Opportunities in Business

Step Up 2 the Streets (2008)

2008-02-12T18:33:00.000-08:00

Overview

Director:

14 February 2008 (USA)

Very interesting movie...assertive, gives aplomb...and you can learn steps:)) Good for relaxation. I like that kind of movies. I don't need to fatigue my brain... So calm, fanny... Also, there's romance in it, and eternal battle between teenagers. It's a worth while. If you have enough time for movies, if you want to learn how to dance, if you need to know street steps, than I recommend you this movie... enjoy it... Maybe someone will not like this movie, everyone has a different taste, but I am sure that every teenager will like it, especially girls, 'cause they wanted to look like most of actress, want to know to dance.And it's good for practice,too.

U.S. Stocks Rise After Buffett Offers to Help Bond Insurers

2008-02-12T08:01:00.000-08:00

By Eric Martin
Feb. 12 (Bloomberg) -- U.S. stocks rose for a second day, led by financial shares, on expectations Warren Buffett's plan to take over liabilities from bond insurers will help calm credit markets.
Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., the three largest U.S. banks, climbed after Buffett said he's willing to take on $800 billion in municipal bond obligations in an interview with CNBC. Monsanto Co., the world's biggest seed producer, advanced for a third day on an increased profit forecast.
The Standard & Poor's 500 Index added 17.39 points, or 1.3 percent, to 1,356.52 at 10:24 a.m. in New York. The Dow Jones Industrial Average advanced 177.94, or 1.5 percent, to 12,417.95. The Nasdaq Composite Index climbed 20.87, or 0.9 percent, to 2,340.93. About five stocks rose for every one that fell on the New York Stock Exchange. Shares in Europe and Asia also gained.
``It's another potential solution to some of the credit problems,'' Mark Bronzo, who helps manage $11 billion at Security Global Investors in Irvington, New York, said of Buffett's offer. ``That's why the markets are responding well.''
Concern that bond insurers don't have enough money to pay claims on the $2.4 trillion in assets they guarantee has contributed to a 8.4 percent drop in S&P 500 financial shares in 2008. MBIA Inc., the largest bond insurer, lost 80 percent of its value in the last year before today, and smaller rival Ambac Financial Group Inc. slumped 88 percent, on concern that the companies will lose their AAA credit ratings.
Buffett's Offer
Citigroup added 76 cents to $26.57. Bank of America rallied 76 cents to $42.90. JPMorgan climbed 66 cents to $44.01. Bear Stearns Cos., the fifth-biggest U.S. securities firm, increased 61 cents to $80.37.
Buffett said he offered to take on the municipal liabilities of MBIA, Ambac Financial and FGIC Corp. One company turned down the offer and the two others haven't responded, Buffett, chairman of Berkshire Hathaway Inc., told CNBC.
Financial shares also climbed on plans to help delinquent homeowners avoid foreclosure. Bank of America, Citigroup and four other U.S. lenders will announce a plan to offer a 30-day freeze on home foreclosures while loan modifications are considered, two people said on condition of anonymity.
Schlumberger, Schering Plough
Schlumberger Ltd. advanced $1.26 to $81.75 after Bear Stearns raised its recommendation on the world's largest oilfield-services provider to ``outperform'' from ``peer perform,'' saying the company's offshore drilling and exploration make it ``well positioned for the next phase of the oilfield service business cycle.''
Schering-Plough Corp. gained 96 cents to $21.58. The maker of Vytorin and Zetia cholesterol pills reported fourth-quarter profit, excluding some items, of 52 cents a share, beating the 27-cent average estimate of 17 analysts surveyed by Bloomberg.
Time Warner Inc. gained 13 cents to $15.76 after UBS AG upgraded the stock to ``buy'' from ``neutral,'' saying it is undervalued.
General Motors Corp. dropped 44 cents to $27.56. The world's largest automaker posted a fourth-quarter loss of $722 million on rising costs in North America and a loss at its partially owned GMAC LLC finance unit. The $1.28-a-share deficit compares with a profit of $1.68 a share in the same quarter a year ago. Sales fell to $47 billion.
Economy Watch
Investors may turn their attention to reports tomorrow that economists expect will show sales at U.S. retailers fell in January for a second month, signaling the biggest part of the economy may be starting to stumble. Still, William Poole, president of the Federal Reserve Bank of St. Louis, said last night that the U.S. will probably avert a recession and the Fed's interest-rate policy is appropriate for the slowing economy.
Investors anticipate the central bank will lower its benchmark interest rate by a further half point by mid-March after five reductions to 3 percent since September. Fed officials are attempting to prevent the first U.S. economic contraction since 2001, and last month lowered the overnight bank-lending rate at the fastest pace since 1990.

The Hottie and the Nottie (2008)

2008-02-09T09:27:00.000-08:00

verview

Director:

Tom Putnam

Writer (WGA):

Heidi Ferrer (written by)

Release Date:

21 February 2008 (Russia)

Genre:

Comedy / Romance

Tagline:

That's hot. That's not.

Plot Outline:

Nate moves to L.A. to track down Cristabel, the woman he's been in love with since childhood, only to discover that his plan to woo her only has one hurdle to overcome: what to do with June, Cristabel's ever-present, not-so-hot best friend? What's even more complicating is Nate's growing feelings for June, whose true beauty starts to emerge.

Welcome Home Roscoe Jenkins

2008-02-09T01:55:00.000-08:00

Overview
Director:Malcolm D. Lee
Writer (WGA):Malcolm D. Lee (written by)
Release Date:8 February 2008 (USA) more
Genre:Comedy
Tagline:Going home is no vacation.
Plot Outline:A successful talk show host leaves Los Angeles to reunite with his family in the Deep South.

Wall St. ends week mixed

2008-02-09T01:50:00.000-08:00

NEW YORK (AP) -- Wall Street finished a dismal week with a mixed performance Friday as investors grappled with fears about insurers of distressed mortgage-backed bonds and anxiety about the broader economy.
The Dow Jones industrial average, which rose in earlier trading, fell more than 60 points, while the Nasdaq composite index managed a gain. Both ended the week down more than 4 percent, however, and it was the Dow's worst week, percentage-wise, since March 2003.
The market has been shaken in recent weeks by uncertainty surrounding bond insurers and whether they'll be able to handle huge losses in the value of mortgage-backed bonds.
On Thursday, Moody's Investors Service lowered its rating on the bond insurer Security Capital Assurance Ltd. Then at midday Friday, Fitch Ratings, another credit rating agency, put a series of mortgage-backed securities insured by MBIA Inc. on negative watch.
"The bond insurers are really on people's minds," said Kim Caughey, equity research analyst at Fort Pitt Capital Group. "This is a horribly complex issue."
If the ratings agencies downgrade more bonds and bond insurers, the moves could hurt the banks that own the bonds -- and "just drive the credit markets into a downward spiral," Caughey said. "It's things happening further upstream that's making people nervous."
Financial stocks fell due to heavy selling in the corporate bond and leveraged loan markets, and meanwhile, soaring commodities prices hit retailers, said Miller Tabak equity strategist Peter Boockvar.
Crude oil prices jumped $3.66 to $91.77 a barrel on the New York Mercantile Exchange on expectations of disruptions in Nigerian exports.
Retailers, which posted poor sales figures Thursday, have said consumer spending is not only slowing because of problems in the housing market, but also because of high gasoline and food prices. Other businesses in the nation's service sector, which earlier this week reported a contraction in January, have struggled, too, with high commodities costs.
The Dow dropped 64.87, or 0.53 percent, to 12,182.13 -- above its lows of the day, but well off its highs, too. The biggest losers among the 30 Dow companies were financial companies American Express Co. and JPMorgan Chase & Co.
Broader stock indicators were mixed. The Standard & Poor's 500 index fell 5.62, or 0.42 percent, to 1,331.29, while the Nasdaq composite index rose 11.82, or 0.52 percent, to 2,304.85.
The Dow ended the week down 561.06, or 4.40 percent, while the S&P 500 index lost 64.13, or 4.60 percent, and the Nasdaq fell 108.51, or 4.50 percent.
The technology-heavy Nasdaq fared better than the other indexes Friday thanks partly to Amazon.com Inc., which authorized a $1 billion share buyback program. The online retailer rose $2.59, or 3.7 percent, to $73.50.
Government bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.65 percent from 3.73 percent late Thursday.
SCA plunged 60 cents, or 23 percent, to $2, and MBIA rose 40 cents, or 2.8 percent, to $14.60. Though MBIA's bonds were downgraded by Fitch, the market was pleased because late Thursday it boosted the size of a share offering to $1 billion from $750 million in response to oversubscription by investors.
A motley batch of corporate earnings failed to provide much reassurance to investors. Some companies such as software maker McAfee Inc. and jewelry maker Tiffany & Co. seem to be faring well despite the economic slowdown, but others, including paper and wood product maker Weyerhaueser Co., are struggling.
McAfee posted a better-than-expected fourth-quarter profit late Thursday and rose $2.92, or 9.2 percent, to $34.65. Tiffany rose $1.68, or 4.4 percent, to $39.86 after predicting fiscal 2008 earnings would beat its fiscal 2007 profit forecast, based on an expected 10 percent rise in global sales.
Weyerhaeuser swung to a fourth-quarter loss as the slumping housing market dampened demand for lumber; the company expects the downturn to extend through the year. Weyerhaeuser fell $2.37, or 3.7 percent, to $62.34.
And Alcatel-Lucent reported a $3.8 billion loss in the fourth quarter, eliminated its 2007 dividend, and predicted that 2008 would be a difficult year. Shares of the Franco-American company, which makes telecommunications equipment, fell 25 cents, or 4 percent, to $6.
The mix in corporate success has made it hard to determine how weak the economy is getting.
Data on Friday showing a higher-than-expected rise in U.S. wholesalers' inventories provided Wall Street with little new evidence about the economy's health. An increase can be positive, suggesting that companies are betting on a rise in demand, but it can also serve as a worrisome sign that inventories are building up unintentionally because demand is waning.
The dollar fell against other major currencies, while gold prices rose.
Declining issues outnumbered advancers by about 3 to 2 on the New York Stock Exchange, where consolidated volume came to 3.66 billion shares, down from 4.44 billion Thursday.

The Eye 2008

2008-02-07T16:07:00.000-08:00

In this era of stem cell research, where genetic re-programming results in human heart cells beating in a Petrie dish, perhaps The Eye's premise of cellular memory is not so far-fetched. Blinded during a childhood accident, gorgeous and gifted first violinist Sydney Wells (Jessica Alba) undergoes a corneal transplant. Previously confident in the dark, sweet Sydney's secure world becomes terrifying when she finds she can see not only dead people, but the prophetic visions of the former owner of her newly restored vision.Everyone around her thinks she's going mad, from her unsympathetic maestro to her concerned sister Helen (played poorly by an underused and under directed Parker Posey) to her conflicted doctor in an underwritten and choppy character arc. (Is Alessandro Nivola playing an eye doctor or a psychoanalyst? Is he a staunch professional or driven by love to cross the line?) Sydney feels compelled to decipher her visions, sensing that if she does, the troubled spirit of the original donor may finally find peace.Directorial flaws aside, The Eye's strengths lie in its superb visuals, effective scares and, above all, the impressive and convincing performance of its leading lady. Appearing in virtually every scene, Alba has you blinking tears when her eyes sting and second-guessing your own eyes when you see what she sees.A remake of the Pang Brothers 2002 Hong Kong hit Gin gwai, The Eye is actually a Hollywood rip-off, traversing the familiar territory of recent thriller Blink, 1978's Eyes of Laura Mars and even Roger Corman's 1963 horror pic X: The Man With X-Ray Eyes.The Eye has satisfying echoes of J horror plus ghost stories such as The Sixth Sense and The Others.

Stocks Finish Higher After Fitful Day

2008-02-07T16:03:00.000-08:00

NEW YORK (AP) -- Wall Street finished moderately higher in fitful trading Thursday as investors, still nervous about the economy, decided to buy back into a stock market pummeled by three straight days of losses.
With the market having largely priced in the possibility of a recession, many believe there are plenty of valuable stocks at cheap prices. Before Thursday, the Dow Jones industrial average had fallen this week by 543 points, or 4.26 percent, giving up all of last week's sharp gains.
Though the market ended up rising Thursday, trading was extremely fickle due to a batch of gloomy data that included declining January sales at major retailers, a drop in December sales of pending homes, and a disappointing outlook from Internet networking supplier Cisco Systems Inc. The major indexes seesawed throughout the day.
''We're kind of trying to create a silk purse out of a sow's ear here,'' said Hugh Johnson, chief investment officer of Johnson Illington Advisors. ''The earnings are lousy, the economic numbers are lousy.''
The Dow rose 46.90, or 0.38 percent, to 12,247.00 after trading down about 80 points and up about 130. The index remains more than 13 percent below its record close on Oct. 9, 2007 of 14,164.53.
Broader stock indicators also recovered some ground. The Standard & Poor's 500 index rose 10.46, or 0.79 percent, to 1,336.91. The technology-heavy Nasdaq composite index rose 14.28, or 0.63 percent, to 2,293.03.
Government bonds fell. The 10-year Treasury note's yield, which moves opposite its price, rose to 3.76 percent from 3.60 percent late Wednesday.
Investors may have been encouraged to buy back into stocks due to a rise in the dollar, whose decline over the past several months has contributed to worries about inflation and a possible drop in foreign interest in U.S. investments.
Peter Cardillo, chief market economist at Avalon Partners, said the dollar's advance followed remarks by European Central Bank chief Jean-Claude Trichet that the United States and Europe remain economically intertwined. This suggested to investors that strength in other countries can help stabilize the United States during its rough patch. Fears of a global economic slowdown have been weighing on stocks around the world.
As expected on Thursday, the Bank of England lowered its key interest rate by a quarter percentage point to 5.25 percent, its second cut in three months, while the European Central Bank left its key rate unchanged at 4 percent.
Another argument for bargain hunting Thursday was that the recent spate of negative economic data raises the likelihood of the Federal Reserve lowering interest rates again to spur growth. Atlanta Fed President Dennis Lockhart said Thursday the Fed's ''focus, religiously, is on the general economy, the real economy.''
Moreover, the stock market often portends economic declines, rather than the other way around.
''Stocks do worse during times of slow growth than they do during recession,'' said Brian Gendreau, investment strategist for ING Investment Management. ''If we're in a shallow and short recession, for all anyone knows, we might be halfway through.''
The market's indecisive movements throughout the day show, however, that it has not moved past the many worries swirling about personal spending, the crumpling housing market and deteriorating conditions in consumer credit.
Late Wednesday, Internet networking supplier Cisco Systems Inc. issued a 10 percent sales growth forecast for its current quarter that fell well below the 15 percent Wall Street projected. But Cisco finished up 30 cents at $23.38, after some investors saw the stock was undervalued.
And in a counterintuitive move, retail stocks -- also regarded as cheap right now -- rose even after the nation's retailers logged their worst January in about 40 years. Wal-Mart Stores Inc. reported a 0.5 percent rise in January same-store sales, or sales at stores open for at least a year, while Target Corp., Gap Inc., Limited Brands Inc. and AnnTaylor Stores Corp. each said their sales fell.
Not all news about retailing was bad -- J.C. Penney Co. raised its earnings forecast for the last three months of 2007. Its stock jumped $3.72, or 8.5 percent, to $47.44.
But on top of the mostly weak retail reports, the Labor Department reported that jobless claims fell last week by 22,000, a smaller decline than many economists predicted, and the National Association of Realtors said pending sales of existing homes fell 1.5 percent in December.
Light, sweet crude oil rose 97 cents to settle at $88.11 a barrel on the New York Mercantile Exchange. Gold prices also climbed.
Oil prices had been gradually declining, so it's possible a slower economy is keeping inflation from accelerating. Still, many market participants are anxious about how much longer the Fed can continue to lower interest rates given relatively high food and energy costs.
The Russell 2000 index of smaller companies rose 10.29, or 1.49 percent, to 702.78.
Advancing issues outnumbered declining shares by nearly 2 to 1 on the New York Stock Exchange, where consolidated volume came to 4.44 billion shares, down from 3.89 billion on Wednesday.
Overseas, many Asian markets were closed for a holiday, but Japan's stock market was open and its Nikkei average rose 0.82 percent. In Europe, Britain's FTSE 100 fell 2.58 percent, Germany's DAX index fell 1.66 percent, and France's CAC-40 fell 1.92 percent.

Obama and Clinton Settle In for the Long Run

2008-02-06T16:30:00.000-08:00

With no breakout winner in Tuesday’s Democratic primaries, Senators Hillary Rodham Clinton and Barack Obama began fortifying for a drawn-out and expensive campaign on Wednesday, with Mrs. Clinton disclosing that she had lent her campaign $5 million and Mr. Obama rejecting calls for several more debates.

Mrs. Clinton’s campaign confirmed that she had lent her campaign $5 million at the end of January for advertising and organizing expenses in Tuesday’s 22 races, an acknowledgment that her fund-raising had fallen far behind her rival’s. Aides said she would consider lending her campaign more money if necessary to remain viable.

Mr. Obama raised $32 million in January, while Mrs. Clinton’s campaign brought in only about $13 million, officials said.

At her campaign headquarters in northern Virginia this afternoon, Mrs. Clinton characterized the loan this way: “My opponent was able to raise more money, and we intended to be competitive, and we were, and I think the results last night proved the wisdom of my investment.”

Mrs. Clinton made millions of dollars on her memoir, “Living History,” while her husband, former President Bill Clinton, has made tens of millions of dollars since leaving the White House by selling his memoir, giving paid speeches and entering a lucrative partnership with Ron Burkle, a Los Angeles billionaire.

The Clinton campaign sent out an urgent e-mail appeal on Wednesday, seeking to raise $3 million in the next three days.

Mrs. Clinton also challenged Mr. Obama to a series of debates over the next month, usually a tactic of a trailing candidate. Mr. Obama said he would consider it but insisted that the Clinton campaign and the media would not set his schedule.

Mr. Obama, while declaring himself still the underdog in the race on Wednesday morning, expressed confidence that he would do well in contests this weekend and next Tuesday in Louisiana, Washington, Nebraska, Maine, Virginia, Maryland and the District of Columbia. His campaign also expects him to do well in Wisconsin and Hawaii, where he was born and largely raised, on Feb. 19.

“We are in a fierce competition, and we have many more rounds to fight,” Mr. Obama said at a Chicago news conference. With a smile, he added: “We’re turning out to be a scrappy little team.”

Mrs. Clinton and her advisers countered that she should now be considered the underdog, even though they believe she emerged from Tuesday’s voting with a small lead in delegates, though the actual delegate totals remained muddled. Mrs. Clinton’s chief spokesman, Howard Wolfson, said in a conference call Wednesday afternoon that Mr. Obama had become the candidate of the Democratic “establishment,” because of his endorsement by Senator Edward M. Kennedy and a number of other senators and governors.

On the Republican side, Senator John McCain canceled a trip to Germany this weekend for an annual defense conference to, in his words, “wrap this thing up.” He piled up victories in many of the biggest states on Tuesday and, according to unofficial tallies, has a substantial lead in delegates. According to the Associated Press, Mr. McCain has 703 delegates overall to 269 for Mitt Romney and 190 for Mike Huckabee. It takes 1,191 delegates to secure the Republican nomination.

Charles Black, the McCain campaign’s senior strategist, claims that Mr. McCain has 775 Republican delegates and says it is mathematically impossible for either of his rivals to catch him.

Both Democratic candidates claimed a narrow lead among the 1,681 delegates at stake in the 22 contests, but counts by several news organizations left the winner unclear. The Associated Press said Mrs. Clinton won 739 Super Tuesday delegates to Obama’s 700, with the fate of more than 200 delegates undecided. NBC News projected Mr. Obama would win about 840 delegates to Mrs. Clinton’s 830.

Mr. Obama prevailed in 13 states, while Mrs. Clinton won 8, among them New York, California, New Jersey and Massachusetts. An unofficial popular vote tally for Time magazine showed the two candidates virtually tied at the end of the long night.

Although many outsiders speculated that Mr. Romney would leave the contest if he did not at least fight Mr. McCain to a draw on Tuesday, advisers said he would continue his quest for the nomination.

Mr. Romney delivered a pep talk to his staff this morning, Mr. Romney’s son Tagg, a senior campaign adviser, said. Advisers are looking into buying airtime to broadcast television commercials in some of the upcoming states.

“They’re making phone calls tonight,” said Tagg Romney.

Mr. Romney has already spent at least $35 million of his personal fortune on the race and was open to investing more, his son said, although he was also seeking to raise outside funds.

Mr. Romney is trying to paint himself as the true conservative in the Republican race, but his argument has been undercut by the performance of Mr. Huckabee, a former governor of Arkansas and Baptist minister. Mr. Huckabee won contests in four southern states and West Virginia on Tuesday.

Republicans hold caucuses in Kansas and Washington and a primary in Louisiana on Saturday. There are Republican primaries in Virginia, Maryland and the District of Columbia on Feb. 12. Like the Democrats, they hold a primary in Wisconsin on Feb. 12 and primaries in Ohio, Rhode Island, Texas and Vermont on March 4.

Mr. McCain, seeking to consolidate his position as front-running and looking toward uniting the party for the fall campaign, said on Wednesday that his critics on the right should focus on shared values and save their ammunition for the general election battle.

“I do hope that at some point we would just calm down a little bit and see if there’s areas we can agree on,” McCain said at a news conference in a Phoenix airport hangar. Vociferous critics on Mr. McCain’s right, including Rush Limbaugh and James Dobson, have been urging Republicans to defeat Mr. McCain because he is too moderate and prone to working with Democrats.

The two Democrats met with their campaign advisers Wednesday morning to recalibrate their plans for the coming weeks. After 28 state primaries and caucuses from Jan. 3 to Feb. 5, the Democratic calendar now airs out a bit.

Mr. Obama planned to head to Louisiana, Maryland, and Virginia in the coming days, while Mrs. Clinton intended to campaign in Virginia, Maine which holds caucuses on Sunday and maybe Louisiana, which she and Mr. Obama have often visited, in part to draw attention to the slow pace of recovery from Hurricane Katrina.

Both campaigns are already looking ahead to March 4, when Ohio, Rhode Island, Texas, and Vermont vote, producing the second-largest single day total of delegates, 534. Mr. Wolfson, the Clinton adviser, said Mrs. Clinton expected to do well in Ohio, where she has a 20-point lead in polls and the support of Gov. Ted Strickland. Ohio is favorable terrain for her because there are large numbers of her most reliable voters, men and women without college degrees and incomes under $50,000 a year.

Texas should be friendly territory, as well, because of the large numbers of Hispanic voters, who are voting for Mrs. Clinton by 6-4 or 7-3 margins over Mr. Obama.

The three senators in the race — Mr. Obama, Mrs. Clinton and Mr. McCain — were all in Washington on Wednesday afternoon for a vote on a package to stimulate the economy.

Stocks plunge on service sector weakness

2008-02-05T15:03:00.000-08:00

NEW YORK - Wall Street plunged Tuesday, driving the Dow Jones industrials down 370 points after investors saw an unexpected contraction in the service sector as evidence the economy is sinking into recession. It was the Dow's biggest percentage drop in almost a year.

The volatility that pummeled stocks in January returned with the news that the service sector shrank last month for the first time since March 2003. The report from the Institute for Supply Management wiped out the nascent optimism about the economy that had sent stocks surging higher last week.
"The report drives a nail into the coffin from investors' minds that we're in a recession," said Todd Salamone, director of trading at Schaeffer's Investment Research. "That doesn't mean stock prices in the months ahead will be lower. But when you see headline numbers like this, there tends to be a reactionary sell."
The ISM said its index of service sector activity, which accounts for about two-thirds of the economy, dropped below 50, a level that indicates contraction. The market had expected another month of growth, and the disappointment contributed to Tuesday's $500 billion loss in the Dow Jones Wilshire 5000 Composite Index, an index that measures the movement in 5,000 U.S. stocks.
Alongside the Labor Department's report last week showing the first monthly U.S. jobs decline in more than four years, the data on the service sector — which includes businesses ranging from restaurants to retailers to banks — was particularly worrisome to investors.
Though Wall Street hopes the Federal Reserve will keep slashing interest rates to stoke the economy, some believe the central bank, which lowered rates 1.25 percent in just over a week last month, acted too late. Rate cuts take several months to take effect, and moreover, many analysts are skeptical that rate cuts are the correct remedy for an economy saddled with bad debt in the wake of a housing market implosion.
Fitch Ratings' plans to lower the rating on more than $100 billion wrapped up in bond funds called collateralized debt obligations added to the host of concerns plaguing Wall Street. Downgrades would mean the securities — many of which are backed by mortgages — are worth even less than many investors thought. That could cause more problems for strugging banks, brokerages, and bond insurers hurt by investments in mortgages that went sour.
The Dow fell 370.03, or 2.93 percent, to 12,265.13, after falling 108 points on Monday. Tuesday's slide was the blue chip index's largest one-day percentage drop since it lost 3.3 percent on Feb. 27, 2007, and its largest point drop since it fell 387 points last Aug. 9.
The broader Standard & Poor's 500 index lost 44.18, or 3.20 percent, closing at 1,336.64, while the Nasdaq composite index tumbled 73.28, or 3.08 percent, to 2,309.57.
In Monday and Tuesday's trading, the Dow gave up most of the gains it made last week, when it jumped 536 points, or 4.39 percent, in a burst of optimism about the economy. It's not surprising that the volatile market would pull back on any bad economic news — but some analysts claim stocks should be near their bottom given how low investors sentiment is right now.
According to JPMorgan equities analyst Thomas J. Lee, the three worst readings on record in the ISM's service sector index are associated with stocks rising in the ensuing three months — on average, by 6 percent.
Even if the stock market is near its low point, though, it has a lot of ground to recover. The Dow is down more than 13 percent since its Oct. 9 record settlement of 14,164.53. Meanwhile, the S&P 500 — the measure most watched by market professionals — is down 8.9 percent for the year, the worst year-to-date performance for the index ever. The S&P 500 has fallen 14.6 percent from its Oct. 9 high.
Bond prices jumped as investors sought the safety of government-backed debt. The yield on the benchmark 10-year Treasury note, which moves opposite its price, sank to 3.56 percent from 3.64 percent late Monday.
The ISM report is particularly alarming, said Bernard Baumohl, managing director of the Economic Outlook Group LLC. Because Americans will not pare back spending significantly on necessary services like health care and transportation, January's rapid decline in service sector activity suggests that investors may have underestimated how damaged the economy is, he wrote in a research note.
On Tuesday, the biggest losers in the stock market were banks, which have already suffered huge losses in their investment portfolios last year and are now socking billions of dollars away to prepare for debt-burdened consumers to stop making payments.
Dow component Citigroup Inc. fell $2.17, or 7.4 percent, to $27.05, while JPMorgan Chase & Co., another Dow component, fell $2.33, or 5 percent, to $44.28. Washington Mutual Inc. fell $1.08, or 5.6 percent, to $18.08; Bank of America Corp. fell $1.66, or 3.8 percent, to $42.37; and Wachovia Corp. fell $1.35, or 3.8 percent, to $34.18.
"When you have the financials in intensive care such as they are, for any economy like ours, they must heal," said Quincy Krosby, chief investment strategist at the Hartford. "They drew us into this; they must lead us out."
Light, sweet crude oil declined $1.61 to $88.41 a barrel on the New York Mercantile Exchange, as traders bet that a slower economy would dampen energy demand. An extended drop in energy prices could aid businesses that are finding their supply costs are rising, but that their customers are having trouble taking on price increases.
The dollar rose against other major currencies, while gold prices fell.
Declining issues outnumbers advancers by about 4 to 1 on the New York Stock Exchange. Consolidated volume came to 4.18 billion shares, down from 4.51 billion on Monday.
The Russell 2000 index of smaller companies fell 21.88, or 3.02 percent, to 701.58.
Stocks overseas also retreated. Japan's Nikkei stock average fell 0.82 percent; Hong Kong's Hang Seng index fell 0.89 percent; Britain's FTSE 100 fell 2.63 percent; Germany's DAX index fell 3.36 percent; and France's CAC-40 fell 3.96 percent.

Microsoft's bid for Yahoo

2008-02-03T06:10:00.000-08:00

(CNN) -- News that Microsoft was making a $44.6 billion bid to buy Yahoo was greeted with skepticism by many CNN.com users on Friday.
The word "monopoly" came up repeatedly in e-mails from people concerned that Microsoft would stifle competition in the Internet search field.
Other readers said that Microsoft and Yahoo were a perfect fit and the deal would be good for consumers.
Shaun Carney said the deal would even help arch-rival Google.
"I think the increased competition this merger brings will force Google to stay on top of its game by offering more innovative Internet tools and expanding on the tools it already offers," he said.
Here are a sampling of responses from CNN.com users:
Diane Burke of Weeksbury, KentuckyI think it would definitely be an interesting combination. Everyone recognizes the names Yahoo and Microsoft, but everyone also says, "Did you Google it?" Such a catchphrase is going to be hard to beat.
Brian Kaldenberg of St. Louis, MissouriGoogle has positioned itself as the world's knowledge source. I highly doubt Microsoft acquiring Yahoo will have a detrimental effect on Google's market share. "Google" is now often used as a verb... a brand manager's dream... a competitor's nightmare.
Scott G. of Egg Harbor Township, New JerseyI was a Yahoo user for years along with Hotmail from Microsoft. Then Google came along.....Google Earth, Google Picasa, Google Toolbar and Gmail. Google is so innovative with everything they do. Yahoo and Microsoft....same old story.....Yahoo with the same offerings as always and Microsoft..well, just being Microsoft. I don't think the merger will do anything for either company except improve the Yahoo shareholders' bank accounts.
Michael Grosser of Estero, FloridaRight now, Yahoo offers a lot of features and tools at no cost for all different levels of Internet users. They even offer source code for developers for free. Microsoft seeks nothing but profit. Undoubtedly, they'll do nothing other than find ways to start gouging for Yahoo's formerly non-priced features. Microsoft's corporate greed will ruin the great thing that Yahoo currently is.
Shaun Carney of Laurelville, OhioI think the merger will provide more competition for Google. I don't think the merger will allow Microsoft to outpace Google, though. Google has a tremendous foothold on its market -- I think the increased competition this merger brings will force Google to stay on top of its game by offering more innovative Internet tools and expanding on the tools it already offers.
Toni Suarez of Hacienda Heights, CaliforniaPerhaps it would bring better high technology innovations to e-mail and help in researching and developing a better Internet!
Rick R. of Edgewater, FloridaSounds like a monopoly try to me. If the merger goes through, I'll drop my Yahoo account and sign up for Google.
Mark Galeassi of Kansas City, MissouriThis is the best move for both parties. Yahoo has the ideas and Microsoft has the money to finally market these ideas correctly. Let's just hope Yahoo jumps at the best thing to ever come its way.
Chris S. of Ankeny, IowaI use Google.com because it is not filled full of news, stock, and other garbage. I can customize Google if I want, but I leave it clean. It will never be touched by the design whizzes at Microsoft or Yahoo. Bring back simple and you will win. If you keep up the greediness to add money, than you will lose.
Luke Gregg of Austin, TexasIf this was to happen, I would stop using my Yahoo e-mail account because I don't like the feeling of Microsoft snooping in my business. It is creepy to think about, I am a Mac user specifically because I will never trust Microsoft after its monopoly in the '90s.
Antonio Simmons of Parkville, MarylandMicrosoft purchasing Yahoo would be nothing more than an attempt from Microsoft to further impose upon the masses their shoddy software and obtain more wealth for the company. In my honest opinion, they will never be able to compete with Google because Yahoo and Microsoft's current search engine are too inferior to compete. Even if combined, they still lack. Microsoft needs to accept its place as a OS maker "Even though they still lag at that as well" and Yahoo needs to keep its place as a good e-mail provider.
Seth Goldberg of Plainview, New YorkI view the merger as a necessary element in preventing a monopolistic and unrivaled growth on the part of Google. Yahoo's management has been incapable of creating an effective business model to insure the company a healthy existence founded upon continued innovation and growth. I am confident that the addition of Microsoft's R&D and marketing prowess will be pivotal in creating the necessary sustainable innovation and growth that Yahoo must incorporate into their corporate DNA to protect consumers against what seems to be Google's unrivaled appetite for global domination of Internet-based search platforms and wireless related services.
Randy Mc, Carlsbad, CaliforniaI personally hate Microsoft, from great minds comes mediocre software! I would not use Yahoo anymore for anything if they sell to Microsoft.
Corey Davis of Morton, Illinois Microsoft is already seen by many as "too large" a company, or one that still has something of a monopoly in the computer industry. Not so much in the Internet search business, but when you think of Microsoft that isn't the first thing that comes to mind. The merging of Yahoo and Microsoft would probably create quite a bit of resentment.
Stuart Hellinger of New YorkI think it is horrible. Microsoft has bloated software, lousy customer service and gives the impression that it does not care about the end users. I try to avoid them as much as possible. They will probably destroy Yahoo, which has one of the larger job search portals in HotJobs! Feh! Microsoft wants to be a monopoly. They should have been broken up by the government.
Chris Cunningham of Alexandria, VirginiaI don't think Microsoft or Yahoo could take on Google. Google does things right by paying heed to the old adage "Less is more." Google's site is easy to use and there is no clutter. Microsoft and Yahoo both like to have flood of links and information on their pages, but I think that is their main weakness. Users running searches on MSN or Yahoo get many useless results, and it becomes cumbersome waiting for all the fancy graphics and java to load. If they do merge, the two companies should focus on maintaining all of the popular features they both offer, but streamline their Web site as much as possible.

Microsoft proposes Yahoo tie-up to challenge Google

2008-02-01T14:37:00.000-08:00

A long rumoured move by Microsoft has finally happening, the software giant is making an unsolicited takeover bid for internet portal Yahoo. It has offering 30 billion euros, that is 62% more than Yahoo's closing stock price on Thursday.Scott Kessler, an analyst with Standard & Poor’s said this lets Microsoft better challenge Google: "If you think about this, it's really all about one thing - it's about competition with Google, and Microsoft and Yahoo frankly have had some difficulties being successful in competing with Google; they've had some small victories in the last number of months, but ultimately Microsoft decided the time was right to strike."At the moment, Google is number one in terms of site visits with a monthly average of 530 million last year. Microsoft and Yahoo are not that far behind, but Google dominates the global Web search market. Microsoft is by far the biggest company in terms of the value of its shares.Not only does Google have more than three quarters of the internet search market it is also strong in online advertising and is diversifying into software, mobile phones and navigational mapping.Bill Gates' billions would be very useful to Yahoo which has been losing market share to Google. However critics of a merger say that Microsoft and Yahoo have very different corporate cultures and many overlapping businesses. Yahoo says it will evaluate the Microsoft offer "carefully and promptly."

Rambo (2008)

2008-01-31T05:35:00.000-08:00

Sly Stallone has really hit the mark with this one. I was very nervous after seeing the trailers but am glad to report that the king of action is back. The action scenes are beyond anything ever seen before but still feel very real thanks to no cgi being used. The music is what I'd hoped for - using the same themes as the previous instalments although is a little understated. This is nothing like Die Hard 4.0 (which i also enjoyed) - it's just gone the other direction IE more raw and gritty. Sly has cleverly kept the dialogue to a minimum..but then again I always thought actions speak louder than words - NOW WATCH RAMBO'S ACTIONS!! It is a real shame however that Richard Crenna is no longer with us.

The Condemned

2008-01-29T14:51:00.000-08:00

The Condemned is a movie that kinda come out of the blue to me one day. I had stumbled across it on IMDb and became excited to see it because it seemed like quite an interesting concept. It seemed like a nice action flick - but WWE, the people behind the stupid horror flick "See No Evil", were making it so I was a bit cautious as to what the outcome would be. Surprisingly, this movie has taken me by surprise and I can say that it is a great, fun action movie with great fight scenes, a nice plot and a lot more. The plot revolves around 10 prisoners on death row (including Stone Cold "Steve Austin" himself and Vinnie Jones) who are sent to an island in the middle of nowhere to fight each other to the death as it is broadcast online, leaving one survivor who leaves the island with freedom and a cash prize. The plot is actually the main thing that attracted me to see the movie. It sounds like "Battle Royale", which is a great flick, so it was great to hear a familiar idea bought to the screen again. It's not a stupid plot like it might sound to some people, but it's just a simple one and a fun one which doesn't require much thinking. Most of the fight scenes in the movie are great, and there's plenty of fights, action and explosions going on non-stop throughout the movie. The first few fights I'll admit are the better ones, but the others are good enough too and still entertaining to watch. I feel that certain characters in the movie are killed off rather too quickly though and some seem to disappear for a while, and then sooner or later get killed off the next time we see them again. The character development is good, but I do feel like we could have spent a little bit more time with one or two of them - mainly the women actually. The cast is good too, and provide good performances. Wrestler Steve Austin doesn't give the best performance but he is good enough. I feel some of his lines weren't delivered too great, but he does make a good action hero and delivers some good fight sequences for us to witness. I'm not going to blame the guy though as he isn't a professional actor and could have easily given a horrible performance but he doesn't. Vinnie Jones is, well, Vinnie Jones - the same old Vinnie Jones with the accent, gritting of the teeth and tough face - and yet still gives a good performance. Tory Mussett, who I had only seen in the terrible Boogeyman, also gives a good performance and this time round has a character to work with. The others are good too, and there's not one performance in the movie that I could say was bad acting. While The Condemned could have gotten a higher rating from me if it had had a few better fights and a bit more screen time for some characters, it hardly has anything negative about it. It's a great action movie with lots of explosions, fights and action to keep you entertained. Don't let the fact that it is made by WWE put you off the movie, it's a great action movie and definitely worth checking out if you want a great action movie to watch.

The Bucket List

2008-01-23T04:56:00.000-08:00

One of the most fun and uplifting films of the year, Rob Reiner's The Bucket List is also a likely contender for Academy Award nominations. Wonderfully sarcastic dialogue, poignant exchanges between excellently crafted characters, and an overall beautiful tale of mortality and morality, The Bucket List is an excellent opportunity for two of the greatest actors of our time to show off their inimitable techniques. Jack Nicholson and Morgan Freeman have a chemistry that will have you laughing until you cry and crying at the sight of something truly majestic.Edward Cole (Jack Nicholson) is an incredibly wealthy hospital owner who firmly believes that he's running infirmaries instead of health spas, and therefore demands that each room contain two beds and two patients. When a twist of fate lands him in his own hospital, he's stuck sharing a room with Carter Chambers (Morgan Freeman). Both men are dying of cancer, and the doctors give each of them only a few months left to live. The two slowly but surely realize how much they enjoy each other's company, so when Carter begins writing a "bucket list", Jack prompts him to see it through. The "bucket list" is a list of all the things both Edward and Carter would like to accomplish in their remaining months (before they kick the bucket) and with Cole's wealth, the two end up touring the world, skydiving and racecar driving. As their list of goals begins to come to an end, they realize how much they've truly lived just in the last few months alone, and how much their short friendship has impacted their lives.Jack Nicholson's performance is excellent as the curmudgeonly Ebenezer character that receives a change of heart and a change of view with Carter's friendship. Little character development is necessary as we have come to recognize Jack's style over the years. We're already familiar with his character and relate to him in much the same way we feel about all of his recent projects. He's attained a level of recognition that allows us to acknowledge him simply as Jack. Regardless of his role, he's still Jack, and he doesn't disappoint.The same can be said for Morgan Freeman who continues to play roles that accentuate his knack for worldly, wise and good-natured characters that can make us laugh and cry from moment to moment. Rarely do we see two actors work so well together – this odd couple appears to have been destined for these roles. The chemistry between these veterans is pleasantly refreshing, and because of it, The Bucket List is one of the most entertaining films of the year.Another aspect, which is a great credit to screenwriter Justin Zackham, is the dialogue, which is continually hilarious even while it borders on heartbreaking. Sarcasm and cynicism are proudly worn by Jack, and the conversations conducted between the two are never dull. Meaningful, affecting and downright funny, the script is amazingly well paced and flows more naturally than anything in recent memory.Nearly everything is likable about The Bucket List, except the tone of the film, which many awards voters and critics may feel is too repetitious of late. The film is uplifting and heartwarming, and while the conclusion strives for unpredictability, comparisons may be drawn to similarly crafted works. "Driving Miss Daisy" and "As Good as it Gets" are immediately brought to mind, especially because these include the same actors, although the morals of "A Christmas Carol" and "It's A Wonderful Life" are clearly beneath the surface of this feel-good comedy. Despite these comparisons, The Bucket List is wholesome entertainment that will certainly bring director Rob Reiner back into the spotlight, especially after his unpropitious previous project, "Rumor Has It…".

27 Dresses

2008-01-22T16:46:00.000-08:00

On Thursday, December 27, my friends and I went to the sneak preview of "27 Dresses". At first, I wasn't excited to see it because I thought it would be just another cheesy romantic comedy, "chick-flick" if you will. I was wrong. "27 Dresses" was a romantic comedy everyone could enjoy. That's right! I said EVERYONE (including guys).

Katherine Heigl is great in the film as Jane, the optimistic bridesmaid who wants a shot of love for herself someday and feels the the 27 bridesmaid dresses she keeps in her closet is a calling that its time for her to get a dress of a different kind.

Judy Greer, who's always "the best friend" in the movies, is very comical and sassy as Katherine's friend Casey. At least she knows what she wants, but she's very compassionate and supportive to Jane throughout the film.

One person, though, that I think stood out in this film, was James Marsden. I've always seen him in action movies ("X-Men" series and "Superman Returns) as a minor or supporting character, but I think that he made the male lead of Kevin his own. Although he gets on Jane's nerves half the time, he always tends to put on a smile on her face because she knows that he's trying to get her to let go of the past and move on to a possible future where her big day might come. Kevin's the guy you would want to confide in if something's troubling you or if you need to dance to an Elton John song to get your groove back.

Cloverfield

2008-01-20T15:11:00.000-08:00

There was so much hype for this movie that you didn't need to know what it was about to see it. I'm sure many viewers this weekend are going to not know anything about the movie, just know that it's called Cloverfield and it was produced by JJ Abrams. I would think the movie wouldn't be as enthralling for someone who doesn't know much about it compared to someone who has been following message board posts for months, but I don't think it should matter.

So, let's begin. Cloverfield. The general plot of the movie is a home-made movie about a mans going away party that turns into a first person action thriller about a "monster" terrorizing the city. Well, I'm intrigued. I have been waiting for this movie for awhile since nothing exciting has come out recently. Everyone talking about the movie only made it more anticipated, so going into it I had high expectations. To be completely honest, I am satisfied. Shocked? Cloverfield is a movie like nothing I've seen before. I am sure this movie is based upon a few other films, but I haven't seen them. First of all, no it is not Godzilla. Second, I didn't get a chance to see Blair Witch Project so the first person thing was new to me. I know, I know. This however is what Made this movie what it is. It made you feel like you were in the action, on the streets running in fear alongside the citizens. It was freakin' sweet.

The action was intense, I expected nothing less from JJ. Once the movie got into motion with the city "earthquake" everything from then on was thrilling. I sat in the seat shaking in anticipation like I was sitting outside in the 20 degree weather; butterflies in my stomach for more than half the film. Awesome. The other part that was great was the sound and sights. It really felt like you were standing next to the soldiers shooting at the monster. And last but not least, the comedy... no seriously. There were many funny parts thanks to the cameraman. "Oh My God, you know Superman too? Geez I'm feeling a connection... have you heard of Garfield?". Classic.

Overall a solid, solid 9. Maybe a little high, but I thought the movie was amazing whether or not the ending was satisfying. No, I'm not telling you how it ends! To me, it was good though because it ended the film on a good note... yet kept the suspense and questions flowing. Also, no monster tips from me... I want you to be awaiting "its" face. Very good work, except on the title... what does Cloverfield have to do with it?

90 minute flick, so why not. Action/Thriller fans will love it; so go see it!

U.S. Sees Stalling by North Korea on Nuclear Pact

2008-01-19T13:45:00.001-08:00

WASHINGTON — A debate is under way within the Bush administration over how long it can exercise patience with North Korea without jeopardizing the fulfillment of a nuclear agreement that President Bush has claimed as a foreign policy victory.
With North Korea sending signals that it may be trying to wait out Mr. Bush’s time in office before making any more concessions, administration officials are grappling with how the United States should react.
The debate has fractured along familiar lines, with a handful of national security hawks in Vice President Dick Cheney’s office and at the State Department arguing for a more confrontational approach with Pyongyang.
On the other side, Mr. Bush’s lead North Korea nuclear negotiator, Christopher R. Hill, has argued that the United States should continue a more restrained approach, one that is widely credited with bringing about an agreement last year that is intended eventually to lead to the denuclearization of the Korean peninsula.
While the restrained stance still appears to have support from Mr. Bush and Secretary of State Condoleezza Rice, it is coming under fire from conservative critics, both in and out of the administration.
In a public departure from administration policy, Jay Lefkowitz, a conservative lawyer who is Mr. Bush’s envoy on North Korean human rights, said this week the North would likely “remain in its present nuclear status” when the next president took over in January 2009.
“North Korea is not serious about disarming in a timely manner,” Mr. Lefkowitz told an audience at the American Enterprise Institute, a conservative think tank. “We should consider a new approach to North Korea.”
At issue is a declaration that North Korea was supposed to make by the end of last year formally stating everything in its nuclear inventory. When the North missed that deadline, administration officials initially sought to minimize the significance of the lapse, but they have expressed increasing concern in the wake of a North Korean statement on Jan. 4, in which the North insisted that it had already disclosed everything that it needed to.
The North has cited a list of nuclear programs that it provided in November, but the United States has rejected the list as incomplete.
“Some people make the argument that we’re just pursuing a policy of talks that go nowhere,” said one administration official with knowledge of the debate within the administration.
John R. Bolton, the former United States ambassador to the United Nations, argued in a Wall Street Journal op-ed article last week that the Bush administration should dump the nuclear pact with North Korea because, he said, Pyongyang was not interested in giving up its nuclear program. “They’re in the classic North Korean role of deception,” Mr. Bolton said in an interview. “It’s like groundhog day; we’ve lived through this before.”
Mr. Bush said the two countries needed to resolve three sticking points: the number of warheads that North Korea has built; the amount of weapons-grade nuclear material produced by North Korea; and the need for North Korea to disclose that it has passed nuclear material to others.
The proliferation issue has taken on new importance after an Israeli strike in Syria in September, which American and Israeli officials said was conducted against a nuclear facility near the Euphrates River that was supplied with material from North Korea. Administration officials want North Korea to disclose what help it may have given Syria, although they also say that the help came before the North agreed to dismantle its nuclear reactor and disclose its nuclear programs.
Mr. Bolton and other critics of the agreement, including the officials in Mr. Cheney’s office, never liked the pact to begin with, and advocates of the deal with North Korea say their second-guessing is expected.
They argue that the Bush administration’s previous confrontational strategy with North Korea is part of what led to the North’s detonation of a nuclear device in October 2006.
Besides the United States and North Korea, the other parties to the nuclear pact include China, South Korea, Japan and Russia.
“People lambaste the six-party process, and sure, it offers no refuge for those in need of instant gratification,” Mr. Hill, the negotiator, said in an interview. “But when asked for alternatives” to the nuclear pact, Mr. Hill said, “even the noisiest critics fall silent.”
Administration officials say that the North has remained true to one part of the October agreement: It has made great strides in disabling and dismantling its nuclear reactor at Yongbyon. “Bush can say, with credit, that he has achieved more than any other administration as far as dismantlement,” said Gary Samore, a vice president at the Council on Foreign Relations who helped negotiate the Clinton administration’s 1994 agreement with North Korea. “He can say that he managed to freeze further production, and handed the next administration a diplomatic process.”
But Bush administration officials say that they want more than just dismantlement on their record, and insist that they have not written off their chances of getting North Korea to make a complete declaration of its nuclear programs before the end of the administration.
Bush officials say they will not ultimately be able to verify that North Korea has got rid of its nuclear weapons program unless they first know what is in the program.
“The issue of the declaration is important because that which they declare must later be abandoned,” a senior administration official said.
The official, who asked that his name not be used because he was not authorized to speak publicly on the issue, said that the administration really wanted North Korea to provide an explanation for purchasing aluminum tubes that could be used to convert uranium gas into nuclear fuel.
In its Jan. 4 statement, North Korea accused the United States and the other countries in the six-party talks of reneging on promises made under an October deal, including the shipment of one million tons of fuel and the removal of North Korea from the United States’ list of states that sponsored terrorism.
So far, North Korea has received about 150,000 tons of fuel, and Bush administration officials say the removal of the North from the terrorism list will depend on whether it meets the requirements of the October deal.
North Korea agreed in October to dismantle its nuclear facilities and to disclose all of its past and present nuclear programs by the end of 2007 in return for 950,000 metric tons of fuel oil or its equivalent in economic aid. Last month, Mr. Bush reached out directly for the first time to the North Korean leader, Kim Jong-il, holding out the prospect of normalized relations with the United States if North Korea fully disclosed all nuclear programs and got rid of its nuclear weapons.

Iran president says Bush confrontational

2008-01-17T16:53:00.000-08:00

CAIRO, Egypt - Iranian President Mahmoud Ahmadinejad said Thursday that President Bush sent a "message of confrontation" during his recent Mideast trip. Bush spent much of his visit to the region, which he wrapped up on Wednesday, rallying support among Arab allies for a strong stance against Iran — calling the country the world's top sponsor of terrorism.

"President George Bush sent a message to the Iranian people and all the nations worldwide," said Ahmadinejad during an interview in Farsi with Al-Jazeera television. "This message reflects his own conceptions and it is a message of rift, a message of sowing the seeds of division. It is a message of confrontation demeaning the dignity of mankind."

The Iranian president said Bush's statements were made for domestic political reasons.

"They are in need of these statements for their presidential race," said Ahmadinejad. "However, these statements increase the sentiment of resentment of the Iranian people against the U.S. officials."

Ahmadinejad also lashed out at Israel, a key U.S. ally in the Mideast, saying the country was "rapidly doomed to collapse."

"All these nations believe they (the Israelis) are a murderous group carrying arms and trying through threats to change their image," said Ahmadinejad.

Israel on Thursday successfully tested a new long-range missile, said senior defense officials speaking on condition of anonymity due to the sensitivity of the project. Israeli radio reports indicated the missiles are capable of being armed with nuclear warheads.

Ahmadinejad dismissed the missile test, saying Israel "lacks the courage to launch any attack against the Iranian state."

"They are aware that any attempt or strike will be confronted by a very strong response," added the Iranian president.

Tensions between Iran and both Israel and the U.S. have remained high over Tehran's controversial nuclear activities. The U.S. and Israel claim Iran's program could be a pathway to nuclear weapons development, but Tehran insists its intentions are peaceful.

"They would like to deceive our people alleging that the nuclear capability would amount to a nuclear weapon," said Ahmadinejad on Thursday.

U.S. attempts to keep up international pressure against Iran were complicated by a December intelligence report saying Iran suspended its weapons development program in 2003 and has not restarted it.

Bush used his first major Mideast trip to stress to Arab allies that Iran's continued uranium enrichment — a process that can produce fuel for a nuclear reactor or fissile material for a bomb — still posed a threat to the region.

The U.N. Security Council has passed two sets of sanctions against Iran for its refusal to suspend enrichment. Germany and the five permanent Security Council members plan to meet Tuesday in Berlin for talks that diplomats say will include attempts to finalize a third set of sanctions.

Ahmadinejad said the U.N. Security Council had no legal justification for focusing on Iran's nuclear program, claiming their sanctions were based on false information.

"If we pay close attention today, it is opportune time for the U.N. Security Council to rectify their false statements," he said.

The Iranian president said his country's cooperation with the International Atomic Energy Agency meant that the IAEA should be the only U.N. body with jurisdiction over the nuclear issue.

In November, an IAEA report said Iran had been generally truthful about key aspects of its nuclear history, but warned that its knowledge of Tehran's present nuclear work was shrinking.

Campaign attention shifts to S.C., Nev.

2008-01-16T01:39:00.000-08:00

CHARLESTON, S.C. - Republican presidential contenders focused their energies on South Carolina's GOP primary just four days off with still no clear front-runner after a critical Michigan victory for Mitt Romney and with John McCain facing what could be a make-or-break battle.
Democratic candidates vied for support ahead of Nevada's caucuses, also this Saturday, after a toned-down campaign debate in which rivals Hillary Clinton and Barrack Obama pledged to try to tamp down arguments between their respective camps over race. The Democratic contest also lacks a clear-cut leader.
McCain, who has perhaps the most at stake in South Carolina, wasted no time getting here. He arrived before the polls closed in Michigan.
The Arizona senator, who had been leading in national polls after winning last week's New Hampshire primary, vowed to fight on and predicted he would prevail here this time in the state that derailed his candidacy eight years ago.
"For a minute there in New Hampshire, I thought this campaign might be getting easier. But you know what? We've gotten pretty good at doing things the hard way, too," McCain told South Carolina supporters. "I think we've shown them we don't mind a fight."
The GOP race is scrambled, with former Arkansas Gov. Mike Huckabee having won the Iowa caucuses, McCain in New Hampshire and now Romney in Michigan.
In an interview with The Associated Press, as well as in his comments to supporters, McCain emphasized Romney's ties to Michigan. He grew up there and his father, George Romney, was an auto company executive and a popular governor.
"I congratulate him on that Michigan welcomed their native son with their support," the Arizona senator said in the interview.
For his part, Romney got off what appeared to be a gentle dig at McCain, calling his Michigan win "a victory of optimism over Washington-style pessimism." McCain said he didn't know what the former Massachusetts governor had in mind.
In Michigan, Romney had 39 percent of the vote, McCain had 30 percent and Huckabee 16 percent. No other Republican fared better than single digits.
All the major Republican candidates were campaigning on Wednesday in South Carolina.
McCain is hopeful for a strong showing in South Carolina, where his military background should provide a big help, and he needs to show that he's competitive in the South.
But South Carolina has been a disappointment for him in the past. In 2000, he won the New Hampshire primary only to see his campaign run into a wall in South Carolina, where George W. Bush emerged victorious and went on to wrap up the GOP nomination.
Also, among his rivals this time are two Southerners — Huckabee and former Tennessee Sen. Fred Thompson. For Thompson's lagging campaign, the South Carolina race may be a last stand.
Huckabee, a former Baptist minister, is counting on support among South Carolina's evangelicals.
"It looks like I won Iowa, John McCain won New Hampshire, Mitt Romney won Michigan. But ladies and gentlemen, we're going to win South Carolina," Huckabee said. Like McCain, Huckabee was already campaigning in the next primary state and predicted in Lexington, S.C., that he would "put a flag in the ground here Saturday."
The three top Democratic candidates — Clinton, Obama and former North Carolina Sen. John Edwards — were locked in a tight battle in Nevada. All three were beginning their day with campaign events in the state.
In their televised debate on Tuesday night, Clinton and Obama sought to defuse recent controversies over race, including comments by the former first lady on President Lyndon Johnson's role in winning approval of civil rights legislation in the 1960s, comments that some of Obama's backers suggested belittled the role of Martin Luther King Jr.
They jointly pledged on the slain civil rights leader's birthday to put the matter behind them. Obama is seeking to become the nation's first black president.
There were some limits to cordiality at the Democratic debate, however.
Asked whether Edwards and Obama were prepared to sit in the White House, Clinton said "that's what the voters have to decide."
Clinton won the Democratic primary in Michigan, but her victory was essentially meaningless since the contest was held in violation of party rules and major Democratic candidates did not campaign there.
On the Democratic side, Obama won the kickoff Iowa caucuses but Clinton came back with a narrow victory in the New Hampshire primary, defying polls.
After the Saturday caucuses for both parties in Nevada and the GOP primary in South Carolina, attention turns to the Democratic primary in South Carolina on Jan. 26 and then the Florida primary on Jan. 29, where Rudy Giuliani hopes to spring into the race as a top contender.
The former New York mayor got only 3 percent of the Michigan vote, trailing Thompson and Texas Rep. Ron Paul as well as the top three, and he hasn't fared better than fourth in any of the states so far.
After that, come the Feb. 5 Super Tuesday contests in 22 states.

Bush insists Iran biggest terror sponsor

2008-01-13T14:00:00.000-08:00

ABU DHABI, United Arab Emirates - President Bush gently nudged authoritarian Arab allies Sunday to satisfy frustrated desires for democracy in the Mideast and saved his harshest criticism for Iran, branding it "the world's leading state-sponsor of terror."
Speaking in this Persian Gulf country, about 150 miles from the shores of Iran, Bush said Tehran threatens nations everywhere and that the United States was "rallying friends around the world to confront this danger before it is too late."
The warning about Iran was much tougher than Bush's admonition about spreading democracy in the Middle East, which had been billed as the central theme of his speech.
In a region of autocratic rulers, Bush did not single out any country for criticism. He spoke about democracy in a deeply undemocratic country, the United Arab Emirates, where an elite of royal rulers makes virtually all the decisions. Large numbers of foreign resident workers have few legal or human rights, including no right to protest working conditions.
"To the people of the Middle East: We hear your cries for justice," Bush said. "We share your desire for a free and prosperous future. And as you struggle to find your voice and make your way in this world, the United States will stand with you."
Usually averse to sightseeing, Bush rode out into the sand dunes to the desert encampment of Abu Dhabi's crown prince, Sheik Mohammed Bin Zayed Al Nahyan. He let Bush hold one of his prize falcons. Later, Bush returned to his suite in the opulent Emirates Palace Hotel, constructed at a cost of more than $3 billion and reputed to be the most expensive hotel ever built.
The next stop scheduled on Bush's eight-day Mideast journey was Saudi Arabia. Its ruler, King Abdullah, has tried to push some reforms on education and women's rights, and there have been limited municipal council elections. But he has been cautious and limited in his efforts, apparently hampered by others in the royal family worried that fast changes could upset the country's conservative clerics and citizens.
In Egypt, the last country Bush planned to visit, the democracy effort has stalled badly. The opposition candidate, Ayman Nour, who ran against longtime President Hosni Mubarak in the first multiparty elections, remains jailed on what many critics view as trumped-up criminal fraud charges.
Apparently referring to Egypt, Bush said, "Unfortunately, amid some steps forward in this region we've also seen some setbacks. You cannot build trust when you hold an election where opposition candidates find themselves harassed or in prison."
Bush cast the broader campaign for democracy in terms of the battle against terrorism, saying there was a desire for freedom from terrorism, oppression and injustice. "We see this desire in the ordinary people across the Middle East, who are sick of violence, who are sick of corruption, sick of empty promises — and who choose a free future whenever they are given a chance."
Bush praised some democratic reforms in Arab countries. He urged leaders to show support for the fragile Iraqi government, open their societies and provide backing, and possible money, to help make an Israeli-Palestinian agreement stick.
"Leaders on both sides still have many tough decisions ahead, and they will need to back these decisions with real commitments," Bush said. "But the time has come for a holy land where Palestinians and Israelis live together in peace."
Bush's blistering words about Iran appeared intended to reassure Arab allies about U.S. readiness to confront Tehran. There have been doubts about Washington's intentions because of a new U.S. intelligence report that said Iran had stopped pursuing nuclear weapons in 2003.
Bush appeared to put the danger posed by Iran on par with that from al-Qaida, which the U.S. national intelligence director, Mike McConnell has said is America's greatest threat.
"One cause of instability is the extremists supported and embodied by the regime that sits in Tehran," Bush said. "Iran is today the world's leading state sponsor of terror.
Bush said Iran funds militant groups such as Hamas, Hezbollah and Islamic Jihad and sends arms to the Taliban in Afghanistan and Shiite extremists in Iraq. "The other major cause of instability is the extremists embodied by al-Qaida and its affiliates," he said.
His words brought a stern response from Iran's foreign minister, Manouchehr Mottaki, to end what he called U.S. meddling.
"Mr. Bush has tried unsuccessfully to undermine our relations with the countries of the region. We believe his mission has totally failed. We have making strides in building ties with the region, politically, economically and even in security," Mottaki told the Qatar-based Al-Jazeera television. "It is much better if the Americans had stopped intervening in the region's affair."
Also Sunday, the U.S. focused new attention on the Jan. 6 confrontation between American and Iranian naval vessels in the Strait of Hormuz.
U.S. Vice Adm. Kevin Cosgriff, commander of the U.S. Navy's 5th Fleet, which patrols the Gulf, briefed Bush on the incident before the president left Bahrain on Sunday morning.
Cosgriff told Bush that he took it "deadly seriously" when an Iranian fleet of high-speed boats charged at and threatened to blow up a three-ship U.S. Navy convoy passing near Iranian waters. The Iranian naval forces vanished as the American ship commanders were preparing to open fire.
White House press secretary Dana Perino said that "all the military people remember what happened in the past, such as the USS Cole." Seventeen American sailors were killed in a terrorist attack on the USS Cole in Yemen in October 2000.

Odd but awesome gadgets from CES

2008-01-11T17:19:00.000-08:00

LAS VEGAS, Nevada (AP) -- It probably goes without saying that no one actually needs a dancing MP3 player or a music-playing Taser holster or a drink cooler that can be ridden like a scooter.
But some vendors at the International Consumer Electronics Show are betting that people will actually want these things.
Alongside gadgets representing the highest of high technology, CES this week showcased a great collection of offbeat items.
Some might even turn out to be blockbusters. Others, if they're lucky, will nestle into an ignored corner of the SkyMall catalog.
Sony Corp.'s Rolly is something that could only come out of Japan, where cuteness is a cult.
The Rolly is an MP3 player the size and shape of a turkey egg. It rolls and spins around on the floor and blasts music out of two built-in stereo speakers, while flapping two speaker lids like it's a cancan dancer with folding fans. Pulsing multicolored diodes complete the sensory experience.
The Rolly was released in Japan in September, and Sony announced at CES that it would sell it in the U.S. It didn't reveal the price -- it costs about $350 in Japan.
The Rolly will improvise moves based on the music, but users can override that and choreograph their own steps on a PC, then transfer them to the device. The Japanese have Rolly dance-offs, according to Sony's Paul Digiovanna.
The Rolly has 2 gigabytes of flash memory and the rechargeable battery will keep it jamming for five hours straight.
Recommended listening: Chuck Berry's "Roll Over Beethoven," Beastie Boys' "Egg Man."
At Taser International Inc.'s booth, it was easy to forget that the company sells a weapon.
The company featured an abundance of femininity. Four Playboy Playmates signed autographs. Then there were new stun gun models in "Fashion Pink" and a leopard print scheme. The leopard one costs $379, while regular Tasers cost $349.
A fitting accessory for the leopard-print Taser is the music player holster, which clips a Taser to a belt and plays digital music.
Recommended listening: Aerosmith's "Lightning Strikes" and, of course, any number of "Don't Tase Me, Bro!" remixes.
Gibson Guitar Corp.'s Robot Guitar is not a guitar for robots. Nor is it a guitar that plays itself. Why let robots have all the fun?
Like a good robot, the Robot Guitar takes care of the boring part of being a guitarist: the tuning. Tiny motors are connected to a guitar's tuning screws. Pull out a master control knob, strum the strings, and the screws start turning themselves. In seconds, the guitar is in tune. It's also easy to switch between tunings.
A rechargeable battery in the body is good for 250 tunings, according to Gibson's Aljon Go. The guitar, "manufactured by human hands in Nashville, Tennessee," lists for $2,499. Retrofit kits will be available for older Gibson guitars.
Recommended listening: Daft Punk's "Robot Rock" and The Beatles' "While My (Non-robotic) Guitar Gently Weeps."
CES exhibitors love combinations, which is why there are MP3 players in everything. Liquid Image LLC found a new place to stash a camera: a swimming mask.
It can take video or still images; it's $99 for the 5-megapixel version and $79 for 3.1 megapixels.
Underwater cameras have existed before, but swimmers have had to hold them. Liquid Image squeezed its camera into the mask by skipping the viewfinder. The two buttons for operating the camera are just above the eyepiece on the right.
It's not yet rugged enough to go deep with scuba divers, though: Liquid Image recommends going no more than 16 feet under water.
Filip Ivanovski believes people shooting hoops in the driveway or playing football in the park have two main needs: to listen to music and to keep score.
So the Canadian developed the $199 Versus Scoreboard, which looks like a small stadium scoreboard, showing points, period and time remaining, on top of a MP3-playing boombox.
Big buttons make it easy for players to run over and quickly adjust the score.
What's the point of relaxing at the lake or campground if you get sore lugging a packed cooler of drinks? That's where the $499 Cruzin Cooler comes in.
"It's the world's first motorized, rideable ice chest," said Charles Pennington, director of national retail accounts for Cruzin Cooler LLC.
The Cruzin Cooler comes with a padded seat for the rider and an electric or gas motor. It can hold 27 12-ounce cans, but you can pack more in a $149 trailer cooler that hooks onto the motorized lead cooler. You supply your own ice.
An ice chest/scooter looked totally out of place at the electronics show. But Pennington noted that the product actually is ridiculous in any setting -- which is why people want it. The company has sold 40,000, he said.
Two of the coolers' specs caught our attention. One is that the driver can weigh up to 300 pounds. The other is how fast the Cruzin Cooler can cruise.

Marion Jones Sentenced to Six Months in Prison

2008-01-11T10:03:00.001-08:00

WHITE PLAINS — Marion Jones, the track and field star who pleaded guilty in October to lying to federal agents about her use of performance-enhancing drugs and her connection to a check-fraud case, was sentenced to six months in prison at the United States District Court here on Friday.

The federal sentencing guidelines recommended Jones face anywhere from zero to six months in prison for her offenses. The maximum she could have faced was five years.

In court filings leading up to the sentencing, prosecutors asked United States District Judge Kenneth M. Karras to give Jones six months in prison; Jones’s lawyers said probation was enough.

At the 2000 Summer Olympics in Sydney, Jones won three gold and two bronze medals, and until her admission about her drug use in Oct., had publicly insisted she never used performance-enhancing drugs.

It was not Jones lying about drug use that forced her to accept plea deals from the government.

Jones’s pleas were triggered by her involvement in the bank-fraud scheme. Prosecutors for the United States attorneys office in the Southern District of New York have said they had ample evidence, including Jones’s signature on the $25,000 check and the testimony of other defendants in the case, many of whom have already pleaded guilty.

The strength of the government’s evidence in that case was used to persuade Jones to plead guilty to the false statements to federal prosecutors in the Northern District of California, which has been leading the investigation of the Bay Area Laboratory Co-Operative for the past five years.

Jones admitted in court that from September 2000 until July 2001, her former trainer Trevor Graham gave her a substance he told her was flaxseed oil.

When she stopped training with him in 2001, she said she realized it had been a performance-enhancing drug. By the time she was interviewed in the Balco investigation in November 2003, Jones said, she knew it was the designer steroid THG, known as the clear. But she had denied recognizing the substance and denied taking it in that Balco interview.

After admitting to lying about her use of steroids, Jones relinquished the three gold and two bronze medals to the United States Anti-Doping Agency.

The International Olympic Committee is examining how to adjust the medal standings for more than 40 athletes who competed with and against Marion Jones at the 2000 Games.

The reallocation of medals is likely to be one of the largest that the I.O.C. has conducted because of the breadth of Jones’s accomplishments. She became the first woman to win five medals in track and field at the same Olympics.

Perhaps the biggest consequence of Jones’s pleas was the damage it did for Graham, who has repeatedly denied providing his athletes with performance-enhancing drugs.

If Jones is called to testify at Graham’s trial, she can no longer invoke her Fifth Amendment right against self-incrimination because she waived that with her guilty plea.

When Jones plead in Oct., she stood on the steps of the courthouse here weeping while apologizing for lying and said she was retiring from track and field.

Housing Woes, AT&T News Sinks Stocks

2008-01-08T17:08:00.000-08:00

Wall Street Plunges -- This Time, on Worries About Countrywide, AT&T, Pending Home Sales Drop
NEW YORK (AP) -- Wall Street skidded lower in another fitful session Tuesday, with investors worried that the tumbling economy may not only cripple mortgage lenders like Countrywide Financial Corp. but also create problems for other companies like AT&T Inc. The Dow Jones industrials fell nearly 240 points.
Investors tried to take the market higher at many points during the day, but eventually succumbed to another stream of bad news. The Dow and the Standard & Poor's 500 index are down more than 5 percent so far this year and the Nasdaq composite index is down nearly 8 percent, having been pummeled since Jan. 1 due to worse-than-anticipated readings on the economy.
The day's events raised fears that fourth-quarter earnings reports, which start pouring in later this week, may not meet already lowered expectations.
In the morning, the National Association of Realtors said its index tracking pending U.S. home sales fell 2.6 percent in November, a larger decline than the market expected. Jitters about the profitability of Countrywide and KB Home kept Wall Street on edge throughout the day, and President Bush reiterating the problems facing the economy likely added to the market's uneasiness.
Many traders have bet recently that Countrywide might need to file for bankruptcy. Countrywide denied that rumor Tuesday, but its stock plunged 17 percent. Lehman Brothers said in a note that Countrywide's earnings power has declined severely, and The New York Times reported the company fabricated documents related to the bankruptcy case of a Pennsylvania homeowner.
Late in the day, the chief executive of AT&T said at a conference that the phone company was seeing some slowdown in its consumer businesses, though not in wireless. That was the last straw for the market, and sent stocks tumbling.
"Anything that talks of contagion spreading to the general economy ... will definitely spook the market," said Joseph V. Battipaglia, chief investment officer at Ryan Beck & Co., referring to the softness AT&T is seeing. "The Fed still has more work to do. They're clearly cutting rates into economic weakness, which to many means that they're somewhat behind the curve. And that's a concern for investors."
The day's abortive advance was due in part to rising hopes that the Federal Reserve, seeing the same bleak economic numbers as Wall Street, will continue its campaign of rate cuts to prevent a recession. The Fed meets Jan. 29-30.
The Dow fell 238.42, or 1.86 percent, to 12,589.07, after ratcheting up and down through the day.
Broader stock indicators also sank. The S&P 500 index dropped 25.99, or 1.84 percent, to 1,390.19, and the Nasdaq, reflecting uneasiness about tech stocks after AT&T's news, declined 58.95, or 2.36 percent, to 2,440.51.
Bond prices rose. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.78 percent from 3.84 percent late Monday.
Recession fears have been thwarting stock rally attempts so far this year, said Richard Sparks, senior equities analyst at Schaeffer's Investment Research. "It's difficult to balance the ability to cut rates to stave off a recession with the stated goal that the Fed has to not spur inflation. There's a question out there: Can the Fed do enough?"
Last week's Labor Department report showing a rise in unemployment to 5 percent and meager jobs growth suggested to Wall Street that it had been too confident last year in the economy's ability to shake off a sinking housing market. A disappointing uptick in the International Council for Shopping Centers' year-over-year chain store sales -- 1.9 percent, the smallest gain since June -- added to the downbeat mood.
Philadelphia Fed President Charles Plosser said in a speech the central bank remains open to further rate reductions given the state of the economy, but that inflation remains a concern. Gold prices surpassed their 1980 levels and reached a record above $880 an ounce Tuesday on the New York Mercantile Exchange, while crude prices resumed their climb, rising $1.24 to $96.33 a barrel.
The dollar fell against most rival currencies, except the yen.
Alcoa Inc. on Wednesday officially kicks off the fourth-quarter earnings season, which investors are pessimistic about.
"The picture doesn't look good right now and the fear is that what we saw through the economic data points last week will be carried through to corporate earnings," said Ryan Larson, senior equity trader with Voyageur Asset Management.
Countrywide fell $1.32, or 17.2 percent, to $6.32, while KB Home fell $1.70, or 9.2 percent, to $16.78.
AT&T fell $1.87, or 4.6 percent, to $39.16.
The Wall Street Journal reported late Monday that Bear Stearns Cos. chief executive James Cayne was planning to step down and remain chairman. The investment bank made no comment on the report Tuesday. Bear Stearns fell $5.08, or 6.7 percent, to $71.17.
Declining issues outnumbered advancers by nearly 2 to 1 on the New York Stock Exchange. Consolidated volume came to 4.62 billion shares, up from 4.10 billion shares Monday.
The Russell 2000 index of smaller companies fell 19.09, or 2.64 percent, to 704.86.
Japan's Nikkei stock average rose 0.19 percent. Hong Kong's Hang Seng index fell 0.25 percent. Britain's FTSE 100 rose 0.33 percent, Germany's DAX index added 0.42 percent, and France's CAC-40 rose 0.79 percent.

Yahoo Makes a New Play for Ads on Mobile Phones

2008-01-07T03:13:00.000-08:00

SAN FRANCISCO — There may not be a Yahoo phone in the works, but the struggling Internet company is betting that a new mobile-phone strategy will help it better compete with the likes of Google, Microsoft and others for a share of the growing cellphone advertising business.
On Monday at the Consumer Electronics Show in Las Vegas, Yahoo is planning to announce that it has opened up some of its key mobile software and services to outside publishers and programmers in an effort to make Yahoo’s own mobile offerings more useful to more people.
The strategy falls in line with the chief executive Jerry Yang’s plans to turn around Yahoo by making it the “starting point for the most consumers” on the Internet. To achieve that, he told investors last fall, Yahoo would have to develop platforms that are open to outside publishers and developers.
MySpace, eBay and MTV Networks have already created mobile services that are accessible via a new Yahoo home page tailored for mobile phones and through Yahoo Go, a cellphone software package that Yahoo introduced two years ago. The Yahoo mobile home page and Yahoo Go both give users easy access to e-mail, search, news, weather and other services provided by Yahoo.
Now users of Yahoo’s mobile offerings will also have easy access to applications from other companies. As more of them create useful programs that run on top of Yahoo’s mobile services, the company hopes that more users will choose its services over those of rivals.
“If Yahoo really wants to become the starting point for everyone, it cannot be only about Yahoo,” said Marco Boerries, executive vice president of Yahoo’s connected life division, which operates its mobile division.
Mr. Boerries said that developers, who often find it frustrating to have to rewrite their software for multiple mobile platforms, would be able to create programs on top of Yahoo’s services, which themselves run across a broad range of devices.
But wireless industry veterans say that Yahoo’s attempt to become a platform faces hurdles and competition. Other companies, including cellphone makers like Nokia and Apple, and mobile software providers, like Google and Microsoft, are trying to lure third-party publishers and programmers to create services for their mobile platforms.
“It’s a standard pitch — build on our platform because we have the most ubiquity,” said Sam Jadallah, a partner at Mohr Davidow Ventures, a venture capital firm that has invested in several wireless companies. “It is a smart and ambitious strategy, but one that is very difficult to pull off.”
Mr. Jadallah said that becoming a software platform could prove especially difficult for a company like Yahoo, as it doesn’t control any phone’s operating system.
To achieve ubiquity, Yahoo may also need closer ties with some wireless carriers, which continue to play a major role in deciding what services are easily accessible to users.
Although Yahoo Go runs on about 250 mobile devices, and comes preloaded on some phones made by Motorola, LG, Samsung and Nokia, carriers in the United States strip the software from the phones. Currently, no American carrier offers phones with the Yahoo software installed, forcing American consumers who want to use Yahoo Go to download it themselves, a requirement that limits its distribution.
Mr. Boerries said that developers who write services to run on Yahoo’s mobile offerings could choose to have Yahoo deliver ads on those services.

After Iowa, Challenges Lie Ahead for Obama

2008-01-05T03:51:00.001-08:00

DES MOINES — As he accepted his victory in the Iowa caucuses Thursday night, Senator Barack Obama presented his presidential candidacy as a vessel to wipe away partisan divisions, transcend the boundaries of race and “build a coalition for change that stretches through red states and blue states.”

The implication was clear: If he could win in Iowa, could he win anywhere?

There is no question that Mr. Obama’s hopeful call for change inspired thousands of Iowans to attend the presidential caucuses for the first time. There is no question that his decisive victory was fueled by a fierce feeling of discontent over the nation’s direction and America’s place in the world.

But a closer inspection of the results in Iowa’s 99 counties also underscores some of the challenges that lie ahead for Mr. Obama as the presidential campaign continues beyond the early-voting states. A detailed map of the caucus results suggests that Mr. Obama’s argument was not convincing to Democrats in many rural stretches of the state.

In 30 counties — from Adams to Appanooose and Wapello to Worth — Mr. Obama fell short of John Edwards of North Carolina and Senator Hillary Rodham Clinton of New York. In some precincts, Mr. Obama was separated by only a small share of delegates, yet in several other places he finished well behind his two rivals.

Iowa counties are not, necessarily, akin to a collection of red states and blue states that Mr. Obama so often talks about while he campaigns around the country. But had he not won in Iowa’s largest three counties, in addition to a strong showing along the Mississippi River in the east, the outcome would almost certainly have been different.

Over the last year, Mr. Obama’s reception in rural Iowa counties seemed to steadily improve, judging by listening to more enthusiastic applause from his audiences. At many stops, though, he would face questions from conservative Democrats about gun control and immigration and his answers did not always meet the approval of voters.

Mr. Obama’s strategists knew that some of these regions were not his strongest.

Again and again, he would turn a less-than-friendly question into an example of how he is willing to “say what people need to hear, not what they want to hear.” (This is one of the reasons his campaign sought to expand his universe of supporters beyond the traditional Iowa caucus attendees.)

Still, the record-setting turnout of 239,000 Democrats, which nearly doubled the attendance of the 2004 Iowa caucuses, is indicative of something. And winning by 8 percentage points puts Mr. Obama in a position that would be envied by his remaining rivals.

“We are choosing hope over fear,” Mr. Obama said in his remarks last night, speaking to a diverse crowd of more than 3,000 supporters. “We’re choosing unity over division, and sending a powerful message that change is coming to America.”

So as the road to the White House moved to New Hampshire early Friday, here is a lone anecdote that helps tell the story of what happened at the conclusion of the most competitive, sophisticated contest in the three-decade history of the Iowa caucuses.

Nell Boyd lives in the tiny northern Iowa town of Belmond. From the moment she saw Mr. Obama speak in October in nearby Waterloo, she said, she was sold on his candidacy and made a small contribution to his campaign, the first time she had ever given money to a politician.

At her precinct last night, 214 people signed in, compared to 72 four years ago.

The crowd, she said, was a mix of old and young, with a sprinkling of college students home on break and high school students who will be 18 by Election Day. In the end, the tally concluded in this order: Mr. Obama, Mrs. Clinton, Mr. Edwards.

The Boyd household, perhaps, is atypical. She supported Mr. Obama, while her husband, Rex, walked into the caucus as a Clinton supporter. Before the final headcount was conducted, she said, he changed his mind and moved over to the Obama corner of the room.

In an overnight e-mail, she offered an explanation.

“Rex went to Clinton and I wore a Obama sticker. As people milled and talked, he changed before the count as he heard people stating they could not vote for someone with a last name like Obama. One said, ‘He needs to stay in Chicago and take care of his family.’

“Rex came over to Obama, where he heard not one negative bit of talk. He felt they both stand for pretty much the same ideas, but our leader needs to be positive and Obama puts that feeling out there. That is important in this world.”

With that, Ms. Boyd’s civic duties are complete, at least until November. It remains an open question which Democrat will be on the ballot when the race returns to Iowa.

Obama, Huckabee sweep to Iowa victories

2008-01-04T06:18:00.000-08:00

DES MOINES, Iowa - Barack Obama and Mike Huckabee won the Iowa caucuses last night as the candidates move on to New Hampshire.

On the Democratic side, Obama scored 38 percent of the vote with John Edwards second with 30 and Hillary Clinton third with 29. Obama won 16 delgates with Clinton getting 15 and Edwards 14. Overall, Clinton leads with 175 delegates, including superdelegates, followed by Obama with 75 and Edwards with 46.
For the Republicans, Huckabee won with 34 percent, with 25 percent for Mitt Romney, 13 percent each for Fred Thompson and John McCain, 10 percent for Ron Paul and 3 percent for Rudy Giuliani. Huckabee scored 30 delegates and Romney got 7.
After the caucuses, Democrats Joe Biden and Chris Dodd dropped out of the race.
Obama, 46 and a first-term senator from Illinois, told a raucous victory rally his triumph showed that in "big cities and small towns, you came together to say, 'We are one nation, we are one people and our time for change has come.'"
Huckabee celebrated his own victory over Mitt Romney and a crowded Republican field. "A new day is needed in American politics, just like a new day is needed in American government," the former Arkansas governor told cheering supporters. "It starts here, but it doesn't end here. It goes all the way through the other states and ends at 1600 Pennsylvania Avenue."
Huckabee, a preacher turned politician, handily defeated Romney despite being outspent by millions of dollars and deciding in the campaign's final days to scrap television commercials that would have assailed the former Massachusetts governor. He stressed his religion to the extent of airing a commercial that described himself as a "Christian leader" in his race against a man seeking to become the first Mormon president.
For the Republicans, former Sen. Fred Thompson and Sen. John McCain battled for third place, while Texas Rep. Ron Paul wound up fifth and former New York Mayor Rudy Giuliani sixth.
With the New Hampshire primary only five days distant, Clinton and Edwards vowed to fight on in the race for the Democratic nomination.
"We have always planned to run a national campaign," the former first lady told supporters at a noisy rally attended by her husband and their daughter, Chelsea. "I am so ready for the rest of this campaign, and I am so ready to lead."
Edwards, the Democrats' 2004 vice presidential nominee, told The Associated Press in an interview he would distinguish himself from Obama in New Hampshire by arguing that he is the candidate who can deliver the change that voters have shown they want. "I"m going to fight for that change," he said by telephone from his hotel room in Iowa. "I've fought for it my entire life. I have a long history of fighting powerful interests and winning."
New Mexico Gov. Bill Richardson said he would campaign in New Hampshire despite finishing in fourth place with a minuscule 2 percent support.
Romney sought to frame his defeat as something other than that, saying he had trailed Huckabee by more than 20 points a few weeks ago. "I've been pleased that I've been able to make up ground and I intend to keep making up ground, not just here but across the country," he said.
The words were brave, but already, his strategy of bankrolling a methodical campaign in hopes of winning the first two states was in tatters — and a rejuvenated McCain was tied with him in the polls in next-up New Hampshire.
Iowans rendered their judgments in meetings at 1,781 precincts from Adel to Zwingle, in schools, firehouses and community centers. Turnout was heavy, far more so for Democrats than Republicans in what could be an early indication of the country's mood after eight years of a Republican administration.
With President Bush constitutionally unable to seek re-election, a wide-open race developed in both parties that resulted in campaign organizations that dwarfed anything in previous campaigns. Romney alone spent $7 million on television commercials. The result was a record turnout.
Projections estimated that 220,588 Democrats showed up on a cold midwinter's night, shattering the previous mark of 124,000.
Turnout was also up on the Republican side, where projections showed about 114,000 people taking part. The last previous contested Republican caucuses in 2000 drew 87,666 participants.
In interviews as they entered the caucuses, more than half of all the Republicans said they were either born-again or evangelical Christians, and they liked Huckabee more than any of his rivals. Romney led handily among the balance of the Iowa Republican voters, according to the survey.
About half the Democratic caucus-goers said a candidate's ability to bring about needed change was the most important factor as they made up their minds, according to the entrance interviews by the AP and the television networks. Change was Obama's calling card in the arduous campaign for Iowa's backing.
Obama also outpolled Clinton among women, and benefited from a surge in first-time caucus-goers. More than half of those who participated said they had never been to a caucus before, and Obama won the backing of roughly 40 percent of them. Edwards did best among veteran caucus-goers, garnering 30 percent of their vote. Obama and Clinton each got about a quarter of their support.
While Republicans and Democrats both looked to Iowa to pass the first judgment of the election year, there was a key difference in the way they ran their caucuses. Republicans took a straw vote, then tallied the results. Democrats had a more complicated process in which one candidate's supporters might eventually wind up backing another contender.
Clinton, Obama and Edwards had all urged voters to consider them if their own candidate fell short. Rep. Dennis Kucinich of Ohio publicly urged his backers to line up with Obama on a second round, and two Democrats said aides to Richardson did likewise as the caucuses unfolded in hopes of blocking the former first lady. Those two spoke on condition of anonymity, citing private discussions.
In the campaign's final days, Obama, a first-term senator, stressed a need for change. Clinton boasted of her experience as she worked to follow her husband into the White House. Edwards cast himself as the implacable enemy of special interests as he aimed to improve on last time's second-place showing in the state. Strikingly, none of the Democrats ran television commercials attacking one another, and the result was a remarkably civilized race despite the stakes.
Romney stressed his background as a businessman and organizer of the 2002 Olympics, and he worked to persuade conservatives to ignore his earlier positions on abortion and gay rights. He ran the only commercials of the campaign critical of a rival, hitting Huckabee for his positions on immigration and the pardons he issued while governor of Arkansas.
For three decades, Iowa's caucuses have drawn presidential hopefuls eager to make a strong first impression, and this year was no different.
Obama, Clinton and Edwards spent at least $19 million on television advertising among them. Romney told supporters in a final daylong swing around the state he had been in 68 of 99 counties since he began his quest for the White House, had spent 55 days in Iowa and spoken before 248 separate audiences.

Candidates Offer Final Messages to Iowa Voters

2008-01-03T15:34:00.000-08:00

DES MOINES — With an eye on the weather forecast and faith in their organizations, the presidential candidates wound down their Iowa caucus campaigns on Thursday and sought to manage their expectations as they nervously awaited a verdict from voters in the first contest of the presidential nominating season.

“I feel good,” said Senator Hillary Rodham Clinton, Democrat of New York. “But it depends on who comes out, who decides to actually put on their coats, warm up their cars and go to the caucuses.”
The field of Republican and Democratic hopefuls called into talk radio stations across the state and dropped by television studios here, offering last-minute messages to their supporters. Party officials predicted a record turnout in precinct caucuses that begin in Iowa at 7 p.m.
“I’d like to win them, but if I don’t win, coming in second in these states is a strong statement,” former Massachusetts Gov. Mitt Romney said in a television interview today. “I think at this stage it’s too close to call.”
Mr. Romney’s Iowa campaign chairman, Doug Gross, characterized the likely outcome as depending on how many people show up for the caucuses. Mr. Gross said that if Republican turnout today is 80,000 or more, Mr. Romney’s campaign could be in trouble.
That number would mean that evangelical turnout is higher than expected, with the vast majority of those votes likely to go to Mr. Romney’s rival, Mike Huckabee, a former Baptist minister who has clearly benefited from evangelical unease about Mr. Romney’s Mormon faith, as well as the fact that until several years ago he was a supporter of abortion rights.
In the end, after a year of political speeches and nearly $25 million in Iowa television advertising, the most important work in the hours before the caucuses was taking place far away from the candidates. Campaigns established telephone hotlines designed to direct voters to their specific precincts at 1,781 locations across the state.
“Anything is possible at this point,” said Senator Barack Obama, Democrat of Illinois. “We’ve put a lot into Iowa and our efforts here. We feel good about what we’ve done, but this is the beginning and not the end.”
After a month in which dozens of campaign events were canceled because of dangerous winter conditions, no snow or ice was in the caucus forecast and the National Weather Service said temperatures on Thursday evening would be in the teens to low 20s.
While Mrs. Clinton and Mr. Obama suspended their formal campaigning today, so their volunteers could help turn out voters rather than attend rallies, other rivals remained on the campaign trail. John Edwards of North Carolina thanked volunteers in Des Moines, Cedar Rapids and Davenport, while Senator Joseph R. Biden Jr. of Delaware, dashed from Waterloo to Dubuque to Davenport.
On the Republican side, Mr. Huckabee, a former governor of Arkansas, returned from a quick trip to California to appear on The Tonight Show and attended campaign stops in Burlington and Grinnell. On Thursday, Mr. Huckabee sharpened his pitch to Iowa voters that his humble roots gave him a better understanding of the problems of working people than his rival, Mr. Romney, a former private equity fund manager.
“People would rather elect a president who reminds them of the guy they work with, not that guy who laid them off,” Mr. Huckabee told about 150 people at a hotel in Burlington, Iowa, in the morning, without ever naming Mr. Romney.
Seizing on the news that oil prices had hit $100 a barrel, Mr. Huckabee said, “For some people, that may not effect their lifestyles. It affects yours.” He added, “If your salaries aren’t going up to meet it, that is a problem.”
Senator John McCain of Arizona flew through four Iowa cities before traveling to New Hampshire in advance of next Tuesday’s primary there.
On Wednesday, Mrs. Clinton asked voters at rallies and in a two-minute television commercial broadcast statewide, “Who is ready to be president?” Mr. Obama implored supporters to believe in his candidacy, asking, “Who can take us in a fundamentally new direction?” And Mr. Edwards pledged to represent struggling Americans, saying, “Who’s going to fight for you?”
Only part of the Republican field spent Wednesday courting voters in Iowa. When Mr. Huckabee flew to California to appear on “The Tonight Show,” he drew strong criticism from Mr. Romney. Seeing a potential opening, Mr. McCain hastily flew to Iowa for a last-minute plea for support as he sought to capitalize on the turmoil of the unsettled field.
As the costliest campaign in the three-decade history of the Iowa caucuses headed to an unpredictable finish, thousands of volunteers and campaign aides from across the country descended on neighborhoods and towns to coax voters to 1,781 precinct sites in the state. Politics dominated the radio and television airwaves, with advertisements back to back from morning until night.
The most sophisticated presidential campaigns that have ever been waged in Iowa — fully engaged for much of the year — ended in a flurry of old-fashioned get-out-the-vote efforts. The Clinton campaign, for example, has enlisted 5,000 drivers to ferry voters to the caucuses, particularly elderly women, who form a critical well of support.
The disparity in intensity between the Republican and Democratic contests was palpable in the final round of campaigning, with Mr. Romney, Mr. McCain and Fred D. Thompson, a former Tennessee senator, holding a series of small sessions with voters, while six Democratic candidates drew hundreds of people to boisterous rallies across the state.
Still, the outcome for both parties depended on many variables, particularly in the Democratic contest, where Mr. Biden and Christopher J. Dodd of Connecticut and Gov. Bill Richardson of New Mexico staged vigorous campaigns. Candidates that do not reach a threshold of 15 percent in a given precinct are deemed unviable there, freeing their supporters to align with a more popular candidate.
The Republican contest has no such rules, but, for Democrats, the realignment of supporters could tip the balance of the contest, so the leading campaigns intensified efforts on Wednesday to identify voters’ alternative selections. Those decisions also often hinge on local politics, adding a fresh dose of uncertainty to a volatile caucus night.
Reporting was contributed by Julie Bosman in Fort Madison, Cate Doty in Waterloo, Patrick Healy in Cedar Rapids, David D. Kirkpatrick in Fort Dodge, Michael Luo in Bettendorf, and Marc Santora in Derry, N.H.

Oil Hits $100 a Barrel for the First Time

2008-01-02T18:16:00.000-08:00

HOUSTON — Oil prices briefly reached $100 a barrel on Wednesday, a long-awaited milestone in an era of rapidly escalating energy demand and tightening supplies.

Crude oil futures for February delivery hit $100 on the New York Mercantile Exchange shortly after noon when a single trader bid up the price by buying a modest lot and then sold it immediately at a small loss. Prices eased somewhat in later trading, settling at $99.62.

But while the trader was apparently looking for vanity bragging rights, the spike in crude prices of $3.64 for the day reflected deeper worldwide trends, including the surge in energy demand from China, India and the oil-producing countries themselves.

“We’re starting the year with a bang,” said Fadel Gheit, senior energy analyst for Oppenheimer & Company. “It’s the same usual suspects: the bad, bad world out there, a cold winter and declining oil inventories.”

The immediate impetus for the price rise appeared to come from an attack by rebels in the Nigerian oil center of Port Harcourt and rough weather in the Gulf of Mexico that slowed Mexican oil exports.

The price of oil has been flirting with the $100 mark for months, and in recent weeks there has been added price pressure because of turbulence in Pakistan following the assassination of former Prime Minister Benazir Bhutto, which may threaten further unrest in the Middle East.

There is no shortage of explanations for the escalation of oil prices by about 60 percent over the last year. The price of a barrel was below $25 as recently as 2003 and, almost unimaginably, below $11 in 1998, a time when there was a glut in the world oil markets.

Booming economies in recent years have led to more consumption of oil-derived products like gasoline, jet fuel and diesel. Political tensions in countries like Nigeria, Venezuela and Iran have threatened world supplies, while important fields in Mexico, the United States and other countries are aging and producing less.

Big oil companies, though flush with cash from record profits, are having trouble finding promising new fields to increase supplies. Newly found fields in the deep waters of the Gulf of Mexico and off the coast of Brazil will take years to develop.

The Bush administration has further tightened supplies by announcing that it would add to the nation’s Strategic Petroleum Reserve in the coming weeks, a move that some leading Democrats have urged President Bush to call off to ease the tight oil market.

Investors and hedge funds have contributed to the run-up in prices. Oil, like other commodities, has become a perceived safe haven for traders who are skittish about the weakening dollar and fallout from the American credit crisis.

“There is a momentum for higher prices because of the lack of cushions and because surprises are everyday events,” said Larry Goldstein, a director of the Energy Policy Research Foundation. “When anything goes wrong now, it gets immediately priced in not by pennies, nickels or dimes but by dollars.”

Oil is now within reach of its inflation-adjusted high, reached in April 1980 in the aftermath of the Iranian revolution when oil prices jumped to the equivalent of $102.81 in today’s money. The brief stab at $100 on Wednesday broke the previous intraday trading record of $99.29, reached on Nov. 21. The price at the end of the day, $99.62, surpassed the record close of $98.18, set on Nov. 23.

Other commodities also rose, spurring more speculation that inflation could be a problem this year. Spot gold climbed over $860 an ounce, and soybeans, wheat, platinum, heating oil and natural gas soared.

Unlike the oil shocks of the 1970s and 1980s, the current spike in oil prices has not caused a recession or contracted consumer spending in a major way so far. But it has widened the trade deficit and raised concerns about inflation at a time when a growing number of economists fear a recession may be coming.

Energy experts are divided about how high oil prices can go, with some predicting that an economic slowdown will ultimately ease demand pressures.

“We’re going to see sharply higher gasoline prices this spring, we’re going to see sharply higher heating oil and diesel prices immediately,” said Tom Kloza, chief oil analyst at the Oil Price Information Service. But he added, “If I had to bet what we would see first, $115 oil or $85 oil, I’d bet $85.”

Gasoline prices have so far lagged behind the rise in the price of oil, currently at a nationwide average of $3.05 a gallon for regular grade, according to AAA, the automobile club. That is below the all-time peak in May of $3.23 a gallon, but 73 cents higher than at this time a year ago.

Mr. Gheit said if there is a recession “oil prices will definitely go down because demand will go down and the speculators will take a dip as a leading indicator and they will jump first and that will cause a meltdown.”

Of the trader who sent oil to $100 in New York on Wednesday, Mr. Gheit added, “He’s probably going to frame the ticket and sell it on eBay for $100,000.”

Stocks Slip, Ending Year of Turmoil

2008-01-01T07:37:00.000-08:00

Stocks fell on Monday, ending a tumultuous year that battered financial firms but left other pockets of the market and the world with stunning gains.

Even a report that showed sales of existing homes had been nudged up in November failed to lift the market as traders closed their books on a year marred by the running crisis in the mortgage market. A small rally in the afternoon helped cut early losses but was not enough to push the market into positive territory.

The Standard & Poor’s 500-stock index ended the year up 3.5 percent, slightly less than the inflation rate. For the day, the index fell 10.13 points, or 0.7 percent, to 1,468.36 in relatively light trading. The Dow Jones industrial average, which closed up 6.4 percent for the year, ended the day down 101.05 points, or 0.8 percent, at 13,264.82.

“It has been a disappointing year,” concluded Tobias Levkovich, chief United States equity strategist at Citigroup. “The debt bubble burst and its ramifications were far wider than most people anticipated.”

It was also a year of stark contrasts. While the broad market struggled under the weight of the credit crisis, which hurt financial firms, home builders and retailers, sectors like technology, energy and materials posted remarkable gains. The Nasdaq composite index, which includes many technology stocks, ended the year up 9.8 percent, its best showing since 2003. Foreign markets, particularly in developing countries, did even better.

Ultra-safe Treasuries and risky emerging markets both rewarded investors. For the first time since 2002, when the last bear market ended, Treasuries outperformed the S.& P. 500 as investors sought a haven in government debt. Including dividends and interest payments, the S.& P. returned 6.2 percent while a Merrill Lynch index that tracks government-backed debt returned 8.5 percent.

“There was a flight to quality,” said Douglas M. Peta, chief market strategist at J.& W. Seligman, an investment firm based in New York.

Investments that had even a slight taint of risky subprime mortgages were battered. A Merrill Lynch index that tracks floating-rate securities backed by home loans fell 10.9 percent through November, after including interest payments. MBIA, a company that guarantees those debts, fell 74.5 percent for the year.

Financial stocks tumbled 20.8 percent for the year and shares in the consumer discretionary sector, which includes home builders and retailers, sank 14.3 percent. Other areas of the market rose, but the decline in these two big sectors hurt benchmark indexes. Together the sectors accounted for about one-third of the stock market’s valuation at the start of 2007; they account for about one-fourth now.

As investors bailed out of investments perceived as risky at home, they sought out growth elsewhere. Billions of dollars flowed from the developed world into fast-developing economies in Asia, Latin America, Africa and Eastern Europe.

Shares in Shanghai and Shenzhen, China, were up 179 percent; the Nifty 50 index in India was up 74 percent and the Bovespa index in Brazil was close behind at 73 percent. By contrast, the Nikkei 225 index in Japan ended the year down 5.3 percent.

“Typically, you would expect in a flight to safety that investors would flee emerging markets,” Mr. Peta said. “That they haven’t shows that there is a strong desire to invest in growth.”

The growth in developing economies also has helped propel the prices of commodities like oil (up 58 percent), wheat (68 percent) and gold (31 percent). And the United States dollar has fallen against many currencies, including the Chinese yuan, Indian rupee, the euro, the British pound and the Canadian dollar.

Many investors believe that the slower growth of the American economy will not hobble its trading partners in Asia, Europe and Latin America. Their view also reflects a belief that the dollar will continue to sink, making stocks elsewhere more attractive. From the start of 2007 through Dec. 26, investors had put $141 billion into foreign equity funds, compared with just $49 billion in domestic stock funds, according to AMG Data Services, a research firm.

But some specialists are unsure that developing economies, many of which rely heavily on exports to developed countries, will continue to thrive. Bernard Connolly, the global strategist for Banque A.I.G. in London, said that European countries were also starting to contend with housing and credit problems.

“World demand, which has been extremely buoyant for a couple of years, is visibly melting away,” Mr. Connolly said. “Sitting here in London, it’s very easy to see.”

Mr. Levkovich of Citigroup said he was also concerned that foreign stock markets might be overvalued. But unlike Mr. Connolly he is more upbeat about the American stock market, at least through the first six months of the new year. In the second half of the year, he worries, corporate profit margins could come under pressure.

Mr. Levkovich also asserts that most American stocks are not overvalued as they were in 2000 at the height of the tech boom. The price-to-earnings ratio of the S.& P. 500 index, for instance, stands at 18.6, down from 30 in early 2000 but still higher than the long-run average of about 16. The stock market, he said, has punished companies that were most closely tied to the mortgage mess but has been kind to others, a pattern he thinks will continue.

“If you were very credit sensitive, you got hammered, and if you were not, you did not,” Mr. Levkovich said. “Equity markets didn’t have the same kind of bubble conditions that the credit markets had.”

Still, the stock market’s fate will be closely tied to the housing and credit markets, specialists say. The economy will be most vulnerable if banks are not willing to lend to businesses and consumers with good credit histories. Without access to capital, businesses will not be able to expand or invest in new products. It would also be hard for consumers to move for new jobs and pay for education and training.

“The linchpin for the U.S. is how quickly do the credit markets behave normally,” said Robert C. Doll, vice chairman at BlackRock, the asset management company.

In an indication that at least some parts of the market are beginning to unlock, the interest rates banks charge one another to borrow have been falling since the Federal Reserve started lending to banks through a new auction system in mid-December.

The three-month interbanking lending rate fell to 4.7 percent Monday, from 5.1 percent on Dec. 11. The difference between that rate and the cost at which the federal government borrows also fell over the same period, to 1.5 percentage points on Monday from 2.2 percentage points, though it remains very high relative to historical norms.

“It’s going to be a challenge getting back to a normalized level,” Mr. Peta said. But the recent drop “does say to me that things are improving.”

Following are the results of Monday’s auction of three-month and six-month Treasury bills.

Wall Street results in focus this week

2007-12-16T23:32:00.000-08:00

Three of the nation's top brokerages are set to report fourth-quarter results - and for two of them at least, the news is not likely to be good.

NEW YORK (CNNMoney.com) -- When the nation's biggest brokerage firms reported disappointing quarterly earnings in October, many on Wall Street were hoping that the darkest days of the credit crisis were behind them.
Now, with as the next earnings season heats up, analysts and investors are betting that this quarter's results could be just as bleak.
"I expect the numbers to be terrible," said Matt Kelmon, president and portfolio manager at the Kelmoore Strategy Funds, whose firm owns shares of a number of Wall Street firms.
Since the last quarter, few encouraging signs have emerged about the health of brokerage firms. Meanwhile, stock investors have remained on edge, the credit markets frozen shut and the nation's economic picture uncertain.
As a result, Wall Street analysts have been slashing their earnings estimates on firms like Morgan Stanley (MS, Fortune 500) and Bear Stearns (BSC, Fortune 500), both of which are expected to post steep losses this week after warning last month they would take multi-billion dollar writedowns this quarter.
Morgan Stanley is scheduled to report results on Wednesday and Bear Stearns on Thursday.
Also set to report this week is outlier Goldman Sachs (GS, Fortune 500), which is expected on Tuesday to post a profit for the quarter.
Last week, Lehman Brothers (LEH, Fortune 500) reported that net income fell 12 percent, or $1.54 a share, down from $1.72 a share a year earlier. Those results nonetheless exceeded Wall Street's expectations.
Merrill Lynch (MER, Fortune 500), the nation's largest brokerage, will not report results until January. To date, Merrill has been among the hardest hit by the credit crunch. It suffered an $8 billion loss on mortgage securities last quarter, which prompted the exit of Chief Executive Stanley O'Neal.
For now, much focus will be paid on Morgan Stanley and Bear Stearns.
Last month, Morgan Stanley became the latest firm to reveal massive losses, saying it would take a $3.7 billion hit in the fourth quarter because of its subprime mortgage exposure. One week later, Bear Stearns said it would take a $1.2 billion writedown due to its subprime assets and collateralized debt obligations.
Investors will again be paying close attention to how they value these so-called "level three" assets like mortgage-backed securities, which aren't highly liquid, said Lehman Brothers analyst Roger Freeman.
So far this year, banks have booked or announced more than $36 billion in writedowns as they try to value these securities.
"Just as in the third quarter, the markdowns will be very closely watched," said Freeman. "The question is are those marks going to be worse, the same or better."
During the month of November, a number of ABX indexes, which serve as a benchmark for securities backed by home loans issued to borrowers with weak credit, suffered declines suggesting that some of these securities could be worth even less than originally anticipated.
In addition, investment banks are no longer enjoying the type of dealmaking activity of recent years. The credit crisis has virtually stamped out debt and equity underwriting.
Buried within these troubling results, however, will be some good news, analysts argue. Some of the fourth quarter's weakness will be offset by growth in firms' rapidly expanding overseas businesses and results in their trading divisions.
"Despite the recent challenges in the mortgage and credit businesses, trading volume was robust," J.P. Morgan Chase analyst Kenneth Worthington wrote in a recent research note.
Analysts and investors will scrutinize the outlook these firms give as they enter fiscal year 2008. Most analysts are leaving the door open to the possibility of more writedowns, warning it will take some time before brokerages return to the days of record-setting profits.
"It will take some time for these companies to recover and re-establish their record results," Punk, Ziegel & Co.'s Richard Bove wrote in a recent research note. "There will be earnings disappointments and inability to regain record profits for what may be 12 to 18 months."

Crude oil demand to jump in 2008

2007-12-14T08:21:00.000-08:00

Crude oil demand growth will jump by 2.1m barrels a day in 2008 as strong Middle East consumption will offset the US economic slowdown and the impact of record prices, the International Energy Agency said on Friday.

The revised forecast is about 200,000 b/d higher than last month’s IEA estimate of a growth of 1.9m b/d and it is significantly higher than the Organisation of the Petroleum Exporting Countries own calculations of a growth of just 1.3m b/d.

Opec, the oil cartel which controls 40 per cent of the world’s oil supply, last week in a meeting in Abu Dhabi rejected an official increase in its production ceiling warning that demand could be lower than forecast because the impact of the credit squeeze.

However, the IEA, the western countries’ energy watchdog, said that higher output from some Opec countries, such as Iraq, Angola and the United Arab Emirates, will boost the cartel’s real output in December in spite of its decision to leave its official production ceiling unchanged.

“Overall, winter prospects have clearly improved,” the IEA said, “but $90 a barrel oil makes clear that the market is still on edge and is unlikely to relax until the peak weather risks have subsided and a clear trend in Opec supplies is apparent.”

Crude oil prices in New York and London in early morning trading were higher. Nymex West Texas Intermediate crude oil was 48 cents up to $92.73 a barrel while ICE Brent crude oil jumped $1.28 to $93.40 a barrel.

Crude oil prices have been trading in a range of between $85 and almost $100 a barrel since October and hit an all-time high of $99.29 a barrel in late November. High oil prices coupled with rising food cost have boosted inflation around the world.

The IEA said that high oil prices were only dampening at the margin demand growth in developed countries, such as the US or Germany. Consumption among rich countries will rise 1.3 per cent next year, they said.

However, in developing countries, the watchdog said that demand would growth 4 per cent in 2008 led by strong economic growth in China, the Middle East and India.

In addition, “most of the largest and fastest-growing emerging countries cap end-user prices, thus insulating consumers and fuelling strong oil demand growth,” the IEA said in its monthly oil report.

The jump in consumption in 2008 will force Opec to pump more than initially forecasted or to draw down inventories as non-Opec supply will only growth by 1m b/d. In spite of the gap between demand and non-Opec supply, next year’s increase will be an acceleration from 2007 meagre growth of 0.5m b/d.

Crude oil and products inventories level have already fallen below the 5-year average, the IEA said. In October, the inventories equalled 52.6 days of demand, down from 55 days during the spring and 54 days in the summer.

India, a Stirring Giant, Is the New Place to See and Be Seen

2007-12-13T00:40:00.000-08:00

NEW DELHI — If it’s Monday, it must be Romania — and Finland and Minnesota.

A soaring economy and crumbling trade barriers are making India a “must visit” destination for foreign politicians and executives. The crush of visitors, often first-timers but also companies seeking to expand their existing operations here, lands daily. They all hope to sign deals, find local partners, sell their wares or just soak up the contradictions that characterize the world’s largest democracy, a singular melding of chaos and opportunity.

Bald demographics make India impossible to ignore, and the slowdown in the United States economy adds to its appeal. About half of the country’s 1.1 billion people are under 25, and its rapidly expanding middle class is already estimated to be as large as the entire population of the United States. A rocketing stock market and a fast-growing class of the superrich add to its appeal.

Trade experts compare the rising tide of interest to the wave of outsiders who flooded China a few years ago. This year, Felipe Calderón Hinojosa became the first Mexican head of state to visit India in 22 years. Angela Merkel, the chancellor of Germany, President Luiz Inácio Lula da Silva of Brazil, and Henry M. Paulson Jr., the United States Treasury secretary, have all paid their respects.

But official delegations are arriving from unexpected corners of the globe, too. On a recent typical Monday in New Delhi, the government played host to Minnesotan businessmen led by Gov. Tim Pawlenty, a Romanian delegation led by the senior counselor in the ministry of small and medium-size companies, and Finns led by the minister of trade and development.

Privatization of major industries, a quickly Westernizing, youthful population and the prevalence of English draw a wildly diverse group of prospectors.

On a recent visit to Mumbai, Donald Trump Jr. pledged to invest in real estate there, Jägermeister held parties in New Delhi to introduce consumers to its herbal liquor, Prudential Financial partnered with the Indian real estate giant DLF to create an asset management business and Fiat announced tentative plans to import the Alfa Romeo.

India is like the “proverbial bus in today’s business world,” said Suhel Seth, managing partner with Counselage India, a New Delhi-based branding consultancy. “No one knows where it is going, no one knows whether there is space on it for them — but no one wants to miss that bus.”

Given the vast and varied interest, Indian business leaders can sound overwhelmed. “Iceland is suddenly on our radar screen,” said Supriya Banerji, the deputy director general of the Confederation of Indian Industry, one of the country’s largest trade groups. “Malta is coming in and Cyprus is clamoring for us.” So are Trinidad and Tobago, Uganda, Vietnam, Kazakhstan and Mozambique, all of which have sent delegations.

It is too soon to tell what impact the visits will have economically. They rarely yield immediate results, and sometimes they produce negative reactions. India’s mix of poverty and areas where vast, fetid slums edge newly refurbished international airports and barefoot children beg outside of $500-a-night hotels, has left more than one Western visitor aghast.

The realities of India often surprise even first-time visitors who have studied the country. Signs of social upheaval — strikes, dangerous roads and electricity that flickers off even in the most luxurious hotels — are common. One recent morning in a five-star New Delhi hotel, bleary-eyed Minnesota executives puzzled out a scene from the night before. As they had returned from a visit to the Taj Mahal, thousands of protesters blocked the road, police conspicuously absent. The Americans did not make it back to New Delhi until after midnight.

“We learned a lot,” said Jonathan B. Farber, president of global underwriting for Travelers, the insurance company, picking his words. It was interesting to see “how the logistics worked themselves out,” he said, recalling that as protesters laid down in one lane of the highway, two-way traffic seemed to intuitively share the other lane.

In spite of such hiccups, most visitors are optimistic about India’s future and the opportunities it offers their companies. To date, “trade has been rather modest,” acknowledged Asko Numminen, the Finnish ambassador, tall and blue-eyed, in an understated gray suit that complemented his embassy’s clean Nordic lines. In a nod to his host country, his tie depicted a field of elephants.

In Finland, Mr. Numminen said, “we are speaking about the ‘India phenomena.’” He said companies, universities and research centers were looking toward India because it had the “biggest pool of human resources in the world.” Since the beginning of September, Mr. Numminen has traveled twice to Chennai to open factories for Finnish companies, and Finnair now has 12 direct flights a week from Helsinki to India.

Members of foreign royalty are also making official visits to India — even royalty whose ancestors were involved in colonization of the subcontinent centuries ago. Queen Beatrix of the Netherlands arrived in October, with eight of her country’s most important chief executives, on her second visit to India.

Warner Rootliep, general manager for the Air France-KLM Group in the region, said the trip allowed the executives a “great opportunity to raise some questions directly to the prime minister and other ministers present.”

Showing off a knowledge of India is often de rigueur on the visits. When Gov. Jon Huntsman Jr. of Utah came in October with university administrators and biotechnology executives to pitch business opportunities with Utah, he boasted over lunch with Indian industrialists that he had celebrated Diwali, the most important Hindu festival, at the governor’s mansion back home.

Grinning, he said the relationship between the United States and India had “gone from being flat as a chapati to sweet as gulab jamun,” referring to a flatbread and a local dessert.

Mr. Pawlenty of Minnesota started his speech in New Delhi with “namaste,” the Hindi greeting, though he was quick to address the obvious question: What could a group of Minnesotan and Indian businessmen have in common?

He said Indians tended to like spicy food, while some Minnesotans considered milk spicy, and called the contrasting weather a clear divide. But Mr. Pawlenty noted similarities too: both Minnesota and India broke away from Great Britain, both play forms of hockey, and rural life and farming are a backbone of each.

To be sure, India remains in China’s shadow. Because of weak infrastructure, a fractious political climate and other hurdles, India’s foreign trade and investment figures are dwarfed by China’s, where foreign direct investment was nearly $70 billion in 2006. But many foreign companies and governments increasingly equate the two when they talk about the growth markets of the future.

The government here expects foreign direct investment to grow rapidly next year, to some $30 billion, from $19.5 billion, and the economy to grow at 9 percent for the third year in a row.

And India definitely tops China on one front. Because of increasing business travel demand, American Express predicts, hotel room rates here will increase more than anywhere else in the world in 2008: 34 to 38 percent for midrange hotels and 38 to 41 percent for the best hotels.

Oil-Rich Nations Use More Energy, Cutting Exports

2007-12-11T05:06:00.000-08:00

The economies of many big oil-exporting countries are growing so fast that their need for energy within their borders is crimping how much they can sell abroad, adding new strains to the global oil market.Experts say the sharp growth, if it continues, means several of the world’s most important suppliers may need to start importing oil within a decade to power all the new cars, houses and businesses they are buying and creating with their oil wealth.
Indonesia has already made this flip. By some projections, the same thing could happen within five years to Mexico, the No. 2 source of foreign oil for the United States, and soon after that to Iran, the world’s fourth-largest exporter. In some cases, the governments of these countries subsidize gasoline heavily for their citizens, selling it for as little as 7 cents a gallon, a practice that industry experts say fosters wasteful habits.
“It is a very serious threat that a lot of major exporters that we count on today for international oil supply are no longer going to be net exporters any more in 5 to 10 years,” said Amy Myers Jaffe, an oil analyst at Rice University.
Rising internal demand may offset 40 percent of the increase in Saudi oil production between now and 2010, while more than half the projected decline in Iranian exports will be caused by internal consumption, said a recent report by CIBC World Markets.
The report said “soaring internal rates of oil consumption” in Russia, in Mexico and in member states of the Organization of the Petroleum Exporting Countries would reduce crude exports as much as 2.5 million barrels a day by the end of the decade.
That is about 3 percent of global oil demand. It may not sound high, but experts say demand for oil is so inflexible, and the world has so little spare production capacity, that even small shortfalls can raise prices. In 2002, when a labor strike in Venezuela took 3 percent of global production off line, oil prices spiked 26 percent within weeks.
The trend, though increasingly important, does not necessarily mean there will be oil shortages. More likely, experts say, it will mean big market shifts, with the number of exporting countries shrinking and unconventional sources like Canadian tar sands becoming more important, especially for the United States. And there is likely to be more pressure to open areas now closed to oil production.
Greater political stability and increased drilling in some important oil states, notably Iraq, Iran and Venezuela, could help offset the rising demand from other oil exporters.
“Ten years from now, world capacity to produce oil could be 20 percent higher than today,” said Daniel Yergin, chairman of Cambridge Energy Research Associates. “But a lot will depend on how the geopolitics work out.”
Growth in demand among oil exporters is one aspect of a larger issue, breakneck economic growth in parts of the developing world. China and India are expected to account for much of the increase in global oil demand in the next 20 years. But Fatih Birol, chief economist at the International Energy Agency in Paris, rated consumption growth among oil exporters as the second-biggest threat to meeting the world’s oil needs.
“It’s a big problem, and growing all the time,” Mr. Birol said.
Internal oil consumption by the five biggest oil exporters — Saudi Arabia, Russia, Norway, Iran and the United Arab Emirates — grew 5.9 percent in 2006 over 2005, according to government data. Exports declined more than 3 percent. By contrast, oil demand is essentially flat in the United States.
CIBC’s demand projections suggest that for many oil countries, including Saudi Arabia, Kuwait and Libya, internal oil demand will double in a decade.
Factors contributing to the trend include increased industrialization, higher government spending and increasing personal consumption. According to a World Bank report, economic growth in the Middle East and North Africa has doubled since the 1990s, and Russia has done even better.
Oil money is giving many countries the means to invest in their own economic development, and robust global growth is creating markets for their goods — including plastics, chemicals and fuels refined from oil.
To be sure, many oil-exporting states have a long way to go before they achieve Western living standards. The global oil market is still dominated by traditional consumers, particularly the United States, which uses nearly a quarter of the world’s oil.
Perhaps surprisingly, though, some producing countries have surpassed the United States in oil consumption per person. They include Bahrain, Kuwait, Qatar and the United Arab Emirates.

Particularly in oil-producing countries with large populations, like Indonesia, Russia and Mexico, a rapid rise in car ownership is a big factor driving consumption increases. Russian farmers are replacing horses and carts with gas-guzzling four-wheel-drive vehicles, while urban consumers are snapping up BMWs even before they learn to drive.

“Most of the producing countries have young populations entering the driving age and can more readily afford to buy cars because the price of fuel is low,” said Charles McPherson, an oil expert at the International Monetary Fund. “It’s certainly pulling product off the international markets.”
Some oil-exporting countries use price controls and subsidies to ensure cheap fuel for their people. These programs are politically popular, even though experts say they contribute to wasteful energy use.
Kuwaitis, for instance, often leave their air conditioning — powered by electricity generated from natural gas or oil-derived fuels — running for weeks while on vacation, said an official at the World Bank. Sportsmen of the United Arab Emirates ski indoors on manufactured snow and play golf on lush courses that require desalinated water produced with fuels refined from oil.
Saudis, Iranians and Iraqis pay 30 to 50 cents a gallon for gasoline. Venezuelans pay 7 cents, and demand is projected to rise as much as 10 percent this year. Auto sales have tripled in four years. “Where cheap oil is viewed as a national human right, you’ve virtually got runaway demand,” said Chris B. Newton, an executive of the Indonesian Petroleum Association in Jakarta.
Indonesia flipped from exporting oil to importing it three years ago because of sagging production in depleted fields and rising demand. Iran, Algeria and Malaysia are vulnerable in the next decade. Most oil experts view Mexico as the next country likely to flip, in as little as five years.
Rapidly falling production in Mexico’s aging Cantarell oil field is part of the problem. Also significant, though, is the rising number of cars on Mexican roads. They have nearly doubled, to almost 16 million, in the last decade, and gasoline consumption is growing 5 percent a year.
In Mexico City the other day, a bricklayer named Jaime Guerrero arrived at a local Chevrolet dealership. His extended family cried “bravo!” as he signed the papers for his first car.
“To have a new car in my name is a dream transformed into reality,” said Mr. Guerrero, 26. He and his family piled in and weaved through the chaotic traffic of the capital, hunting for a priest to douse the car with holy water.
“I don’t worry about the climate or shortages of oil in the world,” Mr. Guerrero said. “I just worry if gasoline prices go up.”

America's Grand Deleveraging

2007-12-07T15:02:00.000-08:00

What's with all the gloom about the U.S. economy? The problem is that we have two problems. One is that the economy is slouching toward recession or, at best, slow growth. It's the consequence of falling house prices, higher energy prices, flagging consumers and shrinking profits.
The other is that the market for credit, the lifeblood of a modern economy, isn't functioning well. That problem is amplifying the pain caused by the first.
Just a few weeks ago, a lot of folks were arguing that the worst was behind us. Housing was still ailing. But after a big wallop, markets for credit seemed to be moving toward normalcy. The Federal Reserve ended its Oct. 31 meeting declaring that the "upside risks to inflation roughly balance the downside risks to growth." If Fed officials truly believed that then, they no longer do. They'll likely cut interest rates again on Tuesday. Only the most optimistic observers expect the U.S. economy to rebound quickly from its fourth-quarter slump. The argument now is between those forecasters who expect growth to be so slow in early 2008 that the unemployment rate climbs a little, and those who see a recession in which it climbs more.
In ordinary times, this would be unpleasant, but not so frightening. The Fed knows how to treat this condition: cut interest rates.
Sure, it's tough to get the timing right. And administering the remedy is more complicated with the dollar drooping and inflation returning to the Fed's agenda for the first time in years. Still, this is a familiar disease. Although the Fed has not and cannot abolish the business cycle, the U.S. has suffered from recession only 16 months in the past 25 years. (In the quarter-century before that, there were 64 months of recession.)
But these aren't ordinary times.
For years, banks and investors lent freely. They took big risks for surprisingly little reward (known as "low risk premiums" in the patois of the trade). Now, they're shunning risk. Big banks are reluctant to lend even to each other for more than a few days, and are hoarding cash. In a symptom that the financial fever hasn't broken, interest rates for one- and three-month loans among banks are up sharply. The Fed and the European Central Bank are now forced to consider the economic equivalent of alternative medicine.
"History," Alan Greenspan warned back in August 2005, "has not dealt kindly with the aftermath of prolonged periods of low risk premiums." He wasn't right about everything (and, yes, he may have contributed to today's problems by keeping rates so low for so long). But he was right about that.
Perhaps all this is a function of the calendar, a reflection of bankers' eagerness to dress up their books for the Dec. 31 snapshot. Possible, but not likely. "When the alarms go off, we note that we have heard them several times over the past few months, and there has never been a real fire," commentator John Mauldin writes in his latest newsletter. "However...we see a few fire trucks starting to gather and those sirens are telling us that more are on the way. There is smoke coming from the building. Attention must be paid."
The problem goes beyond mortgages. Rising delinquencies for credit cards and home-equity and auto loans are bound to make banks, credit-card issuers and other lenders wary. "Banks are having to eat into their capital base in order to reserve for growing losses," Mr. Mauldin says. "And that means they have less money to lend."
The Fed's weekly numbers show that bank lending is still increasing. But a lot of that is unwilling lending. Some banks are making loans under old promises to finance customers if they couldn't access financial markets. Others are taking on to their books loans made through complicated off-balance-sheet entities, and now have to set aside capital as a result. At a time when they'd rather reduce their portfolios of loans, that unwilling lending seems certain to lead them to pull back, if they haven't already, on lending to consumers and businesses.
Leverage is defined as the factor by which a lever multiplies a force. In economics and finance, leverage allows the bold to borrow to make bets that can pay off handsomely when times are good. But leverage magnifies losses when things go bad. So borrowing binges are followed by periods of deleveraging in which lenders and investors borrow less and take fewer risks. Economists dub the recent decades in which recessions were scarce and inflation calm the Great Moderation. That seems to be giving way to the Grand Deleveraging.
At best, the economy has a hangover, and will feel better in a couple of months. But this may be more like a case of mono, an ailment in which the patient doesn't return to normal vigor for a lot longer.

Impact of the Apple iPhone

2007-11-27T12:11:00.000-08:00

Impact of the Apple iPhone
It's too early to tell if the Apple iPhone will be a sales success; we'll have to see how the product actually works. But I think Apple's announcement is very promising, and whether or not the product is a best-seller, it resets a lot of the agenda for the mobile industry.This post is in three parts:--Information on the iPhone. What we know for sure about its specs and functionality, and other information that appears to be true but is not yet confirmed.--Prospects for the product. Speculation on the iPhone's potential sales success. Who might want it and why.--Impact on the industry. Who suffers, what the opportunities are, what to watch for next, and what to do if you're working at a mobile company.Information on the iPhoneBefore I even get into details about the iPhone, I want to acknowledge for the record that Steve Jobs does great announcements. The Apple faithful were appropriately awed. But the most impressive moment to me was his handling of Google and Yahoo. Both companies are posturing as the future dominators of mobile data, but Jobs managed to have each of them on stage, in order, catering to him. A wonderful power play, and a nice inversion of that first Macworld after Steve's return when he kowtowed to Microsoft. This is a long, multiyear exercise in personal and corporate redemption.About the device. It's a small mobile device with a touchscreen-centric interface. It has a 160-dpi 320x480 screen, four gigs or eight gigs of memory, a quad-band GSM/Edge cellular radio (not 3G), WiFi (802.11 b and g), Bluetooth 2.0, and a two megapixel camera.The device senses whether it's being held horizontally or vertically, and rotates the screen image appropriately. There's a proximity sensor to turn off the touchscreen when the phone is held against your face, and an ambient light sensor to dim the screen when you're in low light conditions.The device weighs 4.8 ounces / 135 grams, and is nicely sized (not as thin as some phones, but acceptable size and weight for most phone users).Battery life is supposedly five hours of talk and 16 hours of music playback.There are no buttons on the face of the device -- dialing, typing, and all user interface is controlled through the touchscreen.The operating system is Mac OS X. Bundled software includes the Safari Web browser, an e-mail, Google Maps and associated location-based services, iPod music and video playback, a suite of phone apps (address book, threaded SMS, calendar, dialer, visual voicemail [pick messages from a printed list on screen]), photo management software, and some widgets provided by Apple.The visual voicemail feature is nice to see but also frustrating because we were talking about this feature at Palm roughly four years ago. Sigh.The touchscreen interface includes multi-touch support, so you can use on-screen gestures to navigate the interface. For example, you can pinch two fingers together to shrink an image, and spread two fingers to enlarge it. This will be especially important to applications like the Web browser, which lets you zoom in and out on web pages.Price is $499 for four gigs and $599 for eight gigs. That price apparently requires purchase of a two-year service plan from Cingular. The phone is exclusive to the Cingular network in the US for "multiple years." Availability is June in the US, late 2007 in Europe, and 2008 in Asia.What it doesn't do. There are apparently some important restrictions on the functionality of the device.No direct connection to iTunes. Time Magazine reports that you can't download songs and videos directly from iTunes; instead, you have to go through a PC or Mac and then sync the songs over. That may be a blessing since the phone doesn't have 3G performance, but it ought to work direct at least on WiFi.No wireless sync. You have to use a cable to sync it to a PC, even though it has high-speed wireless. Again, why restrict this?No third party apps. This one was a shock to me. Michael Gartenberg of Jupiter Research reports that Apple says the iPhone is a closed device -- only Apple will be able to add applications to it. Michael thinks it won't be an issue to the masses, but I think it's a huge missed opportunity for Apple. They have Mac OS X in there, they have the Widgets infrastructure -- if they turned the developers loose on it they could rapidly amass an incredible array of add-on features and system completers. I don't know if the restriction on third party apps is a temporary thing, or an intentional and permanent part of Apple's plan.No Office enclosure support. Michael also reports that Microsoft Office files enclosed by e-mails can't be read by the iPhone. I lived through this sort of restriction at Palm, and it is a stopper for serious e-mail users. This is exactly the sort of thing that third party developers could fix if Apple opened the platform.What we don't know:--What's the processor and its speed? (Just curious about this; it doesn't make much difference to the user.)--How powerful is the battery, and can it be replaced by the user? (This is important because I suspect that doing heavy media and maintaining a wireless connection will drain the battery fairly fast. I remember back when Palm thought the Treo didn't need a replaceable battery. Wrong.)--Will the GSM SIM card be removable? (This might let you use the device on another network, although you'd still have to buy it with a service plan.)--What's the price of the required Cingular service plan?Prospects for the iPhone: Great, for a segmentAs I've said a few times, I think the market for mobile data devices is split into at least four big segments: people who won't pay more for anything other than voice (65% of the population), people who will pay extra for communication features, people who will pay extra for information management features, and people who will pay extra for entertainment features (each of those three groups are about 12% of the population). The iPhone looks like an ideal offering for the entertainment-centric users. Steve says he wants one percent of the mobile phone market (for now). I think that the iPhone and its lower cost offspring could eventually get about 12%.Is that a big number or a small one? Well, it's a hundred million phones, and would be enough to make Apple a top five phone vendor. So it's a big hairy number.Of course, that's assuming the phone actually works. I think it will -- the demos today were very impressive -- but we can't really tell yet. Here are some thoughts on drawbacks and preliminary conclusions:It's a segment, not the whole smartphone market. Jobs compared the iPhone aggressively to other smartphones, but that's confusing. There is no unified smartphone market. You can anticipate a lot of confusing articles and web posts in the next few months with people arguing over whether the iPhone is the ultimate mobile thing, all based on their own personal preferences. Here's the answer -- there is no single ultimate mobile device, let's talk about which segments will like it and which won't.How good will the battery life be really? I'm very suspicions of the power requirements of a wireless + media device that's as thin as the iPhone. It's going to be bought first by enthusiasts who'll use it a lot. If the batteries go flat in a single day's heavy use, that's going to be a major issue. It's one thing when your iPod runs out of power; it's a very different thing when it takes your mobile phone down with it.Apple can sidestep the problem partially if the battery can be replaced by the user. If not, watch battery life really carefully.A lot depends on the multi-touch interface. Since there are no buttons, there's no familiar interface to fall back on if people can't figure out the interface. Multi-touch looks really cool when demonstrated by someone who knows it well, but will the average user be able to figure it out? Will the system be able to distinguish well between a tap and the beginnings of a gesture? For example, what if I'm trying to expand an image in the browser, and the system thinks I tapped on a button in the web page? This could create the sort of mess that makes people throw devices against the wall.Would you like a side order of grease with your phone screen? In the mobile industry, the general belief is that it's bad to have the phone's screen pressed directly against your face -- it'll pick up oil and/or makeup from your face, and get smudged very quickly. Apple's going to test whether that's a real problem or just a superstition in the industry. (David Pogue says Apple came up with a screen coating that minimizes the grease problem.)This design may not go over as well in Europe and Asia as it will in the US. In the US it's easy for Steve to give a speech saying how stupid it is to type using a phone keypad. In Europe and parts of Asia, a lot of phone users are very used to doing it for SMS, and no matter how stupid Steve tells them they are, they kind of like doing it. I think they may not be happy trading in their physical keypad for a screen where they can't feel the keys. That forces them to look at the screen when they type.For these people, Apple's product is like trying to get touch typists to use a keyboard that's just a flat glass surface without moving keys. With the single exception of the sets on Star Trek, this has never been accepted by anyone because the ergonomics are bad.I think Apple is at risk when it tries to change the established habits of users.This is a poor device for communication-centric users. RIM's stock was hammered today, but I think that's a mistake. Yes in the long term there's a risk to RIM from any new competitor, but stock market valuations are not generally driven by multi-year trends. The iPhone as currently designed is a lousy device for RIM's communication-centric users because it doesn't have a keyboard and because it can't handle Outlook attachments. It has a lot of features those communication-focused users don't care about and won't pay extra for.Trashing RIM stock because of the iPhone is like trashing the stock of Caterpillar Tractor because someone brought out a new sports car.Impact on the industryThe immediate impact of the iPhone is that it changes the terms of the debate for everybody. Every new mobile data device will be evaluated against the iPhone's specs, which is going to become very irritating for a lot of vendors because the iPhone isn't shipping yet. It's like boxing a ghost. I suspect that may have been Apple's intention. Supposedly it had to announce now because the device would have leaked when it entered FCC testing, but an interesting side benefit will be that Apple can stall sales of all its competition. I think this is likely to be a very unpleasant time for Microsoft Zune, a moderately unpleasant time for Palm, and an intense annoyance for everyone else.Curious side thought -- will this also stall sales of traditional iPods? I think there's a chance it will.Microsoft looks foolish. Robbie Bach, the president of Microsoft's entertainment and devices division, made a big mistake at CES. He got roped into critiquing the iPhone the day before it was announced. Some of his very off-base comments include:
"The latest rumor we hear is that it is going to be a MVNO phone and there hasn't been a lot of successes in that MVNO space for a lot of different reasons."Speculating that Apple won't sell through a carrier: "Historically, working with partners hasn't been a strong point for Apple, so maybe it will find a way to work around those relationships.""You have to find out what it's great at. Is it great as a phone or is it great as music player?....If it's great as a music player, then it's just another iPod trying to be a phone."He ended up sounding both arrogantly dismissive and out of touch at the same time.Two suggestions, Robbie:1. Repeat after me: "We can't comment until we know what they're announcing. It's a big market and there's room for a lot of companies in it. We're just focused on making the Zune product as great as possible, and taking wonderful care of our customers."2. The best way to respond to Apple is to out-innovate it. There's no reason you guys couldn't make a product as interesting as the iPhone. Do you have the vision to build it, and the marketing skills to make people buy?Apple is focusing enormous effort behind this one initiative. Jobs devoted virtually the entire Macworld keynote to this product -- so much so that a number of Mac fans are bitching that he ignored the Mac. Can Microsoft put the same focus on Zune and its future siblings, or is Zune just one of fifty other Microsoft initiatives?The impact on Palm is hard to read, but potentially very serious. The core users of Palm Treos tend to be communication-centric and information-centric users. Without third party apps and without a complete e-mail solution, I think the iPhone is not a great substitute for a Treo today for most users.If I were at Palm I'd be pounding those issues relentlessly in my marketing for the next six months.However, the Treo has benefited mightily in the US from its image of being the coolest smartphone. It has been a status symbol in Silicon Valley and beyond. Judging from the reactions of the people I spoke to today, I think that position is profoundly at risk. Check out David Pogue's enthusiastic iPhone comments in the New York Times. Pogue is a longtime Palm fan, and before he started at the Times he was a traditional keynote speaker at Palm's developer conferences.The Treo is still a practical choice, but it's not necessarily the emotional choice.I think there's a danger that Treo will turn into a tweener in the mobile market -- not as credible for e-mail as RIM, not as good for entertainment as iPhone, and not optimized properly for information management (screen is too small, not enough storage, no note-taking). Palm needs a stable niche it can dominate, so it will have enough money and time to grow its product line.I don't know if Palm wanted to make Jeff Hawkins' new product a test of the company's ability to innovate, but like it or not that product is going to be compared intensely to the iPhone, even if they don't attack the same problems or sell to the same people. It's Jeff Hawkins vs. Steve Jobs for the title of mobile visionary.That should be entertaining.Nokia must be frustrated. It has been doing all these experiments in tablets and media phones, and Apple waltzes in with its first phone product and resets the dialog in the mobile industry. Nokia wants that sort of leadership role, and I'm sure it'll invest heavily in pursuing it.SonyEricsson has a problem. I've been impressed by SonyEricsson's media phones, but the iPhone is aimed at exactly that same market. Luckily for SonyEricsson, most of its franchise is in Europe, where I think Apple will find sales a little tougher. It also helps that Apple's shipping in Europe later than it is in the US. But I think SonyEricsson will find it harder than ever to penetrate the US, and it will have to innovate rapidly to hang onto its emerging franchise in Europe.And now, the opportunity. Apple did an exclusive deal with Cingular. I'm sure it will do other exclusive deals with a small number of other operators around the world. That will create intense demand for an alternative product among the other operators. Verizon, Sprint, and TMobile US must all be desperate for answers to Apple's product. That means phone companies that can produce media phones, and software developers creating apps that can duplicate some of the iPhone's functions, have an important opportunity. Samsung probably spun up a team today to copy the iPhone, and LG probably spun up a team to copy whatever Samsung copies. And so on.I think the issue isn't getting around Apple's multi-touch patents; you don't have to have a touch screen to make a great entertainment product. The key question is whether anyone else can integrate a wireless entertainment device (services, apps, and hardware) as well as Apple can. It won't be enough to just dump a bunch of apps into a device, and unfortunately that's what most of the mobile phone companies are organized to do.What comes next? Michael Gartenberg made this point, and I think it's a good one. Apple undoubtedly plans a mobile product line, not just a single product. It's possible that the other products to come will plug some of the gaps, and attack additional targets.

Opportunities in Business

2007-11-27T12:04:00.000-08:00

Apple unveils new iPod with Wi-Fi
CEO Steve Jobs announced major upgrades to its popular music players; cuts iPhone price by $200.
By Jon Fortt, Business 2.0 Magazine senior editor
September 5 2007: 11:00 PM EDT
SAN FRANCISCO (Business 2.0 Magazine) -- Apple announced Wednesday the first major overhaul of its popular iPod music digital players in nearly two years and slashed the price of its new iPhone.
CEO Steve Jobs unveiled a series of iPod upgrades - including more storage and bigger screens - but the showstopper was a new model dubbed the iPod Touch and fashioned after the iPhone.

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Apple (down $7.40 to $136.76, Charts, Fortune 500) also announced a new version of its iTunes music store that will allow users to buy songs wirelessly.
In iPhone news, Jobs said Apple will discontinue one of the two models sold since late June. The remaining version, with 8 gigabytes of storage, will now sell for $399, or $200 less than before.
Investors, however, weren't happy about the price cut (and neither were iPhone owners). Apple shares closed down 5.1 percent on Wednesday.
Blogging the Apple event
Jobs detailed the iPhone changes and other developments at an invitation-only press conference held in San Francisco.
The biggest news centered on Apple's iPod line. To date, the company has sold more than 100 million iPods, but sales have been drifting since last year's holiday shopping season and profit margins are shrinking.
Apple now sells four different types of iPod: the Touch, Shuffle, Nano and the original model, which Jobs christened the Classic on Wednesday.
A new version of the Classic comes with a full metal design and is thinner than its predecessor. A $249 version has 80 gigabytes of storage and 30 hours of audio. A slightly thicker model features 160 gigabytes of storage and will retail for $349.
"This boggles the mind," Jobs said. He noted that the original iPod could hold up to 1,000 songs. Today, an iPod can store 40,000 songs.
What's still missing: The Beatles
The new Nano, meanwhile, will have video and a larger, brighter screen with an interface similar to the iPhone. Apple will also bundle three games into the new Nano, including Sudoku from Electronic Arts.
The new Nano will feature two memory sizes: A 4-gigabyte model for $149 and an 8-gigabyte model for $199. It will be sold in black, red, silver, blue and green.
Jobs said the new Nanos should be in stores by this weekend.
As for the iPod Touch, Apple watchers had speculated for days that Apple would unveil an iPod similar to its new mobile phone. Though slimmer than the iPhone, the iPod Touch features a similar multitouch interface, built-in Wi-Fi and the Safari Internet browser.
Like the iPhone, the iPod Touch can play YouTube videos. It will retail for $299 or $399, depending on the memory installed.
One thing the iPod Touch can't do that the iPhone can: make or receive phone calls.
Jobs said Apple will begin shipping the iPod Touch this month.
Next up: The 'iCar'?
Jobs also announced a new venture with Starbucks (Charts, Fortune 500) whereby iPod Touch users who visit one of the coffee house's outlets can download any song playing directly to their music player. They can also retrieve a list of the last 10 songs that the Starbucks store played.
Starbucks CEO Howard Schultz, who joined Jobs on stage, said the new service will begin rolling out in early October and will be available in 25 percent of the company's WiFi-enabled stores by next spring.
Wednesday's announcements come more than two months after Apple took on mobile phone giants Nokia (Charts) and Motorola (Charts, Fortune 500) with the iPhone.
Jobs said the company is on track to sell one million iPhones by the end of September. Research firm iSuppli reported Tuesday that the iPhone outsold all other smartphones in July.

Source: Google.com