Sunday, March 23, 2008

Price of gas from around the world


Oslo , Norway


Hong Kong


Brussels, Belgium


London, UK


Rome, Italy


Tokyo, Japan


Sao Paulo, Brazil


New Delhi, India


Sidney , Australia


Johannesburg, South Africa


Mexico City


Buenos Aires , Argentina

You are going to love this…


Riyadh , Saudi Arabia




Caracas , Venezuela


Sheridan, Arkansas
Who Cares? Not going anywhere.

Original here

(New Math) x (SEC Rules) + Proxy=Confusion

The latest proxy statement from Applied Materials Inc. tells exactly how the company set 2007 bonuses for top executives:

"Base Salary x Individual Target Percentage x (Weighted Score + Total Stockholder Return Adder, if Achieved)."

[Applied Materials' math]

Of some help may be Applied's definition of weighted score:

"(Performance Measure 1 x Weight as Percentage) + (Performance Measure 2 x Weight as Percentage)."

And so on.

As a maker of semiconductor equipment, Applied Materials belongs to an industry of mathematical whizzes. Yet the complexity of its proxy this year reflects a trend that extends far beyond Silicon Valley. Even Deere & Co., the maker of tractors, has produced a proxy that uses three formulas, four tables and a graph to illustrate the calculation of executive bonuses.

This explosion of mathematics was sparked by the Securities and Exchange Commission, which in 2006 began requiring more information about how companies calculate executive pay. After the first batch of proxies using the new rules arrived last year, the SEC told 350 companies they hadn't been specific enough.

Among those companies was Applied Materials. So this year, it expanded by 76% the word count of its proxy's compensation section. In all, the compensation section contains 16,245 words -- twice the length of the U.S. Constitution and its 27 Amendments -- along with 10 formulas, 10 tables and 155 percent signs.

The result, according to some experts, is unfathomable. "Can even the executives figure out what they have to do to get these awards?" asks Carol Bowie, head of corporate-governance research at RiskMetrics Group Inc., which helps investors sort through such filings.

The SEC has said that it wants disclosure to be clear and concise, as well as comprehensive. But striking that balance is difficult, companies say. So, many are erring on the side of detail.


"Bonus multiple x target bonus x base salary earnings = payout," explains the new proxy from drug maker Eli Lilly & Co., which last year received a letter from the SEC calling its executive-pay disclosure inadequate. Just in case that term "bonus multiple" isn't clear, the proxy explains that it is "(0.25 x sales multiple) + (0.75 x adjusted EPS multiple)." To find the sales and EPS multiples, investors must consult graphs.

Some firms may be throwing up their hands and deluging the public with figures. "I know a couple of companies where the frustration level with the SEC was so large that they said, 'Just put it all in,'" says John A. Hill, a trustee at mutual-fund giant Putnam Funds. Mr. Hill often chats about pay practices with officials of companies whose stock Putnam investors own.

An SEC spokesman says it's too early to comment on 2008 proxies.

Even activist investors who pushed for more disclosure on executive pay are scratching their heads. "There have been some proxies when I've gone through and said, 'Wow, I have no idea what I just read,'" says Scott Zdrazil, director of corporate governance at union-owned Amalgamated Bank, which manages around $12 billion in pension-fund assets.

The Smell Test

Mr. Zdrazil says he uses a "smell test" to judge whether companies are trying to obscure poor pay practices with lots of detail, or just being wonky. "If you can clearly understand the algebra involved, it passes," he says.

One that doesn't pass his test is software maker Novell Inc. Its proxy tosses around such terms as "assigned weighted quantitative performance objective achievement percentage," and describes a two-step process for calculating executive bonuses:

First: "Bonus Funding Percentage x Weighted Quantitative Performance Objectives Achievement x Qualitative Performance Factor = Performance Factor."

Then: "Performance Factor x Target Bonus Percentage x Base Salary = Recommended Bonus Amount."

Mr. Zdrazil says Novell fails to explain how difficult it is for executives to achieve performance targets.

Asked about the formulas, Novell says it gave more detail in response to the SEC's push and that its proxy statement complies with SEC rules.

At first glance, the bonus formula at software maker Adobe Systems Inc. seems straightforward: "Target Bonus x Unit Multiplier x Individual Results."

But then comes the definition of unit multiplier. Adobe says it is:

"Derived from aggregating the target bonus of all participants in the Executive Bonus Plan multiplied by the funding level determined under the funding matrix, and allocating a portion of the funding level to each business or functional unit of Adobe based on that unit's relative contribution to Adobe's success, and then dividing the allocated funding level by the aggregate target bonuses of participants working within each such unit." Got that?

After all that calculating, Adobe's top five executives somehow received the exact same unit multiplier -- 200%. Adobe says that was the highest possible percentage and that it reflects how well the company performed.

Degree of Transparency

Adobe also says it "strives for a high degree of transparency" in financial reporting, and that it added detail this year on executive compensation "in that spirit, and in response to new SEC requirements."

Applied's bonus formula was created a decade ago by an employee who majored in math, but the company hadn't previously included it in its filings. General Counsel Joe Sweeney says the new compensation discussion has won praise from investors and lawyers. Proxy adviser Glass Lewis & Co., which says it has no financial relationship with Applied, called the company's proxy "clear and concise."

But Applied shareholder Robert Friedman, a retired computer programmer, isn't so sure. "This is too much," he says, munching on a cookie and flipping through a proxy moments before the company's March 11 annual meeting. "I own about a dozen companies, and if I did this for every company..."

For all its length, Applied's proxy doesn't reveal some crucial information, such as the target to which the company would like to see its market share increase. That number -- key to calculating the CEO's bonus according to the formula -- must be kept from rivals, Mr. Sweeney, the general counsel, says. For the same reason, the document also excludes some information about other executives' performance goals. "I hate to think how long the [compensation section] would have been if we had included all the factors for all the individuals," says Mr. Sweeney.

So if some important factors remain secret, what's the point of all the math? Mr. Sweeney says it is meant to give shareholders a taste of the decision-making process.

Original here

Starbucks must pay $100m in tips

Starbucks coffee shop
Starbucks said the ruling was "fundamentally unfair"
A US judge has ordered Starbucks to repay its California coffee-makers more than $100m (£50m) in tips that were paid to shift supervisors.

San Diego Superior Court Judge Patricia Cowett said the coffee-makers - "baristas" - were entitled to $86m in back tips, plus interest.

She issued an injunction banning supervisors from sharing future tips.

She said the practice broke a state law barring managers and supervisors from obtaining a share of employee tips.

A Starbucks spokeswoman, Valerie O'Neil, said the company planned to appeal against the ruling, which she described as "fundamentally unfair and beyond all common sense and reason".

The lawsuit was filed in October 2004 by Jou Chou, a former Starbucks barista in La Jolla, California.

In 2006 the suit was granted class action status, allowing it to go forward on behalf of as many as 100,000 former and current baristas in the chain's California stores.

Original here

Foreign Investors Systematically Dumping US Treasuries

As feared, foreign bond holders have begun to exercise a collective vote of no confidence in the devaluation policies of the US government. The Federal Reserve faces a potential veto of its rescue measures.

  • Contagion fears sweep across the Atlantic
  • Dollar plunges as Fed steps up moves
  • Read more of Ambrose Evans-Pritchard
  • Ben Bernanke, Dollars down a drain and the Federal Reserve
    Desperate measures: Bernanke and the Federal Reserve need to keep on top of the crisis and continue to intervene if needed

    Asian, Mid East and European investors stood aside at last week's auction of 10-year US Treasury notes. "It was a disaster," said Ray Attrill from 4castweb. "We may be close to the point where the uglier consequences of benign neglect towards the currency are revealed."

    The share of foreign buyers ("indirect bidders") plummeted to 5.8pc, from an average 25pc over the last eight weeks. On the Richter Scale of unfolding dramas, this matches the death of Bear Stearns.

    Rightly or wrongly, a view has taken hold that Washington is cynically debasing the coinage, hoping to export its day of reckoning through beggar-thy-neighbour policies.

    It is not my view. I believe the forces of debt deflation now engulfing America - and soon half the world - are so powerful that nobody will be worrying about inflation a year hence.

    Yes, the Fed caused this mess by setting the price of credit too low for too long, feeding the cancer of debt dependency. But we are in the eye of the storm now. This is not a time for priggery.

    The Fed's emergency actions are imperative. Last week's collapse of confidence in the creditworthiness of Fannie Mae and Freddie Mac was life-threatening. These agencies underpin 60pc of the $11,000bn market for US home loans.

    With the "financial accelerator" kicking into top gear - downwards - we may need everything that Ben Bernanke can offer.

  • Bear Stearns may be worse than LTCM collapse
  • Jeff Randall: A world addicted to easy credit must go cold turkey
  • How Bear Stearns ran out of the necessities
  • "The situation is getting worse, and the risks are that it could get very bad," said Martin Feldstein, head of the National Bureau of Economic Research. "There's no doubt that this year and next year are going to be very difficult."

    Even monetary policy à l'outrance may not be enough to halt the spiral. Former US Treasury secretary Lawrence Summers says the Fed's shower of liquidity cannot cure a bankruptcy crisis caused by a tidal wave of property defaults.

    "It is like fighting a virus with antibiotics," he said.

    We can no longer exclude a partial nationalisation of the American banking system, modelled on the Nordic rescue in the early 1990s.

    But even if you think the Fed has no choice other than to take dramatic action, the critics are also right in warning that this comes at a serious cost and it may backfire.

    The imminent risk is that global flight from US Treasury and agency debt drives up long-term rates, the key funding instrument for mortgages and corporations. The effect could outweigh Fed easing.

    Overall credit conditions could tighten into a slump (like 1930). It's the stuff of bad dreams.

    Is this the moment when America finally discovers the meaning of the Faustian pact it signed so blithely with Asian creditors?

    As the Wall Street Journal wrote this weekend, the entire country is facing a "margin call". The US has come to depend on $800bn inflows of cheap foreign capital each year to cover shopping bills. They may have to pay a much stiffer rent.

    As of June 2007, foreigners owned $6,007bn of long-term US debt. (Equal to 66pc of the entire US federal debt). The biggest holdings by country are, in billions: Japan (901), China (870), UK (475), Luxembourg (424), Cayman Islands (422), Belgium (369), Ireland (176), Germany (155), Switzerland (140), Bermuda (133), Netherlands (123), Korea (118), Russia (109), Taiwan (107), Canada (106), Brazil (103). Who is jumping ship?

    The Chinese have quickened the pace of yuan appreciation to choke off 8.7pc inflation, slowing US bond purchases. Petrodollar funds, working through UK off-shore accounts, are clearly dumping dollars amid rumours that Gulf states - overheating wildly - are about to break their dollar pegs. But mostly likely, the twin crash in the dollar and US agency debt reflects a broad exodus by global wealth managers, afraid that America is spinning out of control. Sauve qui peut.

    The bond debacle last week tallies with the crash in the dollar index to an all-time low of 71.58, down 14.6pc in a year. The greenback is nearing parity with the Swiss franc - shocking for those who remember when it was 4.375 francs in 1970. Against the euro it has hit $1.57, from $0.82 in 2000. Against the yen it has smashed through Y100. Spare a thought for Toyota. It loses $350m in revenues for every one yen move. That is an $8.75bn hit since June. Tokyo's Nikkei index is crumbling. Less understood, it is also causing a self-reinforcing spiral of credit shrinkage throughout the global system.

    Japanese investors and foreign funds are having to close their yen "carry trade" positions. A chunk of the $1,400bn trade built up over six years has been viciously unwound in weeks. The harder the dollar falls, the further this must go.

    It is unsettling to watch the world's reserve currency disintegrate. Commodities from gold to oil and wheat are taking on the role of safe-haven "currencies". The monetary order is becoming unhinged.

    I doubt the dollar can fall much further. What is it to fall against? The spreading credit contagion will cause large parts of the globe to downgrade in hot pursuit - starting with Europe.

    Few noticed last week that the Italian treasury auction was also a flop. The bids collapsed. For the first time since the launch of EMU, Italy failed to sell a full batch of state bonds.

    The euro blasted higher anyway, driven by hot money flows. The funds are beguiled by Germany's "Exportwunder", for now. It cannot last. The demented level of $1.57 will not be tolerated by French, Italian and Spanish politicians. The Latin property bubbles are deflating fast.

    The race to the bottom must soon begin. Half the world will be slashing rates this year to stave off credit contraction. The dollar will have a lot of company. Small comfort.

    Original here

    Starbucks customers clamoring for more free Wi-Fi

    SANTA BARBARA, CALIF. -- The Starbucks Corporation has launched a social network, of sorts, where customers can post suggestions or complaints, and vote on the posts of other customers if they agree. Like foam in a cappuccino, the most popular entries rise to the top.

    First, let me say this move is bold and beautiful, and that other companies should emulate it. The site, called My Starbucks Idea, provides a way for the company to focus its attention on the real complaints or concerns real customers really have, rather than the ones the company imagines are most important. Plus it makes customers feel trusted and listened to. Bravo, Starbucks.

    Comments are categorized. In the "Atmosphere & Locations" category, the customers are clamoring for free Wi-Fi.

    As I reported February 11, Starbucks announced on that day two hours of free Wi-Fi for Starbucks cardholders at locations that have a Wi-Fi network. If the comments on My Starbucks Idea are any indication, customers want a lot more Wi-Fi, and they want it a lot freer.

    The number-one voted comment (with nearly three times the number of votes as the number-two comment) is: "Starbucks needs to make ALL stores have free Wi-Fi. In Seattle I go to Tully's, because of the free Wi-Fi, not superior service." Another customer wrote: "I purposely go to a cafe in my home town that offers free wi-fi. I drive by 3 Starbucks on the way there and pay 50 cents more for the mocha for the free wi-fi."

    As you browse the comments it becomes clear that customers want free Wi-Fi, and other things that go with it, such as:

    "convenient power connections for laptops"

    "one or two comfy study desks for students to spread out. I always fell guilty using the handicap table."

    "A way for Starbucks to offer free WiFi to customers, and not the rest of the surrounding area, would be to place temporary passwords on each cup that expire after a set amount of time (e.g. 2 hours)."

    Starbucks has done the right thing with My Starbucks Idea, and it appears to be well-implemented. Now if they can address the major complaints -- such as moving to free Wi-Fi -- they'll have hit a major home run.

    Original here

    A Couple of My Rules for Startups

    My buddy Jason had a GREAT post about rules for startups. Read it, love it learn it.

    Of course, anyone who has started a company has their own rules and guidelines, so I thought i would add to the meme with my own. My "rules" below aren't just for those founding the companies, but for those who are considering going to work for them as well.

    1. Don't start a company unless its an obsession and something you love.

    2. If you have an exit strategy, its not an obsession.

    3. Hire people who you think will love working there.

    4. Sales Cures All. Know how your company will make money and how you will actually make sales.

    5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but are cheap

    6. An expresso machine ? Are you kidding me ? Shoot yourself before you spend money on an expresso machine. Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.

    7. No offices. Open offices keeps everyone in tune with what is going on and keeps the energy up. If an employee is about privacy, show them how to use the lock on the john. There is nothing private in a start up. This is also a good way to keep from hiring execs who can not operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over their secretary, run away. If an exec wont go on salescalls, run away. They are empire builders and will pollute your company.

    8. As far as technology, go with what you know. That is always the cheapest way. If you know Apple, use it. If you know Vista... ask yourself why, then use it. Its a startup, there are just a few employees. Let people use what they know.

    9. Keep the organization flat. If you have managers reporting to managers in a startup, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.

    10. NEVER EVER EVER buy swag. A sure sign of failure for a startup is when someone sends me logo polo shirts. If your people are at shows and in public, its ok to buy for your own folks, but if you really think someone is going to wear your polo you sent them in public, you are mistaken and have no idea how to spend your money

    11. NEVER EVER EVER hire a PR firm. A PR firm will call or email people in the publications, shows and websites you already watch, listen to and read. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them an email introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communications with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.

    12. Make the job fun for employees. Keep a pulse on the stress levels and accomplishments of your people and reward them. My first company, MicroSolutions, when we had a record sales month, or someone did something special, I would walk around handing out 100 dollar bills to salespeople. At and MicroSolutions, we had a company shot. Kamikaze. We would take people to a bar every now and then and buy one or 10 for everyone. At MicroSolutions, more often than not we had vendors cover the tab. Vendors always love a good party :0

    These are all off the top of my head. But they have worked for me so far.

    Original here

    Efforts to Block Junk Mail Slowed

    Chris Pearson, a state legislator in Vermont, had a sense that the people were with him when he proposed a bill last November to allow residents to block junk mail.

    He got media attention, radio interview requests and e-mails from constituents eager to stop the credit card offers, furniture catalogues and store fliers that increasingly clog their mailboxes.

    Then came the pushback from the postmasters, who told Pearson and other lawmakers that "standard" mail, the post office's name for junk mail, has become the lifeblood of the U.S. Postal Service and that jobs depend on it.

    "The post office and the business groups are pretty well-organized," said Pearson, whose bill remains in a committee and has not been scheduled for a vote.

    Barred by law from lobbying, the Postal Service is nonetheless trying to make its case before a growing number of state legislatures that are weighing bills to create Do Not Mail registries, which are similar to the popular National Do Not Call Registry.

    The agency has printed 3,000 "information packets" about the economic value of standard mail, with specific data for each of the 18 states that have considered a Do Not Mail Registry. It has dispatched postmasters to testify before legislative committees around the country.

    "The Postal Service has come in and clobbered legislators," said Todd Paglia, executive director of ForestEthics, an environmental group that has collected 289,000 signatures on an online petition to Congress that calls for a National Do Not Mail Registry. "It's really a people-versus-special interest kind of battle."

    The Postal Service is working closely with the Direct Marketing Association, the trade group that represents retailers and the printing industry, in its new campaign -- Mail Moves America -- which is designed to quash the Do Not Mail initiatives.

    So far, their efforts appear effective. None of the states where Do Not Mail legislation has been introduced since 2007 has approved a law. And no similar legislation is pending in Congress.

    Sean Sheehan of the Center for a New American Dream, a progressive group based in Takoma Park, said state efforts may precede national action, just as they did with the Do Not Call Registry.

    "Federal legislators are more sensitive to the heavy lobbying of the paper industry, as well as the impact on the postal service, whereas a lot of state legislators are really more in tune with local needs," Sheehan said. "It's local governments that have to pay millions to truck that trash out to landfills."

    So far in the 2008 campaign cycle, the Direct Marketing Association has made $141,877 in contributions to federal candidates, including $6,610 to Sen. Thomas R. Carper (D-Del.), who chairs the subcommittee that oversees the Postal Service and does not face reelection until 2012.

    Perhaps surprisingly, environmental groups -- whose members say they are concerned about junk mail -- are cool to the idea of a registry that prohibits marketers from sending mail to those enrolled and that fines violators.

    One reason may be that most environmental groups are themselves junk mailers. They use standard mail for their solicitation letters.

    A national registry "would affect anybody who mails," said Laura Hickey, senior director of global warming education at the National Wildlife Foundation, which belongs to the Direct Marketing Association. "I don't think it would be any different whether you were for-profit or nonprofit.'' As an alternative, the National Wildlife Foundation, the Natural Resources Defense Council and other groups have created Catalogue Choice, a program that asks retailers to voluntarily stop sending catalogues to anyone who signs up for the free online service at

    "If people participate in a voluntary system, then I don't see the need for a legislative strategy," Hickey said. When Catalogue Choice was launched in October, the foundation expected about 150,000 people to sign up in the first year. Six months into the project, more than 642,000 people have joined. "It obviously filled a void," Hickey said.

    Still, it is unclear how many marketers are voluntarily heeding requests to stop mailing.

    The Direct Marketing Association operates its own registry ( and in an e-mail sent last November, instructed its members to ignore Catalogue Choice.

    Postal officials say they are aware of the environmental concerns related to junk mail. In testimony on Capitol Hill last week, Postmaster General John E. Potter told lawmakers that the Postal Service has one answer: Recycling bins positioned beneath personal mailboxes at post offices, to catch junk mail as it tumbles out.

    Original here

    Top 5 reasons why “The customer is Always Right” is wrong

    The customer is always right?

    When the customer isn’t right - for your business

    One woman who frequently flew on Southwest, was constantly disappointed with every aspect of the company’s operation. In fact, she became known as the “Pen Pal” because after every flight she wrote in with a complaint.

    She didn’t like the fact that the company didn’t assign seats; she didn’t like the absence of a first-class section; she didn’t like not having a meal in flight; she didn’t like Southwest’s boarding procedure; she didn’t like the flight attendants’ sporty uniforms and the casual atmosphere.

    Her last letter, reciting a litany of complaints, momentarily stumped Southwest’s customer relations people. They bumped it up to Herb’s [Kelleher, CEO of Southwest] desk, with a note: ‘This one’s yours.’

    In sixty seconds, Kelleher wrote back and said, ‘Dear Mrs. Crabapple, We will miss you. Love, Herb.’”

    The phrase “The customer is always right” was originally coined by Harry Gordon Selfridge, the founder of Selfridge’s department store in London in 1909, and is typically used by businesses to:

    1. Convince customers that they will get good service at this company
    2. Convince employees to give customers good service

    Fortunately more and more businesses are abandoning this maxim - ironically because it leads to bad customer service.

    Here are the top five reasons why “The customer is always right” is wrong.

    1: It makes employees unhappy

    Gordon Bethune is a brash Texan (as is Herb Kelleher, coincidentally) who is best known for turning Continental Airlines around “From Worst to First,” a story told in his book of the same title from 1998. He wanted to make sure that both customers and employees liked the way Continental treated them, so he made it very clear that the maxim “the customer is always right” didn’t hold sway at Continental.

    In conflicts between employees and unruly customers he would consistently side with his people. Here’s how he puts it:

    When we run into customers that we can’t reel back in, our loyalty is with our employees. They have to put up with this stuff every day. Just because you buy a ticket does not give you the right to abuse our employees . . .

    We run more than 3 million people through our books every month. One or two of those people are going to be unreasonable, demanding jerks. When it’s a choice between supporting your employees, who work with you every day and make your product what it is, or some irate jerk who demands a free ticket to Paris because you ran out of peanuts, whose side are you going to be on?

    You can’t treat your employees like serfs. You have to value them . . . If they think that you won’t support them when a customer is out of line, even the smallest problem can cause resentment.

    So Bethune trusts his people over unreasonable customers. What I like about this attitude is that it balances employees and customers, where the “always right” maxim squarely favors the customer - which is not a good idea, because, as Bethune says, it causes resentment among employees.

    Of course there are plenty of examples of bad employees giving lousy customer service. But trying to solve this by declaring the customer “always right” is counter-productive.

    2: It gives abrasive customers an unfair advantage

    Using the slogan “The customer is always right” abusive customers can demand just about anything - they’re right by definition, aren’t they? This makes the employees’ job that much harder, when trying to rein them in.

    Also, it means that abusive people get better treatment and conditions than nice people. That always seemed wrong to me, and it makes much more sense to be nice to the nice customers to keep them coming back.

    3: Some customers are bad for business

    Most businesses think that “the more customers the better”. But some customers are quite simply bad for business.

    Danish IT service provider ServiceGruppen proudly tell this story:

    One of our service technicians arrived at a customer’s site for a maintenance task, and to his great shock was treated very rudely by the customer.

    When he’d finished the task and returned to the office, he told management about his experience. They promptly cancelled the customer’s contract.

    Just like Kelleher dismissed the irate lady who kept complaining (but somehow also kept flying on Southwest), ServiceGruppen fired a bad customer. Note that it was not even a matter of a financial calculation - not a question of whether either company would make or lose money on that customer in the long run. It was a simple matter of respect and dignity and of treating their employees right.

    4: It results in worse customer service

    Rosenbluth International, a corporate travel agency, took it even further. CEO Hal Rosenbluth wrote an excellent book about their approach called Put The Customer Second - Put your people first and watch’em kick butt.

    Rosenbluth argues that when you put the employees first, they put the customers first. Put employees first, and they will be happy at work. Employees who are happy at work give better customer service because:

    • They care more about other people, including customers
    • They have more energy
    • They are happy, meaning they are more fun to talk to and interact with
    • They are more motivated

    On the other hand, when the company and management consistently side with customers instead of with employees, it sends a clear message that:

    • Employees are not valued
    • That treating employees fairly is not important
    • That employees have no right to respect from customers
    • That employees have to put up with everything from customers

    When this attitude prevails, employees stop caring about service. At that point, real good service is almost impossible - the best customers can hope for is fake good service. You know the kind I mean: corteous on the surface only.

    5: Some customers are just plain wrong

    Herb Kelleher agrees, as this passage From Nuts! the excellent book about Southwest Airlines shows:

    Herb Kelleher […] makes it clear that his employees come first — even if it means dismissing customers. But aren’t customers always right? “No, they are not,” Kelleher snaps. “And I think that’s one of the biggest betrayals of employees a boss can possibly commit. The customer is sometimes wrong. We don’t carry those sorts of customers. We write to them and say, ‘Fly somebody else. Don’t abuse our people.’”

    If you still think that the customer is always right, read this story from Bethune’s book “From Worst to First”:

    A Continental flight attendant once was offended by a passenger’s child wearing a hat with Nazi and KKK emblems on it. It was pretty offensive stuff, so the attendant went to the kid’s father and asked him to put away the hat. “No,” the guy said. “My kid can wear what he wants, and I don’t care who likes it.”

    The flight attendant went into the cockpit and got the first officer, who explained to the passenger the FAA regulation that makes it a crime to interfere with the duties of a crew member. The hat was causing other passengers and the crew discomfort, and that interfered with the flight attendant’s duties. The guy better put away the hat.

    He did, but he didn’t like it. He wrote many nasty letters. We made every effort to explain our policy and the federal air regulations, but he wasn’t hearing it. He even showed up in our executive suite to discuss the matter with me. I let him sit out there. I didn’t want to see him and I didn’t want to listen to him. He bought a ticket on our airplane, and that means we’ll take him where he wants to go. But if he’s going to be rude and offensive, he’s welcome to fly another airline.

    The fact is that some customers are just plain wrong, that businesses are better of without them, and that managers siding with unreasonable customers over employees is a very bad idea, that results in worse customer service.

    So put your people first. And watch them put the customers first.

    If you liked this post, there’s a good chance you’ll also enjoy:

    NB: This is a re-run of a previous post while I’m away from the blog for a day.

    Original here

    What makes a tightwad

    Why are some people tightwads? Is it, perhaps, an unusual physical characteristic coupled with an odd sartorial quirk? In other words, short arms and deep pockets? Or is there something more to it?

    U.S. researchers have been trying to find the answer, polling 13,327 respondents over 31 months from late 2004.

    The researchers were surprised to find that despite perceptions that people always overspend, chronic underspending was far more widespread than thought, with tightwads outnumbering spendthrifts by 3 to 2.

    But researcher Scott Rick from the University of Pennsylvania said they found it wasn't the cost of an item or someone's income level that had an impact on their spending. Tightwads reported feeling an emotional pain when handing over their money. Spendthrifts, on the other hand, felt pleasure making a purchase.

    Prof. Rick started off his research in this area when he was at Carnegie Mellon University and he and fellow researcher George Loewenstein were discussing their opposing spending habits. “He's the tightwad and I am a recovering spendthrift,” Prof. Rick said in an interview from Philadelphia Tuesday.

    The resulting study, by Prof. Rick, Prof. Loewenstein and Cynthia Cryder, will be published in the Journal of Consumer Research.

    In general, the researchers found that men are bigger tightwads than women; younger people are more likely to be spendthrifts than older people; and the more educated a person is, the more likely he or she is to cling on tightly to a dollar.

    Also, however, “in subsequent research we found that the difference between a male tightwad and a male spendthrift is much bigger than the difference between a female tightwad and a female spendthrift.”

    Prof. Rick says that men's spending decisions seem to be simpler and are more likely to be based solely on how painful it is to make the purchase. Female spending habits, however, tend to be more complex.

    “Women take a lot more into account, such as how therapeutic spending will be and if it will improve their mood or not,” he said.

    The study also found that females were no more likely to be tightwads than spendthrifts but males were nearly three times more likely to feel pain when parting with cash than their free-spending peers. As for the difference between being a tightwad and merely being frugal, the researchers wrote: “The evidence suggests that frugality is driven by a pleasure of saving, as compared with tightwaddism, which is driven by a pain of paying.”

    But it is possible to get money out of tightwads.

    They will use credit cards, although they are less likely to run up debts, and were also found to be more sensitive to marketing ploys designed to reduce spending pain.

    For example, in one experiment, participants were asked if they would be willing to pay $5 to have free DVDs shipped overnight rather than waiting four weeks for delivery. The cost was framed as either a “$5 fee” or a “small $5 fee.” Spendthrifts were insensitive to the manipulation, but tightwads were 20 per cent more likely to pay the fee if it were called “small.”

    Interestingly, some of the 13,327 subjects in the study were readers of The Globe and Mail, who filled in an online survey that was linked to an earlier story on Prof. Rick's research that appeared on

    “They were our most extreme group by far,” said Prof. Rick. “Tightwads outnumbered spendthrifts 6 to 1.”

    With a report from Reuters

    Original here

    Dollars tough to sell

    AMSTERDAM (Reuters) - The U.S. dollar's value is dropping so fast against the euro that small currency outlets in Amsterdam are turning away tourists seeking to sell their dollars for local money while on vacation in the Netherlands.

    "Our dollar is worth maybe zero over here," said Mary Kelly, an American tourist from Indianapolis, Indiana, in front of the Anne Frank house. "It's hard to find a place to exchange. We have to go downtown, to the central station or post office."

    That's because the smaller currency exchanges -- despite buy/sell spreads that make it easier for them to make money by exchanging small amounts of currency -- don't want to be caught holding dollars that could be worth less by the time they can sell them.

    The dollar hovered near record lows on Monday, with one euro worth around $1.58 versus $1.47 a month ago.

    Original here

    Summit acquires Mezrich's 'Rigged'

    Novel explores oil trading on Wall Street


    Summit Entertainment has acquired screen rights to Ben Mezrich's novel "Rigged."

    The film will be produced by Trigger Street Productions principals Kevin Spacey and Dana Brunetti, who turned Mezrich's "Bringing Down the House" into the Spacey starrer "21," which will be released March 28 by Columbia Pictures.

    Based on the true story of John D'Agostino, "Rigged: The True Story of an Ivy League Kid Who Changed the World of Oil, From Wall Street to Dubai" is about an Italian kid from Brooklyn who matriculates at Harvard and lands on the Merc Exchange. After establishing himself, the protagonist hooks up with another young trader and a mysterious Middle Easterner to engage in a dangerous scheme to revolutionize the oil trading industry.

    "Every generation wants its 'Wall Street,' that relatable hero thrust into a world we want to know more about, and 'Rigged' has that," said Summit production prexy Erik Feig.

    Brunetti has championed Mezrich and has Trigger Street developing movies from his books "Ugly Americans: The True Story of the Ivy League Cowboys Who Raided the Asian Markets for Millions" and "Busting Vegas: The MIT Whiz Kid Who Brought the Casinos to Their Knees." "Ben has a knack for uncovering brilliant minds mastering different markets," Brunetti said.

    Summit recently completed the Paul McGuigan-directed "Push" and is in production on the Catherine Hardwicke-directed "Twilight" and the Todd Graff-directed "Will." The Alex Proyas-directed thriller "Knowing" begins shooting late March.

    Original here

    Bush says US will weather storm, but Americans disagree

    US President George W. Bush said on Monday he expects the economy to ride out a financial storm that is roiling markets, with the help of his administration and the Federal Reserve.

    A day before the Fed was widely expected to unleash another interest rate cut to bolster stalling economic growth, Bush attempted to reassure investors that the government was maintaining a bulwark against a market meltdown.

    "The Federal Reserve has moved quickly to bring order to the financial markets," Bush said in a statement after huddling with his top economic advisors, including Treasury Secretary Henry Paulson and chief economic aide Edward Lazear.

    "We're in challenging times," Bush said, voicing support for the Fed's emergency moves to add liquidity and stability to the financial system.

    Bush's remarks came after a series of extraordinary actions by the Fed to unlock a frozen credit system and rescue troubled investment bank Bear Stearns as it teetered on bankruptcy.

    "Secretary Paulson ... is supportive of that action, as am I," Bush said.

    Praising the Treasury chief, a former chief executive at Wall Street investment giant Goldman Sachs, Bush said: "You've shown the country and the world that the United States is on top of the situation."

    Paulson, meanwhile, defended the government's decision to provide a US$30 billion line of credit to prevent Bear Stearns from going bankrupt, while he declined to speculate on possible intervention in the currency markets to prop up the dollar.

    "Bear Stearns had a liquidity crisis. And so we felt it was very important that this be resolved as a way to minimize impact on our economy," Paulson said. "This was an easy decision."

    He repeated his consistent statements that the US has a "strong-dollar policy."

    "It's very much in our nation's interest. Our economy has ups and downs. The long-term fundamentals, and I'm very confident about this ... we have strong long-term fundamentals. That will be reflected in our currency markets," he said.

    Meanwhile, more than three in four Americans think the US is in a recession according to a USA Today/Gallup Poll released yesterday.

    Not since September 1992, two months before former president George Bush lost his re-election bid, have so many Americans said the economy was in such bad shape, USA Today reported.

    Seventy-six percent of those polled said the economy is in recession, compared to 22 percent who said it is not, USA Today said. Asked if the US could slip into a depression lasting several years, 59 percent said it was likely and 79 percent said they were worried about it, the paper said.

    The poll of 1,025 adults was completed on Sunday and has a margin of error of plus or minus 3 percentage points.

    The poll results reflect a slide in confidence that economists say could make the US economy worse, the article said.

    Original here

    SF Visa Shares Vault Upwards After Record IPO

    Visa shares rose more than 30 percent in their stock market debut Thursday.

    Investors are grabbing up a piece of the largest initial public offering in U.S. history.

    SLIDESHOW: Silicon Valley Companies
    In early trading, the shares had climbed to $58 from their IPO price of $44, trading under the stock symbol "V".The world's largest processor of credit and debit cards is seen as well positioned to profit as more people rely on its electronic network to make payments instead of cash and checks.

    In the weeks leading up to the IPO, Visa's management pledged 20 percent earnings growth for at least the next two years.Visa also has been able to entice consumers to use its credit and debit cards more frequently to pay for staples like groceries, gas and even utility bills.Visa Inc. raised $17.9 billion late Tuesday to complete the largest initial public offering in U.S. history and help prop up the wobbly financial services industry.The company is headquartered in San Francisco.The world's largest processor of credit and debit cards sold 406 million shares at $44 apiece to easily eclipse the previous U.S. record IPO of $10.6 billion set by AT&T Wireless eight years ago. The IPO price topped the range of $37 to $42 per share that Visa set three weeks ago just before its executives began meeting with institutional investors and analysts to drum up interest. If investment bankers exercise an option on another 40.6 million shares, Visa's IPO will end up raising $19.7 billion before expenses. Visa shares satrted trading on the New York Stock Exchange. The company debuted with a market value of about $36 billion.

    Visa IPO Could Save Economy?

    JPMorgan Chase & Co., Visa's biggest customer and shareholder, is in line for the biggest payoff from Tuesday's IPO - about $1.25 billion, based on figures provided in Securities and Exchange Commission documents. More than $10 billion of the IPO proceeds are being used to buy back some of the shares owned by the banks that have helped build Visa during the past 50 years. The money is expected to help banks strengthen their balance sheets as they write off billions of dollars in loans that have soured amid the worst housing slump since the 1930s. The Visa windfall will supplement a series of Federal Reserve Bank measures that have pumped billions of dollars into the banking system. That's five times more than New York-based JPMorgan has agreed to pay in a proposed takeover of investment bank Bear Stearns Co., a major casualty of the credit crisis. Other big winners in Visa's IPO include: Bank of America Corp., expected to receive roughly $625 million; National City Corp., about $435 million; Citigroup Inc., about $300 million; and U.S. Bancorp and Wells Fargo & Co., both getting more than $270 million. All the banks will remain major Visa shareholders. The IPO also is expected to generate more than $500 million in fees for Visa's team of investment bankers, led by JP Morgan and Goldman Sachs & Co. Besides paying banks, Visa is depositing $3 billion in an escrow account to insulate its shareholders from lawsuits alleging the company profited by stifling competition. Those legal headaches are one of the chief reasons that Visa decided to go public and pose the biggest investment risk in the IPO, said Aite Group analyst Gwenn Bezard. With loan problems battering the banking industry, Visa executives sold the IPO by positioning their company as a safe haven - a message that apparently resonated with investors. "In times like this, you generally see a flight to quality," said Joel Greenberg, a New York attorney who has advised on other IPOs. Unlike lenders who have issued nearly 1.5 billion cards bearing its brand, Visa doesn't carry any consumer debt on its books. The company makes its money from processing fees, which have been steadily rising for years, including the past two U.S. recessions in 1991 and 2001. Since the latter recession, Visa also has been able to entice consumers to use its credit and debit cards more frequently to pay for staples like groceries, gas and even utility bills. Visa estimates about 42 percent of its transactions fall into this "nondiscretionary" category, up from 27 percent in 2000. Visa conceivably could benefit from tougher times if more cash-strapped consumers rely on their credit cards to make ends meet, Bezard said. "And even if people can't pay back the debt, Visa still makes money. It's a very attractive company." The IPO gives investors a chance to profit from the rise of electronic payments as more people eschew cash. The trend is expected to accelerate in the years ahead as an entire generation weaned online grow up to enter the job market and begin buying more merchandise and services on the Web, where electronic payments are standard. Visa already dwarfs its closest competitor, MasterCard Inc., whose stock has more than quintupled since that company went public less than two years ago. But analysts say Visa priced its IPO more aggressively than MasterCard, making it less likely that its stock will appreciate as dramatically in the months ahead. Visa processed 44 billion transactions totaling $3.2 trillion in 2006, according to the Nilson Report, an industry newsletter. MasterCard handled 23.4 billion transactions totaling $1.9 trillion in the same year. Hurt by legal expenses, Visa suffered an $861 million loss on revenue of $5.2 billion in its last fiscal year ended Sept. 30. Visa bounced back in its fiscal first quarter a $424 million profit, a 70 percent increase from the previous year. While pitching the IPO, Visa executives told investors to expect the company's earnings to rise by at least 20 percent during the next two years. To help achieve that goal, Visa plans to trim its annual expenses by about $300 million over the same period.

    Original here

    Author Struggles to Stay Removed from Slave Trade

    Benjamin Skinner

    Benjamin Skinner Courtesy of Benjamin Skinner

    Day to Day, March 11, 2008 · With $50 and a plane ticket to Haiti, one can buy a slave. This was just one of the difficult lessons writer Benjamin Skinner learned while researching his book, A Crime So Monstrous: Face-to-Face with Modern-Day Slavery.

    Skinner met with slaves and traffickers in 12 different countries, filling in the substance around a startling fact: there are more slaves on the planet today than at any time in human history. Skinner speaks with Anthony Brooks about his experience researching slavery.

    Though now illegal throughout the world, slavery is more or less the same as it was hundreds of years ago, Skinner explains. Slaves are still "those that are forced to work under threat of violence for no pay beyond sustenance."

    Something disturbing has changed however — the price of a human. After adjusting for inflation, Skinner found that, "In 1850, a slave would cost roughly $30,000 to $40,000 — in other words it was like investing in a Mercedes. Today you can go to Haiti and buy a 9-year-old girl to use as a sexual and domestic slave for $50. The devaluation of human life is incredibly pronounced."

    Skinner obtained this specific figure through a very hands-on process. In the fall of 2005, he visited Haiti, which has one of the highest concentrations of slaves anywhere in the world.

    "I pulled up in a car and rolled down the window," he recalls. "Someone said, 'Do you want to get a person?'"

    Though the country was in a time of political chaos, the street where he met the trafficker was clean and relatively quiet. A tape of the conversation reveals a calm, concise transaction. He was initially told he could get a 9-year-old sex partner/house slave for $100, but he bargained it down to $50.

    "The thing that struck me more than anything afterwards was how incredibly banal the transaction was. It was as if I was negotiating on the street for a used stereo."

    In the end, he agreed on the price, but told the trader not to make any moves.

    "When I was talking to traffickers, I had a principle that I wouldn't pay for human life," he says.

    This principle enabled him to keep a certain distance from the system, but not giving in to the temptation to free a suffering human being was an emotionally taxing struggle, he says.

    "It's one thing when you are planning an effort like this, this is a work of journalism — I'm not going to interfere with my subjects. It's another thing when you are in an underground brothel in Bucharest, who has this girl with Down Syndrome, who you know is undergoing rape several times a day. When this girl is offered to me in trade for a used car ... I walk away ... it's not an easy thing to do," he says.

    At one point, he did violate his principal — helping a mother free her daughter from slavery. He says he does not regret his decision, however, and continues to track her progress through a local NGO in Haiti. She's now in school, he says, and wrote him a letter over Christmas.

    Slavery consumes Skinner, he says.

    "When I come back to a nice loft in Brooklyn and I have to think about writing this thing — that drove me. I knew that I had to write as compelling a book as possible. This is a life-long commitment for me."

    Excerpt: 'A Crime So Monstrous: Face-to-Face with Modern-Day Slavery'

    Book Cover
    Courtesy of Simon and Schuster

    Chapter 1: The Riches of the Poor

    For our purposes, let's say that the center of the moral universe is in Room S-3800 of the UN Secretariat, Manhattan. From here, you are some five hours from being able to negotiate the sale, in broad daylight, of a healthy boy or girl. Your slave will come in any color you like, as Henry Ford said, as long as it's black. Maximum age: fifteen. He or she can be used for anything. Sex or domestic labor are the most frequent uses, but it's up to you.

    Before you go, let's be clear on what you are buying. A slave is a human being who is forced to work through fraud or threat of violence for no pay beyond subsistence. Agreed? Good. You may have thought you missed your chance to own a slave. Maybe you imagined that slavery died along with the 360,000 Union soldiers whose blood fertilized the Emancipation Proclamation and the Thirteenth Amendment. Perhaps you assumed that there was meaning behind the dozen international conventions banning the slave trade, or that the deaths of 30 million people in world wars had spread freedom across the globe.

    But you're in luck. By our mere definition, you are living at a time when there are more slaves than at any point in history. If -you're going to buy one in five hours, however, you've really got to stop navel—gazing over things like law and the moral advance of humanity. Get a move on.

    First, hail a taxi to JFK International Airport. If you choose the Queensboro Bridge to the Brooklyn—Queens Expressway, the drive should take under an hour. With no baggage, you'll speed through security in time to make a direct flight to Port au Prince, Haiti. Flying time: three hours.

    The final hour is the strangest. After disembarking, you will cross the tarmac to the terminal where drummers in vodou getup and a dancing midget greet you with song. Based on Transportation Security Administration warnings posted in the departure terminal at JFK, you might expect abject chaos at Toussaint L'Ouverture Airport. Instead, you find orderly lines leading to the visa stamp, no bribes asked, a short wait for your bag, then a breeze through customs. Outside the airport, the cabbies and porters will be aggressive, but not threatening. Assuming you speak no Creole, find an English—speaking porter and offer him $20 to translate for the day.

    Ask your translator to hail the most common form of transport, a tap-tap, a flatbed pickup retrofitted with benches and a brightly colored canopy. You will have to take a couple of these, but they only cost 10 gourdes (25 cents) each. Usually handpainted with signs in broken English or Creole, tap-taps often include the words my god or jesus. my god -it's my life reads one; another announces welcome to jesus. Many are ornate, featuring windshields covered in frill, doodads, and homages to such figures as Che Guevara, Ronaldinho, or reggae legend Gregory Isaacs. The -driver's navigation is based on memory, instinct. There will be no air conditioning. Earplugs are useful, as the sound system, which cost more than the rig itself, will make your chest vibrate with the beats of Haitian pop and American hip-hop. Up to twenty people may accompany you: five square inches on a wooden bench will miraculously accommodate a woman with a posterior the size of a tractor tire. Prepare your spine.

    You'll want to head up Route de Delmas toward the suburb of Pétionville, where many of the -country's wealthiest thirty families—who control the -nation's economy—maintain a pied—à-terre. As you drive southeast away from the sea, the smells change from rotting fish to rotting vegetables. Exhaust fumes fill the air. You'll pass a billboard featuring a smiling girl in pigtails and the words: Give me your hand. Give me tomorrow. Down with Child Servitude. Chances are, like the majority of Haitians, you -can't read French or Creole. Like them, you ignore the sign.

    Heading out of the airport, -you'll pass two UN peacekeepers, one with a Brazilian patch, the other with an Argentine flag. As you pass the blue helmets, smile, wave, and receive dumbfounded stares in return. The United Nations also has Jordanians and Peruvians here, parked in APVs fifteen minutes northwest, along the edge of the hyperviolent Cité Soleil slum, the poorest and most densely populated six square miles in the poorest and most densely populated country in the hemisphere. The peacekeepers -don't go in much, neither do the national police. If they do, the gangsters that run the place start shooting. Best to steer clear, although you'd get a cheap price on children there. You might even get offered a child gratis.

    You'll notice the streets of the Haitian capital are, like the tap—taps, overstuffed, banged up, yet colorful. The road surfaces range from bad to terrible, and grind even the toughest SUVs down to the chassis. Parts of Delmas are so steep that the truck may sputter and die under the exertion.

    Port au Prince was built to accommodate about 150,000 people, and hasn't seen too many centrally planned upgrades since 1804. Over the last fifty years, some 2 million people, a quarter of the nation's population, have arrived from the countryside. They've brought their animals. Chickens scratch on side streets, and boys lead prizefighting cocks on string leashes. Monstrously fat black pigs root in sooty, putrid garbage piled eight feet high on street corners or even higher in enormous pits that drop off sidewalks and wind behind houses.

    A crowd swells out of a Catholic church broadcasting a fervent mass. Most Haitians are Catholic. Despite the efforts of Catholic priests, most also practice vodou. In the countryside, vodou is often all they practice.

    The foregoing is excerpted from from the first chapter of A Crime So Monstrous: Face-to-Face with Modern-Day Slavery by Ben Skinner. All rights reserved. No part of this book may be used or reproduced without written permission from Simon & Schuster.

    Original here

    Pope baptizes famous Muslim convert

    By Philip Pullella

    VATICAN CITY (Reuters) - Pope Benedict led the world's Catholics into Easter on Saturday at a Vatican service where he baptized a Muslim-born convert who is one of Italy's most famous and controversial journalists.

    The German-born pontiff, marking the third Easter season of his pontificate, began the service in the atrium of a darkened St Peter's Basilica where he carved the Greek letters Alpha and Omega on a large candle.

    The basilica became a sea of flickering flames as thousands of faithful inside lit candles before the lights were turned on in a ritual symbolizing the darkness in the world after Christ's death and the light of the resurrection.

    Easter, the most important day in the Church's liturgical calendar, commemorates Christ rising from the dead three days after he was crucified.

    In his sermon, Benedict wove a connection between the resurrection of Christ and the sacrament of baptism, the initiation rite of Christianity.

    "...from the abyss of death he was able to rise to life. Now he raises us from death to true life. This is exactly what happens in baptism," the pope said.

    The pope traditionally baptizes newborns on January 1 and adult converts to Catholicism on Easter eve.

    One of the seven adults he baptized on Saturday night was Magdi Allam, 55, an Egyptian-born journalist who, as deputy director of the leading newspaper Corriere della Sera, is one of Italy's best-known intellectuals.

    Allam, a fierce critic of Islamic extremism and a strong supporter of Israel, is protected by a police escort because of threats he has received.


    His conversion to Christianity was a well-kept secret, disclosed by the Vatican in a statement less than an hour before the Easter eve service started.

    "For the Catholic Church, each person who asks to receive baptism after a deep personal search, a fully free choice and adequate preparation, has a right to receive it," it said.

    Allam defended the pope in 2006 when the pontiff made a speech in Regensburg, Germany, that many Muslims perceived as depicting Islam as a violent faith.

    The Vatican statement announcing Allam was joining Catholicism said all newcomers were "equally important before God's love and welcome in the community of the Church".

    Allam, who has been living in Italy for 35 years, has said he was never a very devout Muslim. Still, his conversion to Christianity came as a surprise.

    "What amazes me is the high profile the Vatican has given this conversion," Yaha Sergio Yahe Pallavicini, vice-president of the Italian Islamic Religious Community, told Reuters.

    The Easter eve service was the first of three at which the pope presides. On Sunday he will celebrate a mass and then deliver his twice-yearly "Urbi et Orbi" (to the city and the world) blessing and message.

    (Reporting by Philip Pullella; Editing by Robert Woodward)

    Original here

    U.S. Death Toll in Iraq Nears 4,000

    BAGHDAD -- A roadside bomb killed three American soldiers north of Baghdad on Saturday, pushing the U.S. death toll in the five-year conflict to nearly 4,000.

    Also Saturday, Iraqi authorities reported that a U.S. airstrike north of the capital killed six members of a U.S.-backed Sunni group -- straining relations with America's new allies in the fight against al-Qaida.

    [nowides] FIGHT FOR IRAQ
    [Iraq map]
    See continuing coverage of developments in Iraq, including an interactive map of day-to-day events in Iraq and a tally of military deaths.

    Two Iraqi civilians also died in the roadside bombing, which occurred as the Americans were patrolling an area northwest of the capital, the U.S. military said in a statement.

    Two of the soldiers were killed in the blast and the third died of wounds, the statement said. The soldiers were assigned to Multinational Division-Baghdad, the statement said, but gave no further details.

    The latest deaths brought to 3,996 the number of U.S. service members and Pentagon civilians who have died since the war began on March 20, 2003, according to an Associated Press count.

    With the war entering its sixth year, President Bush paid tribute Saturday to America's fallen service members, saying in his weekly radio address that they will "live on in the memory of the nation they helped defend."

    Speaking for the Democrats, however, Sen. Robert Menendez of New Jersey called on Bush to "face the reality" in Iraq and "tell us the truth" about the cost of the conflict as America is struggling with a faltering economy and mounting casualty tolls.

    U.S. officials have pointed to a number of positive signs, including a 60% drop in violence since Bush ordered 30,000 U.S. reinforcements to Iraq early last year. Iraqis have also made some limited progress in power-sharing deals among rival Shiite, Sunni and Kurdish communities.

    However, U.S. military commanders have been careful to point out that security gains are fragile and that major violence could erupt abruptly.

    Much of the progress has been due to a move by thousands of Sunnis to abandon the insurgency and join pro-U.S. defense groups -- known as "awakening councils." Another was a cease-fire called last August by firebrand Shiite cleric Muqtada al-Sadr, leader of the feared Mahdi Army militia.

    On Saturday, a U.S. attack helicopter fired on two checkpoints manned by U.S.-allied Sunni fighters near Samarra, 60 miles north of Baghdad, killing six and injuring two, Iraqi police said.

    The U.S. military said an AH-64 Apache helicopter fired on the positions after five people were "spotted conducting suspicious terrorist activity" in an area notorious for roadside bombs.

    "Initial reports suggested the attack may have been a Sons of Iraq checkpoint," the military said, using a term for the armed U.S.-backed groups. "The incident is currently under a joint Iraqi-Coalition Force investigation."

    A local official of the U.S.-backed group said the attack occurred about two hours after American soldiers stopped at the two checkpoints to meet the Sunni fighters.

    "They asked us general questions like: 'Have you gotten your IDs?' and 'Do you need anything?' and then they left," Sabbar al-Bazi said. "Two hours later, after I had gone home, I heard two explosions, probably caused by two missiles, and machine-gun fire from a helicopter."

    Lt. Col. Dhiya Mahmoud Ahmed, an Iraqi military officer in charge of security in the area, said he told the Americans after the attack that he had been aware of the friendly checkpoints for two days.

    Television of the aftermath showed awakening council members loading bodies into a pickup. Their faces were masked and they wore bright yellow vests -- apparently to identify themselves for U.S. forces as members of friendly groups. Bloodstained rocks and bits of flesh could be seen around the checkpoint.

    U.S.-funded awakening councils, which first sprung up in Anbar province west of Baghdad and spread to Baghdad and surrounding areas, are composed of ex-Sunni insurgents who turned against al-Qaida in Iraq and joined forces with the Americans.

    But the Shiite-dominated leadership in Baghdad has been ambivalent toward the mostly Sunni councils, fearing they could turn against the government as America draws down its forces.

    In Baghdad, members of Sunni awakening councils in the west of the capital have complained that they have not been paid for months and have threatened to withdraw their support for the government unless they receive their money within days.

    At the same time, tensions have been rising within the majority Shiite community as rival factions maneuver for position ahead of provincial elections expected this fall.

    A bomb exploded Saturday on a minibus in a predominantly Shiite area of eastern Baghdad, killing at least one passenger and injuring eight, including a woman, police said.

    Late Saturday, bombs exploded at four offices of the Iraqi Red Crescent Society in the Mansour district of Baghdad, causing damage but no casualties. The Red Crescent Society is the Muslim world's equivalent of the Red Cross.

    A roadside bomb targeting a police patrol also killed one passer-by and injured seven, including five officers, in the northern city of Kirkuk, police said.

    An awakening council member in western Baghdad's Mansour neighborhood was killed and four others were injured in a mortar blast, police and hospital officials said.

    Copyright © 2008 Associated Press

    Original here

    Disabled pregnant woman used as target practice

    ALTON, Illinois (AP) -- Banished to the basement, the 29-year-old mother with a childlike mind and another baby on the way had little more than a thin rug and a mattress to call her own on the chilly concrete floor.


    Five adults and a 12-year-old child were charged with Dorothy Dixon's murder.

    Dorothy Dixon ate what she could forage from the refrigerator upstairs, where housemates used her for target practice with BBs, burned her with a glue gun and doused her with scalding liquid that peeled away her skin.

    They torched what few clothes she had, so she walked around naked. They often pummeled her with an aluminum bat or metal handle.

    Dixon -- six months pregnant -- died after weeks of abuse. Police have charged two adults, three teenagers and a 12-year-old boy with murder in the case that has repulsed many in this Mississippi River town.

    "This is heartbreaking," police Lt. David Hayes said. "It was almost as though they were making fun of the abuse they were administering. This woman was almost like living in a prison."

    Investigators put much of the blame on Michelle Riley, 35, who they said befriended Dixon but pocketed monthly Social Security checks she got because of her developmental delays.

    Dixon saw little, if any, of the money, Hayes said. For months she weathered the torment to keep a roof over her head and that of her year-old son, who weighed just 15 pounds when taken into state custody after his mom's death.

    "I've never seen an almost conspiratorial effort by a group of people to continuously torture someone until she finally died, then not really show any remorse," Hayes said. "It was just a slow, torturous, tragic way to die. I highly doubt Dorothy Dixon even knew she was dying."

    Riley, 43-year-old Judy Woods and three teenagers, including Riley's 15-year-old daughter, LeShelle McBride, are charged with first-degree murder, aggravated and heinous battery, intentional homicide of an unborn child, and unlawful restraint. Riley's 12-year-old son is charged as a juvenile.

    Riley, her daughter, Woods and 16-year-old Benny Wilson have public defenders who did not immediately return messages for comment. An 18-year-old defendant, Michael Elliott, planned to get his own attorney, court records show.

    All remain in jail on $1 million bond.

    Messages left with a Chicago-area sister of Dixon went unreturned, but neighbors, Hayes and newspaper accounts offer a mosaic of the months leading to Dixon's demise inside the small, white, blue-shuttered house.

    Riley and Dixon, police said, had lived in Quincy, a Mississippi River town about 100 miles north of St. Louis, Mo. Quincy is where Riley worked as a coordinator for a regional center that helps the developmentally disabled with housing and other services. Dixon was a client.

    For years, an impoverished Riley struggled raising her children. Her use of methamphetamine and cocaine brought drug convictions in 2002 and 2004. But with treatment and housing help from the Quincy YWCA, Riley put her life in order -- so much that in February of last year, the Quincy Herald-Whig did a story on her comeback.

    Last summer, Dixon and Riley moved into the $800-a-month, three-bedroom rental in Alton about 15 miles north of St. Louis. From the start, neighbors Chad Hudson and Terri Brandt considered Riley trouble.

    "Michelle was evil, vindictive. Manipulative," said Hudson, convinced the teenagers were Riley's powerless minions.

    "She was angry, vicious," added Brandt.

    Riley considered Dixon her slave, making her rub Riley's feet until Riley fell asleep and forcing her to run naked around the house when she got in trouble, the neighbors said.

    "Being in their house was like being in a prison day room," Hudson said. "They just sat around the kitchen table and fought."

    There was little question that Riley ruled the roost.

    While doing fix-ups on the home last fall, landlord Steve Atkins saw Riley "barking orders" at the children and everyone else. Atkins joked to her whether he needed to call the Army and see if they wanted their drill sergeant back.

    "She didn't laugh about it at all," Atkins said. "Obviously, I hit a nerve."

    Atkins said Dixon generally kept to herself "but was always nice when she spoke to you." He saw no hints she'd been suffering or tortured.

    "I would have never, ever suspected something like this," he said. "It's definitely shocking."

    Police said Dixon was allowed out of the house but didn't say under what conditions. Hayes didn't know who the father of Dixon's fetus is.

    Hayes said things apparently came to a head Jan. 30, when investigators believe that Woods, during a dispute, beat Dixon on the head with an object Hayes wouldn't identify. The next day Woods found her dead.

    Hayes watched the autopsy and found her injuries disturbing. X-rays revealed roughly 30 BBs lodged in her. Deep-tissue burns covered about one-third of her body -- her face, her chest, her arms and feet -- and left her severely dehydrated. Her face and body showed signs of prolonged abuse. Many of her wounds were infected.

    None of the injuries, Hayes said, proved singly fatal to Dixon. Her system already was taxed by her unborn baby.

    "The autopsy sort of indicates her immune system just shut down," he said. "It was not capable of fending off any more."

    In the rental home's basement, Atkins said, he found spots of blood in a shower and tiny smears on the concrete floor, washer and dryer.

    "It's disgraceful the way this girl died, as kind and as sweet as this girl was," he said. "She didn't deserve to die the way she did. It's just terrible, senseless. It's just a total shame."

    Original here

    FRONTLINE | "Bush's War" | Preview of Night 1 | PBS

    Israel grounds some F-16 fighters over cancer fears

    JERUSALEM (Reuters) - The Israeli air force said on Friday it was suspending training flights using U.S.-made F-16I fighter jets after finding a suspected cancer-causing substance in the cockpit.

    Israel informed Lockheed Martin Corp, the U.S. defense contractor that manufactures the F-16, that formaldehyde residues were leaking into the cockpit, the military said in a statement.

    "Tests have shown that the substance is formaldehyde, which was recently identified as a carcinogen," the statement said.

    The two-seater F-16I, known in Israel as the "Storm," was designed specifically for the Israeli air force.

    "The air force has passed the information to the aircraft manufacturer, Lockheed Martin, and tests are being coordinated with the company," the statement said.

    An army spokeswoman said only training flights would be grounded.

    (Writing by Joseph Nasr; Editing by Giles Elgood)

    Original here

    Video: Officers hit fleeing suspects with car

    (CNN) -- South Carolina Highway Patrol officers have been caught on dash-cam video hitting African-American suspects with patrol cars, and using a racial epithet during at least one pursuit, a U.S. attorney said.

    Dash-cam video captures a suspect running away from a patrol car that is chasing him.

    One officer is heard on tape saying he intentionally hit a suspect, Kevin McDonald, acting U.S. attorney for South Carolina, said Thursday. The FBI is looking into the allegations, he said.

    "I felt it was important the FBI look further into it. And because of the nature of the tapes, I thought it was important for the Civil Rights Division of the Justice Department to be brought into it," McDonald said.

    The South Carolina Department of Public Safety welcomes the investigation, spokesman Sid Gaulden said.

    "I think any investigation will clearly show there's no systemic pattern of misconduct," he said. "I am not defending these incidents, but the number is small. If there was a pattern of misconduct, it would have come to light."

    In one video, dated June 24, 2007, Lance Cpl. Steven Garren strikes a suspect running away during a pursuit at night. The man slides onto the hood of the car before landing on the roadside.

    In an exchange with another officer afterward, Garren is heard saying, "I nailed the f--- out of him. He went flying up into the air."

    Someone is heard asking, "You hit him?"

    Garren responds, "Yeah, I hit him. I was trying to hit him." Video Watch men being chased and an officer saying he intentionally hit a man »

    In another video, dated April 28, 2007, Lance Cpl. Alexander Richardson chases a suspect through an apartment complex. Richardson drives his car over the sidewalk, across the grass and through a common area as other people scramble to get out of the way.

    At one point, Richardson briefly strikes the man with his car, causing him to stumble before he resumes running.

    Gaulden said both troopers violated department policy by using cars to chase suspects who were on foot. Garren, he said, received a three-day suspension, which he has completed but is appealing. Richardson was reprimanded and completed a stress management course.

    Two highway patrol bosses left their jobs after a third video emerged of a December 2004 incident. In that video, Lance Cpl. Daniel Campbell can be heard telling a running suspect, "You better run, [racial epithet], because I'm fixing to kill you."

    Campbell was reprimanded, suspended and ordered to undergo anger and diversity training, Gaulden said.

    But South Carolina Gov. Mark Sanford believed stronger action should have been taken.

    Sanford released a statement saying his administration "has always been about setting a higher bar and a higher standard for how state government goes about the business of protecting and serving the people of South Carolina."

    "When someone disregards that standard -- or, worse yet, exhibits behavior that is absolutely intolerable, no matter the situation -- we expect the leaders we've appointed to take swift and meaningful steps to correct it."

    McDonald said Thursday that he could not say whether the federal investigation would focus only on the troopers in the newest videos or extend to last month's departures.

    He said the Justice Department and federal prosecutors would wait to hear from the FBI before deciding whether charges would be filed.

    Highway patrol tapes are routinely reviewed, Gaulden said.

    Disciplinary action is taken when inappropriate behavior occurs, he said.

    "You want to stop it," Gaulden said. "One time is too many. Action is designed to get the individual's attention and change behavior."

    Original here