Google First Quarter Profit Climbs 30 Percent

A Google sign at Google headquarters in Mountain View, Calif. is seen Oct. 15, 2007. Google Inc. reports earnings for the first quarter after the market closes on Thursday, April 17, 2008. (AP Photo/Paul Sakuma)

SAN FRANCISCO — Google Inc. tweaked its online advertising formula and accelerated its growth outside the United States to produce a first-quarter profit that surpassed analysts' predictions, alleviating some of the economic worries battering its stock this year.

The news, released after the stock market closed Thursday, lifted Google's recently drooping shares by more than $76, or 17 percent.

"This is mostly a relief rally," said Stanford Group analyst Clayton Moran. "People are relieved that things aren't as bad as they thought."

Google's global appeal propelled the Mountain View-based company as more than half its revenue came from outside the United States for the first time in its 9 1/2-year history.

The Internet search leader said it earned $1.31 billion, or $4.12 per share, during the first three months of the year. That represented a 30 percent increase from net income of $1 billion, or $3.18 per share, in the first quarter of 2007.

If not for expenses to cover stock given its employees, Google said it would have made $4.84 per share.

That figure outstripped the average projection of $4.52 per share among analysts surveyed by Thomson Financial.

First-quarter revenue totaled $5.19 billion, up 42 percent from $3.66 billion a year ago.

After subtracting the commissions paid to the company's advertising partners, Google's revenue stood at $3.7 billion _ about $100 million above analyst estimates.

"It's clear we are well positioned for 2008 and beyond, regardless of the business environment we are surrounded by," Google Chief Executive Eric Schmidt told analysts during a Thursday conference call.

Some analysts and investors, though, remain cautious because so much of Google's ad revenue comes from small and mid-sized businesses, which are more apt to curb their spending if the economy worsens.

"The fact Google hasn't seen a slowdown yet just means that there might be another shoe to drop," said Darren Chervitz, co-manager and research director for the Jacob Internet Fund, which has sold about half of its Google holdings in recent months.

Google's first-quarter showing could be a precursor to a strong earnings report from Yahoo Inc. next week.

If it can meet or exceed analyst expectations like Google did, Yahoo will be in a better position to ward off Microsoft Corp.'s unsolicited takeover bid or at least argue for its suitor to raise the cash-and-stock offer from its current value of about $42 billion.

Google is trying to help Sunnyvale-based Yahoo thwart Microsoft by helping Yahoo place ads on its Web site as part of a test scheduled to conclude next week. Schmidt declined to answer a question about the chances of Google signing a long-term advertising contract with Yahoo _ a deal that would likely face intense scrutiny from antitrust regulators.

"It's nice to be working with Yahoo," Schmidt said. "We like them very much."

Investors had serious doubts about Google's short-term prospects before Thursday.

The financial targets that guide Wall Street's expectations had fallen during the past two months as Web surfing data convinced analysts that Google's advertising links aren't attracting as much consumer interest amid mounting evidence the U.S. economy had tumbled into a recession. Google makes money from the links only when Web surfers click on them.

But management has said the slowdown in ad clicking largely reflected changes that purposefully reduced the volume of commercial in an effort to deliver more compelling messages that lead to purchases.

By making this switch, Google bet that advertisers would be willing to pay more for each ad link and ultimately generate more revenue from fewer clicks.

That appears to be what happened in the first quarter when the company said the number of paid clicks from last year rose by 20 percent, less than half the rate of the first-quarter revenue increase.

Google's performance indicates the Internet's advertising market _ expected to generate $44 billion in worldwide spending this year _ remains robust, especially outside the United States.

International markets accounted for 51 percent of Google's revenue in an expansion that was accentuated by the weak dollar. Google said its revenue would have been about $202 million lower if the dollar's value hadn't declined so dramatically from the first quarter of 2007.

As it was, Google's international revenue surged by about 50 percent from last year's first quarter compared with about 30 percent in the United States.

An unusually low tax rate of 24 percent also bolstered Google's earnings. The company's quarterly tax rate ranged from 25 percent to 27 percent last year. Management attributed this year's lower rate primarily to its widening exposure to markets outside the United States.

The results restored some of the $75 billion in shareholder wealth that had evaporated with the 35 percent drop in Google's stock price this year.

Google shares declined $5.49 during regular trading to finish at $449.54 before the company released its pleasant surprise.

This was the 12th quarter out of the 15 since Google went public that its performance has topped analyst expectations _ a trend that had helped propel its stock to nearly $750 before the recent plunge.

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WaMu: Sorry We Don't Have Your $4200 In Cash, Want A Check?

Maybe we're crazy but $4200 doesn't seem like too much money to withdraw in cash at a branch bank, especially if you give them 24 hours notice. Apparently, that large of a withdrawal leaves WaMu all tapped out. Is WaMu really that short on capital reserves?

I had an interesting time last night at my local Washington Mutual.

I am getting ready to leave on a trip to Las Vegas for a friends wedding so last night I decided that I would actually go into a Washington Mutual branch and withdraw my 'bankroll'. It was about 10 minutes to close but there thankfully no line. I filled out the withdrawal slip for the cash that I wanted, approached the teller, scanned my ATM card, entered my PIN and handed her the slip. She immediately asked if I wanted a check for the amount ($4.2k) and I said no, that I wanted cash. She then yelled to the manager across the bank about the transaction. He asked; how much? She said "$4200". Keep in mind that this was not done in private but across the room at the bank, therefore letting everyone in the room know that I wanted a (fairly) large sum of cash.

It was at this time that the faux hawk sporting manager said 'nope'. He told me (still across the room BTW) that they operated on some automatic withdrawal machines and that he couldn't authorize that much of a withdrawal because other people needed to use it and that the amount of capital wouldn't cover it.

In shock I asked when they (the bank!) would be getting more capital, he said that they got more nightly. So I asked if I could come get the amount I wanted tomorrow. He said 'no' again. Apparently these machines had enough money for me but they didn't want to give it to me because someone else might need it (the bank is open for 10 more minutes).

The manager let me know that I could try a 'traditional' WaMu branch as they have 'more leniencies' with the withdrawal amount. Keep in mind that those are at least 3 miles (over 30 minutes in San Francisco) away.

I then asked the teller very plainly... "Are you saying that I can't have MY money?"

She said "yes".

Beyond mad I ripped up my withdrawal slip and left the bank. I have two out standing checks (IRS and State) with WaMu, when they clear I am OUT. I can't think of anything more ridiculous than not being able to get my money. Aren't there some rules about that?

I guess that the good thing to come of all this is that there can't be a run on the banks because even if everyone tried to get their money... the banks will not give it to you!

Thought this was something that you might find interesting!
Thaddius

Is this normal? We've been snooping around looking for rules as to how much cash you can withdraw from a bank and haven't been able to find much of anything. Cash withdrawals over $10,000 require a something called a Currency Transaction Report, and we've seen some credit unions that ask for notice of one business day for withdrawals over $2,000. One day's notice seems reasonable.

Any bankers want to explain how this works?

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Japan temple rejects torch relay

Several legs of the relay have been disrupted by human rights protests

A major Buddhist temple has withdrawn from plans to host Japan's opening stage of the Olympic torch relay.

Zenkoji Temple, in the city of Nagano, had been due to serve as the starting point for the parade on 26 April.

An official said the monks were worried about safety but also linked the decision to concern over recent unrest in Tibet.

Meanwhile the torch has arrived in Thailand in preparation for a parade through the capital city, Bangkok.

The relay has been dogged by protests over Tibet, with chaotic scenes in London, Paris and San Francisco.

Security row

In Japan, the torch is to be paraded 18.5km (11.5 miles) through Nagano, which hosted the 1998 Winter Olympic Games.

The decision by the temple to withdraw was announced after talks with city officials.

"We needed to think about security, being a temple with national treasures and many visitors," a temple official told Reuters news agency.

"We also had to take into account the many messages of concern that we, as a Buddhist temple, received from residents all over the country and from our followers after growing international focus on the Tibet issue."

Kunihiko Shinohara, of Nagano's organising committee for the relay, said that the starting point for the parade would be changed.

"We respect the temple's decision," he said.

The city has already cancelled one event planned around the relay because of security concerns.

There is also a row brewing with China about whether or not its security officials will be allowed to run alongside, reports the BBC's Chris Hogg in Tokyo.

Japan says its own security measures will be sufficient, but China has asked Japan to accept that its people should be in place to deter any demonstrators.

On Thursday, the Indian leg of the relay, in the capital, Delhi, took place under tight security. At least 100 pro-Tibet activists were arrested.

Torch lit in Olympia on 24 March and taken on five-day relay around Greece to Athens

After handover ceremony, taken to Beijing on 31 March to begin a journey of 136,800 km (85,000 miles) around the world

Torch arrives in Macau on 3 May. After three-month relay all around China, it arrives in Beijing for opening ceremony on 8 August

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Praying passenger removed from plane at NY airport

NEW YORK - A passenger who left his seat to pray in the back of a plane before it took off, ignoring flight attendants' orders to return, was removed by an airport security guard, a witness and the airline said.

The Orthodox Jewish man, who wore a full beard, a black hat and a long black coat, stood near the lavatories and began saying his prayers while the United Airlines jet was being boarded at John F. Kennedy International Airport on Wednesday night, said Ori Brafman, a fellow passenger who spoke about the incident by phone from San Francisco, where he lives.

When flight attendants urged the man, who was carrying a religious book, to take his seat, he ignored them, Brafman said. Two friends, who were seated, tried to tell the attendants that the man couldn't stop until after he'd finished his prayers in about 2 minutes, he said.

When the man finally stopped praying, he explained that he couldn't interrupt his religious ritual and wasn't trying to be rude. But the attendants summoned a guard to remove him, said Brafman, a writer who had been visiting New York to talk to publishers.

The plane, Flight 9 to San Francisco, took off without the man. It landed at its destination as scheduled, Brafman said.

Robin Urbanski, a spokeswoman for United Airlines, a subsidiary of UAL Corp. with headquarters in Chicago, confirmed the man was taken off the plane and put on another flight Thursday morning.

Urbanski said flights cannot depart if all passengers are not in their seats, which risks a delay, and it is important that passengers listen to the instructions of the flight crew.

The Port Authority of New York and New Jersey, which runs area airports, and the Transportation Security Administration, which handles airport security, said Thursday they weren't involved in the incident.

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China: We're fighting piracy, honest!

If there's one thing China is known for aside from its Internet censorship practices, it's piracy. China insists, though, that it is making an effort to crack down on piracy, especially in anticipation of the Olympic Games this summer. Chinese officials said at a news conference this morning that the state had convicted 4,322 people for piracy in 2007, and that it would make a special effort to ensure that the Olympic trademark would be protected.

"The Chinese government has taken concrete steps and its success is there for all to see," State Intellectual Property Office spokesperson Yi Xintian told the press, according to the AP. "We are extending comprehensive and strict protection to Olympic intellectual property. The Chinese government has the resolve and capability to make sure that during the Olympic Games we create a favorable climate for intellectual property."

It's no secret that China is rife with intellectual property rip-offs—not just of music, movies, and software, but of everything you can possibly think of. Handbags, Beanie Babies (yes, still), shoes, cell phones, other gadgets, home appliances, clothing—anything that has a well-known brand name can be found in knockoff form. This fact is amplified significantly if you actually visit some cities in China; it's near impossible to turn your head and not be greeted with blocks upon blocks of street vendors trying to hawk their ripped-off wares for cheaper than it costs to buy a bottle of pop in the US.

It's no surprise, then, that the International Olympic Committee could be a little concerned over its trademarks being abused when the Olympics touch down in Beijing. For an organization that undoubtedly makes lots of money on official merchandise sales, China can be a very scary place.

China's statements come at a time when the country is still widely criticized for not doing enough to combat piracy. A year ago, US Trade Representative Susan Schwab filed a complaint with the World Trade Organization over China's "inadequate protection of intellectual property rights," and later that month the WTO named China again at the top of its piracy watch list. Although some organizations—such as the Business Software Alliance—say that the piracy situation in China is improving, China has continued to butt heads with government officials and even Hollywood.

Some companies, though, are trying to compete with pirates instead. Twentieth Century Fox, Warner China, and Paramount have all begun selling DVDs in China at a severe discount in hopes of attracting would-be buyers away from illicit copies being sold on the street. These studios have priced their movies at between 10 and 25 yuan (roughly $1.40 to $3.50)—the lower end being roughly the same price at which pirated movies are commonly found.

The studios have apparently found that selling their DVDs for so cheap is still better than not selling any at all. If the IOC is smart, perhaps it should plan to sell official merchandise on the cheap during the Games, too.

Original here

Polygamist sect hearing in Texas descends into farce

SAN ANGELO, Texas (AP) - A court hearing to decide the fate of the 416 children swept up in a raid on a West Texas polygamist sect descended into farce Thursday, with hundreds of lawyers in two packed buildings shouting objections and the judge struggling to maintain order.

The case - clearly one of the biggest, most convoluted child-custody hearings in U.S. history - presented an extraordinary spectacle: big-city lawyers in suits and mothers in 19th-century, pioneer-style dresses, all packed into a courtroom and a nearby auditorium connected by video.

At issue was an attempt by the state of Texas to strip the parents of custody and place the children in foster homes because of evidence they were being physically and sexually abused by the Fundamentalist Church of Jesus Christ of Latter Day Saints, a renegade Mormon splinter group suspected of forcing underage girls into marriage with older men.

As many feared, the proceedings turned into something of a circus - and a painfully slow one.

(AP) Members of the Fundamentalist Church of Jesus Christ of Latter Day Saints, front, walk out of the... Full Image

By late afternoon only two witnesses had testified, and both only to lay the foundation for documents to be admitted. One witness, a state trooper, was cross-examined by dozens of attorneys, each of them asking the same question on behalf of a child or parent.

As the afternoon dragged on, no decisions had been made on the fate of any of the youngsters.

Additional details on life at the ranch began to emerge as child welfare investigator Angie Voss testified.

She said that if one of the men fell out of favor with the FLDS, his wives and children would be reassigned to other men. The children would then identify the new man as their father. Voss said that contributed to the problem of identifying children's family links and their ages.

Texas District Judge Barbara Walther struggled to keep order as she faced 100 lawyers in her 80-year-old Tom Green County courtroom and several hundred more participating over a grainy video feed from an ornate City Hall auditorium two blocks away.

(AP) Members of the Fundamentalist Church of Jesus Christ of Latter-Day Saints arrive at the Tom Green... Full Image

The hearing disintegrated quickly into a barrage of shouted objections and attempts to file motions, with lawyers for the children objecting to objections made by the parents' attorneys. When the judge sustained an objection to the prolonged questioning of the state trooper, the lawyers cheered.

Upon another objection about the proper admission of medical records of the children, the judge threw up her hands.

"I assume most of you want to make the same objection. Can I have a universal, 'Yes, Judge'?" she said.

In both buildings, the hundreds of lawyers stood and responded in unison: "Yes, Judge."

But she added to the chaos as well.

(AP) Members of the Fundamentalist Church of Jesus Christ of Latter Day Saints make their way down a... Full Image

Walther refused to put medical records and other evidence in electronic form, which could be e-mailed among the lawyers, because it contained personal information. A courier had to run from the courthouse to the auditorium delivering one document at a time.

"We're going to handle this the best we can, one client at a time," Walther said.

Little evidence had been admitted by midafternoon. The first attempt to admit evidence resulted in an hourlong recess while all the lawyers examined it. The rest of the morning was spent in arguments about whether to admit the medical records of three girls, two 17-year-olds and one 18-year-old.

Department of Public Safety Sgt. Danny Crawford testified to DPS's discovery of a church bishop's records taken from a safe at the ranch that listed about 38 families, some of them polygamous and some that included wives 16 or 17 years old. But under repeated cross-examination, Crawford acknowledged the records contained no evidence of sexual abuse.

The sect came to West Texas in 2003, relocating some members from the church's traditional home along the Utah-Arizona state line. Its prophet and spiritual leader, Warren Jeffs, is in prison for forcing an underage girl into marriage in Utah.

(AP) Dan, 24, a member of the Fundamentalist Church of Jesus Christ of Latter Day Saints walks down a... Full Image

Voss testified that through their interviews with girls at the ranch, investigators believed there was a pattern of underage girls given in marriage to older men.

Voss said that if the prophet told the girl to marry or to lie the girl would do as instructed.

"If the prophet told her to lie she would because the prophet received all his messages from the Heavenly Father," Voss said.

State officials asked the judge for permission to conduct genetic testing on the children and adults because of difficulty sorting out the sect's tangled family relationships and matching youngsters with their parents. The judge did not immediately rule.

Amid the shouting and chaos among the lawyers, who came from around Texas to represent the children and parents free of charge, dozens of mothers sat timidly in their long cotton dresses, long underwear even in the spring heat, and braided upswept hair.

(AP) Members of the Fundamentalist Church of Jesus Christ of Latter Day Saints walk along the grounds of... Full Image

In the satellite courtroom, about 175 people strained to see and hear a large projector set up on the auditorium's stage. But the feed was blurry and barely audible.

"I'm not in a position to advocate for anything," complained Susan Hays, the appointed attorney for a 2-year-old sect member.

Outside, where TV satellite trucks lined the street in front of the courthouse's columned facade, a man who said he was an FLDS father waved a photo of himself surrounded by his four children, ranging from a baby to a child of about 9.

"Look, look, look," the father said. "These children are all smiling, we're happy."

Walther signed an emergency order nearly two weeks ago giving the state custody of the children after a 16-year-old girl called an abuse hot line claiming her husband, a 50-year-old member of the sect, beat and raped her. The girl has yet to be identified.

(AP) A member of the Fundamentalist Church of Jesus Christ of Latter Day Saints works in the garden on... Full Image

Authorities raided their compound April 3 in the nearby town of Eldorado - a 1,700-acre ranch with a blindingly white limestone temple and log cabin-style houses - and began collecting documents and disk drives that might provide evidence of underage girls being married to adults.

The children, who are being kept in a domed coliseum in San Angelo, range in age from 6 months to 17 years. Roughly 100 of them are under 4.

FLDS members deny children were abused and say the state is persecuting them for their faith.

The judge must weigh the allegations of abuse and also decide whether it is in the children's best interest to be placed into mainstream society after they have been told all their lives that the outside world is hostile and immoral.

If the judge gives the state permanent custody of the children, the Texas child services agency will face the enormous task of finding suitable homes. It will also have to decipher brother-sister relationships so that it can try to preserve them.

Over the past two weeks, the agency has relied on volunteers to help feed the children, do their laundry and provide crafts and games for them.

Gov. Rick Perry would not say how much the case is costing the state, but said: "Does the state of Texas have the resources? Absolutely we do."

---

Associated Press writer Jennifer Dobner in San Angelo, Angela K. Brown in Fort Worth, and Linda Stewart Ball in Grapevine, Texas, contributed to this report.

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University calls art project a fiction; Shvarts '08 disputes Yale's claim

According to a statement released by the University today, Aliza Shvarts .08 was never impregnated. She never miscarried. The sweeping outrage on blogs across the country was apparently for naught.

The supposed senior art project of the Davenport College senior was a .creative fiction,. a Yale official said Thursday afternoon as students on campus and bloggers across the country expressed colossal outrage over what Shvarts described as a documentation of a nine-month process during which she claimed to have artificially inseminated herself .as often as possible. while periodically taking .abortifacient drugs. to induce miscarriages.

.The entire project is an art piece, a creative fiction designed to draw attention to the ambiguity surrounding form and function of a woman.s body,. Yale spokeswoman Helaine Klasky said in a written statement e-mailed to the News this afternoon.

But Shvarts stood by her project, calling the University.s statement .ultimately inaccurate..

Klasky said Shvarts informed three senior Yale officials today . including two deans . that she neither impregnated herself nor induced any miscarriages. Rather, the entire episode, including a press release describing the exhibition, was .performance art,. Klasky said.

.She is an artist and has the right to express herself through performance art,. Klasky said. .Had these acts been real, they would have violated basic ethical standards and raised serious mental and physical health concerns..

But Shvarts reiterated Thursday that she repeatedly use a needleless syringe to insert semen into herself. At the end of her menstrual cycle, she took abortifacient herbs to induce bleeding, she said. She said she does not know whether or not she was ever pregnant.

.No one can say with 100-percent certainty that anything in the piece did or did not happen,. Shvarts said, .because the nature of the piece is that it did not consist of certainties..

This afternoon, Shvarts showed the News footage from tapes she plans to play at the exhibit. The tapes depict Shvarts . sometimes naked, sometimes clothed . alone in a shower stall bleeding into a cup.

Pia Lindman, Shvarts.s thesis adviser, and Davenport College Dean Craig Harwood could not be reached for comment Thursday. Art Director of Undergraduate Studies Henk van Assen deferred comment to the Yale Office of Public Affairs.

Yale.s statement comes after a day of widespread outrage all across the country following an article in today.s edition of the News in which Shvarts described her supposed exhibition, which she said would include the video recordings well as a preserved collection of the blood from the process, which she said she is storing in a freezer.

In an interview Wednesday, Shvarts said the goal of her exhibition was to spark conversation and debate about the relationship between art and the human body. She said her endeavor was not conceived with any .shock value. in mind.

.I hope it inspires some sort of discourse,. Shvarts said. .Sure, some people will be upset with the message and will not agree with it, but it.s not the intention of the piece to scandalize anyone..

Shvarts said her project would take the form of a large cube suspended from the ceiling of a room in the gallery of Green Hall. Shvarts said she would wrap hundreds of feet of plastic sheeting around the cube, with blood from her self-induced miscarriages lining the sheeting.

Recorded videos of her experiencing her miscarriages would be projected onto the four sides of the cube, Shvarts said, and similar videos would also be displayed on the walls of the room.

Many students on campus expressed outrage when told of the concept, saying it trivialized abortion and transgressed any reasonable moral boundary. On Thursday, the general public seemed to agree; by early evening Thursday, news outlets from The Washington Post to London.s Daily Telegraph had reported the story, and the blogosphere was ablaze in horrified debate over the supposed exhibition.

The project . at least the way Shvarts presented it in her press release and her interview . was immediately condemned Thursday by national groups on both sides of the abortion debate.

.It.s clearly depraved. I think the poor woman has got some major mental problems,. the president of the National Right to Life Committee, Wanda Franz, was quoted as saying on the Web site of FOX News. .She.s a serial killer. This is just a horrible thought..

The abortion-rights group NARAL Pro-Choice America also condemned the exhibition in a written statement e-mailed to the News on Thursday.

.This .project. is offensive and insensitive to the women who have suffered the heartbreak of miscarriage,. said Ted Miller, a spokesman for the organization.

Original here

Predator kill-machine pilots suffering 'chronic burnout'

A US military report says pilots operating the well-known Predator drone aircraft suffer far higher levels of mental stress than flyboys who are physically present aboard their planes.

Too much time staring at a screen, controller

in hand, can impair domestic relationships.

According to the report's authors, a group of US officers, "crewmembers in a MQ-1 Predator unmanned aircraft system (UAS) squadron had significantly increased fatigue, emotional exhaustion, and burnout relative to traditional aircrew". The study allowed for the present very high level of demand for Predator flights by comparing the drone operators against similarly hard-worked aircrews aboard AWACS airborne radar planes.

The revelation that safe, remote drone operations seem to tire pilots and sensor-operators out faster than being airborne above warzones comes in the snappily-titled A Resurvey of Shift Work-Related Fatigue in MQ-1 Predator Unmanned Aircraft System Crewmembers (pdf), flagged up at Flight International's DEW Line blog.

The authors say changes to shift patterns worked by the drone jockeys haven't really helped: their work is just extra tiring and stressful compared to flying airborne missions.

According to the report, survey results "indicated a pervasive problem with chronic fatigue... Nearly 50 per cent of surveyed crewmembers met the diagnostic threshold for levels of daily sleepiness which can be expected to adversely impact job performance and safety".

Worrying stuff, when speaking of people handling deadly aerial kill machines packing smart bombs and laser-guided Hellfire missiles. It seemed that the weary remote-control warriors even suffered "impaired domestic relationships".

Of course, there could be other factors in play here. Predator pilots in the US air force have typically been reassigned from normal airborne flight duties, and given the ordinary military flyboy mindset* this probably isn't seen as a step up. The droneboys may be suffering from sleepiness on the job, burnout, failed relationships, etc, because their macho self-image has been destroyed. Conceivably, the real fighter pilots taunt them, snap towels in the locker room, etc.

Alternatively, some might point out the location from which the Predator is handled during missions: Nellis Air Force Base. Which is right next to Las Vegas, a place long known for disrupted sleep patterns, burnout, and impaired domestic relationships. ®

*Perhaps most succinctly expressed by the old saying: "If you don't know who the greatest fighter pilot in the world is ... it isn't you".

Original here

Nearly 1 in 5 troops has mental problems after war service

WASHINGTON (AP) -- Roughly one in every five U.S. troops who have survived the bombs and other dangers of Iraq and Afghanistan now suffers from major depression or post-traumatic stress, an independent study said Thursday. It estimated the toll at 300,000 or more.

As many or more report possible brain injuries from explosions or other head wounds, said the study, the first major survey from outside the government.

Only about half of those with mental health problems have sought treatment. Even fewer of those with head injuries have seen doctors.

Army Surgeon General Eric Schoomaker said the report, from the Rand Corp., was welcome.

"They're helping us to raise the visibility and the attention that's needed by the American public at large," said Schoomaker, a lieutenant general. "They are making this a national debate."

The researchers said 18.5 percent of current and former service members contacted in a recent survey reported symptoms of depression or post-traumatic stress. Based on Pentagon data that more than 1.6 million have deployed to the two wars, the researchers calculated that about 300,000 are suffering mental health problems.

Nineteen percent - or an estimated 320,000 - may have suffered head injuries, the study calculated. Those range from mild concussions to severe, penetrating head wounds.

"There is a major health crisis facing those men and women who have served our nation in Iraq and Afghanistan," said Terri Tanielian, the project's co-leader and a researcher at Rand. "Unless they receive appropriate and effective care for these mental health conditions, there will be long-term consequences for them and for the nation."

The study, the first large-scale, private assessment of its kind, includes a survey of 1,965 service members across the country, from all branches of the armed forces and including those still in the military as well veterans who have completed their service. The Iraq war has been notable for the repeat tours required of many troops, sometimes for longer than a year at a time.

The results of the study appear consistent with mental health reports from within the government, though the Defense Department has not released the number of people it has diagnosed or who are being treated for mental problems.

The Department of Veterans Affairs said this month that its records show about 120,000 who served in the two wars and are no longer in the military have been diagnosed with mental health problems. Of those, about 60,000 are suffering from post-traumatic stress, and depression runs a close second.

Veterans Affairs is responsible for care of service members after they have leave the military. The Defense Department covers active duty and reservist needs.

The lack of numbers from the Pentagon was one motivation for the Rand study, Tanielian said in an interview.

The most prominent and detailed Pentagon study on the military's mental health that is released regularly to the public is the Army's survey of soldiers, taken annually at the battle zones since 2003.

The most recent one, last fall, found 18.2 percent of Army soldiers suffered mental health problems such as depression, anxiety or acute stress in 2007, compared with 20.5 percent the previous year.

Other studies have variously estimated that 10 percent to 20 percent of troops had symptoms of mental health problems.

Col. Loree Sutton, who heads a new Pentagon center on brain injury, said the Rand study will add to the work defense officials are doing. That includes researching best practices used inside the military and out, improving and expanding training and prevention programs, adding mental health staff and trying to change a military culture in which many troops are afraid or embarrassed to get mental health treatment.

"We've got to get the word out that seeking help is a sign of strength," Sutton said.

She said officials have been working to add thousands more mental health professionals to help the uniformed psychiatrists, psychologists and others struggling to meet the wartime demands of troops and their families. Across the services, officials are trying to hire over 1,000 additional staff. Also, companies providing health care by contract to the Pentagon have added over 3,000 in the past year, and the U.S. Public Health Service has provided some 200, she said. Veterans Affairs has added some 3,800 professionals in the past couple of years, officials there said.

In other survey results:

-About 7 percent of those polled reported both a probable brain injury and current post-traumatic stress or major depression.

-Rates of post-traumatic stress and major depression were highest among women and reservists.

-About 53 percent of service members with post-traumatic stress or depression sought help over the past year, and 43 percent reported being evaluated by a physician for their head injuries at some time.

-They gave various reasons for not getting help, including that they worried about the side effects of medication, they believed family and friends could help them with the problem, or they feared seeking care might damage their careers.

The Army's own warfront survey found the stigma associated with getting help has been decreasing slowly but steadily in recent years.

Thursday's report was titled "Invisible Wounds of War: Psychological and Cognitive Injuries, Their Consequences, and Services to Assist Recovery." It was sponsored by a grant from the California Community Foundation and done by researchers from Rand Health and the Rand National Security Research Division. The division also has done work under contracts with the Pentagon and other defense agencies as well as allied foreign governments and foundations.

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On the Net:

Rand Corporation: http://www.rand.org

Army studies: http://www.armymedicine.army.mil

Original here

Bush and Brown Share Impatience on Iran

Stephen Crowley/The New York Times

British Prime Minister Gordon Brown and President George W. Bush at a news conference on Thursday at the White House.

WASHINGTON — President Bush and Prime Minister Gordon Brown of Britain expressed mounting impatience Thursday with Iran for proceeding with its nuclear enrichment work in defiance of the international community.

Earlier, the prime minister met with the three presidential candidates, but he smilingly side-stepped a question about which he might feel more affinity for.

While Tehran argues that its nuclear program is purely for civilian purposes, Mr. Bush told reporters that it “is, in my judgment, naïve” to think that the know-how that Iranians are developing could not be transferred to military efforts to produce an atomic weapon.

Iranian leaders, he said, standing beside the prime minister with American flags and Union Jacks resplendent in the background, had proved themselves “untrustworthy.”

Mr. Brown, who said he would be talking to other European leaders about further tightening economic sanctions against Iran, said, "I make no apology" for doing so, as long as Tehran defies United Nations demands that it halt its enrichment program.

The president and prime minister also said they were working together to help alleviate a building global food crisis that has produced food riots in several countries. On other topics, from Darfur to trade, the two leaders stood shoulder to shoulder.

During a brief news conference that plowed little new ground but underscored yet again the closeness of the U.S.-British “special relationship,” reporters essayed a few questions that seemed almost guaranteed to be shrugged off: A British journalist asked Mr. Bush whether his relationship to Mr. Brown’s predecessor, Tony Brown, had not been closer (“False,” the president shot back, “we’ve got a great relationship”).

And Mr. Brown politely sidestepped another such question — on whether he had struck up a special rapport with any of the three candidates to be the next president.

Before he could speak, Mr. Bush, who seemed amused by the question, interjected: "One of those three has a good chance of winning!” The prime minister then said that “it is for Americans to decide who their next president is going to be,” adding that he had been “delighted” to meet Senators John McCain, Hillary Rodham Clinton and Barack Obama during back-to-back interviews earlier at the British ambassador’s residence.

No matter who replaces President Bush, Mr. Brown added, the relationship between the United States and Britain will remain “strong and steadfast.”

Earlier, the candidates’ aides offered only bare-bones descriptions of their meetings, which took place without staff members present.

Mr. Obama, was the first to arrive and the only one of the three not to have met previously with Mr. Brown, said in a statement released later: "Prime Minister Brown and I discussed our commitment to strengthen the historic transatlantic alliance, and to confront common challenges like the ongoing operations in Afghanistan and Iraq, the instability in the global economy and the need to support democracy and prosperity in Africa. The Prime Minister has been a critically important partner for the United States and I look forward to working with him in the months and years ahead.”

A Clinton aide noted that the two leaders knew each other previously and had a “good meeting” that covered Iraq, Afghanistan, China, global climate change, and the international economy. The aide, speaking on grounds of anonymity, described both politicians as “wonky people,” saying they spoke until just minutes before Senator McCain arrived, ignoring assistants’ efforts to wind up the session sooner.

Melissa Shuffield, the Senate spokeswoman for Senator McCain, noted that he and Mr. Brown had talked at length last month in London during the senator’s trip to Europe and the Middle East. “They touched more on those topics this time around — the importance of the special relationship, climate change,” as well as Iran and the events in southern Iraq.

Ms. Shuffield said they had also discussed the senator’s idea of a League of Democracies — an organization that would supplement the United Nations and promote a more cooperative U.S. foreign policy.

The White House endorsed the meetings. "We think it’s probably a wise move by the prime minister to get to know one of the individuals who will be elected president a year from now," said Tony Fratto, a presidential spokesman. "It makes sense."

The president had underscored the durability of the relationship, saying, “Our relationship is very special, and it’s -- I’m confident future presidents will keep it that way.”

David Stout contributed reporting.

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Study says 300,000 US troops suffer mental problems

By David Morgan

WASHINGTON, April 17 (Reuters) - About 300,000 U.S. troops returning from Iraq and Afghanistan suffer symptoms of post-traumatic stress disorder or depression, but about half receive no care, an independent study said on Thursday.

The study by the RAND Corp. also estimated that another 320,000 troops have sustained a possible traumatic brain injury during deployment. But researchers could not say how many of those cases were serious or required treatment.

Billed as the first large-scale nongovernmental survey of its kind, the study found that stress disorder and depression afflict 18.5 percent of the more than 1.5 million U.S. forces who have deployed to the two war zones.

The numbers are roughly in line with previous studies. A February assessment by the U.S. Army that showed 17.9 percent of U.S. troops in Iraq and Afghanistan suffering from acute stress, depression or anxiety in 2007, down from 19.1 percent in 2006.

But the 500-page RAND study, based in part on interviews with more than 1,900 soldiers, sailors and Marines, also said that only half of troops suffering debilities receive care. And in half of those cases, the care is only minimally adequate.

"There is a major health crisis facing those men and women who have served our nation in Iraq and Afghanistan," said Terri Tanielian, a RAND researcher who helped head the study.

"Unless they receive appropriate and effective care for these mental health conditions, there will be long-term consequences for them and for the nation."

FEAR OF STIGMA

The study said many service members do not seek treatment because they fear the stigma associated with psychological problems could harm their careers.

Post-traumatic stress disorder, or PTSD, can result from wartime trauma such as suffering wounds or witnessing others being hurt. Symptoms include irritability or outbursts of anger, sleep difficulties, trouble concentrating, extreme vigilance and an exaggerated startle response.

RAND recommended that the Pentagon create a way for service members to receive mental health service confidentially and monitor the quality of care.

Army Col. Loree Sutton, director of the U.S. Defense Center of Excellence for Psychological Health and Traumatic Brain Injury, welcomed the study.

She was concerned at the finding that only about half of those who sought help received "minimally adequate" treatment and said it would spur the military to try harder to recruit more mental health specialists.

The Army wants to hire 275 civilian mental health professionals but a tight labor market and difficulties getting civilians into war zones has slowed the effort, officials say.

RAND, a private research organization, estimated that stress and depression among returning soldiers cost $6.2 billion in the two years following deployment, mainly due to lost productivity, medical costs and a higher risk of suicide. (Additional reporting by Andrew Gray; Editing by Alan Elsner and Will Dunham)

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Suicide bomber kills 50 at Iraq funeral

By Dean Yates

BAGHDAD (Reuters) - A suicide bomber struck a funeral in northern Iraq on Thursday, killing 50 mourners and wounding 55 in an attack that suggests militants have launched a new campaign of violence in the north.

Survivors said the funeral had been for two members of a U.S.-backed neighborhood security unit who were killed on Wednesday. Blame is likely to fall on the Sunni Islamist al Qaeda, which has vowed to target the neighborhood units because they work with U.S. forces.

The attack was one of the deadliest in Iraq for months and underscored the ability of militants to wreak havoc despite an overall fall in violence that has prompted the United States to start withdrawing troops from Iraq.

Police said the bomber detonated a suicide vest after entering the funeral tent in a Sunni Arab village near the town of Adhaim in Diyala province. They put the final death toll at 50.

"Suddenly a fireball filled the funeral tent. I fell to the ground. I saw bodies scattered everywhere," said mourner Ali Khalaf, who was taken to a hospital in the nearby town of Tuz Khurmato to have wounds treated.

Outside a hospital in the northern city of Kirkuk, to which pickup trucks took many of the bodies, frantic relatives gathered to look for loves ones. Several women wearing black robes sat on the ground, wailing.

Northern Iraq has seen an upsurge in bombings this week, including one that killed 40 people in the town of Baquba, capital of Diyala, on Tuesday.

The U.S.-backed neighborhood security units, called "Concerned Local Citizens" by the U.S. military, have been credited with helping to bring down violence in Iraq.

Around 90,000 men, mainly Sunni Arabs and including some former Sunni Arab insurgents who have turned against al Qaeda, have been recruited. They largely man checkpoints and provide intelligence tips to the U.S. military.

In northern Baghdad, police sources said a roadside bomb killed four of the neighborhood guards and two civilians. Gunmen also killed another guard in the city's south.

U.S. and Iraqi authorities say al Qaeda militants have moved into northern provinces after being pushed out of the westerly Anbar province, their former stronghold, and also Baghdad.

Prime Minister Nuri al-Maliki, in a speech in Brussels on Wednesday, said Iraq was "near to announcing victory over the terrorist organization al Qaeda".

But U.S. commanders say that while al Qaeda has been significantly weakened, it can still carry out big attacks.

MORE FIGHTING IN SADR CITY

In Baghdad, fighting has been dominated by weeks of clashes between gunmen and security forces in the Shi'ite slum of Sadr City, stronghold of the anti-American cleric Moqtada al-Sadr. Fresh battles erupted overnight, officials said.

U.S. military spokesman Major Mark Cheadle said five gunmen had been killed in the early hours of Thursday in three separate incidents, including an air strike.

Hospitals in Sadr City said they had received nine bodies and 36 wounded after clashes and air strikes.

Most U.S. troops in Iraq are deployed in Sunni Arab areas, which have become quieter in the past year after a "surge" in U.S. forces. But troop levels are being cut. By July, 20,000 U.S. soldiers will have left Iraq, bringing numbers to 140,000.

Al Qaeda militants are frequently blamed for attacks on funerals, which are often held with little security. The group also has a history of striking with car bombs near government targets and civilian crowds.

While the U.S. military says security has improved in the north, the strikes this week have been a reminder of the instability there at a time when attention has been focused on fighting in southern Shi'ite areas that erupted late last month.

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Surviving son denied health benefits post-Iraq

FRESNO, Calif. - Forced to leave the combat zone after his two brothers died in the Iraq war, Army Spc. Jason Hubbard faced another battle once he returned home: The military cut off his family's health care, stopped his G.I. educational subsidies and wanted him to repay his sign-up bonus.

It wasn't until Hubbard petitioned his local congressman that he was able to restore some of his benefits.

Now that congressman, Rep. Devin Nunes, plans to join three other lawmakers in introducing a bill that would ensure basic benefits to all soldiers who are discharged under an Army policy governing sole surviving siblings and children of soldiers killed in combat. The rule is a holdover from World War II meant to protect the rights of service people who have lost a family member to war.

"I felt as if in some ways I was being punished for leaving even though it was under these difficult circumstances," Hubbard told The Associated Press. "The situation that happened to me is not a one-time thing. It's going to happen to other people, and to have a law in place is going to ease their tragedy in some way."

Pair enlisted after brother's death
Hubbard, 33, and his youngest brother, Nathan, enlisted while they were still grieving for their brother, Marine Lance Cpl. Jared Hubbard, who was 22 when he was killed in a 2004 bomb explosion in Ramadi.

At their request, the pair were assigned to the same unit, the 3rd Brigade of the 25th Infantry Division in Hawaii, and deployed to Iraq the next year.

In August, 21-year-old Cpl. Nathan died when his Black Hawk helicopter crashed near Kirkuk. Jason was part of the team assigned to remove his comrades' bodies from the wreckage.

Hubbard accompanied his little brother's body on a military aircraft to Kuwait, then on to California. He kept steady during Nathan's burial at Clovis Cemetery, standing in dress uniform between his younger brothers' graves as hundreds sobbed in the heat.

But Hubbard broke his silence when he found his wife, pregnant with their second child, had been cut off from the transitional health care the family needed to ease back to civilian life after he was discharged in October.

"This is a man who asked for nothing and gave a lot," said Nunes, R-Calif., who represents Hubbard's hometown of Clovis, a city of 90,000 next to Fresno. "Jason is one person who obviously has suffered tremendously and has given the ultimate sacrifice. One person is too many to have this happen to."

Hubbard went to Nunes, who began advocating for the former soldier in December, after hearing the Army was demanding that he repay $6,000 from his enlistment bonus and was denying him up to $40,000 in educational benefits under the GI bill.

After speaking with Army Secretary Pete Geren, Nunes got the repayment waived, and a military health policy restored for Hubbard's wife.

But the policy mandated that she be treated at a nearby base, and doctors at the Lemoore Naval Air Station warned that the 45-mile trip could put her and the fetus in danger. Hubbard said doctors offered alternative treatment at a hospital five hours away.

Meanwhile, Hubbard and his 2-year-old son went without any coverage for a few months.

The Hubbard Act, scheduled to be introduced Wednesday, would for the first time detail the rights of sole survivors, and extend to them a number of benefits already offered to other soldiers honorably discharged from military service.

Legislative action
The bill — co-sponsored by Rep. Jim Costa, D-Calif., Sen. Dianne Feinstein, D-Calif., and Sen. Saxby Chambliss, R-Ga. — would waive payback of their enlistment bonuses, allow them to participate in G.I. educational programs, give them separation pay and access to transitional health care.

Meanwhile, Hubbard, his wife Linnea and his son Elijah, have permanent health coverage now that he is once again working as a Fresno County sheriff's deputy, the job he left in 2004 to serve in Iraq.

The Army will adopt to any changes in policy springing from the legislation, said Army spokesman Maj. Nathan Banks.

"Foremost the Army itself sympathizes with him for the loss of his brothers," Banks said. "We will do everything within our means to rectify this issue. He is still one of ours."

Hubbard's father, Jeff, said that resolving the family's bureaucratic difficulties would provide some comfort, but would not help lessen their pain.

"We're still very much deeply involved in a grieving process. We're pretty whacked," he said. "This doesn't relate back to the loss of our boys, it can't, but we would consider it a positive accomplishment."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Report reveals Iran seized British sailors in disputed waters

Dominic Kennedy

Fifteen British sailors and Marines were seized by Iran in internationally disputed waters and not in Iraq’s maritime territory as Parliament was told, according to new official documents released to The Times.

The Britons were seized because the US-led coalition designated a sea boundary for Iran’s territorial waters without telling the Iranians where it was, internal Ministry of Defence briefing papers reveal.

Documents released under the Freedom of Information Act detail for the first time the blunders last spring that led to what an all-party committee of MPs came to describe as a “national embarrassment”.

The captured 14 men and one woman were paraded on Iranian TV for a fortnight before being freed a year ago by a smiling President Ahmadinejad, who gave them new suits and bags of presents.

Newly released Ministry of Defence documents state that:

— The arrests took place in waters that are not internationally agreed as Iraqi;

— The coalition unilaterally designated a dividing line between Iraqi and Iranian waters in the Gulf without telling Iran where it was;

— The Iranian Revolutionary Guards’ coastal protection vessels were crossing this invisible line at a rate of three times a week; It was the British who apparently raised their weapons first before the Iranian gunboats came alongside;

— The cornered British, surrounded by heavily armed Iranians, made a hopeless last-minute radio plea for a helicopter to come back and provide air cover.

Iran always claimed that it had arrested the Britons for violating its territorial integrity.

Des Browne, the Defence Secretary, repeatedly told the Commons that the personnel were seized in Iraqi waters.

The MoD, in a televised briefing by Vice-Admiral Charles Style, the Deputy Chief of the Defence Staff, produced a map showing a line in the sea called “Iraq/Iran Territorial Water Boundary”. A location was given for the capture of the Britons inside what the chart said were “Iraq territorial waters”. But the newly released top-level internal briefing accepts that no such border exists.

The report, addressed to Air Chief Marshal Sir Jock Stirrup, the Chief of the Defence Staff, blames the incident on the absence of an agreed boundary and a failure to coordinate between Iraq, Iran and the coalition.

Under the heading “Why the incident occurred”, the report examines the history of a border that has been disputed since a treaty between the Persian and Ottoman empires in 1639.

Professor Robert Springborg, of the School of Oriental and African Studies, said yesterday that it was negligent to fail to clarify with the Iranians where the notional boundary was.

Using the Freedom of Information Act, The Times made requests about the events. The MoD released two documents, although parts are censored. One is the report to Sir Jock dated April 13, 2007, a week after the Britons returned home unharmed. It was compiled after they had been debriefed. The other is the communications log between the mother ship HMS Cornwall and the two seaboats used by the boarding party.

What they said

“There is no doubt that HMS Cornwall was operating in Iraqi waters and that the incident itself took place in Iraqi waters . . . In the early days the Iranians provided us with a set of coordinates, and asserted that was where the event took place, but when we told them the coordinates were in Iraqi waters they changed that set and found one in their own waters. I do not think that even they sustain the position that the incident took place anywhere other than in Iraqi waters”

Des Browne, Defence Secretary, House of Commons, June 16, 2007

“Since the outset of the Iraq-Iran War there has been no formal ratified TTW [territorial waters] agreement in force between Iraq and Iran . . . In the absence of any formal agreement, the coalition tactical demarcation (the Op Line) is used as a notional TTW boundary. It is a US NAVCENT [US Naval Forces Central Command] construct based on an extension of the Algiers accord demarcation line beyond the mouth of the Shatt al-Arab [waterway] into the NAG [northern Arabian Gulf]. While it may be assumed that the Iranians must be aware of some form of operational boundary, the exact coordinates to the Op Line have not been published to Iran.”

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Consumer groups urge "do not track" registry

By Diane Bartz

WASHINGTON (Reuters) - Two consumer groups asked the Federal Trade Commission on Tuesday to create a "do not track list" that would allow computer users to bar advertisers from collecting information about them.

The Consumer Federation of America and the Consumers Union also urged the FTC to bar collection of health information and other sensitive data by companies that do business on the Internet unless a consumer consents.

The call echoed those of other privacy advocates who filed statements with the FTC on Internet companies' use of "behavioral advertising." That is the practice of tracking a computer user's activities online, including Web searches and sites visited, to target advertisements to the individual consumer.

In December, the FTC approved Google's purchase of advertising rival DoubleClick over the objections of some privacy groups.

At the same time, the agency urged advertisers to let computer users bar advertisers from collecting information on them, to provide "reasonable security" for any data and to collect data on health conditions or other sensitive issues only with the consumer's express consent.

In comments to the FTC on online behavioral advertising, advertisers made clear a strong preference for self-regulation rather than government dictates on how personal data are collected, what disclosures are made to computer users and how long the information is stored.

Consumer groups said on Tuesday they were skeptical of self-regulation.

"Self-policing schemes are not enough to protect consumers' privacy and offer no enforcement against improper behavior," said Chris Murray, senior counsel for Consumers Union, in a statement.

"While companies like Google are trying to put pretty good practices in place, we don't want to rely on the good graces of the companies because they might change their minds," he told Reuters in a telephone interview.

Several child advocacy groups, including the American Academy of Child and Adolescent Psychiatry and American Academy of Pediatrics, urged the FTC to bar advertisers from collecting information on or advertising to anyone under the age of 18.

Several advertisers also questioned whether the FTC and privacy groups had established that any harm had been done by the data collected and pointed out that the advertisers subsidized the free information often sought on the Internet.

"The associations (of businesses and advertisers) strongly believe that self-regulation and leading business practices comprise the most effective framework to protect consumers and further innovation in the area of privacy and behavioral advertising," the American Advertising Federation, Association of National Advertisers and other organizations said in a statement.

"We believe that any additional principles or guidelines should be issued only after the commission specifically identifies harms and concerns so that business is in a position to consider and address them," the group said in its comments to the FTC.

(Reporting by Diane Bartz; Editing by Gary Hill)

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Wall Street Winners Get Billion-Dollar Paydays

Chip East/Reuters

John Paulson of Paulson & Company earned $3.7 billion.

Hedge fund managers, those masters of a secretive, sometimes volatile financial universe, are making money on a scale that once seemed unimaginable, even in Wall Street’s rarefied realms.

One manager, John Paulson, made $3.7 billion last year. He reaped that bounty, probably the richest in Wall Street history, by betting against certain mortgages and complex financial products that held them.

Mr. Paulson, the founder of Paulson & Company, was not the only big winner. The hedge fund managers James H. Simons and George Soros each earned almost $3 billion last year, according to an annual ranking of top hedge fund earners by Institutional Investor’s Alpha magazine, which comes out Wednesday.

Hedge fund managers have redefined notions of wealth in recent years. And the richest among them are redefining those notions once again.

Their unprecedented and growing affluence underscores the gaping inequality between the millions of Americans facing stagnating wages and rising home foreclosures and an agile financial elite that seems to thrive in good times and bad. Such profits may also prompt more calls for regulation of the industry.

Even on Wall Street, where money is the ultimate measure of success, the size of the winnings makes some uneasy. “There is nothing wrong with it — it’s not illegal,” said William H. Gross, the chief investment officer of the bond fund Pimco. “But it’s ugly.”

The richest hedge fund managers keep getting richer — fast. To make it into the top 25 of Alpha’s list, the industry standard for hedge fund pay, a manager needed to earn at least $360 million last year, more than 18 times the amount in 2002. The median American family, by contrast, earned $60,500 last year.

Combined, the top 50 hedge fund managers last year earned $29 billion. That figure represents the managers’ own pay and excludes the compensation of their employees. Five of the top 10, including Mr. Simons and Mr. Soros, were also at the top of the list for 2006. To compile its ranking, Alpha examined the funds’ returns and the fees that they charge investors, and then calculated the managers’ pay.

Top hedge fund managers made money in many ways last year, from investing in overseas stock markets to betting that prices of commodities like oil, wheat and copper would rise. Some, like Mr. Paulson, profited handsomely from the turmoil in the mortgage market ripping through the economy.

As early as 2005, Mr. Paulson began betting that complex mortgage investments known as collateralized debt obligations would decline in value, much as Wall Street traders bet that shares will drop in price. In that case, known as shorting, they borrow shares and sell them, wait for the price to fall, buy the shares back at a lower price and return them, pocketing the profit.

Then, over the next two years, Mr. Paulson established two funds to focus on the credit markets. One of those funds returned 590 percent last year, and the other handed back 353 percent, according to Alpha. By the end of 2007, Mr. Paulson sat atop $28 billion in assets, up from $6 billion 12 months earlier.

Mr. Soros, one of the world’s most successful speculators and richest men, leapt out of retirement last summer as the market turmoil spread — and he won big. He made $2.9 billion for the year, when his flagship Quantum fund returned almost 32 percent, according to Alpha. Mr. Simon, a mathematician and former Defense Department code breaker who uses complex computer models to trade, earned $2.8 billion. His flagship Medallion fund returned 73 percent.

Like Mr. Paulson, Philip Falcone, who founded Harbinger Partners with $25 million in June 2001, cast a winning bet against the mortgage market. He pulled in returns of 117 percent after fees in 2007 and made $1.7 billion. The trade thrust him from relative obscurity to hedge fund heavyweight: he now manages $18 billion. Harbinger recently won agreement from The New York Times Company to add two members to its board.

Hedge fund managers share their success with their investors, which include wealthy individuals, pension funds and university endowments. They typically charge annual fees equal to 2 percent of their assets under management, and take a 20 percent cut of any profits.

With a combined $2 trillion under management, the hedge fund industry is coming off its richest year ever — a feat all the more remarkable given the billions of dollars of losses suffered by major Wall Street banks.

In recent months, however, scores of hedge funds have quietly died or spectacularly imploded, wracked by bad investments, excess borrowing or leverage, and client redemptions — or a combination of those events.

“To some degree it’s a very gigantic version of Las Vegas,” said Gary Burtless, an economist at the Brookings Institution.

As Alpha’s list shows, managers who reap big gains one year can lose the next.

Edward Lampert, the founder of ESL Investments and a member of the 2007 Alpha list, was absent this year. His fund fell 27 percent last year, according to Alpha. About 60 percent of ESL’s equity portfolio is invested in Sears, whose shares plunged 40 percent last year. ESL is also a major holder of Citigroup, whose abysmal performance matched that of Sears.

A manager who ranked high in the 2007 list and fell off in 2008 was James Pallotta of the Tudor Investment Corporation, who was 17th last year and earned $300 million. Mr. Pallotta’s $5.7 billion Raptor Global Fund fell almost 8 percent last year, according to Alpha.

A few who did not make the cut still made buckets of money. Bruce Kovner of Caxton Associates and Barry Rosenstein at Jana Partners didn’t make the top 50. But Mr. Kovner earned $100 million, and Mr. Rothstein earned $170 million, according to Alpha. Spokesmen for the hedge fund managers either declined to comment on Tuesday or could not be reached.

Since 1913, the United States witnessed only one other year of such unequal wealth distribution — 1928, the year before the stock market crashed, according to Jared Bernstein, a senior fellow at the Economic Policy Institute in Washington. Such inequality is likely to impede an economic recovery, he said.

“For a recovery to be robust and sustainable you can’t just have consumer demand at Nordstrom,” he said. “You need it at the little shop on the corner, too.”

Despite the explosive growth of the industry — about 10,000 hedge funds operate worldwide — it is relatively lightly regulated. On Tuesday, two panels appointed by Treasury Secretary Henry M. Paulson Jr. advised hedge funds to adopt guidelines to increase disclosure and risk management.

And Mr. Gross, the fund manager, warned that the widening divide among the richest and everyone else is cause for worry.

“Like at the end of the Gilded Age and the Roaring Twenties, we are going the other way,” Mr. Gross said. “We are clearly in a period of excess, and we have to swing back to the middle or the center cannot hold."

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Citigroup's Market Value Drops Below Apple's Amid Credit Crisis

By Connie Guglielmo and Bradley Keoun

April 12 (Bloomberg) -- At the end of 2006, Citigroup Inc. was the fourth-largest company in the Standard & Poor's 500 Index, with a market value of $274 billion, almost four times that of Apple Inc. Now investors say the maker of iPods is worth $7.7 billion more than the biggest financial services provider.

Citigroup, reeling from the collapse of the subprime mortgage market, has lost 13 percent in value since reporting the biggest quarterly loss in its 196-year history in January. That followed a 47 percent drop last year. Even after a 26 percent decline in its own shares this year, Apple has a market value of $129.3 billion to Citigroup's $121.6 billion.

The shrinking of Citigroup underscores the devastation that has rocked the financial industry, highlighted by the Federal Reserve-managed takeover of Bear Stearns & Co. last month. Apple, on the verge of bankruptcy 10 years ago, has emerged as a technology star under Chief Executive Officer Steve Jobs. Its shares more than doubled last year.

``The market looks at what Steve Jobs has done and what he's likely to do,'' said Michael Holland, who oversees more than $4 billion as chairman of Holland & Co. in New York. ``The market is valuing that far more than the financial assets of Citigroup.''

Holland sold his Citigroup shares a year and a half ago because he felt the ``prospects were pretty lousy'' and instead bought JPMorgan Chase & Co. shares. He also holds Apple and Google Inc., owner of the most popular Internet search engine.

``While we don't comment on our stock price, Citi remains focused on serving customers and implementing the priorities Vikram Pandit has developed, including better managing the firm's capital resources and risk management for improved profitability, stability and future growth,'' spokesman Michael Hanretta said.

Apple declined to comment, spokesman Steve Dowling said.

Subprime Writedowns

New York-based Citigroup, whose market value dipped below $100 billion on March 17 for the first time since 1998, now ranks 19th globally by that measure. Among the other companies that have overtaken it in the last quarter are International Business Machines Corp., Coca-Cola Co. and JPMorgan.

Citigroup fell 35 cents to $23.36 yesterday in New York Stock Exchange composite trading. Apple fell $7.41 to $147.14 on the Nasdaq Stock Market.

Of 29 analysts tracked by Bloomberg, 26 recommend investors buy Apple shares, two suggest holding and one says sell. Seven analysts recommend investors buy Citigroup's shares, five say hold and six suggest selling.

Citigroup, the biggest bank by assets since the merger of Citicorp and Travelers Group Inc. in 1998, took $24 billion in subprime writedowns and reduced its dividend 41 percent in January, the first cut since Citigroup was formed.

Pandit Takes Over

CEO Charles O. ``Chuck'' Prince stepped down in November and was replaced by Vikram Pandit, who has eliminated about 6,000 jobs and plans more cuts. The bank may be poised to dispose of more than $200 billion of loans and securities to shore up its capital, a person with knowledge of the plans said last month.

``Citigroup got itself into a really big mess,'' said Richard Sylla, a financial historian and professor of economics at New York University. ``Apple is an innovative company, having come up with iPods and iPhones, and they seem to have a lot of promise for the future.''

The slump in market capitalization puts Citigroup behind technology companies that themselves slid this year, including Google and Cisco Systems Inc., according to data compiled by Bloomberg. Bank of America Corp. passed Citigroup last year. Bank of America now ranks ninth and JPMorgan is 11th.

IPod Players

Citigroup also ranks below Wal-Mart Stores Inc., Procter & Gamble Co., Johnson & Johnson and Pfizer Inc. -- so it trails the world's largest retailer, the top U.S. consumer-goods producer, the largest health-products maker and the biggest drugmaker even as slowing consumer spending weighs on the U.S. economy.

Apple's Jobs relied on iPod music players, the Web-surfing iPhone handset and Macintosh computers to drive profit to more than $3 billion last year for the first time in the Cupertino, California-based company's 32-year history. Sales may rise 31 percent to almost $31.5 billion this year, according to the average of 23 estimates in a Bloomberg survey.

Citigroup had a record loss of $9.83 billion in the fourth quarter and may post another loss when it reports first-quarter financial results next week, said Ed Maran, who helps manage about $10 billion at Thornburg Investment Management in Santa Fe, New Mexico.

May Bounce Back

Citigroup shares may bounce back, Maran said. At its current valuation, Citigroup is ``extremely attractive'' he said, because the company seems poised to reap the benefits of efforts in emerging market lending, wealth management, brokerage and even consumer lending in the U.S., which he says may have better long-term prospects than it seems today.

``The market is completely ignoring the earnings power of Citigroup and is completely focused on the balance sheet damage they have incurred,'' said William Fitzpatrick, an equity analyst at Optique Capital Management in Racine, Wisconsin, which owns Citigroup. He says this is a buying opportunity. ``This franchise has tremendous value, particularly from a global perspective.''

Citigroup's prospects in international banking convinced historian Sylla to buy the shares a few months ago. He said he may add to his holdings if the shares decline further.

``Once they get some infusions of capital, then life will go on again and Citigroup will come back,'' Sylla said. In the meantime, ``there's an opportunity for bottom feeding.''

To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net; Bradley Keoun in New York at bkeoun@bloomberg.net.

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