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Virgin America is suing a company that allegedly created a phony ad, making it look like Virgin was trying to profit from the US Airways crash.
According to the suit, filed yesterday in Federal court, Virgin claims Adrants Publishing posted an ad on its website, Adrants.com, showing a photo of the jet planted in the Hudson River, with the caption, "The Hudson Crash: Just One More Reason to Fly Virgin."
The suit claims a honcho at Adrants said, "We've seen Virgin turn ugly situations to its advantage before, making it [the fake advertisement] very much in keeping with the Virgin brand persona. The only thing saving the tribute from being in terrifically bad taste is the fact that no one lost his or her life in the crash. So woot! -- slather your big reds all over those news shots, V."
Virgin says the ad damages its good name and is suing for, among other things, defamation.
Adrants maintains it was all just a spoof.
Wednesday, January 28, 2009
Virgin Sues Over Hudson Crash Prank
'Mini-Madoff' Accused of $400M Ponzi Scheme Surrenders
HICKSVILLE, New York — The FBI says the owner of a Long Island investment firm has turned himself in to face accusations he cheated clients out of more than $100 million.
FBI spokesman Jim Margolin says Nicholas Cosmo surrendered on Monday night.
Cosmo runs Agape World Inc. in Hauppauge. He's accused of taking in $300 million from investors and cheating them out of about $140 million.
A letter hanging in Cosmo's office window denies there was any pyramid scheme, the type of fraud Bernard Madoff is accused of committing. A Ponzi, or pyramid, scheme promises unusually high returns and pays early investors with money from later investors.
Cosmo is expected to appear in court Tuesday.
Defense attorneys at the Herrick Feinstein law firm haven't returned telephone calls seeking comment.
US to have 'vigorous' Iran talks
| Susan Rice on 'direct diplomacy' with Iran The new US envoy to the United Nations says Barack Obama's administration will make Iran's nuclear plans a diplomatic priority and pursue direct talks. Susan Rice told reporters she looked forward to "vigorous diplomacy that includes direct diplomacy with Iran". Under George W Bush, there were no direct US nuclear talks with Iran. The UN has urged Tehran to halt uranium enrichment, amid fears it could be used for military purposes. Iran says its nuclear programme is entirely peaceful. In the run-up to his inauguration last week, Mr Obama promised a "new approach" in the dispute. Last month he called for "tough but direct diplomacy", offering Iran economic incentives to end its nuclear programme or face tougher sanctions. Iran dismissed the move as "unacceptable". Ms Rice was speaking after presenting her credentials to UN Secretary General Ban Ki-moon. | |
Original here
FROM HUMBLE WORKER TO HAMAS LEADER
"TEL AVIV, Israel – Danny Mahlouf, a 70-year-old Israeli plasterer from Ashkelon, has a message for Hamas Prime Minister Ismail Haniyeh, and it’s personal. "Tell Ismail Haniyeh to lose the beard, and stop making trouble!"
They go way back. In the late ‘80s, Haniyeh worked for five years as a plasterer in Ashkelon and Mahlouf was his boss. "We were close friends but we lost contact," Mahlouf said. "Then one day my son was watching TV and suddenly he shouted, Dad, come quickly, Ismail’s on TV. He’s prime minister!"
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| Hatem Moussa / AP file |
| Hamas Prime Minister Ismail Haniyeh waves to supporters in Gaza City, Dec. 8. |
Their story tells much about the ties between Jews and Arabs that have been lost in the violence. The relationships between Israelis and Palestinians weren’t always full of the tension and hatred that often characterize them today, and that raises the possibility that one day, somehow, it could go back to the more peaceful days.
Old friends
I met Mahlouf in a café in Ashkelon, while waiting for Grad rockets to fall, fired by Haniyeh’s men in Gaza. My new friends in the café, where I went every day during the recent three-week war, told me Mahlouf’s story and said I must meet him. Then one day he came in, and we talked for an hour.
He’s a tough old guy who still works a six-day week. He stood up, blew out his chest, patted his firm stomach and boomed, "Guess how old I am! Ismail would recognize me right away!"
I won’t get in the way of his words, for they tumbled out. But it’s Mahlouf’s explanation of why he believes Ismail Haniyeh changed from a humble worker to an Islamic militant, and what his old friend thinks about him:
"He was a good worker, he worked for me for five years on a salary. He went with my son to Netanya, all over, he came to my house and I went to his in Gaza.
"There was no border post then, we all just came and went. We went to him, I went to Jabaliya like going to my own home, we ate fish there, we lived together, no difference between Jews and Arabs. We ate together, they went to Tel Aviv in their cars, I went to his house, his old house, not the new one now! Gaza was like Tel Aviv for me.
"Weddings, funerals, we were friends. He came with his wife and two children to my daughter’s wedding. But one day his brother was killed and from that very day he became a Hamasnik."
On May 20, 1990, an Israeli, Ami Popper, who had been dishonorably discharged from the army, lined up Arab workers in the road in Rishon-le-Zion, and killed seven. One of them was Haniyeh’s brother. Popper was sentenced to seven life terms for murder, one for each of the seven Palestinians he killed, but he could be paroled by 2023.
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| SLIDESHOW: Gaza's road to recovery |
"I went to Ismail’s house for the funeral," Mahlouf continued. "There were four men in masks. I thought, walla! I’m finished. I’m a dead man. Then one took off his mask and it was Ismail. He said, ‘I told you not to come. I’m finished. I’ll never come to Israel again.’ He came with me to the Erez border to make sure I was safe, and he never came back to work. I never saw him again.
"He wasn’t religious – only later when his brother died. Then I didn’t see him again till [I saw him on] TV, and he’s prime minister! But today, let him stay in the bunker.
"That day at the funeral, I told him, get better, you can’t kill the Jews, we are one state, you are many, you won’t beat us.
"What’s to talk about? They ate with us, worked with us, lived like kings. What happened? They want to get rid of us, what? Tough, we have our state, that’s it. Nothing they can do about it. There they kill each other, what did they get out of it?
"That’s it, if you see him, best wishes to Haniyeh. I say to him, Ismail, get better, stop making problems, it’s over. That’s my message to Ismail. And lose the beard. Tell him your boss, Danny the plasterer, Rachel’s husband, sends his best wishes and stop making all those problems. We all want peace."Original here
'Dark day' as Zimbabwe talks fail
| Mr Tsvangirai said it was "probably the darkest day of our lives" for his MDC party Zimbabwean President Robert Mugabe and opposition leader Morgan Tsvangirai have failed in their latest attempt to form a unity government. After 12 hours of talks, Mr Tsvangirai said it was "probably the darkest day of our lives" for his party. The MDC remained committed to a power-sharing pact but only if it had control of home affairs and finance, he said. Mr Mugabe said he intended talks with the MDC to continue ahead of a regional summit on Zimbabwe's crisis next week. The BBC's Peter Biles in Johannesburg says Zimbabwe's parliament is due to re-open on Tuesday, but without an effective government, the country remains paralysed and the suffering of millions of Zimbabweans goes on. Parliament must change the constitution to create the post of prime minister for Mr Tsvangirai before the power-sharing deal can take effect. 'No progress' Mr Mugabe said Monday's Harare talks, which broke up at around midnight, "didn't go well". He accused Mr Tsvangirai of presenting new conditions. | |
But negotiations would go on, he said, before next Monday's Southern African Development Community summit, set for either in South Africa or Botswana.
"We will continue with discussions here at home," the 84-year-old told reporters.
On the eve of the negotiations, both sides had depicted it as a make-or-break moment for the power-sharing agreement struck in September.
The Movement for Democratic Change (MDC) leader said: "Unfortunately, there's been no progress because the very same outstanding issues on the agenda... are the same issues that are creating this impasse.
"For us as the MDC this is probably the darkest day of our lives, for the whole nation is waiting."
South African President Kgalema Motlanthe, his predecessor Thabo Mbeki and Mozambican leader Armando Emilio Guebuza mediated at the talks.
Under the deal, Mr Tsvangirai is supposed to become prime minister while Mr Mugabe stays president.
Arthur Mutambara, the head of an MDC breakaway faction who is supposed to become deputy prime minister under the pact, also joined the meeting.
The deal first faltered after the MDC accused Mr Mugabe's Zanu-PF of trying to hive off the most powerful cabinet posts.
The MDC has also demanded an end to the abduction of opposition and human rights activists by state security agents.
The political deadlock has exacerbated the problems facing Zimbabweans, from a cholera epidemic and an economic meltdown to food shortages and the collapse of basic services such as health and education.
Mr Tsvangirai, who arrived back in Zimbabwe on Saturday after an absence of more than two months, gained the most votes in elections last March but not enough for outright victory.
He pulled out of a run-off in June against Mr Mugabe, citing a campaign of violence against opposition supporters.Original here
Obama: U.S. not your enemy
President Barack Obama presented a humble and conciliatory face of America to the Islamic world Monday in the first formal interview since he assumed office, stressing his own Muslim ties and hopes for a Palestinian state, and avoiding a belligerent tone — even when asked if America could "live with" an Iranian nuclear weapon. The interview with the Dubai-based Al-Arabiya Network was a dramatic piece of public diplomacy aimed at capitalizing on the new American president's international popularity, though it balanced America's traditional commitment to Israel, whose security Obama called "paramount.'
"I have Muslim members of my family. I have lived in Muslim countries," Obama said, according to a White House transcript. "My job to the Muslim world is to communicate that the Americans are not your enemy."
The Al Arabiya interview, directed squarely at Muslims around the world, revived a vision of personal, symbolic international change that was in the air when Obama - with his far-flung family members, and complicated story - launched his campaign. It was a vision, and an aspect of his story, that the candidate buried when, in 2007, was forced to combat whispering campaigns about his own faith.
But by giving his first interview to the Arabic network, Obama signaled his continuing belief in his personal power as a symbol of America against the temptations of Islamic militancy. He even dismissed "bankrupt" ideas and policies that don't improve children's health care, jabbing at "nervous" Al Qaeda leaders in language that echoed his campaign against George W. Bush.
The occasion for this interview was the departure of Obama's special envoy, George Mitchell, to the Middle East, and a more aggressive and optimistic approach to that conflict than some argued that the circumstances dictated. The president offered no timeline for peace, but a firm view that a Palestinian state remains within reach.
"What I told him is start by listening, because all too often the United States starts by dictating — in the past on some of these issues — and we don't always know all the factors that are involved," Obama said. "What we want to do is to listen, set aside some of the preconceptions that have existed and have built up over the last several years. And I think if we do that, then there's a possibility at least of achieving some breakthroughs."
Obama's interview was marked by attempts to sympathize with the concerns of ordinary Muslims, particularly on the question of living conditions in the West Bank. But he sought a conciliatory tone throughout the interview, at one point avoiding even restating American policy, and his own platform, than an Iranian nuclear weapon is plainly unacceptable.
"Will the United States ever live with a nuclear Iran? And if not, how far are you going in the direction of preventing it?" asked the interviewer, Al Arabiya Washington Bureau Chief Hisham Melhem.
Obama responded only generally, expressing disapproval of an Iranian bomb but not the flat condemnation that is standard from American officials.
"You know, I said during the campaign that it is very important for us to make sure that we are using all the tools of U.S. power, including diplomacy, in our relationship with Iran," he said. "Now, the Iranian people are a great people, and Persian civilization is a great civilization. Iran has acted in ways that's not conducive to peace and prosperity in the region: their threats against Israel; their pursuit of a nuclear weapon which could potentially set off an arms race in the region that would make everybody less safe; their support of terrorist organizations in the past -- none of these things have been helpful."
During the campaign and transition periods, Obama's condemnations of an Iranian nuclear weapon were more direct: "[T]heir development of nuclear weapons would be unacceptable," Obama said on Meet the Press on December 7.
A senior Obama aide said Monday night that Obama had not changed his views on Iran.
Obama also signaled a move away from President Bush's confrontational, generalizing language. Melhem noted to Obama that "President Bush framed the war on terror conceptually in a way that was very broad, 'war on terror,' and used sometimes certain terminology that the many people -- Islamic fascism. You've always framed it in a different way, specifically against one group called al Qaeda and their collaborators."
"I think that you're making a very important point. And that is that the language we use matters," Obama replied. "[W]hat we need to understand is, is that there are extremist organizations -- whether Muslim or any other faith in the past -- that will use faith as a justification for violence. We cannot paint with a broad brush a faith as a consequence of the violence that is done in that faith's name.
"And so you will I think see our administration be very clear in distinguishing between organizations like al Qaeda -- that espouse violence, espouse terror and act on it -- and people who may disagree with my administration and certain actions, or may have a particular viewpoint in terms of how their countries should develop," he said. "We can have legitimate disagreements but still be respectful. I cannot respect terrorist organizations that would kill innocent civilians and we will hunt them down."
Obama's shift Monday was one of tone, not of policy, and he also affirmed America's support for Israel.
"Israel is a strong ally of the United States. They will not stop being a strong ally of the United States. And I will continue to believe that Israel's security is paramount," he said. "But I also believe that there are Israelis who recognize that it is important to achieve peace. They will be willing to make sacrifices if the time is appropriate and if there is serious partnership on the other side."
Obama's interview plan was made public only Monday afternoon, and the interview, which concluded just after 6:00 p.m., was distributed to reporters in the evening and embargoed for release at 11:00 p.m.
Asked why Al Arabiya had been granted the president's first interview, and aide said: "We want to communicate directly to the entire world America's new foreign policy."
Jonathan Martin contributed to this story.
Tuesday, January 27, 2009
Stop getting prerecorded telemarketing calls
We're on the Do Not Call list, but we still get prerecorded calls from the likes of "Heather" and her fellow drones. Why is this happening? It's terribly annoying.
Luckily we came across this post by Herb Weisbaum, aka ConsumerMan at MSNBC, while we were researching another topic. He says you can now opt out of these calls -- and can do it quite simply.
First of all, ConsumerMan says that if you're on the Do Not Call list, prerecorded telemarketing calls are legal only from companies with which you already have a business relationship. He defines that as: "If you bought or rented something from that company within the last 18 months, or simply inquired about a product or service within the last three months, you've established a business relationship."
(Some companies ignore this rule or stretch it to the breaking point. We don't know of any business relationship we've had with the companies that keep calling. Maybe it's time to file a complaint with the Federal Trade Commission.)
How do you get them to stop? Simply hanging up won't do it.
- As of last month, the company must give you a way to opt out, like pushing 1. Listen to the instructions at the end of the pitch.
- EveryCall says a method to opt out must be provided whether the prerecorded call reaches a human ear or ends up as a message on your answering machine.
- Starting Sept. 1, a company you have a business relationship with will need your agreement in writing or electronically to send you robo-calls. They'll probably come up with some crafty ways to trick you into that.
Other things you should know:
- Informational prerecorded calls from a company you have a business relationship with are allowed. ConsumerMan says that would include calls from an airline letting you know your flight has been delayed.
- Political calls and calls from charities are exempt. However, if the charity hires an outfit that uses prerecorded calls, you can opt out from receiving them as well.
- You can sign up for the Do Not Call list online or by calling
(88...
from the phone number you want to put on the list. That includes cell phones. There's about a month delay before the registration takes effect.
Monday, January 26, 2009
Office politics, alive and well
By Beth Teitell
Robert Wickham, a software salesman, was working on his laptop at his favorite office - the airy Cafe Fixe, in Brookline - when he took a break to explain the art of scoring a desk, er, table, and how it all comes down to contacts. If people know you, he said, they'll share a table or finish their coffee quickly. "But when you're the new guy," he said, "no one's going to give up a seat for you."
Milk, cream, or office politics with your coffee?
As the WiFi workforce expands and growing numbers of the unemployed, self-employed, even fully employed punch the clock at cafes, competitive and petty behaviors once confined to the office have been outsourced - to the corner coffee shop.
"It's like being at work," Wickham, 39, observed. "You always have to have your antenna up."
If NBC remakes "The Office" (again), the show should be set at
"You do the hover," said Todd Orr, 29, a computer programmer, as he worked with his brother at Starbucks on Boylston Street in Back Bay, explaining a passive-aggressive method for landing a seat that involves assertive loiter ing. "You hope you don't get into a parking lot situation," in which some jerk jumps ahead and takes what's yours, he added. "It could start a fistfight."
Statistics on the number of people working in coffee shops (at the tables, not behind the counter) are hard to come by, but the number of coffee shops has grown from about 10,000 in 1998 to 23,000 or more today, according to Ric Rhinehart, executive director of the Specialty Coffee Association of America. "You walk into a coffee shop [in any urban area], and there's no place to sit down or plug in a laptop," he said. "It's enough of a phenomenon that there are bloggers who've blogged about laptop etiquette."
Maggie Mason of San Francisco is one of them. "I spend a few days a week working at coffee shops," she wrote in a December post on mightygirl.com, "and I've seen some serious audacity in the last few years.
"There's always the guy communing with his computer at a table meant for four. He inevitably plugged in to the only outlet five hours ago; about the time he purchased his coffee, which has long since gone cold. Occasionally he rises to aim banter at the irritated barista, and then returns to his seat without making a purchase. . . . I once saw someone pull a screwdriver out of his bag to remove a cover plate the owner had secured over an outlet. I had to restrain myself from walking over to smack his hands away."
Speaking of power outlets, in at least one local "coffice,"
A human resource issue was born. The store tried to play nice by asking laptop users to limit their time, but when that didn't work, employees covered many outlets with plates, an outcome Linn Parrish, Panera's vice president of public relations, calls a "fair solution to the situation." The rank and file has griped, but picket lines have not formed in front of the store.
Even the sun can be an issue, says Amy Alkon, a syndicated advice columnist and author of a forthcoming book on the collapse of public manners. She spends a lot of time writing in coffee shops, and has witnessed countless workplace-like disputes, including one over whether the shades should be left up, to let in light for the employees, or pulled down, to enable laptop workers to see their screens.
"There's a war between the people who work at Starbucks for a living and the people who work at Starbucks for a living they're earning someplace else," she said.
Many nomadic laptop workers enjoy the break from officemates that coffee shops provide, but anonymity isn't always guaranteed. If you work in one coffee shop too frequently, other regulars can become just as problematic as chatty co-workers.
And then there are the strangers who inject themselves into work conversations.
"We've had people chip in and offer advice about what we're doing," said Dave Gordon, senior art director of B Direct, a marketing and communications firm whose principals all work from home. He was meeting with his two colleagues at the Boylston Street Starbucks, their "conference room."
Most of the unsolicited counsel starts like this, Gordon said: "I'm sorry, but I couldn't help but overhear . . ." Then come the suggestions on how to improve whatever print ad or direct mail piece the firm's creating. People mean well, he said. So, has the firm ever used any of the ideas? "No, not really." Hey, sounds just like the real workplace.Original here
Earnings, economy - here comes 'terrible'
NEW YORK (CNNMoney.com) -- Investors this week will face the largest batch of company report cards yet, in what is quickly shaping up to be the worst quarter for corporate profits in a decade.
The earnings avalanche will test the market's mettle. Last week, the Dow fought back after falling below the 8,000 point psychological benchmark for four days in a row. Analysts say if the Dow can hang on to this level in the weeks ahead, that's a good indication that a bottom has been set.
The biggest week for earnings brings reports from 137 S&P 500 companies and 12 Dow components. Standouts include Caterpillar, American Express, McDonald's, Yahoo, Wells Fargo and Exxon Mobil.
Only 10% of the 85 S&P 500 companies that have reported so far have topped forecasts. Another 60% have met estimates and another 30% have missed, according to Thomson Reuters.
"We're in the process of absorbing just how bad the fourth quarter was," said Bernard McGinn, CEO of McGinn Investment Management. "We had a feeling things were terrible, now we're getting proof of it. The question is 'where do we go now?"
This week also brings the latest Fed policy meeting - although it's likely to be less influential than usual since the central bankers are expected to keep interest rates unchanged near zero, said Kenny Landgraf, principal and founder at Kenjol Capital Management
Investors will also digest reports on housing, consumer confidence and leading economic indicators early in the week. The end of the week brings the fourth-quarter gross domestic product (GDP) report. It's expected to have fallen by an annual rate of 5.2%, it biggest plunge in 26 years.
"Everyone is bracing for the GDP number to be pretty terrible, but the bigger surprise could come with the housing numbers, which are also expected to be awful," he said.
Landgraf said that investors are also looking for more concrete news to come from the Obama administration this week regarding the use of the remaining $350 billion of the TARP money and negotiations on the $825 billion stimulus package.
Earnings hit hard: With 15% of the S&P 500 having already reported results, fourth-quarter profits are expected to have fallen 28.1% from a year ago, according to the latest figures from tracker Thomson Reuters.
Typically, the final number is lower than where it stands at this point in the quarter. But even if the final number is no worse than where it stands now, the fourth quarter will still rank as the biggest decline for S&P 500 profits in the 10 years Thomson has been tracking results.
Worse-than-expected reports from big financial companies such as Citigroup and Bank of America have weighed heavily on the results so far.
"It's not how many companies are missing," said John Butters, Thomson Reuters' senior research analyst. "It's the size of the companies missing and the magnitude of the losses."
Financials are currently expected to lose $12.5 billion this year as opposed to their profits of $5 billion a year ago. But financials aren't alone, with 7 of 10 S&P economic sectors due to post declines.
However, not all of the news has been bad. Last week Google, Apple and IBM reported earnings that were better than expected.
Monday: December existing home sales are expected to have fallen to a 4.40 million unit annual rate from a 4.49 million unit rate in November.
The December index of leading economic indicators (LEI) is expected to have fallen 0.3% after falling 0.4% in November.
Tuesday: The January consumer confidence index from the Conference Board is expected to hold steady at an all-time low of 38.0, unchanged from December.
Also due Tuesday is the S&P/CaseShiller home index for November, expected to show steep declines.
Wednesday: The Federal Reserve concludes its two-day policy meeting with an announcement on interest rates due at around 2:15 p.m. ET. No change is expected in the fed funds rate: The central bank lowered interest rates to nearly zero in December and hinted it would keep them there for some time.
As always, the statement accompanying the decision will be critical, as it offers the Fed's assessment of the economy, now in its second year of a recession. (Full story)
Also on Wednesday, the World Economic Forum kicks off in Davos, Switzerland. It runs through Sunday.
Thursday: The December durable goods orders report is due before the start of trade. Orders are expected to have dropped 1.8% after dropping 1.5% in November.
December new home sales are due after the start of trading. Sales are expected to have fallen to a 400,000 annual unit rate from a 407,000 annual unit rate in November.
Friday: Fourth-quarter gross domestic product (GDP) is expected to have fallen by an annual rate of 5.2%, after falling by an annual rate of 0.5% in the third quarter. That would be the biggest quarterly decline in roughly 26 years.
The January Chicago PMI, a regional read on manufacturing, is expected to have fallen to 34.2 from 35.1 in December.
The University of Michigan releases its revised January consumer sentiment index, which is expected to hold steady at 61.9.
Monday: Before the start of trade, heavy-equipment maker Caterpillar (CAT, Fortune 500), a Dow component, is expected to report earnings of $1.31 per share versus $1.50 a year ago, according to a consensus of analysts surveyed by Thomson Reuters.
Fellow Dow component McDonald's (MCD, Fortune 500) is expected to report earnings of 83 cents per share versus 73 cents a year ago.
After the market close, Dow component American Express (AXP, Fortune 500) is expected to report earnings of 22 cents per share versus 71 cents a year ago.
Also after the close, biotech Amgen (AMGN, Fortune 500) is expected to report a profit of $1.07 per share versus $1 a year ago.
Tuesday: Dow component DuPont (DD, Fortune 500) is set to report results before the start of trading. The chemical maker is expected to have lost 24 cents per share, after having earned 57 cents per share a year ago.
Verizon Communications (VZ, Fortune 500), also a Dow component, is expected to report earnings of 62 cents per share, the same as it did a year ago.
After the market close, Yahoo (YHOO, Fortune 500) is expected to report earnings of 13 cents per share versus 15 cents a year ago.
Wednesday: AT&T (T, Fortune 500) reports results before the start of trade. The Dow component is expected to report earnings of 65 cents per share versus 71 cents a year ago.
Also in the morning, Wells Fargo (WFC, Fortune 500) is expected to report earnings of 33 cents per share, versus 41 cents a year ago. Wells Fargo is perceived as having held up better than a number of other banks.
Thursday: 3M (MMM, Fortune 500), due to report results before the start of trade, is expected to have earned 93 cents per share versus $1.19 a year ago. The Dow component is often seen as a proxy for the economy because of the breadth of its businesses.
After the market close, Amazon.com (AMZN, Fortune 500) is expected to report earnings of 39 cents per share versus 48 cents a year ago.
Friday: A pair of oil companies report results before the start of trade. Chevron (CVX, Fortune 500) is expected to have earned $1.81 per share versus $2.32 a year ago. Exxon Mobil (XOM, Fortune 500), a Dow component, is expected to report earnings of $1.47 per share versus $2.16 a year ago.
Also before the open, Dow component Honeywell (HON, Fortune 500) is expected to have earned 97 cents per share, versus 91 cents a share a year ago.
Procter & Gamble (PG, Fortune 500) is expected to have earned $1.58 per share versus 98 cents a year ago.Original here
Downturn Accelerates As It Circles The Globe
The world economy is deteriorating more quickly than leading economists predicted only weeks ago, with Britain yesterday becoming the latest nation to surprise analysts with the depth of its economic pain.
Britain posted its worst quarterly contraction since 1980 on the heels of sharper than expected slowdowns reported from Germany to China to South Korea. The grim data, analysts said, underscores how the burst of the biggest credit bubble in history is seeping into the real economies around the world, silencing construction cranes, bankrupting businesses and throwing millions of people out of work.
"In just the past few days, we've had a big downward revision, we're seeing that an even bigger deceleration is on the way than we thought," said Simon Johnson, former chief economist at the International Monetary Fund and a senior fellow at the Peterson Institute for International Economics.
The depth of the troubles, analysts say, indicates that nations may need to spend more than the billions of dollars already planned on stimulus packages to jump-start their economies, and that a global recovery could take longer, perhaps pushing into 2010.
Analysts are particularly concerned about the slowdown in China and the recession in Europe. There is mounting concern about the stability of the euro and the British pound, which dropped to a 24-year low against the dollar yesterday. Analysts are fretting about the possibility of a debt default in a euro-zone country that could send fresh shock waves through global financial markets.
The problems in Europe now appear to be as bad if not worse than those in the United States. In the last quarter of 2008, the British economy shrank at an annualized rate of 6 percent. That is worse than economists expected, but also showed the British recession may be even harsher than the one in the United States, where analysts predict data expected next week will show the U.S. economy to have contracted between 5 and 5.5 percent in the last quarter of 2008.
The meltdown is altering high streets in Britain, where retail icon Woolworths shuttered the last of its 807 branches this month after 99 years in business. Marks & Spencer, sometimes described as the bellwether of Britain's retail sector, said this month that it would close 27 stores and cut more than 1,000 jobs. The average price of a house has plummeted to mid-2004 levels, according to Halifax, Britain's biggest mortgage lender. Car sales are at a 12-year low. The number of people out of work has climbed to nearly 2 million, a level not seen since 1997 when the Labor Party came to power.
In fact, the only sector to show growth in Britain was agriculture, which accounts for about 1 percent of the overall economy.
"The question now is not how bad will 2009 be, but will we recover in 2010 and if we recover, will it only be anemic?" said Andrew Scott, professor of economics at the London Business School, adding that the housing bubble is bigger, consumer debt is higher and the speed of the slowdown faster than in previous recessions.
Partial data released in recent days by Germany, Europe's single biggest economy, indicates its economy saw a major contraction in the last months of 2008, posting a 6 percent annualized drop, according to Howard Archer, chief Britain and European economist for IHS Global Insight in London.
That could get worse as problems mount in the European financial system. In recent days, major banks in Europe -- including the Royal Bank of Scotland -- reported surprisingly massive losses. European authorities are seen by some critics as falling behind the Americans in dealing with distress in the their financial sectors.
Standard & Poor's has downgraded Greek and Spanish bonds and warned that others, including Ireland's, may be next. The sense that some European countries are now more risky has driven up the borrowing costs for even large nations in the region, including Italy. That has made it harder for those countries to raise the vast sums needed to launch major stimulus packages aimed at economic recoveries.
Also troubling are signs that China, once a rare light in the global economy, may not prove to be the pillar of strength in Asia that many analysts had hoped. Beijing announced this week that its economy grew by 6.8 percent in the fourth quarter of 2008 -- slower than the 7 percent analysts expected -- bringing total growth for 2008 to a seven-year low. Chinese data, however, are somewhat opaque, and analysts warned the slowdown there may be sharper than Beijing is willing to admit.
That is diminishing hopes for China as Asia's economic white knight, with its growth potentially propping up economies in the region. And as China grows at a far slower rate, it is importing fewer goods from neighbors, giving export-dependent nations in the region no way to pick up the slack from plummeting demand in the United States and Europe.
Particularly hard hit is South Korea, which saw trade with China soar in recent years. But as China slows, and the United States, Europe and Japan sink into deep recessions, unsold goods are piling up at South Korea docks. This week, the government said the economy in the fourth quarter staged its sharpest drop since the Asian economic crisis swept across the country in 1998.
Ford does not need government loans: CEO
By Soyoung KimNEW ORLEANS (Reuters) – Ford Motor Co has enough liquidity to fund its restructuring plan and despite the deep downturn in auto sales still sees no need to ask for government loans, Chief Executive Alan Mulally said on Saturday.
"We don't want to borrow any more money. We have sufficient liquidity to fund our transformation plan, which means our business is in a relatively good shape," Mulally told reporters on the sidelines of the National Automobile Dealers Association convention.
Ford's U.S. rivals, General Motors Corp and Chrysler LLC, won approval in December for $17.4 billion of government loans to avert collapse. Ford has asked for access to a $9 billion credit line from the U.S. government but has not sought loans. Washington has not yet responded to Ford's request.
Mulally said Ford was in a better situation than its rivals because it borrowed more than $23 billion in 2006, using most of the company's assets as security, including its well-known blue oval logo.
Mulally said U.S. industry-wide sales in January had been similar to those in December, when they fell about 36 percent from a year earlier to 10.3 million units on an annualized basis.
Ford expects an economic stimulus package being pushed by new President Barack Obama to drive a recovery in auto sales starting in the second half and maintains its forecast of U.S. auto sales at 12 million to 12.5 million units, he added.
The forecast represents the high end of prevailing expectations. Analysts have forecast U.S. sales in a range between 10.1 million and 12.5 million units for 2009.
"Right now, I think with everything planned in the fiscal and monetary policy, I am very comfortable that we are going to start to turn things around through the second half of the year," Mulally said.
Lawyers Warned to Be Wary of Client E-Mail Scams
Texas Lawyer
Houston lawyer Richard T. Howell Jr., whose firm was scammed out of $182,500 by a client who contacted and hired him through e-mail, says he is talking publicly about the situation so he can prevent other Texas lawyers from making the same mistakes.
"I'm a capital 'D' Dumbass," says Howell, who has practiced law for 23 years and is a partner in Buckley, White, Castaneda & Howell.
In October 2008, Howell became the victim of a sophisticated, international version of a classic check-fraud scam, say two Texas consumer law attorneys, as well as Dan Parsons, president of the Better Business Bureau of Greater Houston and South Texas.
"What has happened to him is a typical form of check fraud," says Richard Tomlinson, of the Law Office of Richard Tomlinson in Houston.
Because he is responsible, Howell says, he did not ask his partners to help him cover the loss, which stemmed from collections work Howell did for a client who said he was a businessman in Japan. To reimburse his firm, Howell says, he had to borrow money on a home equity loan.
In December 2008, Howell's firm sued Citibank in state court in Houston, alleging the New York bank was negligent and engaged in negligent misrepresentation when it represented to Howell that a $367,000 check -- that was supposed to be a payment to Howell's client from a customer -- had cleared when, in fact, it was a bogus check. [See the petition.]
In an answer filed in December 2008 in Buckley, White, Castaneda & Howell v. Citibank, Citibank denies the allegations and seeks a take-nothing judgment. "We are not liable for those funds," says Citibank's attorney, Yasmin Atasi, a shareholder in Winstead in Houston. She says she cannot comment further because the litigation is pending. [See the answer.]
The suit is set for trial in July in 61st District Judge Al Bennett's court in Houston.
Howell says that with a 33.3 percent fee, the prospect of collecting $3.6 million in unpaid invoices for the client was a big lure. "To me, it sounded like it could be a potentially lucrative client from Japan," Howell says.
But Howell has little hope he will ever recover the money from his former client. Tom Kelley, a spokesman for the Texas office of the attorney general, says the U.S. Secret Service typically handles investigations into crimes like the e-mail scam that Howell describes. Howell says he called the Secret Service and the Houston Police Department, but he did not file complaints with either agency. He says the HPD declined to investigate because it involved multiple jurisdictions, and the Secret Service was not interested in investigating his firm's loss, because the amount was too small.
However, Cynthia Marble, assistant special agent in charge of the Houston field office of the Secret Service, says there's no threshold amount that would lead her agency to investigate a loss like Buckley White's. "It's more the dynamics of the case and not so much the amount," she says.
Marble says the field office has no complaint on file from Howell's firm so it is not investigating the firm's loss. The investigations are difficult, she says. "Most of these cases are scams that originate overseas, and once it [money] leaves here and goes to some unknown entity overseas, it's difficult to track," she says.
Howell says he did file a complaint with the U.S. Postal Service Office of the Inspector General, but the agency hasn't reported any progress in the investigation to him.
To somewhat mitigate his embarrassment, Howell says, he has spoken to another Texas lawyer who also was the victim of similar check fraud, to the tune of $300,000. (Howell declines to identify the other lawyer.) That just proves to Howell that e-mail swindlers are preying on lawyers and running a very sophisticated scam.
"It was moving fast with me. I thought I was covering any base," Howell says.
Parsons, the Better Business Bureau official, says what Howell describes is a version of a check-fraud scheme known as the "Nigerian Scam," which the urban myth-busting Web site snopes.com says often involves a putative wealthy foreigner who needs help from the victim in moving money from one place to another. Snopes.com says the scam lures in victims by presenting an opportunity to get something for nothing.
"They have evolved with that to so many new layers, so many new variations," Parsons says.
"The fact that money is being shipped around internationally, it has the smell of it [the Nigerian scam]. Good luck at getting it back," Parsons says, noting that the U.S. government isn't much help.
Craig Butterworth, a communications specialist for the Va.-based National White Collar Crime Center, says the scam Howell's firm describes in its petition sounds like a variety of a "confidence fraud" in which a scammer gains the confidence of a victim, and then takes the victim's money.
"The law firm essentially fell for it -- took the bait, for lack of a better term. They gained their [the firm's] confidence. It's not all that different from the Nigerian Letter Fraud, because the circumstances are 'we did this for you, and you do this for us,'" he says.
According to the 2007 Internet Crime Report, the Internet Crime Complaint Center (IC3) received 206,884 complaints of crimes perpetrated over the Internet during 2007, with more than 90,000 of them referred to law enforcement agencies and amounting to nearly $240 million in reported losses. The IC3 received a total of 12,918 complaints in Texas in 2007, according to the most recent statistics from IC3. IC3 is a joint operation between Butterworth's group and the Federal Bureau of Investigation.
CITIBANK SUED
In its petition in Buckley, White, Castaneda & Howell v. Citibank, Buckley White alleges that it was retained by a Japanese company to collect $3.6 million from four of the company's customers in the United States.
The firm alleges the Japanese company signed a contingent-fee agreement and advised the firm that one of its customers had agreed to make a partial payment of the amount outstanding.
On Oct. 7, 2008, the firm alleges, it received a "Citibank Official Check" for $367,000, and the firm deposited it into its Interest on Lawyers Trust Account at Sterling Bank in Houston.
A Buckley, White, Castaneda & Howell "employee telephoned Citibank and verified that check number 310096829 in the amount of $367,500 was paid. The firm relied upon this unconditional representation in allowing a wire transfer of $182,500 to a supplier of [the Japanese company] in Hong Kong," the firm alleges in the petition.
On Oct. 10, despite Citibank's "unconditional representation," Sterling Bank informed the firm that the check had been returned as "counterfeit," the firm alleges in the petition. The firm alleges Sterling Bank drained the firm's IOLTA account -- taking more than $100,000 -- and took $77,000 from the firm's operating account to cover the wire transfer.
Howell says Sterling Bank tried to cancel the wire transfer, but it was too late. Citing privacy rules, Graham Painter, a spokesman for Sterling Bank, declines comment.
Howell says he e-mailed the client but got no reply.
The firm seeks $182,500 in actual damages for Citibank's alleged negligence and negligent misrepresentation, and it also seeks a minimum of $367,000 in punitive damages.
Howell says he was first contacted by the Japanese client on Oct. 3 to do collections work, and it was only one week later that he learned that the check was fraudulent.
After the bank called him to inform him that the check was a duplicate and not good, Howell told his partners, "I've had a loss," Howell recalls. "They were surprised."
Howell says he told his partners that he would cover the loss, because it was his responsibility. "I said that, and I did that," he says.
COLLECTION WORK
Howell says he thought he was running the right traps before accepting the client, by checking out the Web sites of the U.S. companies from which his prospective client wanted him to collect, by confirming that the client had a Web site, and by checking with Citibank on the legitimacy of the $367,500 check before wiring out the funds. Most of his communication with the Japanese company executive was through e-mail, but the client did telephone him a couple times. Howell says he never called the client. Nothing raised a red flag in his mind, until it was too late.
"I talked to my bank, and they said if it's been paid, you are good. That's all you need is a verification," Howell says.
Even the e-mail approach wasn't unusual. Howell does commercial litigation, but he also does collections. He says he gets referrals from other lawyers through e-mail and receives e-mail contacts from a link through the firm's Web site. While he usually meets his clients in person before they sign retainer agreements, that's not always the case, particularly when the client is from outside Texas.
Howell says he's more cautious today, but he might have prevented the loss by insisting on meeting with the client, face-to-face, before agreeing to take the work.
That's wise, Parsons says.
"It goes back to verifying the credibility of the client. That's the problem in the cyber-world. I'm not faulting the attorney. It's something they are experienced at doing, but their guard went down," he says. "Do more due diligence."
Richard Alderman, a professor at the University of Houston Law Center who teaches consumer law, says, speaking generally, that everyone, including lawyers, should be wary about getting involved in anything that sounds too good to be true.
"The second thing is to understand that when you deal with checks, that until they are finally paid and you can get some guarantee or some statement to that effect, you don't have anything," Alderman says.
Tomlinson, a former Texas assistant attorney general in the consumer protection division, cautions lawyers to be careful when doing business with overseas clients, because checks can take weeks to clear.
"The safe thing is to wait until the check is totally cleared. That doesn't mean he [Howell] doesn't have the right to rely on what the bank said," Tomlinson says.
Tomlinson and Alderman each say Howell's firm may have a claim against Citibank.
Painter, the executive vice president for corporate communications for Houston-based Sterling Bank, says check-fraud scams are "more common than people might believe" and lawyers may be targets because they try to accommodate clients.
Speaking generally about check-fraud scams, Painter says IOLTA accounts are a target, because scammers know firms use them to accept money for their clients and "checks going in are made out to all kind of parties."
"This certainly isn't the first time that those kinds of accounts are under attack," Painter says. "Every kind of business is under attack by fraud these days, so it's not at all limited to lawyers and law firms. They are just in there with everybody else."
His advice to lawyers? He says it's probably safest to refrain from getting involved in the client's business. He says, "If the money goes in through the client, it should probably go out through the client."
GE profit down 44 percent, CEO stands by dividend
By Scott Malone BOSTON (Reuters) - General Electric Co reported a 44 percent drop in quarterly profit on weakness at GE Capital and its lighting and appliance units, and warned that 2009 would be "extremely difficult."
Its shares tumbled nearly 11 percent to their lowest point since early 1996 as investors continued to worry about the U.S. conglomerate's ability to maintain its dividend.
GE Capital -- the company's Achilles heel for the past year -- remained the biggest drag on its results, with profit tumbling 67 percent. GE's energy infrastructure unit, which makes electric turbines and windmills, was the highlight, recording 11 percent profit growth.
Chief Executive Jeff Immelt said on Friday the result -- which met Wall Street's reduced expectations -- reflected brutal economic conditions.
"We're planning for a really tough environment," Immelt told analysts on a conference call. "The recession is tough, the financial services crisis is worse."
Investors have become increasingly concerned over the past month that the world's largest maker of jet engines may have to sacrifice its $1.24 per share annual dividend.
Analysts also are asking whether it could lose its coveted top-tier credit rating, after Standard & Poor's lowered its outlook to "negative" in December.
"GE is not fully out of the woods and macro uncertainties continue to point to continued risk for the dividend and AAA-rating," said Goldman Sachs analyst Terry Darling.
Immelt, 52, defended the dividend, calling it "a good return to investors in this moment of uncertainty. But we're not straining in order to pay it ... We've got lots of cash."
GE shares closed down $1.45 to $12.03 on the New York Stock Exchange, making it one of the heaviest drags on the Dow Jones industrial average. The Dow was off more than 1 percent earlier, before closing down 0.56 percent.
Over the past year, GE shares have tumbled about 60 percent, sharply outpacing the 32 percent fall of the Dow.
It trades at 6.9 times forecast 2009 earnings, a sharp discount to the Dow's forward price-to-earnings ratio of 11.3.
MEETS FORECAST, MAINTAINS OUTLOOK
The Fairfield, Connecticut-based company said fourth-quarter net income fell to $3.72 billion, or 35 cents per diluted share, from $6.7 billion, or 66 cents, a year earlier, as the U.S. conglomerate and economic bellwether closed out one of the toughest years in its 117-year history.
Factoring out one-time items, results met Wall Street's expectations, according to Reuters Estimates.Revenue fell 4.8 percent to $46.21 billion.
In early December, the company sharply lowered the high end of its fourth-quarter profit forecast.
"While GE clearly is being impacted by recession and its financial business is being impacted by the financial meltdown, they are navigating it," said David Katz, chief investment officer, Matrix Asset Advisors.
The company, the only original member to remain in the Dow, stood by its 2009 outlook.
GE has ceased providing numeric per-share profit targets, instead opting to spell out a "framework" for how its individual businesses will perform. That calls for profit at its infrastructure units and its NBC Universal unit to be flat to up 5 percent for 2009, with GE Capital profit down about 40 percent.
Company officials on a conference call said they raised their forecast credit losses at GE Capital to $10 billion for the year, up from a previous forecast of $9 billion.
They also noted that infrastructure equipment orders -- an indicator of future sales -- declined 11 percent in the quarter.
Chief Financial Officer Keith Sherin in an interview expressed confidence in the company's order backlog.
"In a macro sense, for the total company, we've done a very rigorous job of making sure that what we put in our plan we thought, even with the economic problems that people have and even with the financial liquidity problems, that people are going to take those orders," Sherin said.
Across the industrial sector, companies are braced for a rough year. United Technologies Corp, the world's largest maker of elevators and air conditioners, on Wednesday warned that it expected a particularly brutal first half.
GE and United Tech look to the Obama administration's planned stimulus as a potential boost, though investors expect no effect until late this year at the earliest.
(Reporting by Scott Malone, additional reporting by Rebekah Curtis, Dominic Lau and Atul Prakash in London and Christoph Steitz in Frankfurt, Nick Zieminski and Leah Schnurr in New York; Editing by Derek Caney and Carol Bishopric)
Harley-Davidson to cut jobs
The Milwaukee Journal-Sentinel reported the plant's closure is part of a restructuring plan that includes the elimination of 1,100 jobs in the next two years.
Plans call for 640 jobs to be cut at the company's facilities in Wisconsin, Harley President and Chief Executive Officer Jim Ziemer told the newspaper. He said 230 of the job cuts will be in non-production positions -- mostly involving salaried personnel, including engineering, administrative and finance departments.
The newspaper reported that about 70 percent of the job reductions will occur this year, with the remainder to be made in 2010.
"These are all very tough decisions, but sometimes we have to go through some pain" to ensure the company's long-term viability, Ziemer said.
Hamas tried to hijack ambulances during Gaza war
PALESTINIAN civilians living in Gaza during the three-week war with Israel have spoken of the challenge of being caught between Hamas and Israeli soldiers as the radical Islamic movement that controls the Gaza strip attempted to hijack ambulances.
Mohammed Shriteh, 30, is an ambulance driver registered with and trained by the Palestinian Red Crescent Society.
His first day of work in the al-Quds neighbourhood was January 1, the sixth day of the war. "Mostly the war was not as fast or as chaotic as I expected," Mr Shriteh told the Herald. "We would co-ordinate with the Israelis before we pick up patients, because they have all our names, and our IDs, so they would not shoot at us."
Mr Shriteh said the more immediate threat was from Hamas, who would lure the ambulances into the heart of a battle to transport fighters to safety.
"After the first week, at night time, there was a call for a house in Jabaliya. I got to the house and there was lots of shooting and explosions all around," he said.
Because of the urgency of the call, Mr Shriteh said there was no time to arrange his movements with the IDF.
"I knew the Israelis were watching me because I could see the red laser beam in the ambulance and on me, on my body," he said.
Getting out of the ambulance and entering the house, he saw there were three Hamas fighters taking cover inside. One half of the building had already been destroyed.
"They were very scared, and very nervous … They dropped their weapons and ordered me to get them out, to put them in the ambulance and take them away. I refused, because if the IDF sees me doing this I am finished, I cannot pick up any more wounded people.
"And then one of the fighters picked up a gun and held it to my head, to force me. I still refused, and then they allowed me to leave."
Mr Shriteh says Hamas made several attempts to hijack the al-Quds Hospital's fleet of ambulances during the war.
"You hear when they are coming. People ring to tell you. So we had to get in all the ambulances and make the illusion of an emergency and only come back when they had gone."
Eyad al-Bayary, 32, lost his job as a senior nurse at the Shifa Hospital, the largest in Gaza City, about six months ago because he is closely identified with Fatah, the rival political movement of Palestinian Authority President Mahmoud Abbas.
Twice last year Mr Bayary was arrested by Hamas, and once he was jailed for six days for flying the Fatah flag above his house in Jabaliya. He now works part-time as an English teacher at al-Azhar University.
"After the first day of the war, I go to the hospital to work, to help, but I was told to go away. They tell me 'you are not needed here' and they push me away," Mr Bayary said.
Since the ceasefire was declared on January 17, Hamas has begun to systematically take revenge on anyone believed to have collaborated with Israel before the war.
Israel makes no secret of the fact that it has a network of informants inside Gaza who regularly provide information on where Hamas leaders live, where weapons are being stored and other details that formed an important part of Israel's battle plan.
According to rumour, a number of alleged collaborators have already been executed. Taher al-Nono, the Hamas government's spokesman in Gaza, told the Herald that 175 people had been arrested so far on suspicion of collaborating.
"They will be dealt with by the court and the judge and we will respect the judge's decision," Mr Nono said.
And if the sentence is death?
"We will respect the decision."
But the breakdown between Hamas and Fatah over the last 18 months did not prevent some co-operation between the two sides during the war.
The commander of one al-Aqsa Martyrs Brigade unit - the brigades are a coalition of secular militia groups which operate under the loose umbrella of Fatah - said the real enemy remains Israel.
The unit commander, who used the name Abu Ibrahim, invited the Herald into his home.
On the wall of his lounge room hung the portraits of George Habash, who founded the Popular Front for the Liberation of Palestine, a communist paramilitary organisation, and Abu Ali Mustafa, the man who succeeded Habash as leader of the PFLP and who was killed by Israeli forces in 2001.
"Of course we fought together with Hamas because we all have the same aim: to liberate our homeland," he said.
With his two-year old daughter on his knee, Mr Ibrahim, 30, said he would never accept peace or negotiation, even if it might lead to the creation of a Palestinian state.
"I believe in the existence of Israel because it exists on my land - but the war with Israel will only end when I liberate all of my land. This last war with Israel was not the first war, and it will not be the last."
Rebuilding the Strip
GAZA CITY: Hamas will begin a big reconstruction effort in the Gaza Strip today as the territory's 1.5 million people start to recover from the devastating three-week war with Israel that claimed more than 1300 lives and destroyed thousands of buildings, factories and farms.
Life was beginning to return to a relative state of normality yesterday, with schools, universities and businesses back open.
But with most government buildings destroyed during the war, and piles of concrete rubble on street corners, Gazans face a huge effort to return the Strip to the impoverished state that existed before the war began.
Thousands of Gazans who lost their homes are still living in temporary accommodation provided in United Nations Relief and Works Agency schools, and electricity is being rationed, with homes receiving power for just a few hours a day.
A Hamas spokesman in Gaza, Ayman Taha, said his organisation would observe a truce with Israel for 18 months on the condition all the crossing points with Israel were opened.
With Hamas's popularity apparently plummeting in as a result of the war, the movement's leadership is using financial handouts to boost morale.
Hamas leaders from Gaza and Damascus, Syria, travelled to Cairo yesterday to meet Egyptian intelligence leaders and leaders of the Palestine Liberation Organisation for talks aimed at resolving Hamas's dispute with the Fatah movement of the Palestinian President Mahmoud Abbas.
In Israel the appointment of George Mitchell as special envoy of the US President, Barack Obama, to the Middle East has met with caution and suspicion.
Israeli Foreign Ministry officials were scrambling to put together a brief for Mr Mitchell, who is due to visit Jerusalem and the West Bank city of Ramallah this week, as well as Egypt and Jordan.
Israeli officials believe Mr Mitchell's first step will be to recommend the "road map for peace" plan announced by the former president George Bush in 2002 be extended.
Israelis have also begun to turn their attention to the general elections on February 10. With polls indicating the right-wing Likud party leader Benjamin Netanyahu is on track to return to the Prime Minister's office he occupied in 1996, the centrist Kadima Party leader, Tzipi Livni, warned yesterday that if the far-right won government it would lead to an inevitable rift with the US.
Recession hits Silicon Valley as layoffs pile up
By Anupreeta Das NEW YORK (Reuters) - The recession turned up late on Silicon Valley's doorstep but is likely to stay awhile, as technology companies slash thousands of jobs and rein in costs to make up for shrinking earnings and tight-fisted customers.
Job cuts in the technology sector have trailed other industries until recent weeks. Now they are coming fast and furious as the economic downturn grips the Valley, the strip of land in northern California that is home to household names like Google Inc and Amazon.com Inc.
Tech giants like Intel Corp and Microsoft Corp are laying off thousands of employees, while start-up companies are firing in smaller numbers as they struggle to survive with fewer customers and venture capital dollars.
And this is just the start, analysts say, expecting thousands more to lose their jobs this year as the recession forces the industry to slash marketing and capital spending.
"Organizations are saying, 'What is the absolute nuclear winter? Let's plan for that,'" said Adam Charlson, senior partner at executive search firm Korn/Ferry International Inc, who works closely with the recruitment divisions of top tech firms. "What you're seeing now is organizations putting those plans into reality."
Last year, Silicon Valley lost 11,700 jobs, according to Steve Levy, senior economist at the Center for the Continuing Study of the California Economy (CCSCE). The number is small compared to the 200,000 jobs lost after the dotcom bubble burst in 2000, but that is because the 2008 numbers don't reflect recent layoffs yet, he said.
"The headline is that the recession has hit Silicon Valley," Levy said. As a result, he said he was "substantially revising downward" employment predictions for 2009.
California's jobless rate hit a 14-year high of 9.3 percent in December, significantly above the national average of 7.2 percent, according to state officials.
ONCE BITTEN, TWICE PREPARED
Some analysts said they are reading the mass layoffs as preemptive acts by tech companies. When the last recession hit, tech companies were too slow in cutting costs and laying off workers, said Andy Miedler, a senior technology analyst at Edward Jones.
But not this time, he said. "Layoffs and cost-cutting are unfortunate, but companies have to make tough decisions in a rough economy to preserve their own financial position."
Mark Cannice, a professor of entrepreneurship at the University of San Francisco, said Silicon Valley has been "inoculated to some degree" after the dotcom bust.
"Many firms didn't survive .... The ones that survived are much more efficient and resilient and were funded on sounder business models," said Cannice, who publishes a quarterly Silicon Valley Venture Capitalist Confidence Index.
But he said Valley companies are not entirely immune -- especially venture capital-funded start-ups. As large companies like Microsoft and Google cut back on spending, start-ups that supply them with software and other IT could run into trouble.
With venture capital funding falling 71 percent in the fourth quarter of 2008 from a year ago, start-ups could be forced to fold up if they can't sustain their business and investors cannot fund them any longer.But mass layoffs in the tech sector need not necessarily be all doom and gloom. They could actually boost innovation as laid-off engineers, scientists and other highly skilled individuals decide to pursue their own ideas.
Calling it "forced" entrepreneurship, Cannice said he was optimistic that the current layoffs would "unleash the next wave of creative, thoughtful entrepreneurs."
Layoffs in the traditional tech sector could also spur employment in the alternative energy sector, recruiters said.
Neil Boyden, managing director of executive search firm Boyden's technology practice group, said the so-called "cleantech" sector -- which employs environmentally friendly technologies -- will continue to grow and offer jobs.
"It's not that the sky has fallen entirely," he said.
(Reporting by Anupreeta Das; Editing by Tiffany Wu, Richard Chang)
(anupreeta.das@thomsonreuters.com; +1 415-677-2511)
Suspected U.S. Missiles Kill 18 In Pakistan
NPR.org, January 23, 2009 · Suspected U.S. missiles killed 18 people on the Pakistan side of the Afghan border Friday, security officials said, the first attacks on the al-Qaida stronghold since President Obama took office.
At least five foreign militants were among those killed in the strikes by unmanned aircraft in two parts of the frontier region, an intelligence official said without naming them. There was no information on the identities of the others.
Pakistan's leaders had expressed hope Obama might halt the strikes, but few observers expected he would end a tactic that U.S. officials say has killed several top al-Qaida operatives and is denying the terrorist network a long-held safe haven.
The United States has staged more than 30 missile strikes inside Pakistan since August last year - a barrage seen as a sign of frustration in Washington over Islamabad's efforts to curb militants that the U.S. blames for violence in Afghanistan and fears could be planning attacks on the West.
Pakistan publicly protests the strikes in the northwest as violations of its sovereignty that often kill civilians and undermine its own campaign against terrorists that have also launched bloody attacks on domestic targets.
But many observers believe the government secretly agrees with the tactic and may provide intelligence on the targets, noting that Islamabad's admitting to assisting the attacks would be politically damaging.
The first attack Friday took place in the village of Zharki in North Waziristan, when a single drone fired three missiles in the space of 10 minutes, the security officials said.
The missiles destroyed two buildings, killing 10 people, at least five of whom were foreign militants, the officials said on condition of anonymity because they were not authorized to speak to the media.
Hours later, a second missile struck a house in South Waziristan, killing eight people, the officials said, giving no more details.
The United States does not acknowledges firing the missiles, which are believed to be mostly fired from drones operated by the CIA and launched from neighboring Afghanistan.
According to an AP tally based on accounts from Pakistani security officials, at least 263 people - most of them alleged militants - have been killed in the strikes since last August.
A U.S. strike on New Years Eve killed two Kenyans said to be among al-Qaida's top operatives on the FBI's most-wanted terrorist list, an American official said recently.
Gen. David Petraeus, who is in charge of the wars in Iraq and Afghanistan, told the AP late last year that at least three top extremist leaders were killed in recent months due to the missile strikes.
Pakistan's government has little control over the border region, which is considered a likely hiding place for al-Qaida chief Osama bin Laden and other terror leaders.
Obama is making the war in Afghanistan and the intertwined al-Qaida fight in Pakistan his top foreign policy priority. He has not commented on the missile strike policy, but struck a hawkish tone during his election campaign.
On Thursday, he named former U.N. Ambassador Richard Holbrooke a special envoy to both countries, an appointment welcomed by Pakistan's government.
In a statement, the country's foreign office said it "looked forward to enhanced and fruitful engagement with the special envoy to further the cause of peace and stability of the region."
Earlier Friday, a suicide attack and a roadside bomb killed two soldiers and three civilians in the Swat Valley, a one-time tourist destination close to the border region, officials said.
Pakistan has launched military offensives in parts of the northwest, but insurgents are making inroads in Swat, blowing up schools, killing police and soldiers and calling for the imposition of a hard-line interpretation of Islamic law.
Militancy in Swat is seen as especially dangerous for Pakistan because the valley lies away from the areas where al-Qaida and the Taliban have traditionally operated.
An indication of the difficulties facing the government, more than 1,000 hard-liners demonstrated in the capital, saying there would only be peace in Swat and other frontier regions if the government severs its ties with the United States.
"The lawlessness cannot end until the end of the pro-America policy," one speaker told the crowd gathered close to the Parliament building in Islamabad.