul 01, 2005 at 21:56:09 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=4428&u=75|42|... Baltimore Oriole New York City--Central Park, North Woods.

Subject: Where are the savings? From: Johnny5 To: All Date Posted: Fri, Jul 01, 2005 at 19:11:34 (EDT) Email Address: johnny5@yahoo.com Message: These numbers are VERY concerning to me Terri - that the average household with two working adults in thier 50's has around only 30K is very troubling to me. Notice how they try to sugar coat it at the end saying workers who were at the same job for 30 years have 150K - but most people I know have changed jobs 3 times at least. Some 4 or 5. http://www.sptimes.com/2005/07/01/news_pf/Business/Boomers__gift__Penalt.shtml ....In the Employee Benefits Research Institute's annual retirement confidence survey this year, about 40 percent of workers 45 and older reported they had saved less than $25,000. The institute's statistics show about 10 percent of workers 21 to 64 have an IRA as their only retirement savings plan, 22 percent have only a workplace account such as a 401(k) and 9 percent have both. The rest have neither. Other retirement research produces similarly grim numbers. Fidelity Investments says the typical working household of adults 41 to 54 (prime boomer years) has saved $30,000 toward retirement and 14 percent haven't saved anything. Of course, some boomers do have substantial IRAs and 401(k)s. Workers in their 50s who had spent 20 to 30 years at the same company had an average 401(k) balance of about $157,000 at the end of 2003, according to the research institute.

Subject: Re: Where are the savings? From: Terri To: Johnny5 Date Posted: Fri, Jul 01, 2005 at 20:43:10 (EDT) Email Address: Not Provided Message: The lack of saving in baby boom households will either be largely made up by accumulated home equity or retirement accounts or social security will be the sole recourse. I do not know how worrisome the problem may be, for demographic issues in economics are hard to clearly discern. We will follow the matter.

Subject: Energy Companies From: Terri To: All Date Posted: Fri, Jul 01, 2005 at 19:04:08 (EDT) Email Address: Not Provided Message: ExxonMobil and Chevron and ConocoPhillips by the way are so large and powerful that they in effect can become proxies for the entire Vanguard Energy Index. The top 3 companies will often have such weight in sector indexes.

Subject: Costs MATTER! From: Johnny5 To: Terri Date Posted: Fri, Jul 01, 2005 at 19:08:17 (EDT) Email Address: johnny5@yahoo.com Message: XOM has a ZERO expense ratio and gets you the same returns as VDE it seems.

Subject: Effectiveness MATTERS! From: Pancho Villa To: Johnny5 Date Posted: Fri, Jul 01, 2005 at 20:26:24 (EDT) Email Address: nma@hotmail.com Message: Total Real Effectiveness of an Economy = x * millions of tons of carbon equivalent / GDP '(GDP = f(population))'

Subject: Re: Effectiveness MATTERS! From: Jennifer To: Pancho Villa Date Posted: Sat, Jul 02, 2005 at 06:34:55 (EDT) Email Address: Not Provided Message: Well done as always. We can continue to wish for more conservation and efficiency, but we may have to wait a while for a friendlier political environment.

Subject: Protecting Asset Values From: Terri To: All Date Posted: Fri, Jul 01, 2005 at 18:58:33 (EDT) Email Address: Not Provided Message: Thinking of resilience and protection, Alan Greenspan according to Alan Blinder has spoken at times at Fed meetings of protecting asset values, not manipulating asset value just protecting against shocks or the effects of shocks. So, I would guess the Fed will try to raise a few more times but will be cautious not just of slowing growth but of signs the housing market has cooled. What the Fed will wish for when it finally happens is only a levelling of housing or real estate prices rather than a decline. Families will have to find another asset to build wealth with if housing prices level off for an extended period. The alternative again will be stocks, so I am thinking Siegel has the edge on stocks if the Fed is protective of asset values. Notice Britain is my advice to myself.

Subject: Are We More Shock Resistant? From: Terri To: All Date Posted: Fri, Jul 01, 2005 at 18:57:41 (EDT) Email Address: Not Provided Message: Alan Greenspan has been arguing for some time that our economy in particular had grown increasingly shock resistant or resilient since 1980. Investors seem to believe the same and have bid up asset prices correspondingly. Jeremy Siegel makes just this case for stock market investors, while his buddy Robert Shiller argues it is not so. Then, what of Alan Greenspan's sense that modern economies become more resilient to shocks? Inflation was controlled roughly but from then on from 1981. We managed a strong dollar to 1985 and a weak dollar after. We managed 1987 without a recession or even a negative stock market year. What of 1990, 1994, 1998, 1999, 2000...? Do resources move faster in the wake of economic shocks? Of course, if America is resilient who is Japan not? The strong Yen from 1985 may have hurt the Japanese economy for the last 15 years. How could that be?

Subject: A Japanese Master Enlightened the West From: Emma To: All Date Posted: Fri, Jul 01, 2005 at 15:37:36 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/01/arts/design/01john.html?pagewanted=all How a Japanese Master Enlightened the West By KEN JOHNSON WASHINGTON — Legend has it that mid-19th century French artists discovered the wonders of the Japanese woodcut when they examined papers used to wrap imported Japanese ceramics. Today, looking at the prints of Utagawa Hiroshige and Katsushika Hokusai, the greatest of Japanese woodcut printmakers, it is hard to fathom that their works could have been viewed as the equivalents of our funny pages. And it is easy to see how Modernists from Manet to Bonnard could find in the lucidity and technical and formal economy of those Japanese artists inspirational guides for escaping the suffocating conventions of Beaux Arts and Victorian painting. Now an exhibition at the Phillips Collection here illustrates the influence of Japanese prints on early European and American Modernists. 'East Meets West: Hiroshige at the Phillips Collection' interweaves the print series that made Hiroshige famous - 'The Fifty-Three Stations of the Tokaido' - with paintings from the museum's collection by famous artists like Cézanne, Whistler and Braque, as well as by artists of less sturdy repute like Augustus Tack, Ernest Lawson and Maurice Prendergast. It is not a great show as a whole because many of the European and American paintings are of indifferent quality, especially seen next to Hiroshige's work. But it is, nevertheless, an instructive and illuminating one. And it does offer a rare chance to see a complete set of 'The Fifty-Three Stations' in pristine condition. It is on loan from a private Japanese collection. Published around 1833-34, the series is made up of 55 views along the Tokaido Road, the eastern coastal highway that connected Edo - now Tokyo - and Kyoto. There is one print for each of 53 established post-stops and villages along the way and one each depicting bridges at the start and at the end of the journey. Going by the works drawn from the Phillips Collection, it appears that what Western artists took from Hiroshige and other Japanese printmakers was mainly formal: compositions that appear cropped or leave much empty space in central areas, that emphasize flat design rather than illusory depth and that simplify detail in favor of clear shapes, patterns and linear rhythms. For the Impressionists, these qualities served the realization of the canvas as a kind of hypersensitve retinal screen that registered visual sensation with an almost photographic lack of visual and compositional discrimination. With Post-Impressionists like van Gogh and Cézanne, there is a shift from the rendering of visual sensation to a self-reflexive interest in the grammar of picture-making. This is not contrary to Japanese tradition, which evolved not by increasing its ability to imitate nature but by the increasing refinement of traditional conventions of representation. Part of what is so wonderful in Hiroshige is how he gently nudged the schematic abstraction of his fine, prehensile cartoon outlining and flat colors in the direction of naturalism, achieving with pellucid economy naturalistic effects of light and weather and specific descriptions of natural features of the landscape. In a sense East and West met as they were going in opposite directions: the East toward greater naturalism and the West toward greater abstraction. Hiroshige's work was a last great flowering of traditional Japanese printmaking. When Japan was forced to open itself to trade with the West in 1853, an influx of Western art and photography rendered Japanese styles of representation obsolete. Meanwhile, Western Modernism took what it needed from the East and sailed on into uncharted realms of abstraction. Because the Western works in the Phillips Collection are collectively so dull by comparision, the exhibition's main effect is simply to highlight how great Hiroshige is. The experience is visceral: each time you shift your gaze from one of the Western paintings - whether it is a Bonnard, a Prendergast or a Kokoschka - back to one of Hiroshige's perfect, glowing jewels, you feel a kind of physical relief and a rush of pleasure. It would be different had the West been better represented - Manet, Cassatt, van Gogh and Vuillard are among the missing - but in the presence of inferior competition, the Hiroshiges really shine. In focusing on the Hiroshige prints, you discover something that the Modernist preoccupation with form and abstraction overlooks: how terrifically entertaining they are. Hiroshige was not a mandarin composing pictures for purely aesthetic contemplation by the cultivated few. He was an enormously popular artist. Images from the Tokaido were produced and sold in such numbers - over 10,000 in some cases - that many of the blocks wore out and had to be recut to keep up with demand. Reasons for that popularity are easy to see. Hiroshige was a wonderfully skillful, witty and generous caricaturist. Almost all the tiny people that populate his landscapes are delightfully particularized in their bodies and their gestures; and though the series features no main protagonists, as illustrations for a novel would, he gives each of his little people a vivid sense of purposeful humanity: the man running after his hat that was blown off by the wind; the women trying to drag prospective customers off the street and into the inns where they work; the men lounging in tea houses; the travelers struggling up and down a mountain slope under a driving rain. Moreover, Hiroshige conjures the feelings of going on journeys. His prints literally depict all kinds of people in transit and they describe all kinds of places along the way, but they are more than just 19th-century scenic postcards. In almost every print, Hiroshige uses formal devices to enhance a sense of movement through and into space. As paths zigzag from near to far, the eye follows where they lead and the mind wonders where they go beyond the frame of the picture. In many images, bridges sweep across the space of the picture making you think about where the people crossing came from and where they are going. And bridges often lead into villages so that you feel what the weary traveler feels upon arriving at his destination: anticipation of warmth, food and relaxation. Sometimes destinations are far away, like the castle town at the foot of a distant mountain range that beckons the party of travelers resting in the foreground after crossing a river. There is nothing religious about Hiroshige's imagery, but there is a subliminal sense of travel as a kind of spiritual pilgrimage. Hardly any of the Western paintings in the Phillips Collection show convey that adventurous feeling of traveling through or into the picture. Ernest Lawson made Impressionist-style pictures of bridges, but leading as they do only into illegible accretions of paint, they are not bridges you feel an urge to cross. Nor does Cézanne's view of Mont Sainte-Victoire inspire a desire to hike into his world; his patchy brushwork blocks imaginative entry like a wall and directs our attention rather to the construction of the picture. An exception among the Western pictures is a wonderful early painting by Paul Gauguin in which we look down from a high grassy knoll to bathers at the edge of a river and a fisherman farther away on a spit of land. You feel as though you could climb down there yourself to go for a swim or spend a few hours loafing with your own rod and reel. That dimension of pictorial and psychic travel was left undeveloped by Western Modernist painting, which has tended to try to arrest the eye and the mind in the empirical here and now. But Hiroshige's kind of narrative did not die out. It flourishes in comic books, graphic novels and animated films that Eastern and Western artists continue to churn out in great volumes, transporting minds all over the world.

Subject: The Mao Myth Thrives From: Emma To: All Date Posted: Fri, Jul 01, 2005 at 14:35:11 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/01/international/asia/01yenan.html The Mao Myth Thrives, but Don't Mention Its Dark Side By HOWARD W. FRENCH YENAN, China - Horribly outnumbered, poorly armed and constantly under attack, 80,000 Communist fighters set out on foot from a base in China's southeastern Jiangxi Province in October 1934 hoping above all to avoid getting wiped out by their Nationalist enemies. One year and 5,000 miles later, after countless acts of extraordinary courage along the way, the 6,000 survivors of the Long March, led by Mao Zedong, limped into this dusty town in the arid yellow hills of northern Shaanxi Province. Last year, nearly four million Chinese, from backpacking college students to busloads of middle-aged workers on company excursions, followed in their wake - as tourists, not revolutionaries. Without much else to work with, this modest city, all but bypassed by the industrial revolution sweeping China, enthusiastically promotes some of the most resonant founding myths of the country's Communist republic. These days, eager visitors crowd the revolutionary museum here to look admiringly at large black and white photographs of the last stages of the Long March, to buy Mao trinkets or to pose for pictures in front of the rustic cave dwellings that served as residences for Mao and other top leaders from 1935 to 1947, when this city was the Communists' main base. Marxist ideology is said to have little relevance in today's China. But all over this city, people can be overheard trading admiring stories about the heroism of Mao's army or celebrating the spirit of Yenan, as much a name for that 12-year period as for the city itself. Whether they lived through it, or more likely know of it through popular culture, many Chinese still recall the era fondly as a time of great idealism, of selfless volunteers arriving by the tens of thousands to join the movement, and of Mao's supposedly enlightened leadership before such well-known and monumental tragedies as the Great Leap Forward and the Cultural Revolution, which killed tens of millions of people. 'We have always loved Mao,' said Zhao Shiwei, 43, a provincial trade official who had come from far away Guangdong Province and was posing merrily with a group of colleagues in gray People's Liberation Army uniforms from the era. 'He led the nation to success and founded the new China, and he will always occupy a great place in our hearts.' Chinese historians in the academy, like their counterparts abroad, have steadily chipped away at Mao's myth, and the falling chunks have inevitably included many details about Yenan. Far from the idyll celebrated here, the historians say, Mao waged a campaign of political terror against youthful dissenters, perfecting methods of purging real and imagined foes that would be used on a vast scale later. He sold opium to raise money for his army, and it was here that he created his suffocating cult of personality. 'Mao: The Unknown Story,' a heavily researched book published recently by Jung Chang, a Chinese writer who lives in Britain, goes so far as to say that the most legendary act of bravery of the entire Long March, the crossing of the Dadu bridge, while enemy gunners took aim from the opposite bank, was fiction. In China, that is the equivalent of saying Washington never led his troops across the Delaware. That is not all. Far from committed Communists, Ms. Chang writes, many of the marchers were press-ganged captives, and Mao is said to have been carried throughout much of the Long March on a litter by porters, as he read at his leisure. And although Mao's troops were decimated, not a single senior party member was killed or even seriously wounded. 'You can't say the Long March was a military victory,' said Yang Kuisong, a historian at Beijing University. 'It was not about fighting battles. It was a process of running away.' Ordinary Chinese have been carefully shielded from views like this of their late leader, however. Mao's importance to the party he founded remains paramount, even as the founding ideology, Marxism, fades. For ordinary Chinese, history textbooks emphasize the devotion to the common man and heroism of the early Communists, even teaching that Mao's armies, not the Americans, defeated the Japanese invaders. The television and film industries have cranked out hundreds of movies reinforcing the Mao legend. Writing that strongly challenges the chairman or his place in history simply cannot be published in China. Sitting outside the town's Revolutionary Museum, where a huge bronze of Mao looms over a parking lot filling with tour buses, a 33-year-old man named Chen affected boredom when approached by a stranger, saying Mao's history was most relevant to people over 40. 'We didn't have to suffer the same difficulties that they did,' Mr. Chen said. 'You always hear about the great sacrifices that Mao's generation made in all the movies and TV shows. It's got to be true, right?' In the date tree garden by the old Revolutionary Headquarters, where Mao presided over early meetings of the Central Committee, a group of fresh college graduates from Xian were curious about a foreigner's impression of Mao. 'In China, nobody hates Mao Zedong,' one of the students said in prelude. 'This trip is like a souvenir for us. We could have gone anywhere, but we chose here.' Told of the dark side of Mao's record known to historians but not to most Chinese, some of the students grew defensive. 'What do you expect us to do, drag him from his grave and flog him,' one asked. 'The emperors of the past are regarded as great if they moved the country forward, no matter how much the people suffered. With Mao it is the same.' Others, however, grew pensive. 'You might say that China is a very different country in the way it deals with history,' said one young woman. 'But you must understand, foreigners have much more information than we do. There's no real freedom to discuss these kinds of things here.'

Subject: Labor Standards in Central America From: Emma To: All Date Posted: Fri, Jul 01, 2005 at 14:33:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/01/business/worldbusiness/01labor.html Report Criticizes Labor Standards in Central America By JUAN FORERO BOGOTÁ, Colombia - As the White House lobbied Congress to win support for a Central American trade pact, the United States Labor Department tried for more than a year to block the release of reports that harshly criticized labor standards in the region. The reports, by a labor advocacy group, the International Labor Rights Fund, were commissioned by the Labor Department, and concluded that working conditions in five Central American nations and the Dominican Republic were dismal, and that enforcement of labor laws was weak. In a statement Thursday, the Labor Department called the findings biased and flawed. Dirk Fillpot, a spokesman for the department's Bureau of International Labor Affairs, said the study was 'rife with unsubstantiated and unverifiable claims, questionable statistical data, and biased statements of findings and conclusions.' The Labor Department's condemnation drew a quick rebuke from Senator Byron L. Dorgan, a North Dakota Democrat. 'The reports describe labor conditions that would be harmful, not helpful, for passage of Cafta,' he said, referring to the Central American Free Trade Agreement. 'So they decided to deep-six it.' The Associated Press first reported the developments Wednesday. The Senate voted to approve the trade pact on Thursday. Representative Sander Levin, a Michigan Democrat, said the Labor Department should have permitted lawmakers to review the reports and make up their own minds. The Labor Rights Fund concluded in nearly 400 pages that while there were some adequate labor laws in Central America, there were systematic barriers to enforcing those laws. Recordkeeping is shoddy, giving workers little chance to make claims against employers, the reports said, and sanctions for violations are weak. The fund also found problems ranging from discrimination against labor organizers to inadequate measures against child labor. El Salvador, for instance, the study found that it was not uncommon for foreign companies to close shop and leave without paying workers. The study also noted a failure to maintain safety, citing two accidents at a textile plant in 2002 in which 560 workers were overcome by fumes in chlorine spills. The ensuing investigations were shoddy, the study found. Though the Labor Rights Fund has been critical of labor standards in developing countries, the Labor Department nonetheless chose it to conduct the studies. The contract was worth $937,000. 'We transparently and in good faith put in a proposal,' said Bama Athreya, deputy director of the Labor Rights Fund. But after the reports were submitted in early 2004, the Labor Department held them in secrecy, preventing their release to Congress and forbidding the fund to publish them, Mr. Levin, the Michigan representative, said. Mr. Levin repeatedly requested that the reports be released, and the Labor Department released them in April. A central argument in the reports - that enforcement of labor standards in Central America is often nonexistent - is an important point of contention. Opponents of Cafta say the United States should not trade with countries where worker rights are violated, while supporters say Cafta will help put teeth into enforcement efforts.

Subject: Amending Duration From: Terri To: All Date Posted: Fri, Jul 01, 2005 at 13:56:59 (EDT) Email Address: Not Provided Message: There is an addition to the duration discussion that I had missed. Though I noticed that the Vanguard GNMA Bond Fund has duration swings, I had not considered the swings significant. But, they are significant. GNMA duration will fall as mortgage rates fall and rise as rates rise. So, a 2 year duration with a rise in mortgage rates could be a 4 year duration. People tend to refinance when rates fall and pay mortgages for the full term when rates rise. This is the reason for the extra yield of GNMA bonds which are government insured.

Subject: Germany Looks Forward to World Cup From: Emma To: All Date Posted: Fri, Jul 01, 2005 at 13:44:15 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/01/business/worldbusiness/01soccer.html Germany Looks Forward to World Cup and Fans' Money By MARK LANDLER FRANKFURT - There was drama both on and off the soccer field here Wednesday night as Brazil trounced Argentina, 4 to 1, in the final game of the Confederations Cup, a warm-up for the World Cup. Moments after the match began, a sudden thunderstorm dropped heavy rain on Frankfurt's newly completed stadium, tearing a hole in its retractable roof and showering the grass with water. It was a rare glitch in an otherwise smooth tournament, and Germans did not let it temper their excitement for the World Cup, which is to be played here next summer. Germany is well ahead of schedule in its preparations, prompting economists to forecast that the tournament, the world's largest sporting event, will deliver an invigorating kick to one of Europe's most torpid economies. With one million foreign tourists and two million Germans expected at the games, the World Cup could generate 4 billion euros ($4.8 billion) in additional consumer spending in 2006, according to economists. That would be good news for hotels, restaurants, shops, airlines and taxis - which have all struggled in recent years as Germans have reduced their consumption. 'The spending comes at the right time,' said Marco Bargel, the chief economist of Deutsche Postbank, one of Germany's leading retail banks. 'Unlike with the Olympics, where it is highly concentrated, the impact will be felt all over the country.' Germany is investing about 6 billion euros ($7.2 billion) to build or refurbish 12 stadiums in Berlin, Munich and other cities, as well as fixing roads, train stations and other transportation links. Among the showcase projects is an ultramodern train station in Berlin, just north of the German Parliament and Chancellery. Munich's new stadium - with its futuristic translucent roof that looks like a quilted eggshell - has won lavish praise from architecture critics. All told, the $12 billion in World Cup-related spending could raise the growth of Germany's gross domestic product by three-tenths of a percentage point next year, according to Mr. Bargel. That is significant in an economy that grows at barely 1 percent a year. It is also projected to create more than 30,000 jobs. Then there is the potential impact of a successful tournament on the mood of German consumers. While that is notoriously difficult to measure, some economists say that a good World Cup - especially one in which the German team plays well - could be a tonic for the country. 'It's a way to say to the German people, 'You're not as badly off as you think you are,' ' said Markus Kurscheidt, an expert in sports economics at Ruhr University in Bochum. 'If that happens, and consumer sentiment rises, then the World Cup could have a major impact.' France, he said, benefited from an economic afterglow in 1998, when it played host to, and won, the World Cup. Such intangible factors aside, Mr. Kurscheidt is skeptical of grand claims about the long-term benefits of these events. The Dentsu Institute in Japan forecast that the 2002 World Cup tournament, which was split between Japan and South Korea, would generate $25 billion in cumulative economic benefits over time. The real figure, he said, is probably a fraction of that. Mammoth sporting events also have a way of saddling their organizers with debt. Greece is struggling with a persistent state deficit, thanks in part to the huge cost overruns of the Athens Olympics. German cities like Leipzig may also end up with a hangover. Leipzig spent $100 million on a new stadium, but does not have a big-league soccer club to use the arena afterward. Berlin's 1930's-era Olympic Stadium was overhauled for close to $300 million, a sum the state will almost certainly not recoup. For all the excitement, German companies have been slow to attach their names to the World Cup. There are only 3 of them among the 15 major sponsors: Adidas-Salomon, the athletic-shoe maker with longstanding ties to soccer; Deutsche Telekom; and Continental, a tire manufacturer. Frankfurt's arena has been plastered with billboards for Emirates, the carrier in Dubai that is the official airline of the World Cup, and Hyundai of Korea, the official car. Anheuser-Busch of St. Louis has claimed the beer concession, rankling many in this beer-loving country. Germans also complain that they have not been able to buy tickets for the games; more than half of the three million tickets have been put aside by FIFA, soccer's governing body, for sponsors. Still, the postgame mood in Frankfurt was upbeat. Anheuser-Busch handed out bottles of 'Bud' - not using its full name, Budweiser, because of a trademark dispute with another Budweiser beer, made in the Czech Republic. The fans were even philosophical about the leaky roof. 'I don't mean to sound Panglossian,' said one, Thomas Schwingeler, referring to the foolishly optimistic Dr. Pangloss in Voltaire's 'Candide.' 'But I'm glad it happened today and not next year, when the world will be watching.'

Subject: Follow the Leapin' Leprechaun From: Emma To: All Date Posted: Fri, Jul 01, 2005 at 13:29:32 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/01/opinion/01friedman.html Follow the Leapin' Leprechaun By THOMAS L. FRIEDMAN Dublin There is a huge debate roiling in Europe today over which economic model to follow: the Franco-German shorter-workweek-six-weeks'-vacation-never-fire-anyone-but-high-unemployment social model or the less protected but more innovative, high-employment Anglo-Saxon model preferred by Britain, Ireland and Eastern Europe. It is obvious to me that the Irish-British model is the way of the future, and the only question is when Germany and France will face reality: either they become Ireland or they become museums. That is their real choice over the next few years - it's either the leprechaun way or the Louvre. Because I am convinced of that, I am also convinced that the German and French political systems will experience real shocks in the coming years as both nations are asked to work harder and embrace either more outsourcing or more young Muslim and Eastern European immigrants to remain competitive. As an Irish public relations executive in Dublin remarked to me: 'How would you like to be the French leader who tells the French people they have to follow Ireland?' Or even worse, Tony Blair! Just how ugly things could get was demonstrated the other day when Mr. Blair told his E.U. colleagues at the European Parliament that they had to modernize or perish. 'Pro-Chirac French [parliamentarians] skulked at the back of the hall,' The Times of London reported. But Jean Quatremer, the veteran Brussels correspondent for the French left-wing newspaper Libération, was quoted by The Times as saying: 'For a long time we have been talking about the French social model, as opposed to the horrible Anglo-Saxon model, but we now see that it is our model that is a horror.' Given that Ireland received more foreign direct investment from the U.S. in 2003 than China received from the U.S., the Germans and French may want to take a few tips from the Celtic Tiger. One of the first reforms Ireland instituted was to make it easier to fire people, without having to pay years of severance. Sounds brutal, I know. But the easier it is to fire people, the more willing companies are to hire people. Harry Kraemer Jr., the former C.E.O. of Baxter International, a medical equipment maker that has made several investments in Ireland, explained that 'the energy level, the work ethic, the tax optimization and the flexibility of the labor supply' all made Ireland infinitely more attractive to invest in than France or Germany, where it was enormously costly to let go even one worker. The Irish, he added, had the self-confidence that if they kept their labor laws flexible some jobs would go, but new jobs would keep coming - and that is exactly what has happened. Ireland is 'playing offense,' Mr. Kraemer said, while Germany and France are 'playing defense,' and the more they try to protect every old job, the fewer new ones they attract. But Ireland has started to play offense in a lot of other ways as well. It initially focused on attracting investments from U.S. high-tech companies by offering them a flexible, educated work force and low corporate taxes. But now, explained Ireland's minister of education, Mary Hanafin, the country has started a campaign to double the number of Ph.D.'s it graduates in science and engineering by 2010, and it has set up various funds to get global companies, and just brainy people, to come to Ireland to do research. Ireland is now actively recruiting Chinese scientists in particular. 'It is good for our own quality students to be mixing with quality students from abroad,' Ms. Hanafin said. 'Industry will go where the major research goes.' The goal, added the minister for enterprise and trade, Micheal Martin, is to generate more homegrown Irish companies and not just work for others. His ministry recently set up an Enterprise Ireland fund to identify 'high-potential Irish start-up companies and give them mentoring and support,' and to also nurture mid-size Irish companies into multinationals. And by the way, because of all the tax revenue and employment the global companies are generating in Ireland, Dublin has been able to increase spending on health care, schools and infrastructure. 'You can only do this if you have the income to do it,' Deputy Prime Minister Mary Harney said. 'You can't have social inclusion without economic success. ... This is how you create the real social Europe.' Germany and France are trying to protect their welfare capitalism with defense. Ireland is generating its own sustainable model of social capitalism by playing offense. I'll bet on the offense.

Subject: Foreign Suitors Nothing New in U.S. Oil From: Emma To: All Date Posted: Fri, Jul 01, 2005 at 10:31:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/01/business/worldbusiness/01unocal.html?pagewanted=all Foreign Suitors Nothing New in U.S. Oil Patch By ALEXEI BARRIONUEVO Members of Congress opposed to a Chinese bid to take over the California-based energy company Unocal built broader support yesterday for their campaign to block the deal on the ground that it could threaten national and energy security in the United States. But China is not the first foreign country to seek American energy assets. Indeed, oil industry analysts say that the effort by the China National Offshore Oil Corporation to outbid Chevron for Unocal appears to pose less risk of generating domestic shortages or other energy-security headaches than other foreign acquisitions that have been approved by the government. For more than two decades, the United States has not blocked acquisitions of energy properties by Saudi Arabia, Venezuela, Russia, France, Norway and Brazil, among others. Some of those deals, particularly Venezuela's purchase of Citgo, involve access to oil supplies vulnerable to disruption because they feed refineries and thousands of American gasoline stations. By contrast, Unocal has few strategic oil assets in the United States. The company, based in El Segundo, Calif., does not have refineries or gasoline stations, having sold them eight years ago. In fact, the real prizes - more than half of Unocal's production and reserves - that Chevron and the Chinese are after lie in Asia, particularly in Indonesia and Thailand. 'The assets involved in the Unocal transaction are not of the scale or geographic location to make them of critical importance to U.S. energy security,' said Amy Myers Jaffe, an energy fellow at the James A. Baker III Institute for Public Policy in Houston. 'Many of the important Unocal assets are actually located in Asia, and the energy produced there would never flow to the United States.' Still, the bid has prompted strong debate in Washington. Yesterday, Representative Carolyn Cheeks Kilpatrick, a Democrat of Michigan, won House passage of her amendment to the annual appropriations bill prohibiting the Treasury Department from recommending the sale of Unocal to Cnooc. And last night, the House approved, by a vote of 398 to 15, a resolution stating that Chinese ownership of Unocal would 'threaten to impair the national security of the United States' and that approval by Unocal's board of the bid should result in a 'thorough review' by President Bush. The resolution was presented by Representative Richard W. Pombo, Republican of California, whose district includes Unocal's headquarters. In his resolution, Mr. Pombo cited concerns about oil exploration technologies that have 'dual use' in commercial and military applications. 'We cannot afford to have a major U.S. energy supplier controlled by the Communist Chinese,' Mr. Pombo said on the House floor. 'If we allow this sale to go forward we are taking a huge risk.' But Representative Jim Moran, a Virginia Republican, said blocking the Chinese bid was a dangerous move. 'They are holding a financial guillotine over the neck of our economy, and they will drop that if we do things like this that are not well considered,' Mr. Moran said on the House floor. 'If we don't let them invest in western firms, what are they going to do? They are going to invest in Iran or Sudan and make those governments much stronger than they are today.' Earlier this week, 41 members of Congress signed a letter to President Bush expressing their concern about the Cnooc bid. The Congressional debate so far seems to neglect the fact that only one-third of Unocal's production and one-quarter of its reserves are in the United States. And its combined oil and natural gas production is only 1 percent of total United States consumption of the two fuels. It has modest production in Texas and Alaska and is involved in costly and tough-to-develop oil projects in the Gulf of Mexico. Foreign companies in the United States, however, currently own 28 percent of American refining capacity, up from 15 percent in 1983, according to the Energy Information Administration, a part of the Energy Department. Nearly 14 percent of American crude oil was produced by foreign companies in 2003, up from 13 percent 20 years ago. Foreign firms doubled their share of natural gas production in that period, to 12 percent, the Energy Department said. United States securities regulators on Wednesday gave final clearance to Chevron's offer, leaving Cnooc just six weeks to convince Unocal's board that its own bid for Unocal is superior. Chevron says it will move to call a shareholder vote in August. Peter J. Robertson, Chevron's vice chairman, said in an interview last week that Chevron believed that Cnooc might 'strategically focus' Unocal's oil and natural gas assets toward China, potentially restricting supply to the rest of Asia. Since oil prices are determined by global supply and demand, China's acute needs could affect prices everywhere. But analysts say any lost Unocal production would be too small to shift prices much - or cause any global oil shock. Unocal's production and reserves in the United States could not be easily redirected. For decades the United States government has restricted exports of crude oil from the 48 continental states, since the United States must import well over half of its oil from abroad. Then, from 1973 to 1995, it restricted exports of Alaskan crude oil. Declining production on the North Slope of Alaska and a public outcry against exporting any American oil have discouraged oil companies, including the British giant BP, from sending much Alaskan crude abroad since then, Energy Department officials said. Some of those opposed to a Cnooc deal, including executives at Chevron, have said China should be prevented from buying the American company because the Chinese do not 'play fair' on oil deals and because the Chinese government is backing Cnooc's bid with low-interest loans. 'You don't enter China unless it is on terms favorable to the Chinese,' said Robin West, chairman of PFC Energy, an energy consultancy in Washington. 'Chinese companies are clearly advantaged.' While potential for oil in China is not on the world scale of countries in the Middle East or around the Caspian Sea, several companies, including Chevron, have been operating in China for many years. According to BizChina, a Chinese newspaper, China's oil industry has attracted more than $7 billion in foreign investments since 1982. Indeed, Chevron is a partner with the Chinese in two medium-size deals with Cnooc. Buying a majority stake in a Chinese company, however, would be difficult, if not impossible. While no major oil company has tried, Cnooc is 70 percent owned by the Chinese government, which has shown no interest in selling. Some of the United States' long-time energy partners have more restrictive access to their markets than China does. Mexico's state-owned oil company, Petróleos de Mexico, or Pemex, does not allow outside foreign investment in Mexico's oil sector. Despite that, Shell Oil's American subsidiary was allowed to sell 50 percent of its 215,900-barrel-a-day refinery in Deer Park, Tex., to Pemex in 1993. Shell still operates the facility with Mexican involvement. One of the most delicate links in the energy chain right now are the refineries. A fire, accident or government decision to restrict supply to an American-based refinery could affect gasoline or other fuel prices fairly quickly. One of the biggest foreign owners of refining assets is Petróleos de Venezuela, the state oil company of Venezuela, which acquired the American oil company Citgo in the 1980's. Today it owns six American refineries and sells gasoline at more than 13,000 gasoline stations, making it the fourth-largest supplier of gasoline in the United States. Since early last century, Venezuela had been one of the United States' most reliable energy suppliers, though those ties have frayed since Hugo Chávez was elected president of Venezuela in 1998. Mr. Chávez's anti-American politics and close ties to the Cuban leader Fidel Castro have irked the Bush administration, and Mr. Chávez has been steadily making investment terms worse in Venezuela for foreign companies. Three years ago, oil workers staged a strike trying to force Mr. Chávez from office. Citgo struggled for several weeks to obtain the crude oil it needed from Venezuela to feed its American refineries. Creditors lowered Citgo's credit ratings, creating a cash squeeze for the company. The uncertainty contributed to soaring gasoline prices, which rose 37 cents a gallon in the United States during the three-month strike, according to government figures. 'When it comes to national security, exploration and production assets are immaterial compared to refining assets,' said Fadel Gheit, an oil analyst with Oppenheimer & Company, a brokerage firm that recommends both Unocal and Chevron stock, which Mr. Gheit also owns in his account. 'If anything happened to refining capacity anywhere, the impact would be global and almost immediate.' The reason is that refining capacity is tight, especially in the United States, which does not have enough capacity to meet domestic gasoline demand and has no plans to build any large new plants despite increasing gasoline demand. Saudi Refining, a unit of Saudi Arabia's state-owned oil company, formed a 50-50 joint venture in 1988 with three Texaco refineries called Star Enterprises, later renamed Motiva Enterprises. Today, the Saudis still control half of the venture, which includes Texaco gasoline stations in the Eastern United States. Despite restrictions on foreign investment at home, the Russian company Lukoil bought Getty Petroleum Marketing's 1,300 gasoline stations in 2000 on the East Coast, including some in the New York area. Lukoil executives have said that Lukoil might eventually buy an American oil refinery.

Subject: Re: Foreign Suitors Nothing New in U.S. Oil From: P Krugman To: Emma Date Posted: Fri, Jul 01, 2005 at 12:17:05 (EDT) Email Address: krugman@nytimes.com Message: Just because you read it in the NYT does not, repeat, NOT, make it true.

Subject: Conventional Wisdom Not Always Right From: Emma To: All Date Posted: Fri, Jul 01, 2005 at 10:22:21 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/07/01/business/01norris.html Conventional Wisdom Not Always Right By Floyd Norris WITH the year half over, the world's financial markets appear to be well on the way to demonstrating a great investment truth: When virtually everyone expects something to happen, it won't. This year's conventional wisdom concerned the dollar. It would fall under the weight of fiscal irresponsibility and rising trade deficits. So where are we now? The dollar is up against every major currency in 2005. At the end of 2003, the sure bet was supposed to be that long-term interest rates would rise in 2004. They did not, and this year they are down in Japan and Europe as well as the United States. Alas, successful investing is not as easy as taking a poll and then betting against the majority. It may turn out that both the interest rate and currency forecasts were just premature, not wrong. Still, with that kind of record, it is worth asking what is the current conventional wisdom. There are, I think, two main parts. But in this case, they may be mutually exclusive. The question may be which will prove false first. The first area of growing consensus among the chattering class is that there is a housing bubble in the United States, or at least in many areas, and that it is going to burst. Even the bulls see signs of excess. Robert Toll, the chief executive of Toll Brothers, a home builder, says 'the speculating investor will be blown away from the market and then we'll continue on the trend' of steadily rising home prices. The second area of consensus is that China is a growth engine that is on its way to dominating the world in virtually everything as this becomes the Chinese century. China's success these days is intimately tied to the American housing boom. It takes in dollars from selling stuff cheap, and recycles them into Treasuries, holding down interest rates and stimulating American consumption, which gives China more dollars to invest. It is quite true that house prices are higher relative to income than they used to be, but it is not clear what will change that. If China stays strong, the housing bubble may get bigger. On the other hand, if the bubble bursts, that could damage the American economy and slow growth in China. The odds may be that little will change for some time to come. China will keep growing and will keep its currency pegged to the dollar, despite pressure from Washington. If so, those who think the American housing market is about to tumble may look as foolish a year from now as the dollar bears look now. Just because something is overpriced does not mean it will correct anytime soon.

Subject: Re: Conventional Wisdom Not Always Right From: j9 To: Emma Date Posted: Fri, Jul 01, 2005 at 22:40:34 (EDT) Email Address: Not Provided Message: And just because there is a cyclical bull, it does not mean we are out of a secular bear. I think the fundamentals are weak and must correct sometime. The only question is when and how much. The only protection is diversification, and even that may not help much.

Subject: Re: Conventional Wisdom Not Always Right From: Emma To: j9 Date Posted: Sat, Jul 02, 2005 at 13:33:57 (EDT) Email Address: Not Provided Message: I keep all of the notes I find here on Vanguard bond funds in mind, for these funds can be quite valuable diversifiers.

Subject: Chapters 6 and 7... From: Yann To: All Date Posted: Fri, Jul 01, 2005 at 04:12:03 (EDT) Email Address: Not Provided Message: by Krugman and Wells (macroeconomics textbook) are available at http://www.worthpublishers.com/krugmanwellsnew/pdf/KRUGMAN_WELLS_MACRO_CHAPTER06.pdf and http://www.worthpublishers.com/krugmanwellsnew/pdf/KRUGMAN_WELLS_MACRO_CHAPTER07.pdf Don't find them in the 'Economic theory' section...

Subject: Re: Chapters 6 and 7... From: Bobby To: Yann Date Posted: Fri, Jul 01, 2005 at 13:01:52 (EDT) Email Address: robert@pkarchive.org Message: Thanks, Yann!

Subject: Arithmetic of Mutual Fund Investing From: Terri To: All Date Posted: Thurs, Jun 30, 2005 at 21:54:24 (EDT) Email Address: Not Provided Message: http://www.vanguard.com/bogle_site/sp20050524.htm Indeed, this is a fine speech by John Bogle and well worth reading and I will read it again this evening. I can never imagine being let down by Bogle's wisodm in investing, and I agree with him completely on the insulating effect of bond funds on a portfolio in the worst of times. These days I hear people mention using CDs, but have no idea why. Understand how to use constant duration bond funds and there will never be a reason for a CD. It is fine to be cautious in investing, but we need to be sensible, and as I am forever telling friends knowing bond funds is what caution can be about.

Subject: Sector Investing From: Johnny5 To: Terri Date Posted: Fri, Jul 01, 2005 at 07:40:53 (EDT) Email Address: johnny5@yahoo.com Message: Utilities and Energy have the best gains of the vangaurd funds YTD - will these sectors have the momentum to carry them through the next 6 months Terri? Or are you eyeing other sectors for these next 6 months? AS always I have my core in XOM which tracks vangaurd energy VDE almost perfectly.

Subject: Re: Sector Investing From: Terri To: Johnny5 Date Posted: Fri, Jul 01, 2005 at 17:25:04 (EDT) Email Address: Not Provided Message: Traders, especially those who work in teams, are only concerned with sector and market movement and try to follow as they can. Investors who do not trade, or do not index only, have little other choice than to ask where there is relative value and buy there. Who can possibly know whether energy or utility indexes will be strong these 6 months? But, we can ask are they decent relative values? Health care? Finance?

Subject: Buffet looking to buy utilities From: Johnny5 To: Terri Date Posted: Fri, Jul 01, 2005 at 19:12:39 (EDT) Email Address: johnny5@yahoo.com Message: Thanks so much dear sweet Terri. Buffet who is down this year on betting against the dollar but I believe still up long term since he shorted in 2002 has said he will be buying utilities and energy - so he must see value there. VPU is vangaurds utility index and VDE their energy one. Buffet did buy cable companies and I see recently that monopoly type power has been extended through legal means care of the recent supreme court decision on cable companies - however: http://www.usnews.com/usnews/biztech/articles/050701/01commerce.htm Arnold Kling, former economist at the Federal Reserve and Freddie Mac, coauthor of the EconLog blog: 'The cable TV decision does not change my view of the technology, which is that the last-mile fight is going to be won by wireless. I don't know of any Vanguard ETF that tracks wireless - do you? Yes indeed no one can predict the timing of when things will move, so to rephrase my question - what sectors do you see as the most undervalued? Utility like Buffet? As always I am long XOM.

Subject: Re: Buffet looking to buy utilities From: Terri To: Johnny5 Date Posted: Fri, Jul 01, 2005 at 21:46:01 (EDT) Email Address: Not Provided Message: Interesting. Vanguard has only an Information Technology fund. Wireless to my understanding will generally be controlled by the telephone companies, largely Verizon. But, I will read and ask. I am thinking for a while.

Subject: Re: Buffet looking to buy utilities From: Terri To: Terri Date Posted: Fri, Jul 01, 2005 at 21:52:11 (EDT) Email Address: Not Provided Message: Oh, of course, there is a Telecommunications fund.

Subject: Vanguard Returns From: Terri To: All Date Posted: Thurs, Jun 30, 2005 at 18:23:05 (EDT) Email Address: Not Provided Message: http://flagship5.vanguard.com/VGApp/hnw/FundsByName Vanguard Returns 12/31/04 to 6/30/05 S&P Index is -0.9 Large Cap Growth Index is -1.5 Large Cap Value Index is 1.3 Mid Cap Index is 4.0 Small Cap Index is 0.9 Small Cap Value Index is 1.7 Europe Index is -0.7 Pacific Index is -3.4 Energy is 22.7 Health Care is 5.4 Precious Metals 5.6 REIT Index is 6.2 High Yield Corporate Bond Fund is 0.8 Long Term Corporate Bond Fund is 7.7

Subject: Sector Stock Index Returns From: Terri To: Terri Date Posted: Thurs, Jun 30, 2005 at 18:27:24 (EDT) Email Address: Not Provided Message: http://flagship2.vanguard.com/VGApp/hnw/FundsVIPERByName Sector Indexes 12/31/04 - 6/30/05 Energy 21.7 Financials -1.6 Health Care 4.2 Info Tech -5.8 Materials -7.5 REITs 6.3 Telecoms -2.1 Utilities 14.2

Subject: India and China From: Terri To: All Date Posted: Thurs, Jun 30, 2005 at 17:42:28 (EDT) Email Address: Not Provided Message: Should we question the stability of growth in China, we have a fine check in India. Both economies are growing similarly, with China somewhat fater becasue there is a better infrastructure base in China. Right now India is robust which might give us confidence about China.

Subject: 'If only....' From: Pete Weis To: All Date Posted: Thurs, Jun 30, 2005 at 15:39:23 (EDT) Email Address: Not Provided Message: If only ... By Tom Engelhardt The price of a barrel of crude oil has broken the $60 mark; a Chinese state-controlled oil company has made an $18.5 billion bid for American oil firm Unocal - the company that fought to put a projected $1.9 billion natural gas pipeline through Taliban Afghanistan and hired as its consultant Zalmay Khalilzad, the outgoing Afghan ambassador and soon to be envoy to Iraq; world energy consumption, according to last week's British Financial Times, surged 4.3% last year (the biggest rise since 1984), oil use by 3.4% (the biggest rise since 1978). In the meantime, Exxon - which just had the impudence to hire Philip Cooney after he was accused of doctoring government reports on climate change and resigned as chief of staff of the White House Council on Environmental Quality ('The cynical way to look at this,' commented Kert Davies, US research director for Greenpeace, 'is that ExxonMobil has removed its sleeper cell from the White House and extracted him back to the mother ship.') - has quietly issued a report, The Outlook for Energy: A 2030 View, predicting that the moment of 'peak oil' is only a five-year hop-skip-and-a-pump away; 'Oil Shockwave,' a 'war game' recently conducted by top ex-government officials in Washington, including two former directors of the Central Intelligence Agency, found the US 'all but powerless to protect the American economy in the face of a catastrophic disruption of oil markets', which was all too easy for them to imagine ('The participants concluded almost unanimously they must press the president to invest quickly in promising technologies to reduce dependence on overseas oil ...'); and oil tycoon Boone Pickens, chairman of the billion-dollar hedge fund BP Capital Management, is having the time of his life. Over the past five years, he claims, his bet that oil prices would rise has 'made him more money ... than he earned in the preceding half century hunting for riches in petroleum deposits and companies', and he is predicting that prices will only go higher with much more 'pain at the pump'. Ah, the good life. And if you don't quite recognize the new look of this fast-shifting energy landscape, then how are you going to feel if the Age of Petroleum turns out to be drawing - more rapidly than most people imagine - to a close? Imagine where we might be today, energy-wise, if Americans - and American legislators - had taken then-president Jimmy Carter's famed 1979 'moral equivalent of war' speech on energy conservation seriously, but rejected his Carter Doctrine and the Rapid Deployment Joint Task Force that went with it - both of which set us on our present path to war(s) in the Middle East. Here's part of what Carter said to the American people on television that long-ago night: 'Beginning this moment, this nation will never use more foreign oil than we did in 1977 - never. From now on, every new addition to our demand for energy will be met from our own production and our own conservation. 'The generation-long growth in our dependence on foreign oil will be stopped dead in its tracks right now and then reversed as we move through the 1980s, for I am tonight setting the further goal of cutting our dependence on foreign oil by one-half by the end of the next decade - a saving of over 4-1/2 million barrels of imported oil per day ... To give us energy security, I am asking for the most massive peacetime commitment of funds and resources in our nation's history to develop America's own alternative sources of fuel - from coal, from oil shale, from plant products for gasohol, from unconventional gas, from the sun ... I'm proposing a bold conservation program to involve every state, county, and city and every average American in our energy battle. 'This effort will permit you to build conservation into your homes and your lives at a cost you can afford ...' Well, it never happened. Tom Engelhardt is editor of Tomdispatch and the author of The End of Victory Cultur

Subject: Noticing Britain From: Terri To: All Date Posted: Thurs, Jun 30, 2005 at 14:27:42 (EDT) Email Address: Not Provided Message: The country of most interest to me at this time is Britain, for the British economy is slowing as housing has slowed. Britain is lowering short term interest rates and we will find if that supports demand. I am optimistic. Also, we should not the British stock market is up 8.0% in Pounds and 1.5% in dollars. I believe our asset values will selectively hold even if the economy begins to slow convincingly, but right now we are growing nicely. The sense I have is that value stocks and bonds will hold if an American growth slowdown.

Subject: Bergy Bits in the Fog From: Pete Weis To: All Date Posted: Thurs, Jun 30, 2005 at 12:21:20 (EDT) Email Address: Not Provided Message: Found at: http://www.rismedia.com/index.php/article/articleprint/10818/-1/1/ Global Analysis: The Trouble with Bubbles is that the Economy Suffers When They Pop Publishing date: 06/29/05 By Allister Heath The Business, London RISMEDIA, June 29 – (KRT) – Even in America, a country where every man and his dog seem to have caught the property bug and become part-time real estate speculators, paying $90m (Ł49.5m, E73.8m) for a modest three-bedroom farmhouse seems a little over the top. But that is exactly what a wealthy industrialist is believed to have done last week, setting a new record for an American home. Admittedly, also included in the price is a two-bedroom caretaker's house, two guest houses, a fully stocked man-made pond and a lap pool, and a 40-acre estate right in the middle of the Hamptons with ocean views, but it is still an astonishingly steep price for a house. It is not surprising, therefore, that a growing number of economists are convinced that many large cities in the US are in the midst of an irrational property bubble of which last week's transaction was just the most egregious example. They fear that the entire global economy could grind to a halt if and when it finally bursts. Charles Kindleberger, of the Massachusetts Institute of Technology, author of Manias, Panics, and Crashes: A History of Financial Crises, defined a financial bubble as a series of price increases that are so large as to make an asset loose all relationship to fundamentals before ultimately suffering a price implosion. That is a description which seems all too appropriate for the property markets of many of America's big cities, as well as of many other European, Asian and Latin American markets; British and Australian homeowners, whose bubble is at a more advanced stage, are praying that the dreaded implosion doesn't materialise. The ever-louder warning would be ominous enough if housing were the only sector where prices have soared ahead of fundamentals. But in an important report out this weekend, Bear Stearns is warning that China, hedge funds and nanotechnology are three other areas which are already or may soon succumb to bubbleonomics and where a meltdown is likely to occur. What is most surprising about this is that it comes barely five years after the collapse of the previous bubble, that of internet stocks, and after investors and commentators promised themselves never again to fall for overvalued, faddish assets. Investors with short memories should recall what happened to TheStreet.com share index, an equally weighted index of 20 active internet stocks. The index was set at 200 on its founding on September 30, 1998. It rose to 1350.16 on March 10, 2000 before plunging to 121.74 on May 31, 2002 and even lower subsequently. Jeremy Siegel, a professor at Wharton, calculates that there was a nearly seven fold rise followed by a greater than 90 percent fall in the index; that the market value of these stocks exceeded $1 trillion at the market high; and that over this time period, seven of the 20 stocks fell more than 99 percent from their peak price. And as the box below explains, there have been plenty of similar bubbles in history, from tulips in the 17th century to the shares of bowling companies in the 19th. 'Five years ago, it was the equity bubble. Today, it's the property bubble. For America, these are not isolated events. As night follows day, one bubble has spawned the next -- with profound implications for the US economy and financial markets', says Stephen Roach, chief economist at Morgan Stanley. One central reason for the US property bubble is that Alan Greenspan, chairman of the Federal Reserve, was desperate to cushion the blow from the fallout of the previous, dot.com bubble and to prevent a Japanese-style deflation. The Fed slashed interest rates by 5.5 points and ensured that the real federal funds was lower than inflation for three years, between 2002 and 2004, allowing over-leveraged individuals and companies to mend their balance sheets by remortgaging; even today, under some measures, real interest rates are little different from zero, even though they have gradually increased from 1 percent to 3 percent today and are likely to rise again on Thursday. With the cost of borrowing overnight almost free in real terms, investors were able to buy longer-term bonds, which pay higher yields, and make huge amounts of money. The result was an artificially high demand for fixed income securities, a bubble in the bond market and long-term interest rates that have remained far too low (yields and bond prices are inversely related). It also spawned a massive remortgaging binge and a surge in the demand for property, triggering yet another bubble, as well as a huge increase in debt. The problem now, says Roach, is that the consequences of normalising interest rates become more and more severe as the property bubble gets ever worse. The resulting moral hazard dilemma -- the assumption that the Fed will not dare hike rates too high because of the dire consequences that would result -- reinforces the belief that low interest rates are here to stay, further fuelling the bubble until a random event triggers an implosion. This analysis of the domestic causes of the US bubble is reinforced by Bear Stearns this weekend by its London economists David Brown and Steve Barrow, who emphasise Asia's role. 'There has been a wall of money piling into assets such as real estate, fixed income and commodities. The link between the downward pressure on the dollar, fast reserve growth in Asia and asset price inflation is a pretty irresistible one', they argue. The dollar has recovered against many western currencies but remains under pressure against the renminbi, which is hugely under-valued in its 8.28 to the greenback peg. As long as pressure of an imminent revaluation remains, and that Asian countries want to prevent the dollar from falling again, local central banks will continue buying greenbacks and accumulating ever larger stocks of foreign exchange reserves. Because these reserves are then either recycled directly into government bonds, which pushes down long-term interest rates and hence fuels mortgage lending; or deposited with banks, who then lend to hedge funds, the end result is once again higher asset prices. Part of the problem, Bear Stearns believes, is that traditional loan demand has remained depressed, in Europe and Japan because of weak growth and in the US because firms have been busy rebuilding balance sheets -- with the exception of housing-related loans. Much bank lending has gone instead to hedge funds, many of which are based in the Caribbean, helping to inflate prices of government bonds, corporate credit and commodities. 'Ironically, some policymakers, especially in Europe, blame the hedge funds for inflating the bubbles, but it is excessive liquidity driven by central banks that is really to blame', Bear Stearns argues. Francois Trahan, Kurt Walters and Caroline Portny, also of Bear Stearns, argue that the typical bubble follows a standard pattern. The first phase is characterised by ample financial liquidity with the amount of money in circulation reaching a peak three years before the speculative peak. The excess liquidity boosts consumer and business spending and hence economic growth, as well as personal wealth. Usually, price pressures start to build at this stage, though some argue that globalisation means that modern inflation tends to be visible more in asset markets or commodities, rather than consumer prices, at least as long as it remains relatively modest. All of this is accompanied by a bull market. Short-term interest rates (such as those on commercial paper) tend to hit their cycle lows about 10 months before the start of recession before starting an upwards march. The first sign that things are going sour is a widening of yield spreads, with the rates payable on riskier bonds rising relative to the safer ones, signaling that investors' tolerance for risk is waning. At the same time, liquidity is squeezed by a flattening of the yield curve as the difference between short-term and long-term rates narrows. Wholesale price rises typically peak a few months past the start of the bubble-induced recession. The subsequent pattern is deflation as wholesale prices fall; for the first few months after the start of the recession, short-term interest rates continue to increase before they eventually plummet. About a month or two before the start of the recession, business activity starts to slow; eventually, this slowdown turns into a sharp drop. There are four different types of bubble depending on the assets involved, according to Trahan, Walters and Portny: life-changing innovations (such as railways or the internet); scarcity-driven (such as tulips or rare commodities); theme-driven (at various times junk bonds, conglomerates or property); and government-caused (such as the South Sea Bubble monopoly). Of course, bubbles tend to be triggered by excess liquidity, which is always the fault of the monetary authorities. There are strong similarities between US-Chinese trade and the dot.com explosion of the last 1990s. 'If you think of China as a corporation, the current operating environment bears an eerie resemblance to that which surrounded many technology and telecommunications companies during the US technology bubble of the late 1990s', the Bear Stearns economists say. Dot.com companies emerged from nowhere, booking huge revenues by selling products to businesses on credit and enjoying a huge rise in profits, net worth and share prices. This induced financial institutions and the markets to provide funding to the dot.coms, allowing them to continue to offer their customers the means to buy even more on credit. Eventually, people began to notice that the smaller companies at the end of the chain would never make any money, and hence that the sums they owed the dot.com giants would never be paid back. The dot.com giants began to see their customers fail; they were soon faced with an avalanche of defaults, forcing them to take massive write-offs; those stupid enough to have invested in the dot.coms were wiped out. It was a classic Ponzi scheme. Today, Chinese companies are selling their goods to the US but -- just as during the 1990s dot.com era -- the only way America is able to afford to buy them is because China is simultaneously lending the US economy the means to do so. China's massive forex intervention and accumulation of government bonds is having the side-effect of financing the US current account deficit, which has hit an annualised 6.4 percent of GDP. In other words, America is trading IOUs for Chinese goods. Meanwhile, China's banks are providing cheap money for companies to boost capacity to satisfy foreign demand; but this demand only exists because China created in the first place. Because of government intervention, a false market has been created which is distorting the workings of the global economy and preventing a market led-readjustment. The mother of all bubbles remains the US housing market, however. Prices have increased by over 50 percent in the past 5 years, and by 12.5 percent in the past year alone; 42 percent of first-time buyers and 25 percent of all buyers made no deposit on their purchase last year. Floating rate mortgages, which are much cheaper that the traditional, 30-year fixed rates, account for roughly 35 percent of all new mortgages, compared to just 15 percent a year ago. Most worrying is the rise of interest-only loans, which accounted for 31 percent of new mortgages in 2004, up from only 1.5 percent in 2001. Unlike in the UK, this is going hand in hand with an over-supply of new homes: new household formation is running at roughly 1.3m a year while housing starts are over 2m a year, so the boom is not due to population growth, says Paul Ashworth of Capital Economics. David Rosenberg, economist at Merrill Lynch, says more than half of the 52 largest US cities are overheating, defined as housing prices significantly outstripping personal income gains. Almost one-third of the cities are deemed white hot: prices in Miami have jumped 85 percent since the start of 2001 and 21 percent in the first quarter of 2005, the Merrill report found. The problem is that the overheated 'metro bubbles' make up such a large chunk of America's GDP that a house price collapse -- even if limited to those areas -- could prove very damaging. Rosenberg believes a drop in house price inflation to 0 percent would cut GDP growth by 0.4 points this year and by 1.1 points next year; boost the savings ratio from 1.8 percent to 2.4 percent and cut corporate earnings. A 10 percent collapse would trigger a recession. There have been plenty of bubbles over the past five centuries, but with the exception of the equity boom of the 1920s, none that could wreak as much devastation as the current three -- if they pop. Bubblenomics has always been a mad science; but the huge sums involved today are truly frightening. It is lucky for Greenspan that he will be retiring next year: if the housing, hedge funds and Chinese bubbles turn nasty, his reputation will take a battering. Copyright © 2005, The Business, London Distributed by Knight Ridder/Tribune Business News.

Subject: Brazilians Streaming Into U.S. From: Emma To: All Date Posted: Thurs, Jun 30, 2005 at 11:47:13 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/30/international/americas/30brazil.html?pagewanted=all Brazilians Streaming Into U.S. Through Mexican Border By LARRY ROHTER BRAÚNAS, Brazil - For years, Jaider de Andrade, a 35-year-old farm worker, talked about going to the United States to look for work, and early in March he finally agreed to a trafficker's offer to fly him to Mexico and have him guided across the border there. By month's end, though, he was back home here again, in a coffin. 'His dream had always been for us to have a little house of our own, but he never could make enough here to get ahead,' his widow, Nilce Aparecida Moreira da Silva, said at the couple's homestead. 'He knew there was some risk, but he wasn't nervous, because he saw that so many other people from around here had gone and done well in the United States.' Encouraged by highly organized groups of smugglers offering relatively cheap packages, Brazilians recently have been migrating in record numbers to the United States. With direct entry to the United States tougher than in the past, more often than not their route of choice is through Mexico, which in recent years has stopped requiring entry visas of Brazilians. During just two days in late April, Border Patrol agents in south Texas detained 232 Brazilians who had entered the United States illegally. All told, more than 12,000 Brazilians have been apprehended trying to cross the United States-Mexican border this year, exceeding the number detained in all of 2004 and pushing Brazilians to the top of the category known as 'other than Mexicans.' Mexico, facing growing complaints from Washington, is now contemplating restoring visa formalities for Brazilians. That in turn has led to a fever among potential migrants here in the vast heartland of south-central Brazil to obtain a passport and head for Mexico before the door there starts swinging shut. At the Federal Police office in Governador Valadares, the main city in this fertile region of rolling hills, the line of people seeking passports each day stretches around the block. Those waiting one afternoon did not want to talk with a reporter about their travel plans, but the Federal Police delegate for the region, Rui Antônio da Silva, estimated that 90 percent were headed for the United States via the Mexican route. 'We believe that just in this region there are about 30 gangs that offer this service to people,' he said. 'It's a very lucrative business, and a lot of people are involved.' Mr. da Silva said that last year his office issued an average of about 45 passports a day. Since January the number has jumped to a daily average of 140. A few minutes later, an assistant came into his office. 'The numbers just don't stop growing,' she said. 'We hit a new record today, more than 200 passports.' American authorities say that many of the trafficking gangs use travel agencies as fronts. Governador Valadares, a pleasant city of 250,000 in the sprawling inland state of Minas Gerais, which is the source of the majority of the Brazilians apprehended on the Mexican border, now has more than 100 such firms, up from 40 just a couple of years ago. People here who have been approached by trafficking rings said that the going rate at the moment for door-to-door transport to Boston, the preferred destination of illegal Brazilian immigrants, is about $10,500. That is more than two years' income for the average Brazilian, but effectively 30 percent less than a year ago, because the American dollar is weaker now. Brazilian officials and residents of this region said that unlike smuggling situations in many places, migrants do not pay in advance and do not pay at all if they fail to reach the United States, which greatly reduces the financial risk to potential migrants. Mr. de Andrade's widow said her husband had offered a small parcel of land he owned as collateral. After he died, in an automobile accident in northern Mexico, the smuggler returned the land. The accelerating outflow of people has come as a surprise to Brazilians and a blow to their self-image. This nation of 180 million has, after all, traditionally attracted millions of immigrants from Europe and Asia and prides itself on its social mobility. 'Just look at who our president is,' Teresa Sales, the author of 'Brazilians Far From Home' and a professor of sociology at the University of Campinas, said, referring to Luiz Inácio Lula da Silva, a former lathe operator. 'In the past, even when things were going badly no one would have imagined leaving the country, because of the expectation of rising socially.' Not only that, but Brazil's economy has been doing well recently. Furthermore, many of those leaving are not poor peasants, but young people more educated than the general population, including architects, engineers and other professionals. 'What we have to accept that this flow has to do with lack of opportunity, not with poverty or unemployment,' said Ana Cristina Braga Martes, a specialist in immigration issues at the Getúlio Vargas Foundation, a leading research institution. 'It's mainly the lower middle class from prosperous states, not the poor, who are going, and it's because they can't earn a fair wage here and have bought into the idea of the American dream.' One sure sign that 'making America' has entered the popular imagination is that in March, Brazil's largest television network began broadcasting a soap opera called 'America,' which follows a young woman's efforts to get to the United States through Mexico and to adjust to life in Florida. Experts disagree about whether it is encouraging Brazilians to head north, but more than 40 million people are watching nightly. In an effort to discourage the flow, Brazilian priests in Massachusetts have recently published a letter on the Internet alerting illegal immigrants to the dangers they may confront on their way to the United States. 'When they don't die, the migrants are subjected to violence or raped, and experience humiliating situations like sleeping in cemeteries, walking for miles and miles through the desert or drinking water from sewers,' their document warns. Since the 1960's, Governador Valadares has sent a stream of immigrants to Boston and nearby cities, but the stream has been growing larger. Mayor José Bonifácio Mourăo estimates that 40,000 people from his city have emigrated to the United States. 'Almost every family, including mine, has relatives in the United States,' he said. But American authorities report increases in illegal immigration from all of Brazil's southern, more prosperous states. 'It is as if we have infected other regions with the migratory virus,' said Weber Soares, a research specialist in immigration issues at the Vale do Rio Doce University in Governador Valadares. The Brazilian government estimates that between 1.5 million and three million Brazilians are living abroad, most in the United States or Japan. Last year, according to a congressional estimate, the emigrants sent nearly $6 billion in remittances back to Brazil, or about the same amount earned by Brazil's leading export product, soybeans. Until a few years ago most Brazilians living illegally in the United State went as tourists and simply overstayed their visas. But that changed when the United States tightened visa requirements after the Sept. 11, 2001, attacks and Mexico changed its visa policy. 'We started because it was something the business community asked for and to deter the mafia falsifying visas around our consulates,' the Mexican ambassador to Brazil, Cecília Soto, said in a telephone interview from Brasília. 'But it has become a problem these last couple of years, and we have seen that the mafias of human traffickers in both countries are clearly working together.' She said Mexico planned to send an official delegation soon to discuss immigration problems. Many here maintain that any effort to crack down on trafficking schemes is bound to fail. The smuggling rings will not be eliminated, the argument goes, but only be driven deeper underground. 'Nothing indicates that this flow will diminish, despite the efforts to scare people into not going,' Mayor Mourăo said. 'The incentives to go up there to the U.S. are still high. If anything, the tendency is for the flow to increase.'

Subject: G.M. Retirees, a Growing Sense of Unease From: Emma To: All Date Posted: Thurs, Jun 30, 2005 at 09:59:31 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/30/business/30auto.html For G.M. Retirees, a Growing Sense of Unease By DANNY HAKIM and JEREMY W. PETERS DETROIT - The Buick plant in Flint, Mich., where Elvia Reeves used to work has been demolished, but her health care benefits are as strong as ever. For now, that is. She and many of the nearly half million American retirees of General Motors are increasingly worried about the future of their medical benefits as the automaker presses the United Automobile Workers union to agree to deep cuts in health care benefits. At the same time, the legal rights of G.M. - or that of any other company - to cut benefits for retirees as well as the rights of the retirees' former union to negotiate for them are a matter of debate. 'Everything we worked to build up, they're trying to tear down,' said Ms. Reeves, 72, whose seven different prescription drugs, for high blood pressure and arthritis, cost her only $35. On Wednesday, she and other Flint-area retirees gathered at their old union local, No. 599, to buy tickets for a pig roast next month, but the possible cuts in benefits were on everyone's mind. As a U.A.W. cookbook came up for sale to raise money for the local, one of nearly 100 attendees yelled, 'Is there a recipe in there for how to roast a C.E.O. of G.M?' The outcome of the unusual talks this summer between G.M. and the U.A.W., coming at the halfway point of their four-year labor pact, remains to be seen. The talks, prompted by a sharp decline in G.M.'s earnings, are expected to continue into July. In a meeting in early June, a top U.A.W. official in Detroit told local union leaders that the company had threatened to cut health care benefits with or without the union's approval today, to coincide with a teleconference of G.M.'s board. But people close to the talks said they did not expect G.M. to hold to its ultimatum; G.M. officials have recently dismissed talk of a deadline. 'We're not on deadlines,' Edd Snyder, a G.M. spokesman, said this week. 'We're not dealing with deadlines, if you will. We're not talking about deadlines, we're talking about talking and having discussions.' The U.A.W.'s president, Ron Gettelfinger, said in a recent interview that he would not be pushed into a corner by G.M., but was willing to give some modest ground within the terms of the contract. He has also said that he will not accept an unchecked assault on retiree benefits. G.M. is seeking steep cuts in health care benefits and has focused on retirees because they generate the majority of its costs. In 2004, retirees accounted for about 70 percent of G.M.'s total health care bill, or $3.6 billion of its $5.2 billion health care costs. G.M.'s hourly workers and retirees pay no monthly premiums or deductibles. Retirees make co-payments for visits to the doctor and a $5 co-payment for each prescription, with total payments far below the norm. Unlike G.M., about 40 percent of United States companies with more than 5,000 employees offer no retiree health benefits, according to a recent report by the Sanford C. Bernstein & Company, an investment research and management adviser. The burden of retiree benefits will grow for G.M. as its work force continues to shrink, G.M. says. The company, which had half a million active workers in the late 1970's, has 111,000 today and is striving to cut another 25,000 hourly jobs by the end of 2008. That has left G.M. with two and a half retirees for every active worker, a ratio that continues to rise. Earlier this month, Rick Wagoner, G.M.'s chairman and chief executive, threatened to cut the company's health spending with or without the union's support. Mr. Gettelfinger, however, has said the union will not reopen its contract, which does not expire until 2007. Brian Johnson, an analyst at Sanford C. Bernstein, said in another recent report that G.M. had wiggle room within its U.A.W. contract to cut benefits for retirees. He also noted that unions had been limited by courts in their ability to negotiate for retirees, and that workers could not legally strike over cuts in the health benefits for retired workers. But Leonard Page, a former legal counsel for the National Labor Relations Board who also served for 30 years on the U.A.W.'s legal staff, said the retirees would have a solid legal claim to pursue against G.M. 'The retirees, a group of them, would obviously sue and claim that this is a lifetime benefit,' he said. Mr. Johnson, who has a law degree but is not a practicing lawyer, said circuit courts had split on the rights of retirees. 'If it goes to the Supreme Court, it would likely be resolved against the retirees,' he said. In Flint on Wednesday, Stan Marshall, a 76-year-old retiree, said: 'I'll work with the devil if it protects our benefits. If they think they're just going to take our benefits we've fought for over the years, they're going to have one hell of a fight.' When Floyd Laetz started as an office manager in 1929, he was making 35 cents an hour. Those were the days before he had a union-backed job and health insurance. Now, at age 92, his five prescriptions, mainly for his heart, cost him $25 every three months. He has been retired since 1971. 'Darn it, we've got good benefits here at General Motors,' he said, adding that he could stand some cuts but was worried about the effect of cuts on retirees not as financially secure as he is. Frank Molina, 76, worked for G.M. for nearly 34 years before retiring in 1981. His first job was putting tires on 1947 Buicks for 97 cents an hour. 'Back then, it was beautiful,' he said. 'We had a good union in there, good company people. Everyone got along. You did your work, they did theirs.' He worked for the Buick division of G.M. at a plant outside the Local 599 union hall in Flint back when there were so many Buick plants in the area, it was called Buick City. Now, 'I don't think Buick will be here much longer,' Mr. Molina said. 'I'd give it another three to six years.'

Subject: G8 debt write-off: Who pays? From: Setanta To: All Date Posted: Thurs, Jun 30, 2005 at 09:30:25 (EDT) Email Address: Not Provided Message: Last night, U2 were amazing. The band proved again why they are the world's greatest live act and Bono, the consummate showman, was extraordinary. As usual, he spoke of the poor, the third world and debt. Whether you like that part of his personality or not, is it not better that a rock star uses his fame to focus attention on something meaningful, rather than simply hanging out in his crib, buying Ferraris? As Bono knows, the story of third world debt is a complex one and is more a tale of international finance than simply one of old-style exploitation. It begins at a time when, like today, the prices of oil and gold were soaring. Just to put today's price increases in context, the price of oil is up nearly 30 per cent in the past four weeks, while the price of gold has increased by $10.80 or 2.53 per cent to $437.70 per ounce in the past ten days. The saga begins back in the mid-1970s when Walter Wriston, longtime chief executive of Citibank - the bank that was most involved in lending to the third world - was asked whether lending to the third world was risky. He responded that “countries never go bust'‘. Around the same time, the American comedienne Bette Midler demanded that she be paid $600,000 for a European tour in South African gold krugerrands because she felt that in a time of uncertainty, gold was the only asset worth holding. As things turned out, the banker was wrong, the joker was right. Had Midler held on to her gold, she would have seen the price rocket to $653,000 in January 1980,up from $43 per ounce in 1973. In contrast, countries did go bust. In 1982, Mexico defaulted. Brazil and Argentina followed and by 1984, the third world was stuck in the debt quagmire that it remains in to this day. The common factor between Midler's gold and Wriston's third-world debt was oil. On October 3, 1973, the decision of Opec leaders to restrict oil production changed everything. The price of a barrel of oil rose from $2 per barrel to $10.50, inflation in Europe and the US took off and the price of gold rose dramatically as people went back to hoarding the precious metal as a hedge. By the mid-1980s, gold prices had fallen back steeply as inflation abated. However, the impact of the other great monetary shock (third world debt) that was sparked by the 1973 oil shock remains with us to this day. One of the main themes of the global economic story from 1945-1973 was the rapid accumulation of wealth in the US and Europe. Trade, investment and growth rates all soared, people's savings grew and Harold McMillan's “you've never had it so good'‘ comments would have been as apt in the early 1970s as they were in the late 1950s. This all changed in October 1973 when the music stopped, the feel good factor disappeared and the world plunged into recession. More than anything else, the oil shock constituted the largest single peace time transfer of wealth ever seen. Rich, oil-consuming countries transferred billions of dollars literally overnight to relatively poor oil-producing Arab countries. One of the biggest problems for the Arabs was what to do with all the cash. They had little choice but to put billions of dollars on deposit with the world's biggest banks. The headache then for the banks was what to do with all the money. The mid-1970s recession in the US and western Europe meant nobody in the ‘rich world' wanted to spend or invest, so the international banking system's biggest and most reliable clients weren't interested. Japan was hurting and the Asian Tigers were still very much developing countries. Traditional investment banking business had dried up and, unlike today, there was no global housing bubble to fund. The only place the cash could possibly be put to work was in the third world. Within a matter of months, Brazil, Argentina, Honduras and Mexico were awash with Arab dollars. By 1975, African countries such as Ivory Coast, Liberia, Mozambique and Tanzania had easy access to what appeared to be cheap credit. Another huge lender was Russia which, as an oil producer, benefited enormously from Opec's actions and, as a superpower, lent money to prop up communist countries around the globe. The assumption that “countries don't go bust'' was based on the understanding that the World Bank and IMF would not let their darlings in the third world go under. Private investment bankers believed that, if the worst came to pass, the IMF, financed by western taxpayers' money, would bail out the likes of Congo, Uganda and Angola. Bankers turned a blind eye to the sort of ludicrous projects that were often financed by this African credit bonanza. A mountain of debt built up. Typically, poor countries based their ability to pay on revenue from the sale of commodities such as sugar, rubber, diamonds, wood etc. Therefore, countries had to increase production of commodities in order to service their debts. The more supply, the lower the price. So when the world went into its second oil-inspired recession in 1980-81, there were far too many commodities out there that nobody wanted to buy. The price of rubber, cocoa, sugar etc collapsed while at the same time - due to huge budget deficits in the US associated with the doctrine of Reaganomics - American interest rates and the dollar skyrocketed. Third-world countries couldn't pay their bills and began to default, led by Mexico in 1982. The banks, particularly Citibank, took huge hits because most of these loans had to be written off, yet the Arabs still had to be paid interest on their deposits. So the banks refused to have anything more to do with the African and Latin American delinquents. By 1988, without as much as a cent flowing into the developing countries, the situation was precarious. Democratic movements in Latin America were in jeopardy due to lack of cash and American commercial interests were threatened. Nicholas Brady, Ronald Reagan's finance adviser, came up with an ingenious rescue plan. The old loans were re-examined. Part of the banks' original principle would be written off and the remainder would be paid by the issue of new 30-year bonds called Brady bonds. The countries would have a five-year grace period to get back on their feet and those countries that started paying off some of the old interest would be allowed borrow again. Initially, because of the risk associated with former defaulters, the interest on the bonds was very high. However, as the country adopted economic policies sanctioned by the IMF and monitored by investment banks, the risk fell and consequently so did the interest rate. The price of the bond would rise accordingly. Investors bought these new bonds. This solved the banks' dilemma because, despite losing huge amounts on their initial loans, at least the books were now clean and the developing world's debts became someone else's problem. The investors were happy as long as the countries did what the IMF said, and the countries were happy because they now had access to new finance. It is assumed that, even in the event of debt forgiveness for some of the poorest countries, the Brady bond blueprint will be used inmost places. This assumption has created its own market in pre-Brady deal debts. For example, Sudan has $30 billion of outstanding debt that has yet to be renegotiated. Today an investor can buy $1 of Sudanese debt for 2 cents - a 98 per cent discount. If Sudan begins to pay back its debts, the investor is sure to see the price of Sudanese debt jump to at least ten cents. This is a huge killing. Similarly, the debts of Liberia, Congo, Sudan, Chad, Cuba and Mozambique and many more are all being traded despite still being technically in default. Thousands of investors have taken this bet and are owners of third-world debt. This scattered ownership structure makes Bono's job very difficult because it is no longer in the gift of the G8 leaders, meeting in Edinburgh next week, alone to solve the third world's debt problem. The debt holders believe that it is their right, based on international law, to be repaid. Therefore, the G8 cannot just write off debts without cutting a deal with debt holders, in the main, powerful investment banks. Bono has to persuade the G8 to cough up the billions of dollars to repay the investors. By coughing up, George W is going to have to persuade US taxpayers to dip into their pockets to bail out African countries. With the US in a selfish mood, Bono has his work cut out. If he pulls this off, he deserves our thanks and admiration.

Subject: Re: G8 debt write-off: Who pays? From: Jennifer To: Setanta Date Posted: Thurs, Jun 30, 2005 at 12:44:37 (EDT) Email Address: Not Provided Message: http://www.sbpost.ie/post/pages/p/wholestory.aspx-qqqt=DAVID MACWILLAMS-qqqs=commentandanalysis-qqqsectionid=3-qqqc=5.2.0.0-qqqn=1-qqqx=1.asp June 26, 2005 G8 debt write-off: Who pays? By David McWilliams Reference to article....

Subject: Re: G8 debt write-off: Who pays? From: Mik To: Jennifer Date Posted: Thurs, Jun 30, 2005 at 13:13:01 (EDT) Email Address: Not Provided Message: Hmm I think there is a few bits of confusion about the types of debt, who gave loans and who pays. When we talk of private banks making loans in foreign countries, those loans are not held against government and even where government gives guarantees, those guarantees are not looked upon as solid. Debt write-off refers to the issue of developed governments giving loans to developing governments. Whether through the IMF or direct. There was an age where giving out these loans had actually less to do with development and more to do with allegiance. Don't forget we come out of an era where there was a cold war to rule full continents. As a classic example, the USA loaned over 7 billion dollars to Ethiopia in the 70's at a time when neighbouring Somalia had just turned communist and Ethiopia was being courted by the Soviets. The investment went bad and the Soviets got Ethiopia's allegiance. Ethiopia turned to full communism and America's loans went bad. Now that the world has changed, Ethiopia's new government still faces that loan. We can state that many of these loans should not have been given to dictators or brutal governments in the first place, but the times were different and we were fighting a very real war that cost a tremendous amount of money.

Subject: Re: G8 debt write-off: Who pays? From: Jennifer To: Mik Date Posted: Thurs, Jun 30, 2005 at 14:35:05 (EDT) Email Address: Not Provided Message: I thought that the debt write-off was for government rather than private loans. Thank you.

Subject: Investing From: Terri To: All Date Posted: Thurs, Jun 30, 2005 at 07:31:32 (EDT) Email Address: Not Provided Message: The most reliable and simple way to invest is to use the ideas of John Bogle and index and save and buy more shares forever. For the large majority of investors this puts other methods or lack of method to shame. Nonetheless knowledge and intelligence can help in investing and there are those minority who are successful beyond indexing. What I do find however is that the moment investment ideas come up that are wildly expensive and complex, we should turn elsewhere.

Subject: Promoting democracy with CAFTA From: Johnny5 To: All Date Posted: Thurs, Jun 30, 2005 at 04:35:46 (EDT) Email Address: johnny5@yahoo.com Message: Big Business just gets more and more powerful under this administration it seems. http://www.project-syndicate.org/commentary/shaiken1 As the United States Congress begins to debate the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA), a titanic struggle between the forces of free trade and protectionism promises to unfold. But that debate should not be allowed to mask the truth behind this treaty: the DR-CAFTA is more a pleading of special interests than a free-trade deal. It manages simultaneously to fleece the people of six poor countries and to put US workers in harm’s way. To be sure, expanded trade holds great promise for promoting development and democracy. But the trade rules inscribed in DR-CAFTA promote profits for a few at the expense of the well being of the many. Ironically, the pact even limits market competition to protect powerful special interests, undercutting the core principles of free trade. Consider pharmaceuticals. For American drug companies, this agreement extends the time period during which brand-name pharmaceuticals have exclusive access to markets, postponing the entry of generic drugs and thus limiting competition. For Central Americans, the cost of drugs will soar, straining budgets and gutting health care. The result may be a death sentence for many. In agriculture, small farmers would be placed on a collision course with US agro-business and their heavily subsidized farm exports. The US exported paddy rice, for example, at a price almost 20% lower than the cost of production in 2003, making it impossible for Central Americans to compete. As for labor rights, the agreement makes a devil’s bargain: it opens trade while locking in a status quo that is appalling. Workers face everything from rampant discrimination against older people (those over 35) to physical abuse, lack of bathroom breaks, no overtime pay, and poverty wages. In principle, workers can seek remedies by joining a union and bargaining collectively. But this option is all but foreclosed, because union membership or organizing can lead to dismissal, blacklisting, violence, or worse. In Guatemala, the largest economy, less than 3% of workers are unionized and their unions are marginal. The DR-CAFTA pays lip service to international labor standards as enshrined in the International Labor Organization’s core labor rights, but promptly throws them overboard. Instead, countries are committed only to enforcing their own labor laws, which often seem designed to prevent workers from joining a union. Moreover, enforcement of the rights that do exist is trapped somewhere between ineptitude and corruption. As if this were not bad enough, the agreement jettisons everything we’ve learned over the last 30 years or so about international pressure and labor law reform. The stronger provisions of previous trade agreements, such as the Generalized System of Preferences (GSP) and the Caribbean Basin Initiative (CBI), have been dumped. Although trade with Central America represents only about 1.5% of total US trade, the outcome of the debate on DR-CAFTA will shape US trade policy – which sets the tone for other rich countries’ stance in trade talks – for years to come. A trade agreement such as this puts US and Central American workers in the same labor market. If the whip is cracked in Tegucigalpa today, workers in Charlotte will feel it tomorrow. If Salvadorans’ wages are squeezed, they won’t be buying many products made in Los Angeles — unless, of course, they wind up moving there. The anemic labor standards enshrined in this agreement encourage firms to compete by taking the low road, a route that puts them on a collision course with China’s rock-bottom wages. They could just as easily take the high road: much evidence indicates that workers who are rewarded rather than victimized can contribute to greater competitiveness for firms in the long run. It is hypocritical to promote democracy and then sign a trade agreement that denies workers the basic democratic right to organize and join unions. Without this right, elections may not add up to democracy. The checks and balances that unions provide are essential in the workplace, but they are even more important in sustaining fledgling democratic regimes. The issue is not free trade versus protectionism, but “smart trade” versus “polarizing trade.” Smart trade creates balanced development, while polarizing trade rewards a small circle of winners at the expense of the many. Smart trade requires two key provisions: core labor rights, backed up by tough enforcement, and a development fund targeting infrastructure and education to boost competitiveness. DR-CAFTA does neither. Instead, it condemns Central America to carry its dismal past far into the future. Rejecting it opens the possibility for freer markets and faster income growth in Central America, as well as healthier democracies.

Subject: Quenching America’s Thirst for Oil From: Pancho Villa alias Norm To: All Date Posted: Wed, Jun 29, 2005 at 11:53:09 (EDT) Email Address: nma@hotmail.com Message: Quenching America’s Thirst for Oil The United States consumes a quarter of the world’s oil, compared to 8% for China. Even with high Chinese growth expected in coming years, the world will not run out of oil anytime soon. Over a trillion barrels of proven reserves exist, and more is likely to be found. But two-thirds of those proven reserves are in the Persian Gulf, and are thus vulnerable to disruption. In the past, rising prices had a strong effect on US oil consumption. Since the price spikes of the 1970’s, US oil consumption per dollar of GDP has fallen by half, which also reflects the general economic shift away from industrial manufacturing to less energy-intensive production. After all, it requires a lot less energy to create a software program than it does to produce a ton of steel. In the early 1980’s, energy costs accounted for 14% of America’s economy. Today, they account for 7%. Adjusted for inflation, oil prices would have to reach $80 per barrel (or $3.12 per gallon of gasoline) to reach the real level recorded in March 1981. According to the US government, if there are no supply disruptions, and the American economy grows at an annual rate of 3%, the price of a barrel of oil will decline to $25 (in 2003 dollars) in 2010 and then rise to $30 in 2025. The energy intensiveness of the economy will continue to decline at an average annual rate of 1.6%, as efficiency gains and structural shifts offset part of the overall growth in demand. Nonetheless, dependency on oil will grow at an annual rate of 1.5%, from 20 million barrels per day in 2003 to 27.9 million in 2025. The American political system has difficulty in agreeing on a coherent energy policy. But over the next decade, the politics of energy in the US may gradually change. Some observers detect a new “Geo-Green” coalition of conservative foreign-policy hawks, who worry about America’s dependence on Persian Gulf oil, and liberal environmentalists. In the hawks’ view, the real energy problem is not the absence of petroleum reserves, but the fact that they are concentrated in a vulnerable area. The answer is to curb America’s thirst for oil rather than increasing imports. Greens argue that even if energy supplies are abundant, the ability of the environment to support current rates of consumption is limited. The middle of the range of scenarios considered by the Intergovernmental Panel on Climate Change projects that atmospheric CO2 concentrations will reach nearly three times their pre-industrial level in 2100. While the Bush Administration remains skeptical about the science behind such projections, some state and local governments are enacting measures to cut CO2 emissions. More importantly, companies such as General Electric are committing to green goals that go well beyond government regulations. A recent report by the bipartisan National Commission on Energy Policy exemplifies the new coalition. While President Bush argues that technological advances in hydrogen fuels and fuel cells will curb oil imports in the long run, such measures require major changes in transportation infrastructure that will require decades to complete. The commission suggests policies that could be implemented sooner. For example, in recent testimony before Congress, James Woolsey, a commission member and former CIA director, urged the use of hybrid gasoline/electric vehicles that could charge their batteries overnight with cheap off-peak electricity; energy efficient ethanol made from cellulose; and a ten-mile-per-gallon increase in fuel-efficiency requirements. He argued that this agenda could cut gasoline consumption significantly in a matter of years rather than decades. It would also avoid the need for dramatic increases in gasoline or carbon taxes, which are broadly accepted in Europe and Japan, but remain the kiss of death for American politicians. But US government policies are unlikely to change Americans’ energy consumption significantly in the next few years. Even if a new administration were to enact new policies after Bush leaves office in 2008, there would still be a lag prior to any effect on actual consumption. In the next few years, market forces are likely to be more important than government policies in influencing consumption patterns. But over the next decade, the combination of markets and policies could make a big difference. For example, between 1978 and 1987, government regulations produced an improvement of 40% in the fuel efficiency of new American-made cars. In a surprise-free world, the Bush administration is probably right that America’s thirst for oil will grow by 1.5% annually over the next two decades. But political disruption in the Persian Gulf or a new terrorist attack in the US would drive up oil prices rapidly, and the political climate in America might also change quickly. The probability of such events is not negligible. Energy independence may be impossible for a country that consumes a quarter of the world’s oil but has only 3% of its reserves. Even so, a major decline in America’s thirst for oil is not out of the question in the longer term. Joseph S. Nye is a professor at Harvard and author of Soft Power: The Means of Success in World Politics. http://www.freerepublic.com/focus/f-news/1429353/posts

Subject: Re: Quenching America’s Thirst for Oil From: Jennifer To: Pancho Villa alias Norm Date Posted: Wed, Jun 29, 2005 at 14:20:53 (EDT) Email Address: Not Provided Message: Pancho, how do you read or interpret this essay? Does the relative optimism I find here seem warranted? Am I reading porperly to be optimistic?

Subject: Re: Quenching the world From: Pete Weis To: Jennifer Date Posted: Wed, Jun 29, 2005 at 17:49:08 (EDT) Email Address: Not Provided Message: The following in the Wall Street Journal article seems to agree with recent articles quoting geologists now at universities who worked for years in the oil industry who state that we have reached or are about to reach in the next five years peak global oil production. If one were trying to get a handle on oil production in the near future, I can't think of a better source than the geologists who have looked at the data and have run the numbers and who understand how the proven oil reserves are reported by those who own the reserves. A Cartel and Its Snakeoil The Saudis claim to have huge oil reserves. Do they really? BY WILLIAM TUCKER Tuesday, June 28, 2005 12:01 a.m. In 1956, Shell Oil geologist M. King Hubbert discovered a grand illusion in the American oil industry. For tax purposes, he noted, American oil companies regularly delayed the declaration of new oil reserves by years and even decades. The result was a false impression that new oil was being found all the time. In fact, discoveries had peaked in 1936. Based on this observation, Mr. Hubbert predicted that American oil production would peak in 1969. He was wrong by one year. We briefly produced 10 million barrels a day in 1970 but have never hit that level since. Even with the addition of Prudhoe Bay, Alaska, American production has slipped to eight million barrels a day--which is why we import 60% of our oil. Across the oil industry, the uneasy feeling is growing that world production may be approaching its own 'Hubbert's Peak.' The last major field yielding more than a million barrels a day was found in Mexico in 1976. New discoveries peaked in 1960, and production outside the Middle East reached its high point in 1997. Meanwhile world demand continues to accelerate by 3% a year. Indonesia, once a major exporter, now imports its oil. Before an uneasy feeling grows into full-blown pessimism, however, one must consider the supposedly vast oil resources lying beneath Saudi Arabia. The Saudis possess 25% of the world's proven reserves. They routinely proclaim that, for at least the next 50 years, they could easily double their current output of 10 million barrels a day. But is this true? Matthew R. Simmons, a Texas investment banker with a Harvard Business School degree and 20 years' experience in oil, has his doubts. In 'Twilight in the Desert,' Mr. Simmons argues that the Saudis may be deceiving the world and themselves. If only half of his claims prove to be true, we could be in for some nasty surprises. First, Mr. Simmons notes, all Saudi claims exist behind a veil of secrecy. In 1982, the Saudi government took complete control of Aramco (the Arabian American Oil Co.) after four decades of co-ownership with a consortium of major oil companies. Since then Aramco has never released field-by-field figures for its oil production. In fact, no OPEC member is very forthcoming. The cartel sets production quotas according to a country's reserves, so each member has reason to exaggerate. Meanwhile, OPEC nations are constantly cheating one another by overproducing, so none wants to publish official statistics. As a result, the world's most reliable source for OPEC production is a little company called Petrologistics, located over a grocery store in Geneva. Conrad Gerber, the principal, claims to have spies in every OPEC port. For all we know, Mr. Gerber is making up his numbers, but everyone--including the Paris-based International Energy Agency--takes him seriously, since OPEC produces nothing better. The Saudis, for their part, obviously enjoy their role as producer of last resort and feel content to let everyone think that they have things under control. Yet as Mr. Simmons observes: 'History has frequently shown that once secrecy envelops the culture of either a company or a country, those most surprised when the truth comes out are often the insiders who created the secrets in the first place.' Mr. Simmons became suspicious of Saudi claims after taking a guided tour of Aramco facilities in 2003. To penetrate the veil, he turned to the electronic library of the Society of Petroleum Engineers, which regularly publishes technical papers by field geologists. After downloading and studying more than 200 reports by Aramco personnel, Mr. Simmons came up with his own portrait of Saudi Arabia's oil resources. It is not a pretty picture. Almost 90% of Saudi production comes from six giant fields, all of them discovered before 1967. The 'king' of this grouping--the 2000-square-mile Ghawar field near the Persian Gulf--is the largest oil field in the world. But if Saudi geology follows the pattern found elsewhere, it is unlikely that any new fields lie nearby. Indeed, Aramco has prospected extensively outside the Ghawar region but found nothing of significance. In particular, the Arab D stratum--the source rock of the Ghawar field--has long since eroded in other parts of the Arabian Peninsula. The six major fields, having all produced at or near capacity for almost 40 years, are showing signs of age. All require extensive water injection to maintain their current flow. Based on these observations, Mr. Simmons doubts that Aramco can increase its output to anywhere near the level it claims. In fact, he believes that Saudi production may have already peaked. Is he right? Mr. Simmons's critics say that, by relying on technical papers, he has biased his survey, since geologists like to concentrate on problem wells the way that doctors focus on sick patients. Still, the experience in America and the rest of the world shows that oil fields don't last forever. Prudhoe Bay, which was producing 1.2 million barrels a day five years after being brought on line in 1976, is now down to less than 400,000. The mystery of Saudi oil capacity bears an eerie resemblance to Saddam Hussein's apparent belief that his scientists had developed weapons of mass destruction. Who are the deceivers and who is the deceived? No one yet knows the answers. But at least Matthew Simmons is asking the questions. Mr. Tucker is an associate at the American Enterprise Institute. You can buy 'Twilight in the Desert' from the OpinionJournal bookstore.

Subject: Re: Quenching the world From: Terri To: Pete Weis Date Posted: Wed, Jun 29, 2005 at 19:43:46 (EDT) Email Address: Not Provided Message: Though I can not know how severe an oil problem might develop in the coming decades, especially since we do not appear to be attending enough to conservation and efficiency, I have been using energy and utility companies as prime investments. I do not however have a sense from reading whether we are not in much better energy shape than might be supposed.

Subject: Stay the course From: Johnny5 To: Terri Date Posted: Thurs, Jun 30, 2005 at 04:32:29 (EDT) Email Address: johnny5@yahoo.com Message: Terri are you holding VDE or VGENX? Bogle's recent speech just posted to his page: http://www.vanguard.com/bogle_site/sp20050524.htm No matter what happens with OIL - investors should stay the course no? It seems you are sector investing with utilities and reits and energy Terri - isn't this market timing? Buy the total stock and total bond funds and just sit back and stay the course no?

Subject: Re: Stay the course From: Terri To: Johnny5 Date Posted: Thurs, Jun 30, 2005 at 05:59:28 (EDT) Email Address: Not Provided Message: Thank you so much. I will read the John Bogle speech this morning. I could not admire Bogle more, but I do not follow his advice completely, and do time markets thinking I am not bad at it. But, Bogle always has my thoughts and I do not wish to be arrogant ever in investing. Holding the total stock and bond market indexes for decades has been superb as a strategy, so when I depart I do so with considerable care but I have done so at times. I never use initials in investing, only names, so later I will look up VDE and VGENX.

Subject: Re: Stay the course From: Terri To: Terri Date Posted: Thurs, Jun 30, 2005 at 15:43:28 (EDT) Email Address: Not Provided Message: VDE = Vanguard Energy Index, VGENX = Vanguard Energy Fund.

Subject: Name Goods in China, Brand X Elsewhere From: Emma To: All Date Posted: Wed, Jun 29, 2005 at 09:47:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/29/business/worldbusiness/29brands.html?pagewanted=all Name Goods in China but Brand X Elsewhere By DAVID BARBOZA SHANGHAI - Never heard of brand names like Great Wall, Hisense, Konka, Amoi and Panda? Outside China, few have. That may change someday, but in the meantime, some Chinese companies are taking a shortcut and adopting widely known names to make their presence felt abroad. China's leaders have been quietly encouraging Chinese companies for years to set up overseas operations, acquire foreign assets and transform themselves into multinational corporations - in other words, to make themselves more competitive in a world increasingly dominated by Wal-Mart, Microsoft and Coca-Cola. Now, it seems, Chinese companies have gotten the message. This year, Lenovo - the Chinese computer maker - acquired I.B.M.'s personal computer business. Haier, one of China's biggest companies, made a bid last week for the Maytag Corporation. And in the same week, in the biggest move of all, one of China's state-owned oil giants made a hostile $18.5 billion bid for the Unocal Corporation, one of the world's largest oil companies. Yet many of the companies seem to be acting partly out of desperation, as more foreign brands line the shelves of retailers in China. 'Chinese companies are now facing serious foreign competition at home,' said Marshall W. Meyers, a professor of management at the Wharton School at the University of Pennsylvania. 'So they have to do something. They've got to grow to global scale.' The fact is, despite restrictions on foreign competition here, few powerful brands have emerged in China over the last two decades. And now that some of those restrictions are being lifted as part of China's ascension into the World Trade Organization, some of China's biggest companies are being forced to adopt global strategies. With its I.B.M. computer purchase, Lenovo, a major Chinese computer maker but virtually unknown outside of China, is suddenly the world's third-largest computer maker after Dell and Hewlett-Packard. TCL, another Chinese company, became the world's biggest television set maker last year after it acquired the television set business of Thomson of France, which also owned the old RCA brand. And then there was the bid last week by the China National Offshore Oil Corporation for Unocal, an offer that touched off a Wall Street-style takeover battle with the American oil company Chevron. Experts say that whether these deals succeed or not, they are symbolic of China's rapid economic rise, and its global ambitions. 'The Chinese government has been preparing the top 100 to 150 companies to go overseas and expand,' said Jack J. T. Huang, a chairman of the China practice at the law firm of Jones Day. 'The government wants to use this as a testing ground, to see how well the companies stand up to international competition.' Dozens of Chinese companies stand in waiting, and are not shy about their global ambitions. 'The future goal of the company is to make the name Great Wall known across the world,' said Liu Rengang, a spokesman for the state-controlled Great Wall Computer Group. A spokesman for Ningbo Bird, a big cellphone maker, sounded equally ambitious: 'Our future goal is to become one of the top three cellphone manufacturers in the world.' Earlier this month, the Ministry of Commerce issued a report that said that even though China's exports were dominated by consumer products, there were few famous Chinese brands involved in the export trade. Most goods are being shipped abroad with foreign brand labels. To rectify the situation, the ministry called on Chinese companies to start exporting their own 'famous brands.' Every region was ordered to produce its own famous brands. 'We need to cultivate a group of independent famous brands that have international influence,' the report stated. 'Each industry needs to have its own famous brand for export.' The memo reads like a Communist Party document from a state planning commission. But the thinking behind the effort seems to be simple: imitate the foreigners. Japanese and Korean companies like Toyota, Sony and Samsung made the moves from national to global brands successfully. But it took years. Analysts say Chinese companies do not have that luxury because the rapid pace of globalization means that markets are now quickly won and lost. 'Chinese companies don't have that much choice but to acquire overseas companies,' said Joe Chang, a China specialist at McKinsey & Company. 'Very few companies can build organically any more. If they wait 10 to 15 years, they could be dead.' By acquiring well-known brand names, experts say, Chinese companies are hoping to get access to global distribution networks, sophisticated research and development and recognizable brand names. 'What these companies are looking for is to build up capabilities,' said Oded Shenkar, a professor of management at Ohio State University and author of 'The Chinese Century.' 'This is a shortcut. They don't have billions of dollars to invest in the growth. But here in one fell swoop, you're acquiring a venerable brand name.' One advantage some Chinese companies have is that they have worked for years as joint venture partners or suppliers for some of the world's biggest corporations, giving the Chinese an eye into the process of making premium-priced products. And the amount of manufacturing done in China is astounding. According to C.L.S.A., an investment bank, 80 percent of the world's clocks and watches, 50 percent of its cameras, 30 percent of its microwave ovens, a quarter of its washing machines, and a fifth of the world's refrigerators are now 'Made in China.' 'Japanese and Korean companies initially came to the U.S. with a low-end product image,' said Douglas Beal, a partner at the Boston Consulting Group. 'It took a long time to take Japanese brand names and turn them into high-end products. Sony now commands a premium because it's Sony. But 20 years ago they couldn't do that.' The hurdles, however, are steep. The most serious problem facing Chinese companies, analysts say, is a lack of international experience and weak marketing and management structures. That, experts say, is precisely why some big Chinese companies are bidding for Western icons like I.B.M., Maytag, RCA and even MG Rover, the English carmaker that has been pursued by at least three Chinese automakers in the last year. And this is why after acquiring I.B.M.'s personal computer business this year, Lenovo asked the I.B.M. managers to stay on and run the entire company from New York. 'The most valuable asset we have acquired through I.B.M.'s PC business is its world-class management team and their extensive international experience,' Liu Chuanzhi, the chairman of Lenovo said in an interview last December. But can Lenovo run I.B.M.'s PC business? Can Haier, the appliance giant, manage Maytag? Analysts are skeptical because, they say, most mergers fail. 'It's very difficult to make overseas acquisitions,' said Gavin Geminder, a partner at KPMG, the global advisory firm. 'Chinese companies have the same issues, and they probably have less-qualified management teams.' Chan Chun, a professor of finance at the China Europe International Business School in Shanghai, said Chinese companies had also struggled to manage their finances in a corporate environment. 'In terms of managing for shareholder value, they are weak,' he said. 'They lack international experience and have poor financial controls.' But no one expects that to slow China deal making. In fact, largely unnoticed earlier this month was a $1.4 billion bid by China Mobile, one of the giant state-owned telecom companies, for control of a Pakistani telecom company. China Mobile lost out on the deal, but its bid is notable. And many of the Chinese companies are sparing no expense to hire Western lawyers and advisers. Lenovo used McKinsey and Weil Gotshal & Manges. Haier is teaming up with the Blackstone Group and Bain Capital to acquire Maytag. And Cnooc has hired Goldman Sachs, J. P. Morgan, Skadden, Arps, Slate, Meagher & Flom and a team of lobbyists to make its pitch for Unocal. The Chinese companies are also backed by state-owned banks, private equity funds and company war chests. Cnooc's bid for Unocal, for instance, is backed by a $6 billion loan from the Industrial and Commercial Bank of China, the largest Chinese state-owned bank, and another $7 billion in loans is coming from its parent company at rates considerably below what market financing costs. 'There's probably a lot more deals to come,' said Robert Morse, the chief executive for Citigroup corporate and investment banking in Asia. 'Liquidity is at an all-time high for Chinese companies looking to fund overseas acquisitions.' And being the world's low-cost factory floor is no longer the country's singular ambition, analysts say. That is perhaps why China Entrepreneur Magazine recently devoted a cover story to the question, 'Should China Buy Wal-Mart?' Xiang Bing, the dean of the Cheung Kong Graduate School of Business in Beijing, wrote that if Chinese investors could pool their resources, they could acquire a controlling stake in the ultimate global retail brand: Wal-Mart Stores. That, he surmised, was one way a country with few global brands but lots of goods could move up the value chain.

Subject: Robust Growth and Low Inflation From: Terri To: All Date Posted: Wed, Jun 29, 2005 at 09:32:00 (EDT) Email Address: Not Provided Message: Notice that our growth for the first quarter was 3.8% which is quite healthy, especially coming with a core inflation rate of 2%.There are worries all over, but the American economy is growing well with little inflation. The Federal Reserve has room to tighten and prepare to reverse policy when needed. We should be well pleased.

Subject: Ireland: The End of the Rainbow From: Emma To: All Date Posted: Wed, Jun 29, 2005 at 09:24:08 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/29/opinion/29friedman.html The End of the Rainbow By THOMAS L. FRIEDMAN Dublin Here's something you probably didn't know: Ireland today is the richest country in the European Union after Luxembourg. Yes, the country that for hundreds of years was best known for emigration, tragic poets, famines, civil wars and leprechauns today has a per capita G.D.P. higher than that of Germany, France and Britain. How Ireland went from the sick man of Europe to the rich man in less than a generation is an amazing story. It tells you a lot about Europe today: all the innovation is happening on the periphery by those countries embracing globalization in their own ways - Ireland, Britain, Scandinavia and Eastern Europe - while those following the French-German social model are suffering high unemployment and low growth. Ireland's turnaround began in the late 1960's when the government made secondary education free, enabling a lot more working-class kids to get a high school or technical degree. As a result, when Ireland joined the E.U. in 1973, it was able to draw on a much more educated work force. By the mid-1980's, though, Ireland had reaped the initial benefits of E.U. membership - subsidies to build better infrastructure and a big market to sell into. But it still did not have enough competitive products to sell, because of years of protectionism and fiscal mismanagement. The country was going broke, and most college grads were emigrating. 'We went on a borrowing, spending and taxing spree, and that nearly drove us under,' said Deputy Prime Minister Mary Harney. 'It was because we nearly went under that we got the courage to change.' And change Ireland did. In a quite unusual development, the government, the main trade unions, farmers and industrialists came together and agreed on a program of fiscal austerity, slashing corporate taxes to 12.5 percent, far below the rest of Europe, moderating wages and prices, and aggressively courting foreign investment. In 1996, Ireland made college education basically free, creating an even more educated work force. The results have been phenomenal. Today, 9 out of 10 of the world's top pharmaceutical companies have operations here, as do 16 of the top 20 medical device companies and 7 out of the top 10 software designers. Last year, Ireland got more foreign direct investment from America than from China. And overall government tax receipts are way up. 'We set up in Ireland in 1990,' Michael Dell, founder of Dell Computer, explained to me via e-mail. 'What attracted us? [A] well-educated work force - and good universities close by. [Also,] Ireland has an industrial and tax policy which is consistently very supportive of businesses, independent of which political party is in power. I believe this is because there are enough people who remember the very bad times to de-politicize economic development. [Ireland also has] very good transportation and logistics and a good location - easy to move products to major markets in Europe quickly.' Finally, added Mr. Dell, 'they're competitive, want to succeed, hungry and know how to win. ... Our factory is in Limerick, but we also have several thousand sales and technical people outside of Dublin. The talent in Ireland has proven to be a wonderful resource for us. ... Fun fact: We are Ireland's largest exporter.' Intel opened its first chip factory in Ireland in 1993. James Jarrett, an Intel vice president, said Intel was attracted by Ireland's large pool of young educated men and women, low corporate taxes and other incentives that saved Intel roughly a billion dollars over 10 years. National health care didn't hurt, either. 'We have 4,700 employees there now in four factories, and we are even doing some high-end chip designing in Shannon with Irish engineers,' he said. In 1990, Ireland's total work force was 1.1 million. This year it will hit two million, with no unemployment and 200,000 foreign workers (including 50,000 Chinese). Others are taking notes. Prime Minister Bertie Ahern said: 'I've met the premier of China five times in the last two years.' Ireland's advice is very simple: Make high school and college education free; make your corporate taxes low, simple and transparent; actively seek out global companies; open your economy to competition; speak English; keep your fiscal house in order; and build a consensus around the whole package with labor and management - then hang in there, because there will be bumps in the road - and you, too, can become one of the richest countries in Europe. 'It wasn't a miracle, we didn't find gold,' said Mary Harney. 'It was the right domestic policies and embracing globalization.'

Subject: Male Baltimore Oriole Feeding Chick From: Terri To: All Date Posted: Wed, Jun 29, 2005 at 09:20:47 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=5487&u=4|25|... Male Baltimore Oriole Feeding Chick New York City-Central Park.

Subject: Looking Back From: Terri To: All Date Posted: Wed, Jun 29, 2005 at 07:30:29 (EDT) Email Address: Not Provided Message: These months of a flat overall American stock market have given valuations a chance to improve since earnings are positive. I take this as a helpful period, and am rather pleased with how selected value sectors have done and of course there are long term bond funds which have been terrific.

Subject: China's and India's Development From: Terri To: All Date Posted: Tues, Jun 28, 2005 at 17:45:17 (EDT) Email Address: Not Provided Message: China is accomplishing what not long ago economists first corrected lamented and then recognized and brightened, China is developing a remarkable better life for 1.4 billion people. Why development did not close the gulf between richer and poorer economies for almost the entire 20th century was not clear, but then China and India began to show the most hopeful development. Life for 2.4 billion people could be more promising than imagined only 15 years ago. With no exception African friends iterate that they look in hope to the development pattern set in Asia, and I do as well.

Subject: Re: China's and India's Development From: Mik To: Terri Date Posted: Wed, Jun 29, 2005 at 11:52:35 (EDT) Email Address: Not Provided Message: Ahh but do you know that as a proportion of population size, both China and India see 4 and 5 times more 'Aid' money than Africa? A disproportionally higher amount of assistance goes to China and India than to Africa. Let me give you the example: Just recently the US and UK were proude to anounce 25 billion US$ in aid money to Africa.... over 10 years. That would make it approximately 2.5 billion US$ per year. In India the transport sector sees more than 2.5 billion US$ in aid per year. In other words, the aid money dedicated to building roads in India is more than the entire African continent gets. The same story goes for China. So why is India and China so lucky to receive all this money? Is it perhaps because African governments can't get their act together? But China has a communist government with dictatorship style management. Oh but China shows excellent economic growth, yet in 2003 the fastest growing countries in the world were Mozambique and Uganda at 12% and 10% GDP growth respectively. In essence, Africa has already been showing good governance, good economic management and even good growth. So whay does India and China still receive 4 to 5 times more aid money that the entire African continent?

Subject: Siyofika nini la' siyakhona From: Pancho Villa To: Mik Date Posted: Wed, Jun 29, 2005 at 19:47:08 (EDT) Email Address: nma@hotmail.com Message:

Subject: When will we arrive at our destination? From: Jennifer To: Pancho Villa Date Posted: Wed, Jun 29, 2005 at 20:40:25 (EDT) Email Address: Not Provided Message:

Subject: Re: China's and India's Development From: Terri To: Mik Date Posted: Wed, Jun 29, 2005 at 13:59:16 (EDT) Email Address: Not Provided Message: Thank you, I will look at the question of how foreign aid is allocated. I did not know and am surprised that we have extended any foreign aid to China in particular. That we extend aid to India is less surprising, but I was not aware of this either. Time to look at the issue.

Subject: Re: China's and India's Development From: Terri To: Terri Date Posted: Wed, Jun 29, 2005 at 19:24:11 (EDT) Email Address: Not Provided Message: Interesting questions which I simply can not answer, unless foreign aid is tied to trade potential and there is thought to be more trade potential in China and India than Africa. But, I do not know any of the answers.

Subject: Re: China's and India's Development From: Mik To: Terri Date Posted: Thurs, Jun 30, 2005 at 12:56:52 (EDT) Email Address: Not Provided Message: There is an interesting document by the OECD about 'tied aid'. And although aid should not be tied, the document found that it is indeed very tied. Also there is a problem with the definition of 'aid'. The International Development Association (IDA) is a section of the World Bank that funds most of the world bank's projects. As the name states - it is not a bank nor a loaning organization, but rather an association of funders working primarily in aid. However, they often do look for some sort of repayment (normally 3% over 90 years) where a country can repay. So perhaps the IDA favours countries that can do some sort of repayment, yet even those repayment terms should be regarded as 'aid' money. As you can see the issue is a whole lot more complicated. I personally believe that aid is being tied to investment opportunities. If a country shows great promise for investors, they get their respective governments to provide some 'aid' money as a sweetener to the overall deal. Kind of like 'We'll provide some aid money uplifting the nearby community and you in turn allow us to operate under favourable conditions.' Under that premise, I can now understand how China and India receive so much aid.

Subject: Re: China's and India's Development From: Terri To: Mik Date Posted: Thurs, Jun 30, 2005 at 14:19:08 (EDT) Email Address: Not Provided Message: All you write is sensible, but I can find no evidence that America has extended aid to China for a decade. We do however give export credit to American exporters to China. The point you make is nonetheless sound. The major aid receivers are Egypt and Israel by the way.

Subject: America and China From: Terri To: All Date Posted: Tues, Jun 28, 2005 at 17:12:32 (EDT) Email Address: Not Provided Message: Interesting that the price for Unocal is 18 billion dollars, while the market value of Google is 84 billion. That we are dependent on China is no more than saying China is dependent on us, and I find this mutual need, mutual relationship quite promising. I do not know whether China should be allowed to buy Unocal, but I find the ever increasing strategic, economic and cultural ties between the countries benign.

Subject: Unlikely Hero: The 'Polish Plumber' From: Emma To: All Date Posted: Tues, Jun 28, 2005 at 16:43:10 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/26/international/europe/26poland.html?pagewanted=all Unlikely Hero in Europe's Spat: The 'Polish Plumber' By ELAINE SCIOLINO PARIS - Blond, buffed and blow-dried, a come-hither half-smile on his face, the man in the travel ad grips the tools of his trade as he beckons visitors to Poland. 'I'm staying in Poland,' the man says, a set of strategically placed pipes in one hand, a metal-cutter in the other. 'Lots of you should come.' He is the 'Polish plumber,' a mythical figure who became a central actor in the debate in France over the European Union constitution, which was roundly rejected by French voters last month. Portrayed as a predator who would move to France and steal jobs by working for less pay, this 'plumber' has come to personify French fears about the future. Now the Polish Tourism Bureau is using the character to try to allay French fears and attract visitors at the same time. 'With all the bad publicity about the 'Polish plumber,' we thought why not have a sense of humor and make him work for us?' Krzysztof Turowski, the creator of an ad on the bureau's Web site, said in a telephone interview from Warsaw. 'We picked someone handsome and clean with a sexy look in his eyes - to get the French to come to our beautiful country.' Next week the tourist office will offer Paris a firsthand look at Piotr Adamski, the 21-year-old model, who will also pose at the Eiffel Tower in the same green overalls and Stanley Kowalski T-shirt he wore in the ad. Mr. Adamski has become such an overnight sensation that even Poland's former president, Lech Walesa, the Nobel Peace Prize winner and founder of the Solidarity labor movement, offered him advice for his Paris trip. 'I suggest that he ask the French why the heck for so many years they encouraged Poles to build capitalism when as it turns out they are Communists themselves,' Mr. Walesa, an electrician by trade, said in an interview published Friday in the Polish daily Gazeta Wyborcza. He added, 'Piotr probably won't have the chance to say this, so he should at least publicize Poland well in Paris.' The ad campaign blends humor with a more serious message. At a moment when France is suffering from an unemployment rate of more than 10 percent, and Prime Minister Dominique de Villepin is waging what he calls a 100-day battle to combat it, it is an effort to assure the French that Polish workers have no intention of stealing their jobs. Even if they wanted to, they could not. Under the treaty that allowed Poland and nine other countries to join the European Union last year, older members of the union can restrict access to their labor markets for up to seven years. Only Britain, Ireland and Sweden have allowed in workers from the new members. But labor has always been one of Poland's most important exports. In a sense, the 'Polish plumber' is much more than that, because in most cases he is also an electrician and sometimes even a mason, carpenter, painter and roofer as well. 'It's ridiculous, truly bizarre to say Polish plumbers are dangerous for France,' said Wieslaw Zieba, 55, who has worked in France as a plumber and electrician for 25 years. 'Some of the things that have been said by political figures border on the xenophobic. This is a country that desperately needs more plumbers. But it's not a noble profession that everyone wants to follow. You have to clean up after flooding and unblock toilets.' Indeed, according to the French plumbing union, there is a shortage of 6,000 plumbers, and there are only about 150 Polish plumbers in France. When Mr. Zieba first came to Paris, he said, he had no friends, knew no French and slept in the Metro. He now has dual Polish-French citizenship and runs a thriving business that also does masonry, carpentry, plumbing and electrical work. But the fear of cheap imported labor in France is so profound that it has dominated the discourse about the troubled French economy. The term 'Polish plumber' was coined in March by Philippe de Villiers, the head of the right-wing Movement for France party, in response to a European Union proposal known as the Bolkestein directive, which would make it easier for workers to live in other member countries and receive the same salaries and benefits as if they had never left home. The thinking behind the directive was that if goods could move freely across the borders of European Union countries, why not services? The directive 'will permit a Polish plumber to come to work in France with a salary and social protection of his country of origin,' Mr. de Villiers said. He also expressed worries about the 'Latvian mason' and the 'Estonian gardener.' At a news conference in April, Frits Bolkestein, a former Dutch member of the European Commission, used the term himself, saying he was looking forward to the arrival of 'Polish plumbers to do work, because it is difficult to find an electrician or a plumber where I live in the north of France.' He said he hoped that 'Czech nannies' and 'Slovenian accountants' would find work in France as well. The next week, a band of rogue electricians from the state-owned utility EDF cut off the power supply to his country home in the village of Ramousies (population 248). Opponents of the European Union constitution, meanwhile, urged voters to reject the document, arguing falsely that it would facilitate the invasion of the Polish plumber. The issue became so serious that Poland's president, Aleksander Kwasniewski, brought it up during an official visit to France just days before the referendum. 'I know that the argument about the Polish plumber is very often used, or exploited, in France, but I must tell you that this is really exaggerated,' he said. 'It's not true that low-wage workers from the new members of the European Union have flooded the other countries.' Meanwhile, Mr. Adamski, the model, is getting used to his newfound fame, boasting that he spent several days installing the hot and cold water faucets in his Warsaw apartment. 'I'm very pleased to be the postcard for my country,' he said in a telephone interview from Warsaw. But for a real-life Polish plumber like Mr. Zieba, who is 5 feet 4, wears old jeans and hides his belly under a multipocketed work vest, plumbers just do not look like that. Mr. Zieba noted that in the ad, Mr. Adamski is carrying the wrong cutter for the plastic and metal pipes he is holding. 'He's too lacquered, too handsome and too clean to be on a work site,' Mr. Zieba said of Mr. Adamski. 'He looks like something out of an X-rated fantasy film about women who are waiting for the plumber to come.' But then, he added, 'I wasn't so bad when I was his age.'

Subject: Yesterday's Special: Good, Cheap Dining From: Emma To: All Date Posted: Tues, Jun 28, 2005 at 16:00:52 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/26/nyregion/26restaurant.html?pagewanted=all Yesterday's Special: Good, Cheap Dining By JENNIFER STEINHAUER and JO CRAVEN McGINTY There was a restaurant in Greenwich Village called Le Zoo, and it was good, and it was cheap, and now, like so many others of its kind, it is gone. It was not the sort of place that drew tourists clutching their Zagats, but it swelled each night with young hipsters and people from the neighborhood, who sipped red wine at the bar and ate $6.50 trout salad and $13 salmon at the crammed-together tables, and yes, smoked. But last year a new restaurant, the Spotted Pig, arose in Le Zoo's spot on West 11th Street, and it quickly became a destination for patrons with deeper pockets and expense accounts. Pub classics like sautéed veal kidneys are $18, and desserts are $6, not $4. The average bottle of wine is $30. Restaurants like Le Zoo - small, with a decent and inexpensive wine list, a memorable special, a total bill for two of $50 - used to be easy to recognize, the high-quality neighborhood places that were one of New York's pleasures. But now, in Manhattan, they are increasingly becoming a memory. In interviews, several restaurateurs confirmed what many New York diners have long suspected: it is becoming impossible to serve innovative and high-quality food at reasonable prices in Manhattan. Melissa O'Donnell, formerly one of the chefs at Le Zoo and now the owner of Salt in SoHo - where the entrées are 30 percent higher than at Le Zoo - said one more rent increase could be the end of her restaurant. 'I'm from Manhattan, my client base is here, I have been working in downtown Manhattan since I went to cooking school,' she said. 'This is my home. But I think my type of place here is going to be a thing of the past.' To get a rough gauge of how much more diners now have to pay, The New York Times compared the average price of a 1994 meal in Manhattan restaurants given one star in the newspaper's restaurant reviews with last year's average. In 1994, the average one-star meal cost $33; it now costs a little more than $50, pushing it outside many people's weekend budgets. That is a 51 percent increase, and even after adjusting for inflation, it represents an 18 percent increase. Prices, which provide a snapshot of city dining, were taken from the Zagat Guides for 1994 and 2004. The analysis of prices did not try to measure Greek diners, corner Chinese restaurants or chicken spots, no matter how sublime their wings. There remain many satisfying and inexpensive restaurants in what is arguably the nation's greatest food city - restaurants filled with patrons who are not seeking a memorable dining experience each and every night that they disdain their stoves. But the high-quality bistros, trattorias and American comfort-food outposts, where diners flocked for a good meal, quite possibly served on a tablecloth, have greatly increased their prices, or moved outside Manhattan. The new hotbeds of affordable innovative cuisine are increasingly in places like Park Slope and Carroll Gardens in Brooklyn, or Astoria in Queens, having been pushed out by higher rents in Greenwich Village and Chelsea. Increasingly rare in Manhattan are places like Mary's, which a few years ago sold fillet of striped bass for $13.50 in a noisy, happy spot on Bedford Street, and is now a private townhouse. Or Spartina on Greenwich Street, where locals filled the tables, dined on $11.50 plates of black linguine with calamari, and dreaded uptown interlopers. Reflecting the endless transformation of Lower Manhattan, Spartina was replaced with the Harrison, a far more expensive hot spot where the peeky toe crab salad alone is $15 and local denizens press up against Upper East Side investment bankers and Upper West Side moms in search of a big night out. Order a salad, an entrée, a glass of wine or two and dessert, and by the time you've paid the check, you have easily spent $150 for two. Even at the restaurants reviewed in The Times's '$25 and Under' column, the analysis showed, a couple that does not choose carefully may, together, spend well over $50 for an appetizer, entrée and dessert - and that is if they drink only tap water. Last year, Times critics searching for meals of distinction for the $25 column traveled to Brooklyn more than twice as often as they did in 1994. Ethnic fare that even 10 years ago was generally considered inexpensive if seductive has also gone upscale in Manhattan. Consider Devi, an Indian place on East 18th Street where the cheapest entree hovers around $15, and Onera, ostensibly an Upper West Side neighborhood Greek spot were appetizers range from $8 to $11. To some degree, the price increases reflect Manhattan's increasingly concentrated wealth, and the food fetishes of those who are willing to spend it. The higher checks often include a $10 bottle of water, frothy cocktails and organic produce, driven by both their availability and the consumer's demand for them. But more significant, restaurateurs have been forced to pass on the costs of the febrile real estate market. Restaurant leases have more than tripled in many neighborhoods, which has greatly raised prices on even the most prosaic of hash. 'You can't just be a neighborhood restaurant anymore,' said Robert K. Futterman, who owns his own real estate firm. 'You have to be a destination for people from other neighborhoods if you are going to make the rents.' Price increases in the Times analysis were most extreme in the high and lower end of the fine dining scale, which suggest that increased food costs alone do not drive the increases. At two-star restaurants, price increases matched the rate of inflation, and at three-star restaurants, increases were below the rate of inflation, suggesting that their owners had less flexibility to raise their prices. Menu prices also seem to be holding steady among the great middle, those restaurants that serve decent but forgettable food, get scant attention from the food press and stick to basic food without flair. Such restaurants have always lined the main avenues on the Upper East Side and Columbus Avenue, and their numbers are growing, according to Tim Zagat, the guidebook publisher. Mr. Zagat estimated that only about 10 or 15 restaurants north of 50th Street on the East and West Sides rise above that crowd. The affordable high-quality restaurants that were once so common in Manhattan are not quite dodos, but rather like kakapos, ground parrots that are endangered on the island of their birth. Like the kakapo, they have been transported from their natural habitat to other terrain. In the restaurants' case, that place is Brooklyn. In 2003, this dawned on the chef Frank Falcinelli, of Moomba fame, when he scoured his own neighborhood, Greenwich Village, for a spot to open an Italian restaurant. He knew the lease was up at Grange Hall, his neighbor on Commerce Street, but said the landlord demanded $23,000 a month. Next, he looked in the East Village, searching in vain for 1,000 square feet for $3,500 a month. 'I was like, where can I get space, light and a basement and all the clientele I want?' he said. 'People that are my age, 39, and really smart 30-year-olds, and the I-have-no-choice artists and producers and directors. The choices were Park Slope and Carroll Gardens.' Carroll Gardens it was, and for less than half the price of the East Village, he said, he found an old blacksmith shop to serve up inventive Italian food for $2 to $14. It is called Frankies 457 Court Street Spuntino, and he compares its cuisine to Bar Patti in Greenwich Village, where three courses run well over $50. 'The quality of the one-star restaurants in Manhattan are going down to the ground because they can't afford it anymore,' Mr. Falcinelli said. 'The average restaurant profit is 10 cents on the dollar. And when too many paper towels get wasted, it is four cents. I don't have any regrets.'

Subject: Selasphorus Hummingbird From: Terri To: All Date Posted: Tues, Jun 28, 2005 at 15:57:57 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=4925&exhibition=11&pass=public&size=default&lang=eng Selasphorus Hummingbird New York City--Central Park, Strawberry Fields.

Subject: An Energy Producer Utility Consumer Bill From: Terri To: All Date Posted: Tues, Jun 28, 2005 at 15:41:57 (EDT) Email Address: Not Provided Message: There will soon be an energy bill passed, and close attention should be given to the provisions of the bill for investment purposes, both energy producers and utility consumers will be much effected. A rule I always follow in investing is know what is coming from Congress.

Subject: Scrushy & friends bleeding middle-class From: Pete Weis To: All Date Posted: Tues, Jun 28, 2005 at 13:37:46 (EDT) Email Address: Not Provided Message: HealthSouth CEO was just found 'not guilty' of a $3 billion dollar stock fraud case. Investment banking giant UBS figured heavily in helping HealthSouth hide its troubles and continued to recommend HealthSouth stock as it did Enron stock up until troubles at these two companies finally made front page news. Not that this had much to do with the jury finding Scrushy not guilty, but for UBS and many others it certainly seems to have made a difference (with regard to enforcement and prosecution) how you handle your political contributions and who you hire for influential effect. Bush Donor Profile Joseph J. Grano Occupation: Chair & CEO Employer: UBS Wealth Management USA Home: New York, NY Ex-Green Berets Captain Joseph Grano worked 16 years at Merrill Lynch (see Stanley O’Neal) before becoming president of PaineWebber in 1994. After Switzerland’s UBS Warburg acquired PaineWebber in 2000, it named Grano head of its new UBS Wealth Management USA arm (see James MacGilvray). UBS’ trans-Atlantic acquisition was made possible by then-Senate Banking Committee Chair Phil Gramm, who pushed through legislation to repeal a post-Depression ban on combining banking, brokerage and insurance operations. UBS then took care of Gramm, naming him a vice chair after he left the Senate in 2002. Gramm, who gave $612,000 of his Senate war chest to Texas Governor Rick Perry in 2002, has promoted a complex UBS deal in which the Texas state pension fund would take out life insurance policies on state workers. UBS’ relations with George W. Bush date back to 1987, when investment bank Stephens, Inc. (see Warren Stephens) convinced UBS to invest $25 million to keep Bush’s Harken Energy afloat. UBS has weathered many recent corporate scandals. UBS broker Chung Wu was fired hours after he advised clients to sell Enron stock in August 2001, with management quickly notifying clients that, “Mr. Wu’s statements are contrary to UBS PaineWebber’s current recommendation concerning Enron.” After Enron collapsed, UBS bought up its energy trading unit and twin skyscrapers. UBS and nine other big Wall Street firms agreed in 2002 to pay a record $1.4 billion to settle charges that their researchers promoted stocks of companies that kicked back lucrative underwriting contracts. UBS fired two brokers and disciplined nine others in 2003 for “market-timing” violations, when they allowed big investors to conduct rapid-fire mutual fund trades at the expense of regular investors. Congress is probing UBS’s role at HealthSouth, which committed a $4.6 billion accounting fraud. UBS advised HealthSouth on $2 billion worth of deals and heavily promoted its stock after the accounting scandal broke. A lawsuit by HealthSouth investors alleged in 2004 that the company had told UBS bankers about its fraud as early as 1999. The U.S. Federal Reserve fined UBS $100 million in 2004 for violating a currency-exchange contract that prohibited providing U.S. currency to such U.S.-sanctioned countries as Cuba, Libya, and Iran. George W. Bush’s administration reportedly considered Grano for a top economic post in 2002, when it axed Treasury Secretary Paul O’Neill and Economic Advisor Lawrence Lindsey. President Bush appointed Grano in 2002 as chair of the Homeland Security Advisory Council (see Tom Ridge). Four other Pioneers (see Richard Davidson, Archie Dunham, Erle Nye and Steven Burd) sit on advisory councils for the Department of Homeland Security, which has a $30 billion budget. Grano was one of the investors who sold a majority stake in the Maryland Jockey Club racetrack in 2002. The terms of sale entitle Grano and other influential sellers to a cut of any future track earnings from slot machines, the Baltimore Sun reported, if Maryland legalizes slots.

Subject: Roll Over, Godzilla: Korea Rules From: Emma To: All Date Posted: Tues, Jun 28, 2005 at 11:53:09 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/28/international/asia/28wave.html?pagewanted=all Roll Over, Godzilla: Korea Rules By NORIMITSU ONISHI TAIPEI, Taiwan - Here in one of the first corners of Asia hit by the 'Korean Wave' of cultural exports, a television series about a royal cook, 'A Jewel in the Palace,' proved so popular that it is now used to advertise South Korea on the Taipei subway. A huge hit in Mongolia, the drama also fueled a boom in tourists from Hong Kong visiting South Korea. A weepy love story, 'Winter Sonata,' became the rage in Uzbekistan after driving the Japanese into a frenzy last year. In Thailand and Malaysia, people devoured 'A Tale of Autumn,' and Vietnamese were glued to 'Lovers in Paris.' In China, South Korean dramas are sold, and pirated, everywhere, and the young adopt the clothing and hairstyles made cool by South Korean stars. South Korea, historically more worried about fending off cultural domination by China and Japan than spreading its own culture abroad, is emerging as the pop culture leader of Asia. From well-packaged television dramas to slick movies, from pop music to online games, South Korean companies and stars are increasingly defining what the disparate people in East Asia watch, listen to and play. The size of South Korea's entertainment industry, which began attracting heavy government investment only in the late 1990's, jumped from $8.5 billion in 1999 to $43.5 billion in 2003. In 2003, South Korea exported $650 million in cultural products; the amount was so insignificant before 1998 that the government could not provide figures. But the figures tell only part of the story. The booming South Korean presence on television and in the movies has spurred Asians to buy up South Korean goods and to travel to South Korea, traditionally not a popular tourist destination. The images that Asians traditionally have associated with the country - violent student marches, the demilitarized zone, division - have given way to trendy entertainers and cutting-edge technology. Candy Hsieh, 22, who was browsing through shelves of South Korean dramas at a video store here, said her parents became fans and visited South Korea last year. 'I used to think that Korea was a feudalistic, male-centered society,' Ms. Hsieh said. 'Now I don't have the same image as I had before. It seems like an open society, democratic.' South Korea's entertainment industry was born for business and political reasons in the late 1990's. Increasingly rich Asians were thought to be receptive to new sources of entertainment. What is more, South Korea, which long banned cultural imports from Japan, its former colonial ruler, was preparing to lift restrictions starting in 1998. Seoul was worried about the onslaught of Japanese music, videos and dramas, already popular on the black market. So in 1998 the Culture Ministry, armed with a substantial budget increase, carried out its first five-year plan to build up the domestic industry. The ministry encouraged colleges to open culture industry departments, providing equipment and scholarships. The number of such departments has risen from almost zero to more than 300. In 2002, the ministry opened the Korea Culture and Content Agency to encourage exports. By the time almost all restrictions on Japanese culture were lifted in January 2004, the Korean Wave - a term coined in China - had washed across Asia. To South Koreans like Kim Hyun Kyung, a director at Cheil Communications, an advertising agency in Seoul, feeling the reach of their culture for the first time was surprising. In 2001, during a trip to Los Angeles, she met a Chinese woman who brightened up when she learned that she was Korean. 'She was a big fan of Kim Hee Sun,' Ms. Kim said, referring to a South Korean actress who is now more popular in China than at home. 'She was happy that I had the same last name as she did. We were meeting for the first time, but she had a favorable image of Korea.' South Korean dramas and music have started edging out American and Japanese ones in Taiwan, which caught the Korean Wave early this decade. Five years ago, Gala TV here paid $1,000 for one hour of a South Korean drama, compared with $15,000 to $20,000 for a Japanese one, said the network's vice president, Lai Tsung Pi. Now, a South Korean drama commands $7,000 to $15,000; a Japanese, $6,000 to $12,000. 'Korean dramas are considered more emotionally powerful, and their actors are willing to come here to promote them,' Mr. Lai said. 'Because of the Korean dramas, Taiwanese people have become more willing to buy their products.' Sales of South Korean consumer goods and cars have risen sharply here in the last five years as well. The number of Taiwanese going to South Korea rose from 108,831 in 2000 to 298,325 last year, even though the overall number of Taiwanese traveling abroad fell during that period. South Korea has also begun wielding the non-economic side of its new soft power. The official Korean Overseas Information Service last year gave 'Winter Sonata' to Egyptian television, paying for the Arabic subtitles. The goal was to generate positive feelings in the Arab world toward the 3,200 South Korean soldiers stationed in northern Iraq. There have been unintended effects too. Copies of South Korean dramas and music are being increasingly smuggled from China into North Korea. One popular drama in the Communist North was 'All In,' the true story of a South Korean gambler who went to Las Vegas with only $18 and became a millionaire. North Korean women began copying the hairstyle of its lead actress, Song Hae Kyo, prompting the authorities there to crack down on 'untidy' hair, said Kim Yang Rae, director general of the Korean Foundation for Asian Culture Exchange. In mid-June, a 20-year-old North Korean soldier, Yi Yong Su, defected across the demilitarized zone into the town of Chorwon in central South Korea. The private said he had grown to admire and yearn for South Korea after watching its television programs, South Korean military officials told reporters. But the worry of a possible backlash - Taiwan, for instance, is considering levying a 20 percent tariff on Korean programs - impelled the Culture Ministry two years ago to form the cultural exchange foundation, to prevent Southeast Asian countries from feeling that they are regarded only as markets. 'We've never had this experience of seeing our culture spread outside our country,' Mr. Kim said about Korea's modern history. 'I'm very proud, but also very cautious.' At the New Fantasy Travel agency here, about 80 percent of travelers to South Korea pick television theme tours, visiting spots where their favorites dramas were filmed, said the general manager, Louis Wang. Mr. Wang himself is not a huge fan. But his children, who are, now feel closer to South Korea than to the country that considers Taiwan a renegade province. 'They've been learning the lifestyle of Koreans, their fashion and their food,' Mr. Wang said. 'So now they're more familiar with Korea's lifestyle than China's.'

Subject: Know Your Numbers, Improve Your Odds From: Emma To: All Date Posted: Tues, Jun 28, 2005 at 10:51:17 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/28/health/nutrition/28brod.html?pagewanted=all Know Your Numbers and Improve Your Odds By JANE E. BRODY Over the last 40 years, heart specialists have learned a lot about the way cholesterol behaves in the body, much to the benefit of Americans destined to suffer heart attacks or strokes - at least half of the population. As knowledge has grown, the goals of treatment have changed, with lifesaving effects. And now they are changing again. At first, pioneers bent on preventing cardiovascular disease focused only on a person's total blood cholesterol level. A level of 240 milligrams per deciliter of blood serum was considered 'normal' just a few decades ago. Then research, like the Framingham Heart Study in Massachusetts, showed that at least half of heart attack victims had cholesterol levels of 240 or below. Today, the goal for total cholesterol is 200 or less, preferably 180 if you want to remain heart-healthy. Cholesterol is not soluble in water and thus requires substances called lipoproteins to carry it in blood. As the chemistry and physiology of cholesterol became better understood through the work of scientists like Dr. Michael S. Brown and Dr. Joseph L. Goldstein, who shared a Nobel Prize in Medicine in 1985, attention shifted to low density lipoprotein cholesterol, or L.D.L., the so-called bad cholesterol. When L.D.L. is oxidized, it becomes glued to the lining of arteries that feed the heart, brain and tissues throughout the body, setting the stage for a heart attack, stroke or peripheral vascular disease. A Sliding Scale of Safety Based on current recommendations, people otherwise at low risk for heart disease should have an L.D.L. level of less than 130. For someone known to be at high risk or who already has heart disease, the desirable level of L.D.L. is much lower, well below 100. The statin drugs have revolutionized the treatment of elevated L.D.L. These drugs are especially effective combined with a heart-healthy diet and regular exercise. But the statins don't do much for the newest, and perhaps more important, focus of concern about cholesterol. It is the level of high-density lipoproteins, or H.D.L., a reverse carrier of cholesterol. H.D.L., often referred to as the good cholesterol, acts like an arterial Roto-Rooter, clearing cholesterol from blood vessels and routing it to the liver for elimination from the body. Unlike L.D.L., which should be a low as possible, the higher the blood level of H.D.L., the better, even if it means raising your total cholesterol level above 200. Low levels of H.D.L. - below about 40 milligrams for men and 50 for women - are associated with an increased risk of cardiovascular disease. People with 'longevity syndrome,' who live into their 90's without evidence of heart disease, typically have very high levels of H.D.L. There is considerable evidence linking an increased risk of heart disease and stroke more strongly to low H.D.L. levels than to high L.D.L. levels. For every one-milligram rise in H.D.L., the risk for developing cardiovascular disease falls by 2 to 3 percent. An H.D.L. level of 60 milligrams or higher helps to protect against this major killer. In addition to enabling the body to get rid of unwanted cholesterol, H.D.L. acts in several other protective ways: as an antioxidant deterring the harmful oxidation of L.D.L., and as an anti-inflammatory agent, helping to repair what is now considered a major player in blood vessel disease. And it has anticlotting properties, which can help keep blood clots from blocking arteries. Dr. Mark E. McGovern, chief medical officer at Kos Pharmaceuticals, regards H.D.L. as the most important new lipid treatment target. 'The need for drugs to increase H.D.L. is compelling and urgent,' Dr. McGovern wrote in the April issue of Postgraduate Medicine. Raising Good Cholesterol Statins do raise H.D.L. levels a little, perhaps 5 to 10 percent, but rarely enough to protect someone with low H.D.L. Other drugs now in use do a better job. Most effective are the niacin-based medications (but not niacin sold as a vitamin). These high-dose prescriptions come in immediate-release form to be taken two to four times a day and in extended-release form taken once a day. Niacin can raise H.D.L. levels by 15 to 30 percent, and it is especially effective at increasing the larger H.D.L. particles that do the best job of cleansing arteries. The other prescription drugs that can raise H.D.L.'s are fibrates, most often used to lower blood levels of artery-damaging fats called triglycerides. The fibrates, including gemfibrozil (Lopid) and fenofibrate (Tricor and Lofibra), raise H.D.L. by 10 to 15 percent. Developing more effective drugs to raise H.D.L. is an important goal. Meanwhile, some doctors are prescribing statins in combination with a niacin or fibrate. This is not ideal, since combining statins with fibrates greatly increases the risk of muscle damage, a rare but potentially serious complication of statins. Statins with niacin may cause liver problems. But you do not have to wait for the development of safer drugs to improve your cholesterol profile. Changes in the way you live can help to raise H.D.L. Regular aerobic exercise is a good place to start. But for it to result in a significant benefit in H.D.L., about 1,200 calories a week should be expended on activities like brisk walking, jogging, cycling or lap swimming. For most people, that means walking briskly for three miles four times a week. Duration of exercise, not intensity, confers the greatest benefit. If you are overweight, losing weight can raise your H.D.L. level. And if you are a smoker, quitting all forms of tobacco can increase your H.D.L. by 15 to 20 percent. Dr. Peter P. Toth of the University of Illinois School of Medicine at Peoria says certain dietary measures also help. A Mediterranean-style diet, rich in fruits, vegetables, whole grains, olive oil and legumes, is strongly linked to high blood levels of H.D.L. So is eating more fish (and taking fish oil supplements) and consuming fewer refined carbohydrates. A low-fat diet is not necessarily helpful. It may even lower H.D.L. levels if carbohydrates fill in the caloric gap. But the kinds of fats consumed can make a big difference. Most helpful are the monounsaturated fats found in canola, olive, avocado, nut and seed oils; nuts and avocados. These can improve H.D.L. without raising L.D.L. But if you replace saturated fats with polyunsaturates like corn, safflower and soybean oils, both L.D.L. and H.D.L. levels are likely to fall. Avoiding trans fats, formed when unsaturated oils are partly hydrogenated, is also important. These are found in many processed foods, especially snacks and packaged bakery items that contain added fats. Trans fats raise harmful L.D.L. and lower beneficial H.D.L. Another helpful dietary measure is to increase the soluble fiber in your diet. Soluble fiber is found in fruits, vegetables, legumes and oats. In addition, alcohol consumed in moderation, helps to raise H.D.L.'s. Consuming one or two drinks a day can increase H.D.L. levels significantly. Beyond that amount, alcohol can have harmful effects on the heart and increase cancer risk.

Subject: China's Debut as Auto Exporter From: Emma To: All Date Posted: Tues, Jun 28, 2005 at 09:25:56 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/28/business/worldbusiness/28yuan.html?pagewanted=all China's Debut as Auto Exporter Signals Growing Challenge to U.S. By KEITH BRADSHER GUANGZHOU, China - A line of Chinese-made cars began rolling onto a ship here Friday, bound for Europe. The cars, made at a gleaming new Honda factory on the outskirts of this sprawling city near Hong Kong, signal the latest move by China to follow Japan and South Korea in building itself into a global competitor in one of the cornerstones of the industrial economy. China's debut as an auto exporter, small as it may be for now, foretells a broader challenge to a half-century of American economic and political ascendance. The nation's manufacturing companies are building wealth at a remarkable rate, using some of that money to buy assets abroad. And China has been scouring the world to acquire energy resources, with the bid to buy an American oil company only the latest overture. Indeed, fierce domestic competition and a faster accumulation of financial assets are laying the groundwork for the arc of China's rise to be far greater than Japan's. 'It's going to be like the Arabs in the 70's and the Japanese in the 80's - we were worried they'd buy everything,' said William Belchere, the chief Asia economist for Macquarie Securities in Hong Kong. But unlike those previous challenges, which soon faded, 'longer term,' he added, China will 'be a much bigger force.' China's economy has risen rapidly with foreign expertise and investment. The Guangzhou airport here has a terminal designed by an American company, boarding gates supplied by a Danish company, and an air traffic control tower engineered by a company from Singapore. The resulting bilateral corporate tango - in contrast to the confrontations reminiscent of the 1980's and early 1990's when Japanese capital poured into the United States - means that China has many American corporate comrades, who have a stake in helping generate its growth. China, economists and Asia experts say, does not face some of the inherent limitations that ultimately stymied Japan and led to economic stagnation there over the last 14 years. With its giant population, China is developing a large and diverse economy, creating an almost Darwinian competition for a domestic market that has extremely low-cost companies ready to export inexpensive goods around the globe. 'The economy is much more flexible, adaptable than Japan's,' said Liang Hong, an economist in Hong Kong for Goldman Sachs. 'Being a continental economy is an advantage because it has competition within.' To be sure, China is still at an earlier stage of development than was Japan when its economic rise became a national obsession in the United States. In the 1980's and early 1990's, Japanese companies claimed a sizable chunk of the American car market and purchased Rockefeller Center and the Pebble Beach golf course. The bid by the China National Offshore Oil Corporation for Unocal has raised worries among some politicians in Washington. That $18.5 billion bid comes as America's trade deficit with China is ratcheting ever higher and the dollar is getting support from rising inflows of Chinese capital, which also helps support low interest rates. More disconcerting to others in Washington is China's growing ability to finance any political and military ambitions. China has missiles with nuclear weapons that intelligence experts describe as already able to hit not just Hawaii but probably California. Beijing also remains chilly toward American entreaties to put more pressure on North Korea to abandon its nuclear weapons program. In contrast, Japan's military dependence on the United States made it more willing to accept a steep appreciation in the yen in 1985 that hobbled Japanese exporters. So far, China has put off Bush administration demands to let its yuan appreciate. But China's economic rise also faces many obstacles. Its banks have huge portfolios of nonperforming loans that have not yet become a crippling problem because of rapid growth, but that could, as in Japan, make a recession someday even harder to combat. Banks suffering from fraud and political pressures have frequently made poor decisions on which borrowers should receive loans, so that China requires more investment for each dollar of economic growth than many rivals. Xu Xiaonian, an economist at the China Europe International Business School in Shanghai, said that China and Japan shared weak traditions of corporate governance, shareholder rights and the rule of law, and this has hurt efficiency. 'Efficiency rules the game and will decide who wins the game, and not how fast a country grows,' he said. China also has a one-party political system that has not changed nearly as quickly as its economy over the last quarter-century, and a population that will soon start to age rapidly because of the 'one child' policy. The Asian Development Bank forecasts that from 2015 to 2030, China's labor force will drop to 813 million from 842 million, as India's rises. The big question is how smoothly China will make the transition from central planning to capitalism. One of the best places to see the scope of China's challenge to the West, including China's economic strengths and its political weaknesses, is here in Guangzhou, a city of 12.2 million that is often compared to Los Angeles. At the new Honda factory, a tall fence of yellow wire mesh encloses a long section of the assembly line, where white robots poke and crane their long, vulture-like heads into gray, half-completed car bodies to perform 2,100 of the 3,000 welds needed to assemble each car. Workers in white uniforms and gray caps complete the rest of the welds, working as quickly as workers in American factories - but earning roughly $1.50 an hour in wages and benefits, compared with $55 an hour for General Motors and Ford factories in the United States. 'Our export activities are based on the synergy of China's competitive advantage and Honda's global network,' said Atsuyoshi Hyogo, the chairman of the Honda subsidiary here. As G.M. and Ford struggle with high health care costs for unionized work forces with an average age of nearly 50 in the United States, most of the Honda workers here appear to be in their 20's. They are unlikely to go to the doctor very often and when they do, doctors here charge less than $5 for an office visit and administering a few stitches. At a long hall in downtown Guangzhou, it quickly becomes apparent why the Honda workers are young and the pay is low. Rows of young men and women sit in plastic chairs watching two huge television screens covered with Chinese characters and numbers. While it resembles an off-track betting parlor in Hong Kong, 100 miles down the Pearl River, this is really the city's main government-run employment center. Some of the employers are hiring dozens of workers at a time, but one of the columns on each screen shows a requirement that would be illegal to list in the United States: the age range for acceptable applicants, most often 20 to 35. The official average unemployment rate in China's cities is 4.2 percent. But that excludes China's vast army of rural adults with little or no work to do, an army estimated as high as 150 million people. Millions move to the cities each year, an immense migration that slowed increases in Chinese industrial wages until the last year or two, when the Chinese economy has grown so rapidly that employers have begun bidding up workers' wages anyway. The plight of these migrants seems to be improving, and as it improves they may become even more attractive job applicants for multinationals looking for workers. 'People who came here looking for jobs used to be dirty and wearing bad clothes, but now they are coming in suits and ties,' said Zhang Jieming, the director of the Guangzhou Bureau of Labor and Social Security. One question is how China can retain the political stability it has shown for most of the last three decades while moving toward more democratic processes that the Communist Party has long claimed as its goal. A neighborhood election here on Saturday suggested that the path to political pluralism may be long. Gathered in a junior high school classroom were 45 representatives elected by 5,400 neighborhood residents. Only the representatives, not the general public, were allowed to vote for the next level of government, a seven-member council. Liu Yonghong, the director of the council and a Communist Party member, was re-elected, 44 to 1, defeating a nonparty member. Chen Xuangu, the deputy director and also a party member, turned back his opponent, also not a party member, by 40 to 5. The winners may not be in a hurry for change. 'If we have stability,' said Li Weijie, the director general of the municipal bureau of civil affairs, 'we can have successful development.'

Subject: Re: China's Debut as Auto Exporter From: Free Trade or Faire Trade? To: Emma Date Posted: Tues, Jun 28, 2005 at 11:07:07 (EDT) Email Address: Not Provided Message: It is all fine and well to trade with anyone, but what happens when we are fueling a communist system that just doesn't seem to become more open and seems to undermine our economic growth? Are we not shooting ourselves in the foot? If China was showing good signs towards a free market system with all the attributes such as unions and free speech I would not argue what is going on. But China's idea of unions is a farce and the people cannot uplift their incomes and are destined to remain under paid workers driving the great Chinese machine into the international arena AND we are paying for this. The US needs to charge a duty on all Chinese goods. Perhaps start off with a minimal duty of say 2% and incrementally raise the duty with every political impasse. If China shows positive signs towards fair trade, then lower the duty. I am outraged that Microsoft is working with the Chinese government on specialised software for controlling freedom of speech on the internet. How low will a company go to ensure they stay in a market? It is ridiculous that we are being shafted by the Chinese and they are not letting up. What is the real economic cost of cheap Chinese goods when we are fueling a communist regime that just won't shows signs of fairness. Whether it is fairness to their own people or fairness in the market.

Subject: Re: China's Debut as Auto Exporter From: Pancho Villa To: Free Trade or Faire Trade? Date Posted: Tues, Jun 28, 2005 at 11:47:33 (EDT) Email Address: nma@hotmail.com Message: Free Trade! Fair Trade? That depends on you, it's your wallet

Subject: Re: China's Debut as Auto Exporter From: So easy To: Pancho Villa Date Posted: Wed, Jun 29, 2005 at 11:38:32 (EDT) Email Address: Not Provided Message: Ahh yes the easy cop-out - 'well it's your wallet.' My wallet will dictate that I will always tend to go for what is cheaper. So I fuel the race to the bottom. But using the same argument why does government implement environmental restrictions that cause prices to go up? If it was up to 'my wallet', the environmental impact would not even feature as a decision, it would be price, price, price. Government implements those environmental restrictions because it is a responsible thing to do. And the same goes for fair trade. Government does have a role in ensuring responsible progress and avoiding the race to the bottom.

Subject: Re: China's Debut as Auto Exporter From: Pancho Villa alias Easy like a Sunday... To: So easy Date Posted: Wed, Jun 29, 2005 at 12:37:40 (EDT) Email Address: nma@hotmail.com Message: Guy de Jonquičres FT Tuesday June 28 2005 '...While China's regime is clearly authoritarian, so is Saudi Arabia's. The latter is governed by a repressive feudal monarchy with an appalling human rights record. It is linked to the export of terrorism. It is so far from being a free market economy that it has still not qualified to join the WTO. Yet Washington not only tolerates Saudi leaders, it cossets them. The US needs to keep the Saudi regime sweet because of its oil. But to assume, as American Chine-bashers implicitly do, that the US does not need China and can bend it to its own will is self-delusion. The two countries are deeply interdependent(!). China's need for US exports and inward investment is mirrored by its importance as a prime source of funding for the US budget and CA deficits....'

Subject: Google at $300 a Share From: Emma To: All Date Posted: Tues, Jun 28, 2005 at 05:59:19 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/28/technology/28google.html At $300 a Share, Google Looks Pricey and Still Irresistible By GARY RIVLIN SAN FRANCISCO - David Edwards, a financial analyst with American Technology Research, wants to believe in Google. But how do you embrace a stock that has more than tripled in 10 months and cracked the $300-a-share barrier so quickly since going public that much of its growth potential seems already built into the price? In early May, when Google was trading for $236, Mr. Edwards sent a note to clients of his firm, a group that includes wealthy individuals and money managers, recommending that they buy Google stock. But Mr. Edwards, who has been analyzing publicly traded stocks for seven years, acknowledges that Google has him flummoxed now that it has sprinted past $300, to close at $304.10 on Monday, up $6.85. As the stock continues to climb as if it is 1999 all over again, many of his counterparts, including those working for more prominent investment banks, continue to recommend the stock. Heath P. Terry, for instance, an analyst with Credit Suisse First Boston, predicted back in February, when Google was trading at just over $200 a share, that the stock would hit $275 within the year. When three months later the stock crossed $277, Mr. Terry raised his target price to $350, prompting several others to follow suit in the Wall Street equivalent of 'can you top this?' Mr. Edwards, too, says he believes in Google's long-term prospects, but he describes himself as stumped about the advice he should give clients in the short term. 'It seems like everyone has jumped on the price-raising bandwagon, which has left me sitting here and scratching my head,' he said. He does not have the conviction to advise clients to buy the stock, nor is he pessimistic enough to advise them to sell. 'Let's just say if I was owning Google stock right now, I'd be selling some,' he said. Few if any are suggesting that the torrid rise in Google's share price signals an industrywide bubble as in the late 1990's. Google, based in Mountain View, Calif., had more than $3 billion in revenue last year, almost all from its advertising business, and its profits have increased more than sevenfold since July 2004. By contrast, most of the dot-coms that flamed out so spectacularly in 2000 and 2001 never turned a profit, if they even had much in the way of revenue. Yet even some of those who were bullish on Google when it went public in August, at $85 a share, wonder if investors have forgotten some of the lessons of the 1990's. Until recently, John Tinker, an analyst with ThinkEquity, a San Francisco-based investment bank specializing in growth companies, had set the highest price target on Google. Yet even Mr. Tinker uses the 'B' word - bubble - when describing the market's giddy embrace of Google, even as he has a price target of $330 on Google. 'The good news is this is a one-stock bubble,' Mr. Tinker said. 'Remember, in 1998, everything went up. That's a huge difference this time.' At the close of trading on Monday, the cumulative worth of all shares of Google stock added up to $84.47 billion. That gives Google a market capitalization of nearly the combined worth of the other two publicly traded giants created by the Internet: eBay, worth $45.37 billion, and Yahoo, worth $49.83 billion. Comparisons are also being made between Google and Time Warner, another company deriving the bulk of its revenue from advertising. Time Warner had a market capitalization of $79.19 billion at the close of the market on Monday, below Google's though it posted first-quarter revenue eight times that of Google, and profits about three times as large. The increase in the share price has been good for Google's two founders, Sergey Brin and Larry Page. They each have about 36 million shares, according to a proxy filed in early April and updated Yahoo Finance data. At Monday's closing price, that would give each about $11 billion in stock, excluding options. In addition, they have each made more than $500 million by selling a fraction of their shares (about 4.5 percent apiece) since Google went public. Any number of theories might explain the most recent run-up in Google's stock, which has risen 67 percent since April 1. Those range from data suggesting that Internet advertising revenue is rising by as much as 40 percent a year - a trend sure to benefit Google - to a herd mentality among mutual fund managers ready to declare that resistance is futile: to post the kind of returns that would put them in the upper echelons of performance tables, they need to own shares in Google. 'This is where you can say this is like 1998,' Mr. Tinker said. 'Institutions realize they can't afford not to be in, whatever the price.' Google executives, especially its two founders, were outspoken before its public offering in insisting that the company would not play by established Wall Street rules, unnerving any number of institutional investors. But, according to Vickers Stock Research, 38 percent of Google's shares were held by mutual funds and other professionally run pools of money in May, compared with 35 percent one month earlier. 'There's been a waving of the white flag,' Mr. Tinker said. 'People felt left behind.' Still, by comparison, 72 percent of mutual funds and other professional pools own Yahoo shares. Mr. Terry of Credit Suisse thinks that even at its current price, Google is still worth buying, noting the company's aggressive moves to extend its core search business. On Monday, for example, it announced a new bit of software called the Google Video Viewer, complementing its effort to encourage users to submit their own video to its database and adding a 'search within the video' feature. John Battelle, the author of a book on Google called 'The Search,' to be published in September by Portfolio Hardcover, says it is only natural that people want to believe in Google. Those who wanted to believe that the Internet could make them rich might have learned a hard lesson in 2000 and 2001, but that did not mean the dream entirely died. 'If you really believe in something, you're looking for a place where you can prove you were right the first time,' he said. 'And Google is such a place.'

Subject: Scarlet Tanager Feeding From: Terri To: All Date Posted: Mon, Jun 27, 2005 at 20:12:16 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=3268&u=75|309|... Scarlet Tanager Feeding New York City--Inwood Park.

Subject: Relative Value From: Terri To: All Date Posted: Mon, Jun 27, 2005 at 12:55:59 (EDT) Email Address: Not Provided Message: The question I always ask myself when reading Shiller is not whether there is logic to the arguments, for there always is, but how to find relative value in assets no matter the projected return. There is a reason regulated public utilities have performed so well these last 5 years. There was where relative value could be found among other sectors.

Subject: Shiller is getting shriller... From: Pancho Villa To: All Date Posted: Mon, Jun 27, 2005 at 10:48:23 (EDT) Email Address: nma@hotmail.com Message: On stock market fantasies of governments Plans that rely on high returns, as even governments seem to be making, are not advisable ROBERT J SHILLER Historically, the stock market has performed well. In his celebrated 2002 book, Stocks for the Long Run, Jeremy Siegel shows that the American stock market returned 6.9% a year in real terms between 1802 and 2001. Though the return varied by decade, even turning negative in some decades, it performed fairly consistently on the whole. This 6.9% annual average return has since been referred to as ‘Siegel’s constant,’ as if Siegel had discovered a new law of nature. The idea that stocks will perform well in the future has many promoters today, especially among those trying to sell investments in stocks. In the United States, President George W Bush’s Commission to Strengthen Social Security cited Siegel for its claim that the government should encourage people to invest in stocks. Bush has been travelling the country, promoting a plan to introduce personal retirement accounts invested in stocks and bonds. The plan assumes a 6.5% real return for stocks—only slightly below Siegel’s constant—in future decades. But most people don’t believe the stock market will perform so well in the future. Siegel himself recently projected only a 6% average real return for US stocks over the next four decades. Others have lower expectations. I have been conducting surveys of US investors under the auspices of the Yale School of Management, asking what percentage change they expect for the Dow Jones Industrial Average. The expected one-year increase in the Dow for 2005 averages 4.8% for institutional investors and 4.3% for individual investors. • The Bush government is promoting a market-based personal retirement plan • Its assumption of an annual real 6.5% yield in the future appears suspect • Statistics on past stock market performance mislead due to selection bias On closer inspection, the idea that the market will yield a real 6.9% a year in the future appears suspect. Think about it: investing in the stock market at 6.9% a year and reinvesting any dividends means that, in a tax-free account, the real value of the investment will double every 10 years. At that rate, a 20-year-old who, in 1960, invested $4,000 a year in a tax-free account in the US stock market, would have one million dollars today, at age 65. Should we expect to be able to do that in the future? Obviously, most people didn’t invest this way in 1960. But could most people have? If so, how would the economy, with the labour and material resources at its disposal, provide the large houses, luxury cars and high-end services that millionaires expect? It is natural to suppose that it could not. In fact, statistics on past stock market performance mislead because of what statisticians call “selection bias.” This occurs when the sample from which a statistic is derived is not representative of all the data. Several kinds of selection bias must be considered when we look at Siegel’s constant. The most fundamental problem is that, in examining stock market investments, we are selecting an economic activity because it was a consistent success in the past. We are trying to extrapolate the past experience of a small fraction of the world population that we have chosen to examine because they made a lot of money. Of course, if one looks at many different investment strategies and many different countries, one can find something that performed spectacularly in the past, even if there is no strategy that can be expected to do so well in the future. The US had one of the world’s most successful stock markets in the 20th century. Elroy Dimson, Paul Marsh, and Mike Staunton wrote in their book, Triumph of the Optimists, that of 15 countries that have advanced economies today, the US stock market ranked fourth in its rate of return between 1900 and 2000, behind Australia, Sweden and South Africa. The geometric average real return of the US stock market was 6.7%, but the median geometric real return for the other countries was only 4.7%. But even this comparison involves a selection bias. Countries with more successful markets are more likely to have complete data on both, prices and dividends, for 100 years. A study by Philippe Jorion and William Goetzmann found 39 countries with reliable stock price data—though not dividend data—for a good part of the 20th century. Their sample included countries in Latin America and Asian countries beyond Japan. They found that the median real stock price appreciation from 1920 to 1996 for all these countries was only 0.8%, compared to 4.3% for the US. The US was actually ranked first among the 39 countries. Of course, even looking at these countries entails selection bias, for it excludes countries without price data for much of the 20th century, notably China and Russia, where communist revolutions terminated the stock markets, resulting in -100% returns for investors. The particular problems that prevented us from observing the returns on these stock markets will never be repeated, but it is wrong to assume problems of that scale will not recur. There is also the selection bias that we infer from looking at the 20th century, the most successful in terms of economic growth in human history. The 21st century will be different in ways that we cannot fathom today. Of course, investing in stocks is not a bad thing. Indeed, the stock market is an important component of any modern economy. But we should not make plans that rely on high returns, as many (including some governments) appear to be doing. The writer is professor of economics at Yale University. http://www.financialexpress.com/fe_full_story.php?content_id=93442

Subject: China's Quest for Energy Control From: Emma To: All Date Posted: Mon, Jun 27, 2005 at 10:13:44 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/27/business/worldbusiness/27energy.html?pagewanted=all China's Costly Quest for Energy Control By JOSEPH KAHN BEIJING - From the dusty plains of East Africa to the shores of the Caspian Sea, China is seeking to loosen the grip of the United States on world energy resources and secure the fuel it needs to keep its economy in overdrive. Its energy deal-making has cost tens of billions of dollars and has dominated China's foreign policymaking for the past two years. At times it has put China in direct competition with American policy goals, especially in Iran and Sudan, whose leaderships are among the least favored by the United States government. Now Washington has the chance to shape China's frenetic quest. The China National Offshore Oil Corporation, known as CNOOC, has offered $18.5 billion for the American oil company Unocal. If its bid is successful, Beijing will have a greater stake in the global oil markets, in the same way that Japanese and European oil companies work closely with major American companies around the world. If the bid were rejected by the United States on national security grounds, as some members of Congress have publicly advocated, China could be motivated to build more ties to rogue states and step up its courtship of major oil producers in Africa and Latin America that in the past have looked mainly to the United States market. 'Like other big countries, China naturally wants to share proven oil reserves,' said He Jun, an energy consultant in Beijing who advises Chinese oil companies. 'But if the West treats China as a threat, it will inevitably have to find its own path to meet its energy needs.' The energy issue touches all of the hot buttons in China's realm, from its need to modernize its economy to its tensions with Japan, Taiwan and the West. Already, Beijing is leaving few holes untapped. Since becoming China's top leader in late 2002, President Hu Jintao has traveled to Latin America, Southeast Asia and Africa on missions focused largely on securing energy supplies that will not pass through American or European companies before reaching China. Later this month, he will make his third trip to Russia as president to continue a lobbying campaign for a pipeline to ferry Siberian crude to Daqing, China's northeastern oil hub. China hopes the pipeline will reduce its reliance on American-dominated markets for Middle East oil. As was the case with Japan in the 1930's, China's relations with the outside world are being transformed by energy needs, generating fears that it will compete with the United States for resources. Chinese analysts say the United States should approve the Unocal deal and work with China to make energy a common cause, before it becomes a source of tension. 'Relations between China and the United States are mostly stable, but the energy problem is the most serious threat,' said Chen Fengying, a senior strategist at the government-backed China Contemporary International Relations Institute in Beijing. 'We talk about terrorism and Taiwan,' Ms. Chen said, 'but there is nowhere near enough attention to energy.' Just a decade ago China exported more oil than it imported, but last year it passed Japan to become the world's second-largest importer, after the United States. Its booming but grossly inefficient economy consumes three times as much energy per dollar of output than the world average, and oil use has surged along with the country's auto industry, sprawling cities and new network of superhighways built on the American model. Unlike Japan and European nations, which are also big oil importers, China does not have a strategic alliance with the United States. Beijing has grown increasingly wary of depending heavily on imports when its companies do not control major reserves abroad and its navy does not patrol the sea lanes through which those supplies must pass to reach Chinese ports. Some foreign economists have criticized China for paying a hefty premium to control energy reserves abroad when it could pay market prices and have oil delivered to its door. But China's leaders are wary of entrusting their economic growth, and perhaps the longevity of the Communist Party, to American oil companies and the Pentagon. 'A popular saying abroad is that oil is just a commodity that anyone who has money can buy,' Mr. He said. 'But this saying is most popular in the countries that already control the supplies.' Shortages of imported oil could threaten China in the event of a conflict with Taiwan. The United States, which has said it would defend Taiwan if the Chinese were to attack it, could potentially block shipping in the East China Sea, crippling Chinese trade. Partly for that reason, China has scrambled to diversify its oil and gas imports and transport routes, pursuing oil deals with Russia and Central Asian nations and signing a preliminary, $70 billion commitment to buy Iranian oil and natural gas. All of these supplies could be delivered overland if expensive pipelines that Beijing favors are built. More generally, China has sent CNOOC and its two bigger state-controlled oil companies, Sinopec and PetroChina, on a worldwide shopping spree to secure rights to proven reserves. This effort has already created diplomatic complications for Washington. For example, China opposed moves to punish its oil partner Sudan for atrocities in Darfur and blocked efforts to bring the issue of Iran's nuclear weapons program before the United Nations Security Council. Determined to improve ties with Russia, China recently settled a long-festering border dispute on terms widely seen as favorable to Moscow. Russia, in turn, has promised to greatly increase oil shipments to China by rail and has revived discussion of a pipeline to Daqing after earlier arguing that the project made little economic sense. Oil is one factor that has plagued relations between China and Japan, which have jostled for control of natural gas deposits in disputed waters of the East China Sea. Talks about the issue have stalled, and a Chinese submarine incursion in that area contributed to a downward spiral in diplomatic ties this spring. In public, Chinese officials portray their country as a relatively minor player in global energy markets that seeks cooperative ventures with any country or major company on commercial terms. But privately, Chinese officials and analysts say oil is treated as a strategic crisis. They have sounded the alarm about Western and particularly American domination of oil supplies and influence over the major oil-exporting nations, including Saudi Arabia and now Iraq, which has made China dependent on what many here refer to as American economic and military hegemony. Beijing this year began construction of a American-style strategic oil reserve on the coast of Zhejiang province. The first phase includes 52 tanks that can each hold 25 million gallons of gasoline. Ultimately, officials aim to create a reserve large enough to allow China's economy and military to function for at least three months without imported oil. It has also imposed tough new fuel-economy standards on cars, put some industries on notice that they will have to become less wasteful users of energy, and backed an aggressive search for new coal, oil and gas supplies on Chinese territory to slow the growth in imports. Ma Kai, China's top economic and energy planner, told officials in a closed conference recently that the United States was better positioned to withstand the current rise in oil prices because its major oil companies make enormous profits to offset the losses to the American economy. Importing countries with a smaller stake in global energy trading, like China, have nothing to soften the blow of the huge losses they suffer when prices rise, Mr. Ma said, according to a Chinese energy expert who attended the session and asked to remain anonymous. This expert said Chinese leaders were well aware that they are paying inflated prices for foreign assets. Proposed pipelines connecting China to Iran, Kazakhstan and Russia and a Chinese-backed pipeline project in Brazil will cost the country dearly, pushing the price of oil from those sources to double or triple spot-market prices. CNOOC's bid for Unocal, which would be financed primarily by loans from state-run banks and the company's state-owned parent, offers a substantial premium for the company's assets. But the extra cost is worth it for the sake of political security, many Chinese argue. In that sense, the CNOOC offer might be seen in a different light than some other high-profile overseas acquisitions by leading Chinese companies. TCL's purchase of Thompson's television unit, Lenovo's takeover of I.B.M.'s laptop computer line and Haier's proposed purchase of Maytag are all driven primarily by commercial concerns. Whether Chinese companies paid a good price for those assets has been debated, but the motivations for purchasing consumer product lines stem mainly from a desire for global brand names and marketing skills, rather than politics, local analysts said. That may be less true of CNOOC's bid. 'The CNOOC arrangement has both commercial and political factors involved,' said Mr. He, the energy consultant. 'Some of the commercial terms, frankly speaking, are questionable. But the political factors are very clear and straightforward.' Wenran Jiang, an expert in Chinese foreign policy at the University of Alberta, said many in the West viewed the Unocal offer as part of China's coordinated assault on foreign markets, a sign of economic vigor. In China, he said, the energy quest is seen as a belated, disorganized, even desperate rush to meet basic security needs. 'They feel threatened, with their back in a corner, forced to pay high prices to Western companies,' Mr. Jiang said. 'For them, this is a matter of the survival of the regime.'

Subject: China's Brawn Unsettles Japanese From: Emma To: All Date Posted: Mon, Jun 27, 2005 at 10:12:17 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/27/business/worldbusiness/27rivals.html?pagewanted=all China's Economic Brawn Unsettles Japanese By JAMES BROOKE TOKYO - As politicians in Washington watch the Chinese bid for a big American oil and gas company play out, the reaction in Japan to the swelling economic muscle of China provides an early warning sign of the mixed emotions that China evokes as it rises on the global stage. In the last five years, the Chinese economic boom overshadowed the political risks for the Japanese. But in May, export growth to China stalled. New polls of Japanese investors show a growing reluctance to make further investments in China. The immediate catalyst for the changed attitude was a wave of anti-Japanese protests in Chinese cities in April. But those protests, tolerated by China's leaders, sent out a broader message: China would not object if its people, or its business executives, demonstrated their nationalism on the streets or in corporate boardrooms. It was a stark reminder to investors and politicians around the world of China's willingness to play the nationalist card. And it amounted to a bucket of cold water for many Japanese investors who had assumed that they were secure in China because they were providing jobs and quality products. The protests involving the two Asian powers had been fueled by deep disputes over World War II narratives in Japanese textbooks, territorial arguments and Prime Minister Junichiro Koizumi's visits to a shrine to Japanese war dead. Robert A. Feldman, managing director of Morgan Stanley Japan, echoing fears that executives of Japanese companies rarely express publicly, said: 'People are scared; they don't know where the Chinese are going with this.' . The Japanese, Mr. Feldman said, 'don't see a way out of the political mess,' adding, 'They are looking for alternatives.' In two surveys, separated by six months, the percentage of Japanese companies planning to expand operations in China dropped sharply, to just under 55 percent in late May, from 86 percent last December, according to the Japan External Trade Organization, the country's trade and investment promotion agency. The agency polled 414 Japanese companies operating in China last month, and a similar number late last year. Although only 10 percent of the companies said that business had suffered from the protests, largely in reduced sales and tarnished brands, 36 percent said they were worried about future effects, and 45 percent said the business risk of operating in China had increased. 'The psychological impact the anti-Japan movement had on Japanese firms was far from small,' Osamu Watanabe, chairman of the agency, said at a China-Japan investment conference in Beijing recently. Reassuring Japanese investors will be crucial for China to invigorate the economy and create jobs in less prosperous areas that are inland from the booming coastline. As China grows, Japan, the world's second-largest economy, will need powerful friends. In 2050, according to a new Goldman Sachs forecast, the Japanese economy will not be much larger than it is today, but China's is expected to be 30 times as large as now, or 6 times the size of Japan's. The forecast said that the world ranking of economies in 2050 would start with China, followed by the United States, then India. For some Japanese investors, the anti-Japanese protests catalyzed sentiment to diversify away from China to Southeast Asia. 'It was a trigger,' said Hiroyuki Maeda, executive vice president of the Uniden Corporation, a leading maker of cordless phones. After a strike with nationalist overtones halted production for three days in mid-April at its plant in Shenzhen, officials of Uniden decided to accelerate a plan to open a factory in the Philippines this summer. In coming years, the Shenzhen payroll is planned to drop to 10,000, from 17,000 today, and China's share of Uniden's production to fall to about a third from 100 percent today. The shift is prompted by a variety of reasons. Labor costs on the Chinese coast are no longer lower than in the Philippines. Uniden, which exports more than 80 percent of its phones to the United States, selling largely to Wal-Mart, Best Buy and Circuit City, is worried about calls in Congress to impose retaliatory tariffs on Chinese goods if Beijing does now allow an upward revaluation of its currency. 'Personally, I am much more worried about the U.S.-China relationship than the Japan-China relationship,' Mr. Maeda said. 'The case of a new tariff against Chinese imports is most scary for us.' In the United States, the unsolicited bid on Wednesday by the China National Offshore Oil Corporation, a state-controlled company, for Unocal raised new concerns about China's economic power as it continues its shift toward a market economy. In Japan, though, some say that it is only the small fish who are nervous. 'Most big companies are not worried about this situation,' said Hiroshi Kadota, China director for the Keidanren, Japan's powerful business association. Referring to the chilliness between the leaders of China and Japan, he added: 'In the political sphere, there are many problems. But I don't think the economic relationship will be harmed.' Japanese carmakers have $5 billion invested in China, about 20 percent of the total invested by foreign automakers. Honda's joint-venture auto company in China announced Friday that it had started exporting cars made there to Europe, a first for a Japanese auto brand. Other big companies, though, have begun to hedge their bets in China, balancing their investments there with others elsewhere in Asia. For example, Canon, the world's largest copier maker, is planning to spend about $45 million to build a factory in Vietnam. 'It is necessary for Japan to pursue a China-plus-one policy,' Mr. Watanabe told reporters here on Thursday. 'A company should invest not only in China but also one other place. I think the latest demonstrations gave a very good lesson to the companies as to the importance of a China-plus-one policy.' And to the Japanese, India represents an ever more fashionable business destination. 'Visa requests have gone up since political relations between Japan and China have worsened,' Atul Razdan, spokesman for India's embassy here, said. 'They are looking at India as an option. We welcome them.' Mixing business with geopolitics, Prime Minister Koizumi visited India late in April. 'Investment is increasing into India,' Yoriko Kawaguchi, the prime minister's assistant for foreign affairs, said in an interview after meeting with Japanese business leaders in Shanghai. 'Politically, as China grows more, we look to India more.' With China now Japan's largest trading partner and destination for foreign investment, Chinese authorities are eager to reassure Japanese investors, Ms. Kawaguchi said. 'Chinese authorities are interested in keeping Japanese business in China,' she said, adding that she did not think Japanese executives were stopping their investments in China. Holding out the prospect of another olive branch, the Japanese are expected to ease travel policies soon, making China's entire population of 1.3 billion potentially eligible for Japan tourist visas. This would more than triple the size of the previous pool, which was restricted to several large cities and coastal provinces. But from the Japanese side, the boom in cross-China Sea tourism has halted. Japan Airlines is planning to increase flights to China by 5 percent. But after watching traffic on its China routes jump by 52 percent in the first quarter of this year, the carrier said that growth slowed in April to a 12.5 percent pace. In May, traffic fell 12 percent, as 15,000 Japanese tourists canceled their China trips. 'In the July-through-September period,' said Geoffrey Tudor, Japan Airlines' international spokesman, 'we think that tourism to China from Japan will be 50 percent below previous estimates.. People who may have been thinking about traveling to China are planning trips to other destinations.' Along with tourism, the growth in Japanese exports to China is slowing. Last year, these exports recorded the sixth straight year of growth, jumping 29 percent, to $74 billion. But in the first five months of this year, exports were up only 5.9 percent, compared with the similar period last year. In April, exports of Japanese steel were down 18 percent, and exports of construction machinery down 47 percent. In May, exports over all fell, by 0.1 percent. Some market watchers speculate that Chinese companies are holding back on making purchases overseas, gambling that the Beijing authorities will strengthen the currency, the yuan, later this summer. A slowdown with China could spell an overall economic slowdown this year for Japan, whose economy is only expected to grow about 1.5 percent in 2005. 'We were once Asia's growth engine,' Ms. Kawaguchi said, harking back to the 1970's and 80's. 'Now it is China. One day it will be India.'

Subject: Low Rates Could Be Around Long Term From: Emma To: All Date Posted: Mon, Jun 27, 2005 at 09:23:57 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/27/business/27fed.html Low Rates Could Be Around for Long Term By EDMUND L. ANDREWS WASHINGTON - Federal Reserve officials, who meet this week, are beginning to suspect that the perplexing decline in long-term interest rates is more than a temporary aberration. The possibility has major implications for the economy, and it creates new puzzles for Fed officials on how they should respond. On Thursday, the Fed is all but certain to raise the federal funds rate on overnight loans between banks by another quarter point, to 3.25 percent. That would be the ninth increase in the last year, and the central bank is expected to signal that it will continue to raise overnight rates at a 'measured' pace. But the real debate at the meeting is expected to be about the unexpected decline of long-term interest rates, which have kept mortgage rates at their lowest level in decades and fueled what many analysts fear is a bubble in housing prices. Alan Greenspan, chairman of the Federal Reserve, said in February that the low long-term rates were a 'conundrum' but might simply be a 'short-term aberration.' But Mr. Greenspan and other senior officials are now suggesting that the change is more enduring. The debate is over why the change has occurred, and different theories lead to sharply disparate conclusions about the best way to respond. 'My sense is that people think this could be the new reality, that this could be fundamental, that it could be long-lasting,' said Laurence H. Meyer, a former Fed governor and now vice chairman of Macroeconomic Advisers, a forecasting firm. Mr. Greenspan, testifying before Congress earlier this month, described the trend as profoundly important and 'clearly international in origin.' 'How we integrate it into the basic underlying monetary policy structure is something we're spending a considerable amount of time on,' he added. The term premium - the added payment that investors demand to cover the uncertainty of holding long-term bonds - has shrunk to almost nothing. Investors appear to assume that the overnight rate will be about 3.75 percent by the end of this year. But the yield on 10-year Treasury bonds remains about 4 percent. One school of thought holds that low bond yields are a harbinger of slowing economic growth, which would reduce demand for credit in the future. Another school holds that global investors have lower inflation expectations than in the past, which reduces the risk of holding long-term bonds. If either theory is correct, the Federal Reserve would have less need to fend off inflation and could stop raising short-term rates at a much lower level than in the past - perhaps below 4 percent. But yet another theory holds that long-term interest rates may have been depressed by other factors, including a 'savings glut' around the world and efforts by Asian central banks to keep the value of their currencies down by buying United States Treasury securities. If that is true, the flood of foreign money into the country could be diluting the Fed's effort to prevent inflation. That would imply that the Fed needs to raise rates more than many investors are expecting. Mr. Greenspan, testifying before Congress on June 20, was skeptical about theories based on low inflation expectations or on an impending slowdown. 'A narrow gap between short- and long-term rates is often misread as though we're about to tilt into a recession,' he said. 'If that is the case, then the hypothesis that it is a weak economy which has been driving down interest rates is probably not correct.' He also expressed concern that low long-term rates had contributed to 'froth' and might be feeding inflationary pressures. 'And that's something which, needless to say, we are focusing on very extensively.' Other officials have been more optimistic. William Poole, president of the Federal Reserve Bank of St. Louis, has argued several times that long-term rates are mostly driven by investors' expectations of long-term inflation. Even though the Fed has raised short-term rates, Mr. Poole said in a speech on June 14, investors have had no reason over the last year to expect higher long-term inflation. 'Economic surprises have been minimal over the past year, and there has been no reason for significant revision in expected future short-term interest rates,' Mr. Poole said. Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, suggested on June 20 that there may be less uncertainty about inflation than in the past. 'It's important to keep in mind that the term premium shouldn't be expected to behave in the way it's behaved in postwar cycles in which inflation was unsteady,' Mr. Lacker said. 'The most likely explanation for the low rates,' he said, is that 'inflation is low and that inflation expectations are low.' Wall Street economists are as divided as Fed officials about the proper interpretation. James Glassman, a senior economist at J.P. Morgan, contends that long-term interest rates reflect the deflationary effects of globalization. 'If you think of this in economic terms, East Asia and Nafta have been annexed to the United States. It looks like an economy that has far more excess capacity. Overnight, decisions by the Chinese government are releasing huge numbers of Chinese laborers. That means more excess capacity and a longer time to get back to full employment.' By that interpretation, the Fed could stop raising short-term rates once they reach 3.75 percent. But others predict that the Fed will continue to worry about inflationary pressures, the United States' soaring level of foreign indebtedness and the dangers of a housing bubble. Mr. Greenspan, asked by lawmakers to specify a 'neutral' Fed funds rate - one that would try to neither speed nor slow the economy - has periodically remarked that people would know it when they saw it. But in his most recent testimony, he added a twist: people would know it because 'we will observe a certain degree of balance which we have not seen before' in the economy.

Subject: False Data on Student Performance From: Emma To: All Date Posted: Mon, Jun 27, 2005 at 09:01:30 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/27/opinion/27mon4.html False Data on Student Performance Americans often can't find reliable information about how the schools in their state compare with schools elsewhere. The No Child Left Behind Act was supposed to change that by requiring states to file clear and accurate statistical information with the Education Department. The news so far is less than encouraging. Many states have chosen to manipulate data to provide overly optimistic appraisals of their schools' performance. A distressing example emerged last week in a study of graduation rates by the Education Trust, a nonpartisan foundation in Washington. For the second year in a row, the Education Trust has found that many states are cooking the books on graduation rates - using unorthodox calculation methods or ignoring students who drop out. Some states submitted no graduation data at all. The generally accepted way to calculate graduation rates is to track students from the day they enter high school until the day they receive a regular diploma, as opposed to passing the G.E.D. Under this system, students who leave without graduating are reasonably counted as nongraduates. But many of the states are using other, deceptive techniques. Some calculate the percentage of dropouts based on the number of students in a given senior class who graduate. Those who left school in grades 9, 10 or 11 disappear, and the graduation rates reported by many of the states are grossly inflated. The secretary of education, Margaret Spellings, says she is concerned about accuracy. But Congress itself needs to take up this issue and force the states to use accurate methods of calculation when it reauthorizes No Child Left Behind in 2007. Until changes are made at the federal level, student performance data in the United States won't be worth the paper it's printed on.

Subject: America Giveth, America Taketh Away From: Emma To: All Date Posted: Mon, Jun 27, 2005 at 08:58:33 (EDT) Email Address: Not Provided Message: http://www.nytimes.com/2005/06/27/opinion/27mon3.html America Giveth, America Taketh Away In the battle against AIDS, the Bush administration is both savior and scoundrel. Washington is the single largest financier of AIDS programs in poor countries. But the administration uses its muscle to extinguish necessary and successful programs it finds politically objectionable, and to carry out ineffective ideological crusades. First the good news. Washington's financing for AIDS treatment does not go as far as it could because American programs have been buying only expensive brand-name drugs, a sop to the pharmaceutical lobby. Administration officials have said that without approval from the Food and Drug Administration, they can't be sure that generics are safe and effective, even though the World Health Organization has endorsed many of them and AIDS programs around the world use them with excellent results. It's not a question of science: the drugs cannot be used in the United States because they would violate patents, so the F.D.A. never examined them. Until now. Last week, the F.D.A. approved for overseas use two Indian-made generic versions of nevirapine, a standard ingredient in the triple cocktail, and a generic version of efavirenz, another widely used antiretroviral. That brings the number of approved generic antiretrovirals to seven. While none are yet in use in Washington's overseas programs, the approvals will eventually allow four times as many lives to be saved for the same amount of money. Also last week, however, the administration was on a moral crusade that could lead to a significant rise in AIDS cases in Russia, China, elsewhere in Asia and in the former East bloc. In these places, drug users who inject are a prime risk group for AIDS, and the gateway through which the epidemic will spread into the general population. As many as a third of new AIDS infections outside sub-Saharan Africa are in drug users; in Russia, Unaids estimates that injecting drug users are 80 percent of the infected. Needle exchange programs can help control this part of the epidemic. But at a Unaids policy meeting this month, a Bush administration official asked that all references to needle exchange be dropped from the group's governing policy paper. Unaids doesn't control much money, but it sets world policy on how to fight AIDS, and usually operates by consensus to give its recommendations more force. Although America is virtually alone in its opposition to needle exchange, its clout as the largest Unaids donor means it might be able to win a vote this week in the group's program coordination board. If Unaids could no longer work on needle exchange, nations would lose a valuable source of technical help. And a lack of consensus could keep countries from starting needle exchanges. American law already forbids United States money from financing needle exchange programs. For Washington to decide that it wants to stop everyone else from doing that as well is a breathtakingly dangerous step.

Subject: Yellow-breasted Chat From: Terri To: All Date Posted: Mon, Jun 27, 2005 at 07:49:48 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=4964&exhibition=4&pass=public&size=default&lang=eng Yellow-breasted Chat New York City, Central Park--Strawberry Fields.

Subject: Interest Rate Cycles From: Terri To: All Date Posted: Mon, Jun 27, 2005 at 07:39:13 (EDT) Email Address: Not Provided Message: The Federal Reserve will raise short term interest rates another 25 basis points this week, while the European Central Bank considers lowering rates during the summer. The Bank of England and central banks of Canada and Sweden are in an interest rate lowering cycle. So, the dollar which is strong and has made up more than a year of relative declines is likely to stay strong at least until the interest rate cycle changes in America.

Subject: The big squeeze From: Pete Weis To: All Date Posted: Mon, Jun 27, 2005 at 01:40:32 (EDT) Email Address: Not Provided Message: Industry feels pinch from rising oil prices >By Dan Roberts in New York, Bertrand Benoit in Berlin and David Turner in Tokyo >Published: June 26 2005 22:48 | Last updated: June 26 2005 22:48 >> Energy prices appear to have reached a tipping point for many industrial users as the hectic pace of energy inflation outstrips the capacity of companies to pass on higher costs to consumers. US, European and Asian stock markets all fell last week as oil reached $60 per barrel and corporate leaders around the world issued a series of high-profile profit warnings. Shares in energy-intensive companies such as manufacturing and transport were hardest hit. Yet even those companies that have previously minimised the pain by passing on price increases to their customers are finding it harder to do so. FedEx, for example, the US delivery group that has been a leading beneficiary of booming global trade, broke its winning streak by warning that this quarter's earnings would be hit by jet fuel costs despite an automatic surcharge for customers. And the metals industry, enjoying its best growth for years, is squeezed between the high cost of energy-related inputs such as electricity and coal and slowing demand from leading customers. Complaints from US industry will have a particular urgency this week as Congress considers an energy bill that many claim should help ease pressure on oil, electricity and natural gas prices. John Engler, president of the National Association of Manufacturers, is leading the lobbying by arguing that current problems will get far worse if policymakers do not respond soon. Andrew Liveris, chief executive of Dow Chemical, is particularly concerned that high energy costs in the US are making its manufacturing industries permanently uncompetitive. “In the past two years, the chemical industry's natural gas costs, alone, have increased by over $10bn at a cost of $50bn in sales lost to foreign competition,” he said. “And, since the first natural gas spike in 2000, more than 100,000 jobs one-tenth of the US chemical industry workforce have disappeared.” But across the Pacific few rival Japanese companies are immune from energy problems either. Asahi Kasei, one of Japan's largest chemical manufacturers, warned its variable costs were increasing by Y3bn ($27.5m) for every Y1,000 per kl rise in the price of naphtha, an oil product. Despite this, it has no plans to reduce the capacity of its plants or move them to China perhaps because many of the same cost pressures exist across Asia. Few companies, wherever they are, can escape rising energy prices entirely, and most will eventually look to pass costs on. Vimal Shah, chief executive officer of Bidco, a Kenyan manufacturer of cooking oils and soaps, has seen its energy and transport costs rise 20 per cent. He says: “You cannot scale back, it's not only our company that is affected, everyone is affected across the board, so in terms of competitiveness we are not better or worse off. Ultimately, it's the consumer who pays, and the consumer is going to have to spend more money.”

Subject: New ways to wager the dollar From: Johnny5 To: All Date Posted: Sun, Jun 26, 2005 at 23:04:06 (EDT) Email Address: johnny5@yahoo.com Message: Holding XOM and VTRIX. But if Pete and Warren are right - these currency funds may be a good investment soon. Why do they wait to open these funds after all the big moves have been made - reactionary? http://online.wsj.com/public/article_print/0,,SB111973826050669598,00.html New Ways to Wager on the Dollar By CRAIG KARMIN Staff Reporter of THE WALL STREET JOURNAL June 26, 2005 Mutual funds have never been a particularly good way for small investors to play the foreign-exchange markets. Perhaps that was just as well -- currency movements can be notoriously unpredictable. But the fund companies' thinking has changed. The dollar's big drop since early 2002 has attracted fresh attention to currency markets at a time when existing alternatives for benefiting from strengthening foreign currencies -- mainly international stock or bond funds -- offer only indirect plays on the dollar. In the past few months, three mutual fund companies have introduced funds that allow investors to benefit from gains in foreign currencies against the dollar, including the Merk Hard Currency Fund. Two of these fund companies -- Rydex Investments and ProFund Advisors -- also offer products that reward investors when the dollar rallies, as it has been doing for most of this year. The U.S. Dollar Index, which tracks the dollar against a trade-weighted basket of six major currencies, is up nearly 10% this year, while the euro has fallen 11% this year against the greenback. The new currency funds join Franklin Templeton's Hard Currency Fund, an actively managed fund that was established in 1989 and, until recently, was essentially the only game in town. 'Currency is one of the most traded investments out there,' says Michael Sapir, chairman and chief executive of ProFund Advisors. 'But it's been low profile for most investors.' Other fund companies may soon enter the currency arena. Goldman Sachs Asset Management is in the early stages of launching the Goldman Sachs Global Currency Fund, according to a filing with the Securities and Exchange Commission. It will also be an actively managed fund and require an minimum initial investment of $1,000. Managers of these funds maintain that even if currency movements are difficult to predict in the short term, the long-term picture is clearer because major currencies tend to move in multiyear cycles. 'History shows the dollar moves in long-term trends relative to its economic fundamentals,' says David Reilly, director of portfolio strategy at Rydex. The dollar, for instance, enjoyed a broad rally from 1995 to 2001, and then saw declines from 2002 to 2004. The dollar's recent rally has split the currency analyst community: some see it as merely an extended pause in a longer-term bear market, while others think the dollar's worst days may be behind it. For Andrew Clark, a senior research analyst at Lipper, these conflicting views among professional analysts underscore why currency funds are not appropriate as a core holding. 'They're too speculative,' he says. That doesn't mean these funds can't be beneficial as a means to diversify a portfolio. Studies show that rises and falls in currency funds have little or no correlation with the movements of major stock and bond indexes. That means currency funds are less likely to move consistently in the same direction as other funds, which means foreign-currency funds should lower an overall portfolio's risk. Currency funds, Mr. Clark adds, charge about the same fees as international stock and bond funds and less than many emerging market funds. Although some analysts say an international bond fund that does not hedge its currency position can provide similar diversification, Mr. Clark has his doubts. For one thing, most funds don't reveal how much they hedge, so the funds' exposure to foreign currency movements is unclear. Moreover, bond funds respond in large part to interest rates. 'So if interest rates are going up,' says Mr. Clark, 'the bond fund could fall and undermine any gain from currency movements.' Currency funds held little appeal in the late 1990s when the dollar was strong and the stock market was booming. In 1997, Fidelity Investments shut down its currency funds. Things changed this year as the dollar's three-year slump -- it fell more than 50% against the euro at one point -- was grabbing headlines and encouraged some fund companies to test the waters with currency funds. Merk Hard Currency Fund is for investors who think the dollar has further to fall in the years ahead. The fund requires a $2,500 minimum to invest directly and currently holds just four currencies: the euro, Swiss franc, Australian dollar and British pound. It also keeps 20% of its assets in gold, which typically moves in the opposite direction of the dollar. Axel Merk, president of Merk Investments, argues that the record U.S. trade deficit will balloon further, and over time this will reassert pressure on the dollar. His fund will hold only currencies from countries that do not regularly intervene to weaken their currency versus the dollar, which means he excludes the Japanese yen as well as most other Asian currencies. This puts him at odds with Templeton's fund, where the portfolio managers reason that because the U.S. trade imbalances are largely with Asia, these currencies are poised for the biggest gains versus the dollar. Their recent track record has been solid, with a five-year cumulative total return of 36%. But Templeton was caught off guard by the strength of the dollar's recent rebound, joining many currency speculators who have lost money this year. The fund, which requires a minimum investment of $1,000, is down 4.5% year to date. ProFund Advisors, by contrast, offers investors the choice of betting whether a basket of currencies will rise or fall versus the dollar. While the funds were launched in February at a time when few analysts were predicting a dollar rebound, the Rising U.S. Dollar Fund has attracted assets of $82 million, compared with only $12 million in the Falling U.S. Dollar Fund. A $15,000 minimum investment is needed to open a ProFund account directly. But that money can be invested in either currency fund or any of the other dozens of mutual funds. Rydex's Strengthening Dollar Fund and Weakening Dollar Fund both employ the same premise of investing in a basket of currencies but with a twist: the funds offer double the return of the dollar indexes on a daily basis by using derivatives. So if an investor has $1,000 in the fund and the index rises 5% for the day, the investor enjoys a gain of 10%, or in this case $100. This also means double the losses when the indexes fall. Rydex also requires a minimum of $25,000 to open an account with the fund company, though that money can be invested in any of Rydex's nearly 50 mutual funds, not only in the currency funds.

Subject: Ruby-crowned Kinglet in Flight From: Terri To: All Date Posted: Sun, Jun 26, 2005 at 19:44:45 (EDT) Email Address: Not Provided Message: http://www.calvorn.com/gallery/photo.php?photo=4811&u=17|29|... Ruby-crowned Kinglet in Flight New York City--Central Park--Wildflower Meadow.

Subject: Race to Alaska Before It Melts From: Emma To: All Date Posted: Sun, Jun 26, 2005 at 16:32:21 (EDT) Email Address: Not Provided Message: http://travel2.nytimes.com/2005/06/26/travel/26alaska.html?pagewanted=all The Race to Alaska Before It Melts By TIMOTHY EGAN THEY stood and gawked at the great blue mass of shrinking ice. Behold: a frozen landscape giving it up to a midnight sunset. The scene at the receding edge of the Exit Glacier in Kenai Fjords National Park in Alaska was part festive gathering, part nature tour with an apocalyptic edge. Dressed in tank tops and shorts - beachwear, in fact - on this freakishly warm day in early June, people moved ever closer to the rope line near the glacier as it shied away, practically groaning and melting before their eyes. A product of the late ice age, the glacier looked old and tired on this hot day. There was a sense of loss, some people said, at watching this giant recoil. There were oohs and aahs but also more hushed tones, expressions of fear that the big land was somehow diminished, a little less wild. Just a few years ago, the spot where these tourists stood, on dry ground marked by Park Service signs, had been under ice. Alaska is changing by the hour. From the far north, where higher seas are swamping native villages, to the tundra around Fairbanks, where melting permafrost is forcing some roads and structures to buckle in what looks like a cartoon version of a hangover, to the rivers of ice receding from inlets, warmer temperatures are remaking the Last Frontier State. That transformation was particularly apparent at the visitor center here, where rangers were putting the finishing touches on a display that sought to explain the changing landscape of the country's northernmost state. The sign said, 'Glimpses of an Ice Age past. Laboratory of climate change today,' and it explained how the Exit Glacier has been shrinking over the years, and what scientists are learning as the state heats up. Out in the fjords, kayakers paddled into bays newly opened by other receding glaciers. They came to see the ice, a tour guide explained, to paddle around something that had been moving toward a tidewater destiny for thousands of years. And many of them were in a hurry. Glacial pace, in Alaska, no longer means slow. 'Things are melting pretty fast around here,' said Jim Ireland, the chief ranger for Kenai Fjords. Climate change, he said, 'has become one of the major new themes for this park.' In ambition, in the scale of its scenic extremes, in the pure size and wonder of its fish and wildlife, Alaska has never been anything less than flamboyant. It is, after all, more than two times the size of Texas, with a shoreline, more than 33,000 miles, that exceeds that of all other states combined. And as Alaska morphs through a period of warmer weather, it is doing so with characteristic extravagance. The old Alaska, the Alaska of forbidden expanses and adrenaline-surging encounters with brawnier ends of the food chain, still exists of course. But a larger drama - of this land losing some of its icy inheritance - is playing out as well. The sea-level edge of the Exit Glacier, just outside the town of Seward and one of the most visited bodies of ice in the north, has receded by nearly 1,000 feet over the last 10 years, park rangers say. In Prince William Sound and farther south in Glacier Bay National Park, where the cruise ship industry does a thriving business based on active walls of ice, many glaciers have pulled their toes out of the water and shriveled up the valleys. This process has created another attraction: the instant landscape. Take away the ice, add rain and sunshine to the debris left behind and, presto, Stage 1 of creation. To some visitors who fear that global warming is to blame for the accelerated pace of change, there is a sense of urgency in their travel planning. They seem to be fearful that if they don't get to Alaska soon, they will never see the full glory of the state's frozen magnificence. 'One of the things we hear a lot from people is that they want to see Alaska before it's gone,' said Hugh Rose, a tour guide, geologist and photographer who lives in Fairbanks. 'The melting, the warmer temperatures, the changing patterns of wildlife and the land - they've become huge topics of conversation among guides and our clients.' Of course, Alaska is not going anywhere, at least not right away. About 4 percent of the state is ice. One glacier, the Malaspina, is larger than Rhode Island, and another, the Harding Icefield, which feeds the Exit Glacier, is nearly half that size. If all of Alaska's glaciers were joined in one mass, it would be bigger than 10 of the states. But the Great Land is definitely getting warmer. Last year was abnormally hot in the usually wet and cool southeastern part of the state, where cruise ships ply the Inside Passage. Anchorage, Fairbanks, Nome and Juneau all posted their warmest summers on record. More wildfires burned in 2004 than any other year on file. And by early May of this year, the woods were ablaze on the Kenai Peninsula, and the preternaturally quirky residents of Homer were gardening in cutoffs - at a time when snow was still falling in Detroit and Boston. This year, Mr. Rose noticed something odd during the annual spring birding trek he leads to the Copper River Delta, famous for its rich, high-priced wild salmon runs. He takes people to the delta to watch masses of western sandpipers that have migrated north from winter havens in Central and South America. The birds, and people who pay to watch them, have brought an infusion of tourism cash to the fishing village of Cordova, which highlights the migration with an annual shorebird festival. The event has traditionally been held on the second weekend in May; last year it was moved to the first weekend of the month. 'There used to be 100,000 birds on the second weekend in May,' said Mr. Rose. 'Now you'll miss most of them if you don't arrive earlier.' The question of exactly how much warmer Alaska is than 'normal' - and whether it is part of human-caused changes in the temperature brought on by increased greenhouse gases or something natural and cyclical - can start a decent bar fight in any fishing harbor. 'It is probable the last decade was warmer than any other' since records have been kept, the Arctic Climate Impact Assessment reported on Nov. 24, 2004. The study is a project of nations including Denmark, Canada and the United States. The Bush Administration, which has been cautious about blaming global warming for any Alaskan changes, cites rising spring temperatures, loss of sea and glacial ice, melting permafrost and conversion of some parts of the soggy tundra into brushy wetlands among the changes taking place. But to many Alaskans, global warming is not an abstraction or a theory. At least four native villages in the far north may have to move inland or to higher ground to avoid being swept away by erosion from the sea - a consequence, the villagers say, of early-melting sea ice that contributes to shore erosion. The melting ice may also affect polar bears, and whales, who live off the sea life beneath the ice. None of this has deterred people from coming to Alaska. If anything, say many guides and tour operators, warming temperatures have brought more people, and the Alaska Travel Industry Association is projecting a strong year, surpassing last year's 1.45 million visitors. And while travel industry officials say they are not exactly marketing the warmer temperatures around a 'See Alaska Now' campaign, they say some travelers are driven by concern about the fate of the Great Land in a warmer world. 'Our clients are really interested in this,' said John Page, who runs Sunny Cove Sea Kayaking Company in Seward. 'Everyone wants to know: Is the ice retreating because of global warming? How's this going to change Alaska?' For tourists, it can mean a thrill at seeing a landscape more dynamic than any place on earth - global warming on hyperspeed! - or disappointment that something so wild and massive is, well, shrinking. Both reactions were evident at Portage Lake, about 50 miles south of Anchorage. Tour buses packed the parking lot of the big, well-staffed Begich, Boggs Visitor Center. This is where people come by the thousands to see Portage Glacier, one of the most accessible of Alaska's frozen attractions. Except, you can no longer see Portage Glacier from the visitor center. It has disappeared. The most persistent question to rangers at the station was: Dude, where did Portage Glacier go? A display inside showed that just 11 years ago, the glacier descended down to the end of the lake. But now it is around a distant corner and at the back of the lake, completely out of sight from the center. A video featured a Forest Service scientist, Kristine Crossen, who explained that the glacier had been retreating about 165 feet a year. 'We have good evidence that the climate is warming in Alaska,' she says. Visitors were perplexed. Gordon Middleton drove up to Portage Lake in his camper, from his home in Anacortes, Wash. He is retired from a life on factory floors and fishing boats. For him, ice is the draw. 'I've been watching glaciers so long I'm called the Ice Man by some of my friends,' said Mr. Middleton. He aimed his camera across the lake from a roadside perch and zoomed in, looking for Portage Glacier. 'It's supposed to be ... there,' he said, pointing to a shoreline of rocky moraine, the detritus left behind by retreating ice. 'But I don't see anything.' Virtually every visitor center built around a glacier or a blue wall hugging a mountain cliff has its landmarks to warmer temperatures. Just outside of Juneau, the Mendenhall Glacier, which is about 12 miles in length, has gradually pulled away from near the parking lot and up the lake. It is still a prime visitor site for people who are bused from cruise ships in port. But for some cruise passengers who have seen the glacier before, the changes are stunning. 'I saw the Mendenhall Glacier 25 years ago, and it has really pulled back since then,' said Mark Stringer, who is from Arizona and was visiting Alaska by cruise ship. 'But you know, this is a dynamic process. It's a blip in time. We don't know what's going to happen.' In Glacier Bay National Park, the ice has been shrinking since at least the time of Capt. George Vancouver's visit, more than 200 years ago. What are now bays filled with whale-watching kayakers and iceberg-viewing cruise passengers were full of glaciers in the late 1700's, officials say. And what was once bare rock at the edge of the ice to Captain Vancouver's crew is now part of a lush rain forest. But the pace of ice age