World News

Condolences from Khmer Youth Association

2010-11-24T05:50:00.001-08:00

Monks bless dead after horror [-Koh Pich bridge: the "gate to hell"]

2010-11-24T05:48:00.000-08:00

Nov 24, 2010
Reuters

DESPERATE SCREAMS

Scores of people leapt to their deaths from the pedestrian bridge, unable to swim and dragged under water amid frantic splashing as desperate and panicked people plunged down from above.

While many victims drowned, most perished while trapped under the weight of hundreds of fleeing revellers.

Hours after the tragedy, the scene was untouched. Shoes, flip-flops and ripped clothing piled up a foot high across some parts of the 80m bridge linking Phnom Penh to a gawdy man-made entertainment island packed with restaurants, fairground rides and exhibition centres.

Hundreds of onlookers endured the stench of rotting garbage and tip-toed across the trampled grass to get a glimpse at the place where so many died.

Many people sat in silence on the steep banks of the Tonle Sap, a tributary of the Mekong River, listening to the chanting of hundreds of Buddhist monks who laid flowers and lit incense to bless the dead.

Flags were flown at half mast across the city of about 2 million people, which swelled during the festival as hundreds of thousands flocked in from surrounding provinces for the festival marking the end of the rainy season.

Television repeatedly showed footage of shirtless, shoeless bodies laid out on the ground and on hospital floors, many open-eyed and covered in bruises.

Relatives of the dead wept at the Khmer-Soviet hospital, where more than 100 unclaimed and unidentified bodies, most of them teenagers, lay side-by-side, covered in white sheets.

'I didn't feel safe on the bridge, there were just too many people, so I crossed just in time,' said Bothra Cheahcha, whose friends were among the dead.

'It's tragic and I was so lucky,' he said. 'I feel like I'm reborn, like I have been given a second chance at life.' -- REUTERS

PHNOM PENH - SAFFRON-ROBED Buddhist monks chanted as onlookers gazed silently across a bridge piled with the shoes and torn clothing left behind by victims of a stampede in Cambodia's capital.

The body count stood at 375 by sunset on Tuesday and was expected to rise. Many people were missing and Cambodians had many questions about one of the darkest days of their country's recent and troubled history.

The cause of the stampede on the Diamond Gate bridge late on Monday, the last day of an annual three-day Water Festival, remained a mystery.

'Everyone is shocked that this can happen to us,' said Chhun Sreypong, 45, clutching her one-year-old baby and looking out across Phnom Penh's Tonle Sap river, from where scores of limp bodies were dragged.

'Those who died were mostly youngsters. Many mothers have lost their children. No one knows why this happened.' Survivors gave chilling accounts of being buried under piles of bodies, alive and dead, for as long as three hours, crying for help and clambering for air, open-mouthed as police doused the trapped crowd with water cannons.

'People were shouting for help and began to push,' said Touch Theara, 38, who was among the thousands who flocked to Diamond Island to eat in restaurants, listen to live music and buy cheap clothes. Her sister and her friend died on the bridge, which some described as a 'gate to hell'. About 755 people were injured.

Cambodia mourns festival tragedy

2010-11-24T05:47:00.002-08:00

Cambodia mourns stampede victims

2010-11-24T05:47:00.001-08:00

Aftermath of the stampede video

2010-11-24T05:46:00.002-08:00

Anger and grief as Cambodia mourns stampede dead

2010-11-24T05:46:00.001-08:00

November 24, 2010
Kelly Macnamara
AFP

Grieving Cambodian families on Wednesday began paying their last respects to relatives among the nearly 380 victims killed in a festival stampede, as anger built over security at the event.

Authorities were probing why the throngs of revellers had panicked at the annual water festival, crushing and trampling people underfoot on an overcrowded narrow bridge in Phnom Penh.

The government admitted it had overlooked issues of crowd control at the three-day event, which attracted some three million revellers to the capital from all over Cambodia.

"We were concerned about the possibilities of boats capsizing and pick-pocketing. We did well, but we did not think about this kind of incident," government spokesman Khieu Kanharith told AFP.

A committee had been set up to investigate the cause of the stampede, he said, adding that a private security firm was in charge of the main festival site Diamond Island and its bridges.

"The place is private, so they used their own security, and police only helped handle order outside," Kanharith said.

As the first funerals and cremations began taking place across the country, bewildered relatives searched for answers.

"I feel very sad and angry about what happened," Phea Channara said at a funeral service for his 24-year-old sister on the outskirts of Phnom Penh.

"I wonder if the police really did their job. Why did they allow it to happen in the first place?"

Hun Sangheap -- who was on the bridge minutes before the stampede happened and helped pull out victims -- said the rescuers were slow to respond to the incident.

"The authorities were very late in saving the victims. The company did not manage the security well," the 32-year-old said, referring to the island's private security firm.

Prime Minister Hun Sen has described the disaster as Cambodia's worst tragedy since the Khmer Rouge's 1975-1979 reign of terror, which left up to a quarter of the population dead. Thursday will be a national day of mourning.

At least 378 people were killed in the stampede and another 750 were injured, government spokesman Phay Siphan told AFP on Tuesday.

Exuberant festival-goers had been crossing the bridge to reach an island hosting concerts, food stalls and ice sculptures before the crowd turned to a deadly crush of writhing and then lifeless human bodies.

In scenes replicated across the city, the dead were laid out in rows under a white tent erected in Calmette Hospital car park, their uncovered faces showing that many had sustained bloody bruises during the stampede.

Military trucks later began delivering the victims back to their relatives.

It was not immediately clear what had triggered the disaster, but Kanharith said a rumour had spread among revellers celebrating one of Cambodia's biggest festivals that the bridge was unstable.

He said many of the deaths were caused by suffocation and internal injuries, adding that about two-thirds of those killed were women.

One survivor at Calmette Hospital who suffered serious back injuries recalled the anguish of being unable to help others around him as the surging crowd became a suffocating crush.

"I felt selfish when it happened, but I could not help myself. There was a child trapped under me and I wanted to pull him up but I couldn't," he said, asking not to be named.

The stampede marked a tragic end to the boat races, concerts and fireworks that are traditionally part of the annual festival to celebrate the reversal of the flow between the Tonle Sap and Mekong rivers.

The event -- which saw hundreds of brightly coloured boats take part in races on the Tonle Sap -- is popular with tourists but the government said no foreigners were believed to be among the victims.

US Secretary of State Hillary Clinton, who visited Cambodia earlier this month, offered her country's "thoughts and prayers" following the disaster. Other countries to send their condolences include Russia, and Asian neighbours Thailand and Singapore.

Cambodian survivors tell of their festival stampede hell

2010-11-24T05:45:00.000-08:00

November 24, 2010
Martin Petty and Prak Chan Thul
Reuters

PHNOM PENH: Buddhist monks chanted as onlookers gazed silently across a bridge piled with the shoes and torn clothing left by victims of a stampede in Cambodia's capital here.

The body count stood at 375 yesterday and was expected to rise. About 755 people were injured and many people are missing.

The stampede on the Diamond Gate bridge occurred late on Monday, the last day of the yearly three-day Water Festival marking the end of the rainy season.

"Everyone is shocked that this can happen to us," said Chhun Sreypong, 45, clutching her baby and looking across Phnom Penh's river, the Tonle Sap, from which scores of bodies were dragged.

"Most of those who died were youngsters."

Survivors told of being buried beneath piles of bodies, of the living and the dead, for as long as three hours, crying for help and fighting for air, as police doused the crowd with water cannons.

"People were shouting for help and began to push," said Touch Theara, 38, who was among the thousands who flocked to Diamond Island for the festivities.

Her sister and her friend died on the bridge, which some described as a "gate to hell".

Not since the era of the ultra-Maoist Khmer Rouge three decades ago, during which 1.7 million people were killed in four years, has Cambodia seen such a huge loss of life.

Scores of people leapt to their deaths from the bridge, but most of the victims died trapped under hundreds of stampeding revellers.

Flags were flown at half-mast across the city, whose population of two million people had been swelled by hundreds of thousands of people who flocked from the provinces for the festival.

People sat on the steep banks of the Tonle Sap, a tributary of the Mekong River, as they listened to the chanting of hundreds of Buddhist monks who set down flowers and lit incense to bless the dead

Condolences from KEA Inc.

2010-11-24T05:44:00.000-08:00

CONDOLENCES

TO VICTIM’S FAMILIES

KHMER ENTERTAINMENT OF AMERICA, INC.

7863 Broadway, Lemon Grove, California 91945, United States of America (USA)

Tel: (619) 840-6651- Fax: (619) 583-5813 - email: cheanglp@cox.net

On behalf of the KHMER ENTERTAINMENT OF AMERICA, Inc. and families of all officers, I am saddened for the loss of hundreds of lives at Koh Pich Bridge, during the last day of Water Festival, in Phnom Penh.

We would like to extend our profound condolences and best wishes for quick recovery to the families and friends of those lost or injured in the unfortunate stampede in Koh Pich.

Our thoughts and prayers are with the families and friends of the victims and with all Khmers inside the country and abroad.

Signed:
LIM CHEANG
President
KEA -

"Koss Pich Pruos Punleu, Khmer Chheu Kann Tuk " a Poem in Khmer by a Group of Poets

2010-11-24T05:43:00.002-08:00

Cambodians try to handle aftermath of deadly stampede

2010-11-24T05:43:00.001-08:00

November 24 2010
Source: Xinhua

"I went to that island with my boyfriend last night to celebrate the Water Festival, but now I don't know his whereabout...I even don't know whether he is alive or not," said Na Song, a 22-year-old girl lying on a shabby mat along the corridor of the inpatient building of Calmette Hospital.

Na's mother, Thean Veng, said she got the news from Na's friend this morning that her daughter was one of the victims of the deadly stampede on a bridge, connecting an entertainment complex at Diamond Island and the mainland Phnom Penh.

"My daughter had difficulties in breathing and was once in critical condition. Now she still suffers severe stomachache and can eat nothing," said Thean Veng, who was from the Kampong Chuang province.

Monday, the final day of the annual Water Festival of Cambodia, saw at least 375 killed and 755 others injured as a sudden panic among the crowd caused the catastrophic stampede around 9:30 pm local time.

The injuries were rushed to six hospitals across the city, while the medical personnel said they were overwhelmed by so many patients coming up almost at the same time.

Soy Rakmey, a permanent health staff at Calmette Hospital, said that there were 53 patients in this building alone, while many others with minor injuries had left. "We are not worried about the supply of medicines, but we are short of beds," he said.

Beside him, dozens of sufferers of the stampede were lying on the rattan mats, waiting for further diagnosis and treatment.

Vong Sophen, 38, was sitting at the entrance of the inpatient building. His brother Sieng Sanath, 23, hurt his chest in Monday night's crush.

"He is over there," Vong Sophen pointed at a young guy lying indoors on the ground, not far from the entrance, taking drip- feeding. No, he did not know when his brother could be well enough to leave the hospital, said Vong Sophen, adding that he himself, coming all the way from Prey Veng Province on this morning, might have to sleep on the ground just beside his brother tonight.

Calmette Hospital, the largest hospital in the capital city, had seen about 140 deaths from the stampede since Monday night.

Several trucks from the logistics department of the Defense Ministry rested at the yard of the hospital. Meas Thon, a soldier at the department, told reporter that these vehicles are assigned to transport the dead home. "More than 40 trucks started doing this at 2:30 this afternoon," he said.

Not far from Meas Thon, several coffins were being loaded to a truck while on the ground there were a couple of new coffins, still left unpainted.

What led to the deadly stampede remains unclear. Some victims and eyewitnesses said the tragedy occurred due to rumors that the bridge was broken. Some believed a girl who got fainted among the crowd spurred the turmoil. Some blamed a siren blaring for the panic and some think it was the worry of a looming rain that made the crowd rush to the bridge to return home at the same time.

Nobody expected so many people would show up, said Pung Kheau Se, President of Candia Bank, who is also the owner of Diamond Island.

The three-day Water Festival, the largest annual festival in the Southeast Asian nation, attracted over 3 million Cambodians, many from rural areas, converging to the capital city to enjoy the regatta. And the Diamond Island just completed its construction to entertain the public in its first Water Festival.

"The control of pedestrian flow will be the main preventive measure we take in the future, " said Pung Kheau Se, as he came up at Calmette Hospital Tuesday afternoon to give his condolences to the victims there.

He said the rescue work by the government was quick and timely so that even bigger casualties were prevented. He also showed his gratefulness to the charity groups and volunteers who came to help the hospitals, which were struggling to deal with hundreds of patients.

About 70 patients with minor injuries had been discharged, according to a doctor from Calmette. The trauma of Cambodian people, however, may last much longer than their physical pains.

Chek Chan, a 28-year-old man, took his two nieces and a younger brother to join the celebration Monday night but failed to bring back even one of them alive. And he saw his brother was buried underneath the ever-mounting crush.

"I am very, very sorry to see him killed with my own eyes," he said, tears in eyes.

With the stench of death in the air, Phnom Penh hurries along

2010-11-24T05:41:00.000-08:00

Wednesday, 24 November 2010
By Trevor Simons, an Australian travelling in Cambodia
Crikey.com.au

This morning the sun rose on Cambodia just like every other day. People began their business just like every other day. Today is not like any other day.

In the early hours of this morning at least 300 people were killed in a stampede on Diamond Island’s north bridge. Cambodian Prime Minister Hun Sen called the event “the biggest tragedy since the Pol Pot regime”.

Last night I ventured into the warm air planning to attend the water festival. Sharing a tuk-tuk with three others we made it only as far as closest major road. For an hour we inched painfully along a swarm of motos, tuk-tuks, buses, cars and people. The heat from the engines was unbearable. Motos climbed footpaths, tuk-tuks scraped cars and horns saturated the air. Young, well-dressed Khmer looked bright-eyed and excited. Drunk men frantically forced their motos forward where there was no room. Overheating tuk-tuks blew black smoke as their hapless drivers waded against the surging traffic. It was chaos. We abandoned the tuk-tuk and carefully walked home.

This morning I awoke to several calls inquiring about my well-being. It wasn’t until I read the news did I understand. My heart sank.

People were already busy at work as the sun spread across the city. From a cafe I watched yellow uniformed cleaners sweep rubbish with straw brooms, construction workers dismantle stages and rusted tug boats manoeuvre floating stages against the Mekong banks. Everything was carrying on as usual.

A small TV sat above the counter. It was locked on a Khmer channel. Gruesome images of the tragedy were being shown over and over as a panel of Khmer news readers discussed the event. A young waitress handed me a menu. I inquired about her family and friends. She smiled and assured me everything was OK and that she had enjoyed the weekend festivities. After some moments reading the menu I turned back to the television. The channel had been changed.

Several other tourists entered the cafe and asked about the young woman’s well-being. She politely smiled and said that everything was fine. The tourists returned to discussion about the event, heat, overcrowding, future travel plans and other related subjects.

The cause of the stampede is of some conjecture. Several newspapers report that sections of the crowd, upon hearing the bridge was collapsing, panicked. Others report police began firing a water cannon into the crowd in an effort to keep them moving, which not only created panic but also caused electrocution as the bridge was festooned with electric lights.

Reading the articles sparked my curiosity to see the site itself, but then I recalled reading that Phnom Penh experiences an influx of 2 million people during the water festival. I decided to take a trip just out of town to watch the masses return to the provinces. One after another obscenely filled vehicle passed by. A handful of trucks towed dragon boats. Groups of men sat atop vans and flat bed trucks singing loudly, beating drums. Occasionally a vehicle would run off the side of the road kicking dust onto the following motos. People waved and yelled hello. Everybody was smiling.

It grew hotter. I wondered if they had even heard about the stampede. Even if they had, would it have made a difference? I have not known a people to be as gracious, open or resilient as the Khmer.

I believe resilience is the reason life in Phnom Penh continues today as normal. I continue to be totally and utterly astounded by my time in Cambodia. Each new experience gives me further insight into the Khmer psyche. Even following the tragic event this morning and although in private morning the Khmer show astonishing strength and unbreakable will.

This evening the sun will set on Cambodia just like every other day. People will retire to their homes just like every other day. But today is not like any other day.

Cambodia stampede (Photos)

2010-11-23T18:12:00.002-08:00

The coffins of Bun Ratha and his wife, Sim Ratanak, are pictured at a funeral in Kandal province. Ratha and Ratanak died at a stampede on the Diamond Gate bridge during the annual three-day Water Festival. (Chor Sokunthea/Reuters)

At least 378 people have died in Phnom Penh, Cambodia, and the city is steeling itself for that number to rise. People celebrating the end of the rainy season got caught up in a stampede as they crossed a narrow bridge Monday. In panic, the crowd trampled on itself, and many fell over into the river below.

Buddhist monks take part in a religious ceremony to mourn the deaths of stampede victims. (Chor Sokunthea/Reuters)

Women cry as they prepare to carry home the body of their loved one from a makeshift morgue inside the Calmette hospital in Phnom Penh. (Hoang Dinh Nam/AFP)

People look at pictures of victims of the stampede posted on a billboard outside the Calmette hospital. (Hoang Dinh Nam/AFP)

Bodies of stampede victims are lined up at the Preah Kossamak Hospital. (Chor Sokunthea/Reuters)

Cambodia stampede: 'I was in the middle. Everyone was falling'

2010-11-23T18:12:00.001-08:00

Ben Doherty speaks to survivors of the crush that Cambodia's PM called 'the greatest tragedy in more than 31 years'

Ben Doherty in Phnom Penh
guardian.co.uk, Tuesday 23 November 2010

Police begin their investigations amid the belongings left behind by victims of the festival crush on Rainbow Bridge. Photograph: Tang Chhin Sothy/AFP/Getty Images

On Monday night this week the streets of Phnom Penh were full, there were market stalls and music, fairground rides and partygoers crowding every available inch of space in the city.

Sopheap Meng and his older brother Sovaan were on the Rainbow Bridge, a structure spanning barely 50 metres, connecting Cambodia's capital with Koh Pich, also known as Diamond Island, at the heart of the annual Water Festival.

The three-day festival, Bon Om Touk, is the biggest party of the year here. It causes the normally sleepy city to swell by more than 2 million people, international and domestic visitors coming for the parties and the boat races, and to give thanks for the end of the rainy season.

But shortly before 10pm, the night of celebration turned disastrous. A big crowd of people packed on to the narrow Rainbow footbridge panicked, surged and created a crush.

In a few terrifying minutes the crush led to deaths of 378 or more people, and left more than 700 injured. Cambodia's prime minister, Hun Sen, described the occurrence as the greatest tragedy to befall the country since the blood-soaked rule of the Khmer Rouge.

Most of those who died were from the rural areas, unwilling to jump from the bridge because they could not swim; they did not know the water was only waist deep. Most were young, and most women, unable to resist the weight of humanity pushing them to the ground. They suffocated on the bridge, or drowned having fallen unconscious into the water.

Sopheap Meng had gripped his brother's hand as tightly as he could. He fought the crush pushing him to the ground.

"But there was no air, I could not breathe. I got pushed to the side of the bridge, people were falling all around, on to my arm, and I had to let go." Rescued by police from the crush which had pinned his legs, it was hours before 18-year-old Sopheap found his brother again. Sovaan's corpse was pulled from the heap of bodies on Rainbow Bridge.

What sparked the panic is the subject of countless theories. Some at the scene yesterday said it started when word swept among the tightly packed crowd that the bridge was about to collapse. One witness said he saw the bridge bouncing under the weight of the people.

Others said the panic started when the multicoloured lights strung from the suspension ropes began sparking.

There were still more rumours – of mass food poisoning starting the crush, or a gang of youths robbing the crowd. It could be that there were just too many people on the narrow concrete footbridge.

The Rainbow Bridge was built this year, and only open for the festival. It was supposed to be a one-way system, leading people from the island to the city. People trying to get on to the island were meant to take a second bridge, which was 200 metres to the south. But the Rainbow Bridge was closer to the action and, amid the excitement and the celebrations, the regulations were relaxed.

Lin was right in the middle of the bridge with his girlfriend Ni when the crush became unbearable.

"I realised I could not move," Lin told the Guardian. "I could not go back, I could not go forward. People were pushing from everywhere and there was nothing I could do. I was right in the middle, everyone around me was falling, one on top of another, they were being crushed. There were dead people all around me." His girlfriend survived too, shaken but uninjured. "We are the lucky ones today. One in 1,000 lucky. Two more minutes and I would have fallen too."

Yesterday the bridge remained littered with the evidence of the tragedy: there were thousands of shoes, shirts and hats, left behind in the terror that consumed those caught in the crush. Police and army officers pored over the items for clues.

On the banks of the Bassac river, relatives of the victims made Buddhist offerings and prayed for the lost.

At the nearby Calmette hospital a makeshift open-air morgue was laid out in the grounds. Bodies were arranged in lines on straw mats inside a large white tent.

Family members peered through open windows, searching for their loved ones. Those identified were covered with a white sheet, those unknown were left exposed so that they could be claimed. Flies buzzed constantly in the stifling heat.

Boupha Lak sat at her dead daughter's feet, gentling stroking them, waiting for the paperwork to be completed so she could take her home.

Boupha said: "She went to the festival to see her friends, but she was alone on the bridge when it happened – her friends I have seen today, they were on the other side. She was found on the bridge, crushed underneath all the other bodies. They told me she was on the bottom."

In the heat of midday, coffins lined with wallpaper began arriving in army lorries. They were given out to the family members of victims, along with transport to take their loved ones home.

One woman wailed at the pile of wooden coffins, her daughter's name scrawled in text on the lid of one. "It's not fair," she cried. "My daughter doesn't deserve this. She deserved a long life."

Cambodia is a country much too used to tragedy, its people weary of loss and of suffering. The prime minister acknowledged as much when he spoke in the middle of the night on Monday. "This is the greatest tragedy in more than 31 years after the Pol Pot regime," Hun Sen said in reference to the Khmer Rouge, whose regime killed a quarter of the Cambodian population, an estimated 1.7 million people, between 1975-79. "I ask you all to understand me and forgive me for this very bad situation."

The prime minister declared Thursday a day of mourning, and he promised compensation of 5m riel (about £780) to the families of those killed and 1m riel to those who were injured.

In the late afternoon, more than one hundred monks held a Buddhist vigil at the bridge, burning incense and offering prayers for the souls of the deceased.

By sunset, all the bodies had been cleared from the makeshift morgue at Calmette hospital. Army lorries bound for the provinces, loaded with plain brown coffins and grieving relatives, rolled out of the city all evening.

Cambodia Mourns in Aftermath of Bridge Stampede

2010-11-23T18:11:00.002-08:00

Reporters, VOA Khmer
Phnom Penh Tuesday, 23 November 2010

via CAAI

Photo: by Heng Reaksmey

Earlier today, in Cambodia, a group of monks and officials pray for victims near the site where people stampeded during Monday's water festival in Phnom Penh.

“My sister's body was blackened on the hands, chest, stomach and feet, like people had stomped on her.”

The day after the largest tragedy in recent Cambodian history, hospitals were overwhelmed with family members as they searched for lost loved ones.

Hospitals were lined with the bodies of the dead, with disaster authorities claiming they had so far only identified 60 percent of the victims.

Bodies were put in coffins and shipped to their home provinces for burial, as the government declared Thursday a national day of mourning and established an investigative committee.

Officials say at least 378 people were killed during a crowd stampede on a bridge near Diamond Island, on the riverfront, following annual Water Festival festivities.

Revelry turned to tragedy as a crowd in the thousands, trapped on the bridge, panicked, crushing some underfoot as others jumped into the river to escape. More than 700 people were wounded in the event, which had emergency crews scrabbling through the early morning hours Tuesday.

Hospitals were filled with the bodies of the dead, lined up along the floor, where loved ones were forced to search for the lost.

Horn Sam An, 41, in L'vea Em district, Kandal province, found her sister dead after she spent from midnight to 8 am searching three hospitals before finding her at a fourth, Calmette.

Soa Sok, 37, from Kampong Cham province, said he walked with three friends from hospital to hospital to find his missing brother. He had still not found him as of Tuesday afternoon.

In a national address, Prime Minister Hun Sen called the tragedy the worst since the Khmer Rouge, and he appointed one investigative committee to learn the reason for the disaster and a second committee to help the families of victims.

Nhim Vanda, deputy chief of the National Disaster Committee, said health officials were performing examinations of the bodies and identifying them for families.

“And then we put the bodies in white cloth and plastic in a coffin and are transporting the bodies to their respective homes for traditional ceremonies,” he said. “The government has paid everything for all the bodies of families for transport and ceremony.”

Bodies were sent back home via ambulances, military trucks and other vehicles.

Prum Sokha, secretary of state for the Interior Ministry and the head of the investigative committee, called for the survivors and other witnesses to help by providing information to the authorities.

Family members who came to Calmette Tuesday morning described bruised and broken bodies.

“My sister's body was blackened on the hands, chest, stomach and feet, like people had stomped on her,” said Sok Navy, 41, from Kandal province.

But there were those too who escaped the stampede with their lives. Pheoung Srey Leak, a 22-year-old survivor, said she was trapped on the crowded bridge for four hours.

“It was very stuff, and no air,” she said. “I couldn't walk out of the crowd. I had a feeling I was probably not alive, and I was hopeless.... I was determined not to faint. If I had fainted and fallen down, I would have been stomped to death by other people.”

But she did faint, she said, and she couldn't breathe. “When I woke up, I was in the emergency room of Calmette hospital,” she said.

For those who died, some 4,000 Buddhist monks held a ceremony of prayer Tuesday afternoon.

The government has declared Thursday a national day of mourning, and groups from around the country have pledged their support to the families of victims.

Former king Norodom Sihanouk and his son, the king, Norodom Sihamoni, expressed condolences for lost loved ones and promised $200 to the families of the deceased and $100 to the families of the injured.

Students from 10 separate universities have established the 2211 foundation, named for the date of the incident, to gather funds for the families.

“And to march on Nov. 25 to pay respect to the souls of the deceased,” said Toch Norin, a student representative.

Political parties and development agencies issued their own condolences, along with others.

US Secretary of State Hillary Clinton issued a statement on behalf of President Barrack Obama, saying: “I have seen their strength and resilience first hand, including during my recent visit, and I am confident that they will pull together and persevere through this difficult time.”

But questions over how the tragedy happened, and the response, remain.

The Asian Human Rights Commission issued a statement of condolence that also questioned security measures in the capital during the massive festival, saying: “It is clear that Phnom Penh was unprepared for any large-scale disaster.”

Cause of Deadly Crowd Panic Unclear, Authorities Say

2010-11-23T18:11:00.001-08:00

Heng Reaksmey, VOA Khmer
Phnom Penh Monday, 22 November 2010

via CAAI

Photo: Heng Reaksmey, VOA Khmer

Victims of a deadly stampede are carried onto a rescue truck in Phnom Penh, in what Cambodian Prime Minister calls the country's "worst tragedy" since the Khmer Rouge period.

"The killing of Cambodian people this time is a second tragedy after Khmer Rouge regime."

The spark that caused the deadly panic in crowds Monday night at the conclusion of Cambodia’s largest annual festival remained unclear Tuesday morning, authorities told VOA Khmer.

A stampede at the conclusion of the three-day Water Festival killed at least 345 people and injured more than 400 others. The crowds grew unruly and dangerous shortly before 10 pm, and most of the victims were aged between 17 and 25, authorities told VOA Khmer.

Two toddlers, aged three and four, were saved from drowning, authorities confirmed early Tuesday. But they also described the deadly incident as one of the low points in modern Cambodian history.

There are conflicting reports about what sparked the chaos, according to interviews with witnesses, police, local authorities, and victim’s families.

Some witnesses said the incident was likely caused from an electrical shock when people were crossing the bridge of Koh Pich resort area. Others at the scene told VOA Khmer that people were spooked by rumors that the bridge would collapse. There were also reports of a fist fight on the bridge between two groups of teenagers and that when one group ran, turmoil erupted.

Prime Minister Hun Sen appeared several times throughout the night on Bayon TV. He sat at a desk, apparently at his home in Takhmau, on the outskirts of the capital. The broadcasts were carried simultaneously on two other prominent stations, TVK and CTN. Hun Sen said the incident was the worst affliction to strike Cambodia since the 1970s regime of the Khmer Rouge.

“The killing of Cambodian people this time is a second tragedy after Khmer Rouge regime,” a solemn Hun Sen said on the television broadcast.

Hun Sen publicly expressed his condolences and set up committees to investigate the incident.

Phnom Penh municipal authorities have set up special telephone numbers for people who wish to search for lost family members.

There are many people coming to Koh Pich to look for their relatives and many could not find them. They were told to go to Calmette hospital and other hospitals and clinics. Many were distraught.

Authorities have now cordoned off the area and tightened security for investigation. However, Prime Minister Hun Sen said that initial finding was that it was not “a terrorist attack”.

Relatives of the Disappeared Looking For Dead Bodies

2010-11-23T18:10:00.001-08:00

US sends condolences to Cambodia

2010-11-23T18:09:00.001-08:00

via CAAI

WASHINGTON - THE United States on Monday extended its 'deep condolences' for the nearly 350 lives lost during deadly stampede in Cambodia's capital.

'On behalf of President (Barack) Obama and the people of the United States, I offer our deep condolences for the tragic loss of life and the injuries in Phnom Penh during Cambodia's annual Water Festival,' said US Secretary of State Hillary Clinton.

'Our thoughts and prayers are with the family and friends of the victims and with all the people of the Kingdom of Cambodia,' she added in a statement.

Mrs Clinton remarked on the 'strength and resilience' of the Cambodian people she observed 'first hand' during her recent visit earlier this month to the country, adding: 'I am confident that they will pull together and persevere through this difficult time.'

Cambodia began the grim task on Tuesday of identifying 347 people - two thirds of them women - crushed to death in a bridge stampede when revellers panicked at a huge water festival in Phnom Penh.

More than 400 people were also injured in the disaster, Cambodia's deadliest in decades, which took place late on Monday on an overcrowded narrow bridge as millions celebrated the end of the annual three-day event. -- AFP

Country profile: Cambodia

2010-11-23T18:08:00.000-08:00

The Southeast Asian nation has emerged from decades of conflict, but continues to face many challenges.

Last Modified: 22 Nov 2010

Cambodia is a constitutional monarchy in Southeast Asia. King Norodom Sihamoni has reigned since 2004.

Theravada Buddhism is the official religion of Cambodia, which is practiced by around 96 per cent of the Cambodian population. The majority of Cambodians describe themselves to be Khmers, descendants of the Angkor Empire. The country's minority include Cham, ethnic Chinese, Vietnamese and various tribal groups.

Three-quarters of Cambodians depend on the land to make a living and agriculture remains the most important sector. Many farmers have been forced to sell their land to cope with financial pressures in recent years and land grabbing is a major issue.

Oil and nature gas deposits were found in Cambodian waters in 2005. Extraction is set to begin in 2011 and is predicted to have a transformative effect on the country's economy.

While there has been rapid economic growth in the past decade, this has come with a rising gap between the country’s poor and rich. Economic and political power remains in the hands of a small number of elites.

Cambodia is ranked 136 out of 179 in UNDP's Human Development Index (2008), the lowest among East Asian countries. More than a third of Cambodia's population live on less than $1 per day.

Illegal logging is prevalent throughout the country, leading to soil erosion and declining biodiversity. Fish stocks are also in decline because of overfishing.

There are up to one million small arms and light weapons in circulation in Cambodia and weapons remain "dangerously easy to obtain" and selling for as little as $25, according to Oxfam, a UK-based international development NGO.

Broadcast media is a mixture of state-owned, joint public-private, and privately-owned.

Tragic past

Cambodia was "protected" from its neighbours by the French from 1863, and became part of French Indochina in 1887.

Occupied by the Japanese during World War Two, the country won independence from the French in November 1953.

The Communist Khmer Rouge forces captured Phnom Penh in April 1975, after five years of fighting.

Executions, forced labour and starvation devastated the population. More than 1.5 million Cambodians died from atrocities committed during the Khmer Rouge regime.

The Vietnamese invaded in December 1978, driving the Khmer Rouge into the countryside. Vietnamese occupation was to last a decade and triggered 13 years of civil war.

The Paris Peace Accords in 1991 mandated democratic elections and a ceasefire, although the Khmer Rouge did not fully abide by it.

Some surviving Khmer Rouge leaders are awaiting trial for crimes against humanity by a hybrid UN-Cambodian tribunal supported by international assistance.

Hundreds Die in Stampede on Cambodian Island

2010-11-22T19:29:00.003-08:00

November 22, 2010
By SETH MYDANS
The New York Times

BANGKOK — More than 300 people were killed and hundreds more were injured in a stampede at an annual water festival in Cambodia that the prime minister on Tuesday called the nation’s worst tragedy since the murderous Khmer Rouge regime more than three decades ago.

Witnesses in Phnom Penh, the capital, said the stampede began Monday night when people panicked in a dense crowd on a small island close to the shore of the Bassac River.

Hundreds of people tried to escape over a short suspension bridge. Many died of suffocation or were crushed underfoot or were electrocuted by loose wires. Many drowned when they leaped from the suspension bridge into the water.

The night was filled with the constant sound of sirens and, at the scene and in the hospital, with the wailing of people discovering dead friends or relatives.

“This is the biggest tragedy in more than 31 years since the Pol Pot regime,” Prime Minister Hun Sen said in one of several television announcements through the night, referring to the mass killings of the Khmer Rouge between 1975 and 1979.

Millions of people pour into the capital each year and line the river’s shores and islands in densely packed crowds for a boat race that is the climax of the water festival. The last boat race ended early Monday evening, the final night of the holiday, and a concert was being held on the island, called Diamond Island, a long spit of land close to the royal palace on the shore.

There was no confirmation of the cause of the stampede, but Information Minister Khieu Kanharith said it began when what he said were one million people became “scared of something.”

The police and rescuers had to fight their way through crowds, sometimes beating people with their belts to get through, according to reports from the scene.

Video from the site showed scenes of horror with bodies lying here and there and frantic rescuers rushing among them.

People staggered from the scene either alone or supported on both sides by rescuers. Some sat on the ground, holding their hands to their chests and breathing with difficulty.

Other people carried bodies, both the dead and the badly injured, by their arms and legs; they knelt on the ground fanning those who were still alive or trying to perform CPR; they loaded the dead and badly injured onto flatbed trucks or the backs of motorcycles and packed them into ambulances.

People searched, weeping, through the corridors of the hospital, where bodies lay on the floor wrapped in woven mats or under sarongs. Hospital workers threw white sheets over groups of bodies on the floor. White coated hospital personnel hurried through rooms jammed with cots.

The brightly lit suspension bridge with its delicate fretwork was carpeted with the shoes and bits of clothes of those who had been crushed or fled.

Cambodia Water Festival turns tragic with deadly stampede

2010-11-22T19:29:00.001-08:00

At least 339 people died in the stampede, according to Prime Minister Hun Sen, who called it a terrible tragedy. The Water Festival has seen troubles in past years.

November 22, 2010

By Julie Masis, Correspondent

Christian Science Monitor

Phnom Penh, Cambodia - A stampede in Cambodia late Monday night killed at least 339 people and injured as many more, with hospital officials projecting the death toll would continue to rise.

The stampede happened during Cambodia's annual Water Festival, which drew a record 4 million people from around the country and region to watch three days of traditional boat races on the Bassac River in the capital.

Prime Minister Hun Sen called it the "biggest tragedy since the Pol Pot regime." While the comparison is extreme – the Khmer Rouge caused the deaths up to 2 million people in the late 1970s – this is the most deadly incident at a festival plagued by repeated problems.

A Singaporean boat capsized in 2008 and killed five rowers, and one Cambodian rower drowned in 2009. The latest incident raises questions whether the government has the capabilities to handle the ever larger festival crowds, which have increased by several million people in recent years and overwhelmed Phnom Penh's facilities.

The stampede broke out on a recently built bridge that crosses from the mainland over the Bassac River to Diamond Island, where a concert was held Monday night to conclude the Water Festival.

Yan San, who was visiting from outside the city, says the bridge became clogged at 9 p.m., a stampede began at 11 p.m., and he himself was stuck on the bridge until 1 a.m. with is legs injured.

“People were stuck on the bridge, they could not move, so they pushed others into the water," says Mr. Yan, sitting in a wheelchair outside Calmette Hospital, where he and hundreds of others were being treated. "I was stuck on the bridge for five hours and I could not move."

Prime Minister Hun Sen addressed the nation at 2:30 a.m. local time and updated the toll to 339 people dead and 329 injured, according to the Phnom Penh Post. “With this miserable event, I would like to share my condolences with my compatriots and the family members of the victims,” he said.

As the night wore on at Calmette, more than 50 bodies were laid in the hospital's courtyard for family members to identify. Ambulances continued to arrive early into Tuesday morning. The hospital was inundated with patients sitting in hallways and lying on floors awaiting treatment.

The exact cause of the stampede was unclear. Reuters reported that a scare was set off when several people were electrocuted from an unknown source. CNN reported that Cambodian police sparked the stampede by firing a water canon at pedestrians to get them to move off the bridge.

“A lot of people jumped into the water because they knew how to swim and they were scared they would die otherwise," says Kim Houng, who was being treated at Calmette early Tuesday morning after passing out on the bridge.

“If I was on the side of the bridge, I would have jumped in the water, too.”

Cambodia stampede: 'Bodies stacked upon bodies' in Phnom Penh tragedy

2010-11-22T19:28:00.000-08:00

Crowd panicked while crossing a bridge and were crushed underfoot on the final day of the Water Festival

Monday 22 November 2010

Haroon Siddique

guardian.co.uk

More than 300 people were killed and hundreds injured tonight after a stampede broke out among crowds taking part in a festival in the Cambodian capital.

People panicked as they tried to make their way over a densely packed bridge and many were crushed underfoot or fell over the sides during the final day of the Water festival, one of the main events of the year in Cambodia. One witness who arrived shortly after the stampede said there were "bodies stacked on bodies".

Describing the chaos as the "biggest tragedy" to strike his country since the killings under the Khmer Rouge's reign of terror in the 1970s, the prime minister, Hun Sen, said that 339 people had been killed and 329 injured. State television said at least 240 of the dead were women, according to reports from two city hospitals.

Ambulances raced back and forth between the river and the hospitals for several hours after the stampede, as the dead and injured were taken away from the scene, which was littered with hundreds of shoes left behind by the living and the dead. Rescuers also looked in the darkness for the bodies of the drowned.

Amid desperate scenes at Calmette hospital, Phnom Penh's main medical facility, wards were filled to capacity with bodies as well as patients, some of whom had to be treated in hallways. One doctor said the two major causes of death were suffocation and electrocution.

But despite suggestions that some of the dead had been electrocuted by the lights on the bridge, the Cambodian government insisted that no one was electrocuted. Many of the injured were badly hurt, raising the prospect that the death toll could rise as hospitals became overwhelmed.

In the third of three post-midnight live television broadcasts, the prime minister said that he had ordered an investigation and declared that Thursday would be a national day of mourning.

A Cambodian embassy official in Washington said that 4 million people had descended on Phnom Penh for the three-day water festival, which marks the end of the rainy season and whose main attraction is the traditional boat races.

The last race ended early on Monday evening, the last night of the holiday, and the panic started later on Koh Pich Diamond Island, a long spit of land wedged in a fork in the river, where a concert was being held. Seeking to escape the island, part of the crowd pushed on to a bridge, which also jammed up, with people falling under others and into the water

Hundreds die in tragic end to water festival

2010-11-22T19:26:00.001-08:00

A mourner weeps amid several covered bodies at Calmette Hospital early this morning following a stampede that killed hundreds on the northen Koh Pich bridge during the water festival. (Photo by: Pha Lina)

Tuesday, 23 November 2010
The Phnom Penh Post Staff

Hundreds died and hundreds more were injured last night in a stampede on Diamond Island’s north bridge, bringing a tragic close to the final day of water festival celebrations in Phnom Penh.

Prime Minister Hun Sen announced via video conference at 2:30am that 339 people had been confirmed dead and 329 injured.

“With this miserable event, I would like to share my condolences with my compatriots and the family members of the victims,” he said.

“This needs to be investigated more.”

A committee would be set up to examine the incident.

“This is the biggest tragedy since the Pol Pot regime,” he said, adding that Cambodia would hold a national day of mourning tomorrow.

The cause of the stampede has not yet been confirmed, but Minister of Information Khieu Kanharith said it happened because “one million people”, many of whom were leaving the island, became “scared of something.”

Municipal Police Chief Touch Naruth also could not confirm the series of events that led to the disaster.

“People were afraid and began to trample each other and some jumped into the river,” he said at the scene.

Bedlam ensued as the frenzied crowd began to push its way off the bridge, causing a jam that made it nearly impossible to breathe, according to witnesses.

With no other escape route, hundreds of people began jumping off the suspension bridge.

Sirens started to awaken city residents minutes later as ambulances, police cars and emergency vehicles began rushing to the scene, where they had to clear away the crowd before reaching victims.

Boats were called in to pull people out of the water and ferry others across the narrow Bassac River to the shore in front of the Royal Palace, where emergency workers fought through the crowd of frantic onlookers to care for the injured.

The bodies of victims were taken away in ambulances, flat-bed trucks and motor-bikes to area hospitals as police struggled to clear away the crowd by shouting, pushing and beating them back with their belts.

As the scene cleared, many bodies remained on the road, which was littered with shoes, shirts, pants and other objects dropped in the mayhem. Pieces of cardboard were placed over the heads of those obviously dead, while bystanders fanned people thought to be still alive.

Area hospitals confirmed that hundreds were either dead on arrival or died soon after, with witnesses on hand giving various explanations for the initial cause of the stampede and the actual cause of deaths.

A doctor at Calmette hospital, who declined to give his name, said after a preliminary assessment the principal causes of death among the victims he had examined were suffocation and electrocution.

Ouk Sokhhoeun, 21, was at the scene with his sister, 23-year-old Ouk Srey Mom, who was left unconscious and taken to Calmette hospital, said that military police started firing water cannons into the crowd on the bridge after the stampede had already caused scores of people to fall unconscious.

He said the water caused many people on the bridge to receive electric shocks from the cables lighting the bridge, at which point “some police also received electric shocks”.

Victims from Koh Pich

2010-11-22T19:24:00.000-08:00

Additional videos from Youtube: TV footage Click to Read More... Posted by KI Media | Permalink | | 18 comments | Links to this post Labels: Koh

2010-11-22T19:23:00.002-08:00

Video on Koh Pich

2010-11-22T19:23:00.001-08:00

Eyewitness account at Koh Pich

2010-11-22T19:21:00.000-08:00

By Azuriel
Source: http://www.expat-advisory.com/forum/asia/cambodia/phnom-penh-pub-expats-expats-cambodia/diamond-island-bridge

Just arrived back home after the missus and I spent some 4 hours stuck on Koh Pich ... we were just about to cross back to the mainland from the island when the stampede started, and police started cordoning the area off ... total chaos' prolly the best way to describe it ...

spent most of my 4 hours trying to help out, inclusing performing CPR on 4 girls that got fished out of the river ... unfortunately only managed to revive 2 of them ... ( ... of the other 2, only 1 had a pulse when they rushed her to hospital, but nevertheless, hope the ambulance crews managed to do more than my meagre first aid skills ...

From talking to the locals, some of the security and event management staff, and first-hand experience, I gather the following chain of events occurred; not sure these events occurred in this order though, but it's close:
- about 30-odd people were electrocuted (few direct deaths, but many losing consciousness, suffering severe burns) from contact with the metal guard rails on either side of the bridge ...
- about a dozen people fainted from the crush of the crowd, heat exhaustion, dehydration, or a combination of these, and fell underfoot ...
- Crowd panicked from the electrocutions and surged into a stampede; More people tripped or got pushed over, and got trampled underfoot ...
- People started jumping off the bridge into the river below to escape the mob; some were electrocuted climbing over the railings; some died from jumping into shallow water, or missing the water altogether, and landing on the concrete escarpments. One of the girls I performed CPR on had a nasty gash stretching from her collarbone down to just past her belly button ... not bleeding too badly, but was still a pain to patch up half-decently ...
- Curious onlookers surged towards the bridge from both ends trying to find out what was going on. POLICE WERE VERY FORCEFULLY PUSHING BYSTANDERS BACK, USING FISTS, BATONS, PISTOLS, AND PIECES OF METAL PIPING!!! ==>> AND IN PARTICULAR, SHAME SHAME SHAME ON THE BIG BLACK GUY WITH THE AMERICAN ACCENT THAT PHYSICALLY ASSAULTED MY WIFE AND I, NOT ONCE BUT TWICE: WHEN I TRACK DOWN YOUR DETAILS, I'LL BE USING ALL MY POLICE AND LEGAL CONTACTS TO PRESS CHARGES!! <<== Wish more foreigners could've put their energies into helping the wounded, as opposed to bashing up on the innocent bystanders ...
- Some police near the Koh Pich end of the bridge fired warning shops to try to disperse the crowd, but it only served to set off a 2nd panic, since no-one at that stage knew who was shooting, nor at who or what ...
- The crowd was warned to stay away from the metal guard rails along the easter edge of Koh Pich, for fear of electrocution. Around the same time, all the neon lights on the bridge were turned off, along with most of the street lamps along the eastern shore of the island.

As of 3am on Tuesday morning, the official death toll sits at 332 deaths, and 329 injured ...

a moment of silence please ...

ironically, the bayon TV concert a couple of hundred metres away blasted on throughout all of this ... ... ...

CNN news blog: Stampede allegedly started by cops firing water cannon on the crowd

2010-11-22T19:19:00.000-08:00

Cambodian minister: 339 dead in stampede

Source: http://news.blogs.cnn.com/2010/11/22/more-than-100-killed-in-cambodia-festival-stampede/

[Updated at 4:25 p.m.] Steve Finch, a Phnom Penh Post reporter, told CNN that the stampede at the water festival in Phnom Penh began around 10 p.m. Monday (10 a.m. ET), when police began firing a water cannon onto a bridge to an island in the center of a river.

The bridge was packed with people, and police fired the water cannon in an effort to get them to move, he said.

"That just caused complete and utter panic," he told CNN in a telephone interview. He said a number of people lost consciousness and fell into the water; some may have died by electric shock, he said.

Watch: "It was chaos," reporter says

Finch cited witnesses as saying that the bridge was festooned with electric lights, which may have played a role in the deaths.

The government denied anyone died by electric shock.

But a doctor who declined to be identified publicly said the main cause of death was suffocation and electric shock. Police were among the dead, he said.

While Finch said the incident apparently coincided with the firing of the water cannon, a witness, Ouk Sokhhoeun, 21, told the Phnom Penh Post that the stampede began first.

In addition to the 339 people who have been confirmed dead, 329 people were injured, Prime Minister Hun Sen said, according to The Phnom Penh Post.

The incident happened on the final day of the three-day festival, according to The Phnom Peng Post. The festival, which attracts people from all over Cambodia, is held annually to commemorate a victory by the Cambodian naval forces during the 12th century reign of King Jayavarman VII, according to the Tourism Cambodia website.

[Updated at 3:37 p.m.] Steve Finch, a Phnom Penh Post reporter, told CNN there were reports from witnesses of people electrocuted as police fired water cannons at people on the bridge to hurry them along causing the stampede.

According to a Radio Australia report, a big crowd watching the annual water festival panicked when a number of people were apparently electrocuted on the bridge.

Cambodian authorities say hundreds of people were either crushed in the resulting stampede or drowned when they fell or jumped into the river.

Prime Minister Hun Sen has given several post-midnight live broadcasts to update the country. In one, according to the Associated Press, he called the stampede the "biggest tragedy" in Cambodia since the Khmer Rouge reign of terror in the 1970s.

He also ordered all government ministries to fly the flag at half-staff and said there would be a national day of morning.

[Updated at 3:05 p.m.] Cambodian Prime Minister Hun Sen said on state-run TV he was unsure yet as to what caused the stampede.

"This needs to be investigated more," Hun Sen said, according to an AFP report.

Hun Sen said a committee would be set up to examine the incident.

The Associated Press, Reuters and AFP reported that witnesses said 10 people had either collapsed or become unconscious during the festival, triggering the panic.

That led, they reported, to people rushing towards a bridge headed toward Diamond Island. That's when things got worse, a witness told AFP.

"We were crossing the bridge to Diamond Island when people started pushing from the other side. There was lots of screaming and panic," 23-year-old Kruon Hay told AFP. "People started running and were falling over each other. I fell too. I only survived because other people pulled me up. Many people jumped in the water."

Sok Sambath, governor of the capital's Daun Penh district, told AFP "this is the biggest tragedy we have ever seen."

iReport: Are you there? Send photos, videos, descriptions

[Updated at 2:41 p.m.] Khieu Kanharith, the Cambodian Minister of Information, has said the death toll from the stampede has now reached 339.

The three-day festival attracts people from all over Cambodia - and around the world - to the Royal palace. The festival is held annually to commemorate a victory by the Cambodian naval forces during the 12th century reign of King Jayvarman VII, according to the Tourism Cambodia website.

The festival is also used to pray for a good rice harvest, sufficient rain and to celebrate the full moon, the site says. The festival dates back to before the 7th century.

At night, the boats on the river are illuminated with neon lights and there is a fireworks display.

A stampede occurred during a water festival in Phnom Penh, Cambodia.

[Updated at 2:36 p.m.] Cambodian Prime Minister Hun Sen said Monday on state-run Bayon Television that more than 200 people have died in the water festival stampede.

Officers with the Prime Ministers Bodyguard Unit stood outside a local hospital trying to help those who brought injured and control the scene of chaos outside.

Hundreds of shoes, clothing and personal items still littered the streets, the bridge and the underlying water near where the festival took place. The road on the bridge was so covered you could barely see the surface.

[Updated at 2:26 p.m.] Ambulances appeared to be making runs back and forth between the scene of the stampede and the hospital - dropping off the injured and then speeding away again, video on state-run Bayon Television showed.

Doctors stood outside a hospital, trying to direct traffic, between ambulances and vehicles of regular citizens bringing in the injured.

Friends and family clutched some the injured already in the hospital while others raced from the streets clutching the injured in the arms.

[Updated at 2:23 p.m.] Video from state-run Bayon Television in Cambodia showed panic in the streets and outside local hospitals.

Dozens of injured people appeared to be laying on what appeared to be the waiting room floor of a hospital with IV lines hooked up to them that were strung across benches.

[Updated at 2:04 p.m.] Cambodian Prime Minister Hun Sen said Monday on state-run Bayon Television that 180 people have died in the water festival stampede.

"With this miserable event, I would like to share my condolences with my compatriots and the family members of the victims," he said, according to AFP.

More than 4 million people were attending the Water Festival when the stampede occurred, said Visalsok Nou, a Cambodian Embassy official in Washington.

[Posted at 1:55 p.m.] More than 100 people were killed Monday in a stampede that occurred during a festival near Cambodia's royal palace in Phnom Penh, a Cambodian Embassy official in Washington said.

This story is developing. We'll bring you the latest information as soon as we get it.

Koh Pich: Video updates

2010-11-22T19:12:00.000-08:00

Koh Pich Update 5: Photos from Reuters and AP

2010-11-22T19:11:00.001-08:00

Tang Chhin Sothy/Getty Images

The aftermath of a stampede near a bridge in Phnom Penh, Cambodia on Saturday after millions celebrated the end of the annual Water Festival.

Victims of a stampede lie in a hospital in Phnom Penh on Monday. November.

Festival stampede worst tragedy since Khmer Rouge K-5, says PM

2010-11-22T19:10:00.000-08:00

A woman next to the body of a stampede victim at a Phnom Penh hospital (Reuters/Chor Sokunthea)

Monday 22 November 2010
Radio France Internationale

More than 330 festival-goers were killed in a stampede Monday on a bridge in Phnom Penh. The Prime Minister called it the country’s worst tragedy since the Khmer Rouge.

"This is the biggest tragedy since the Pol Pot regime," said Prime Minister Hun Sen in a live television broadcast early Tuesday morning.

Pol Pot was the leader of the Khmer Rouge regime that ruled Cambodia between 1975 and 1979, leaving up to a quarter of the population dead.

At least 339 people died in the stampede, and more than 300 were injured. The circumstances that triggered the stampede remain unclear.

Millions of people were in the streets for the third, and final, day of the Water Festival, which marks the reversal of the flow between the Tonle Sap and Mekong rivers.

Cambodia PM: 339 Dead In Festival Stampede

2010-11-22T19:09:00.001-08:00

Sky News

At least 339 people have died in a stampede at Phnom Penh's annual Water Festival celebrations, Cambodia's prime minister has said.

Thousands of Cambodians were on the streets to mark the end of the festival when the crowd rushed onto a bridge, an official told AFP news agency.

Up to two million people had been expected to attend the festival's close, where the main attraction is a traditional boat race along the Tonle Sap river.

The panic had started on Koh Pich - Diamond Island, a long spit of land in the river where a concert was being held.

Prime Minister Hun Sen made several live television broadcasts after midnight, giving a preliminary death toll of 181 that he later increased to 190 and then to 339.

The website of the newspaper Kampuchea Thmey had already quoted General Sao Sokha, chief of the military police, as saying the death toll could be close to 300, according to information from four hospitals to which bodies were taken.

A drink seller at the concert, So Cheata, told reporters that 10 people had fallen unconscious as the crowd surged, setting off a panic that became a stampede.

According to witnesses, the panic was made worse as the crowd rushed to cross the bridge and people fell into the water.

Koh Pich Update 4: Photos from Reuters and AP

2010-11-22T19:08:00.001-08:00

Koh Pich Update 3: Photos from Reuters and AP

2010-11-22T19:04:00.000-08:00

Hundreds die in Cambodia festival stampede [-Death toll to 339]

2010-11-22T19:03:00.001-08:00

A crowd of Cambodians are pushed onto a bridge on the last day of celebrations of a water festival in Phnom Penh on Monday. Thousands of people celebrating a water festival on a small island in a Cambodian river stampeded Monday evening, killing at least 190. (Heng Sinith / AP)

Most of the victims were crushed or drowned; hundreds more injured

2010-11-22
By SOPHENG CHEANG
The Associated Press

PHNOM PENH, Cambodia — Thousands of Cambodians celebrating a water festival on an island in a river in the capital stampeded Monday night, leaving at least 339 dead and many more injured. As the panic grew, the crowd tried to flee over a bridge, and many fell over its sides into the water.

Ambulances raced back and forth between the river and the hospitals for several hours after the stampede, while onlookers and relatives waited outside the medical facilities. Many of the injured appeared to be badly hurt, raising the prospect that the death toll could rise sharply as local hospitals could easily become overwhelmed.

Thousands of Cambodians celebrating a water festival on an island in a river in the capital stampeded Monday night, leaving hundreds dead and many more injured.

Hours after the chaos, hundreds of shoes still lay on the bridge over the Tonle Sap river and the area underneath. Searchers looked for bodies of anyone who might have drowned, and an AP reporter saw one body floating in the river.

Prime Minister Hun Sen made two live television broadcasts after midnight, giving a preliminary death toll of 181 that he later increased to 339. Authorities had estimated that upward of 2 million people would descend on Phnom Penh for the three-day water festival, which marks the end of the rainy season and whose main attraction is traditional boat races along the river.

The last race ended early Monday evening, the last night of the holiday, and the panic started later on Koh Pich — Diamond Island — a long spit of land wedged in a fork in the river where a concert was being held. It was unclear how many people were on the island to celebrate the holiday, though the area appeared to be packed with people, as were the banks.

Soft drink vendor So Cheata said the trouble began when about 10 people fell unconscious in the press of the crowd. She said that set off a panic, which then turned into a stampede, with many people caught underfoot.

Information Minister Khieu Kanharith gave a similar account of the cause.

Seeking to escape the island, part of the crowd pushed onto a bridge, which also jammed up, with people falling under others and into the water. So Cheata said hundreds of hurt people lay on the ground afterward. Some appeared to be unconscious.

Cambodia is one of the region's poorer countries, and has an underdeveloped health system, with hospitals barely able to cope with daily medical demands.

Koh Pich used to host a slum community, but in recent years the poor have been evicted to make way for high-rise and commercial development, most yet to be realized.

Cambodia stampede leaves hundreds dead

2010-11-22T19:00:00.000-08:00

Cambodian Military Police move the bodies of the stampede victims to a truck in Phnom Penh, Cambodia, Nov. 23, 2010. At least 339 people were killed in a stampede on Monday night as millions of Cambodians celebrated the annual water festival in the capital Phnom Penh, Cambodian Prime Minister Hun Sen said on state TV early Tuesday. The accident took place on a bridge that connects the city with the Diamond Island which has became the center of celebrations. (Xinhua/Phearum)

A body is carried from an ambulance to a hospital in Phnom Penh November 23, 2010. REUTERS/ Chor Sokunthea

A stampede victim is carried to safety in Phnom Penh November 23, 2010. A stampede on a bridge in Cambodia's capital killed at least 339 people lateon Monday and wounded nearly as many after thousands panicked on the last day of a water festival, authorities and state media said.« Read less REUTERS/ Stringer

Cambodian military police carry a body near a bridge in Phnom Penh. A stampede in the Cambodian capital has left more than 340 people dead and hundredsinjured after panic erupted at a water festival that had attracted millions of revellers.« Read less (AFP/File/Tang Chhin Sothy)

Cambodian police officials examine the bridge where at least 330 people died in a stampede in Phnom Penh. A stampede in the Cambodian capital has leftmore than 340 people dead and hundreds injured after panic erupted at a water festival that had attracted millions of revellers.« Read less (AFP/Tang Chhin Sothy)

Cambodian victims lay on the ground with help from their relatives next to the suspended bridge in Phnom Penh. A stampede in the Cambodian capital hasleft more than 340 people dead and hundreds injured after panic erupted at a water festival that had attracted millions of revellers.« Read less (AFP/Tang Chhin Sothy)

Victims of a stampede receive medical treatment at a hospital in Phnom Penh November 23, 2010. At least 180 people were killed in a stampede on a bridgeduring a water festival in Cambodia's capital Phnom Penh, the country's prime minister said on television on Tuesday. REUTERS/ Chor Sokunthea

Military police examine a bridge where a stampede took place in Phnom Penh November 23, 2010. At least 180 people were killed in the stampede on the bridgeduring a water festival in Cambodia's capital Phnom Penh, the country's prime minister said on television on Tuesday. REUTERS/ Chor Sokunthea

Military police look at a bridge where a stampede took place in Phnom Penh November 23, 2010. At least 180 people were killed in the stampede on the bridgeduring a water festival in Cambodia's capital Phnom Penh, the country's prime minister said on television on Tuesday. REUTERS/ Chor Sokunthea

An injured man is helped after a stampede in Phnom Penh, Cambodia, Monday, Nov. 22, 2010. Thousands of Cambodians celebrating a water festival by theriver in the Cambodian capital stampeded Monday night, killing more than a dozen and leaving the area littered with hundreds of injured. The panic was exacerbated as the crowd rushed to cross a bridge, and some fell into the water. (AP Photo/Heng Sinith)

An injured visitor is carried by Cambodian police and another visitor after a stampede onto a bridge at an accident site during the last day of celebrationsof the water festival in Phnom Penh, Cambodia, Monday, Nov. 22, 2010. Thousands of people celebrating a water festival on a small island in a Cambodian river stampeded Monday evening, killing many people, a hospital official said. Hundreds more were hurt as the crowd panicked and pushed over the bridge to the mainland. (AP Photo/Heng Sinith)

An injured Cambodian is carried by police officers and another visitor after a stampede in Phnom Penh, Cambodia, Monday, Nov. 22, 2010. Thousands ofCambodians celebrating a water festival by the river in the Cambodian capital stampeded Monday night, killing more than a dozen and leaving the area littered with hundreds of injured. The panic was exacerbated as the crowd rushed to cross a bridge, and some fell into the water. (AP Photo/Heng Sinith)

Injured visitors seek help after a stampede onto a bridge at an accident site during the last day of celebrations of the water festival in Phnom Penh,Cambodia, Monday, Nov. 22, 2010. Thousands of people celebrating a water festival on a small island in a Cambodian river stampeded Monday evening, killing many people, a hospital official said. Hundreds more were hurt as the crowd panicked and pushed over the bridge to the mainland. (AP Photo/Heng Sinith)

Police officers and a fellow visitor assist an injured Cambodian after a stampede onto a bridge at an accident site during the last day of celebrationsof the water festival in Phnom Penh, Cambodia, Monday, Nov. 22, 2010. Thousands of people celebrating a water festival on a small island in a Cambodian river stampeded Monday evening, killing many people, a hospital official said. Hundreds more were hurt as the crowd panicked and pushed over the bridge to the mainland. (AP Photo/Heng Sinith)

Injured Cambodian visitors are helped after a stampede onto a bridge at an accident site during the last day of celebrations of the water festival in PhnomPenh, Cambodia, Monday, Nov. 22, 2010. Thousands of people celebrating a water festival on a small island in a Cambodian river stampeded Monday evening, killing many people, a hospital official said. Hundreds more were hurt as the crowd panicked and pushed over the bridge to the mainland. (AP Photo/Heng Sinith)

A Cambodian police officer helps injured Cambodians after a stampede onto a bridge at an accident site during the last day of celebrations of the waterfestival in Phnom Penh, Cambodia, Monday, Nov. 22, 2010. Thousands of people celebrating a water festival on a small island in a Cambodian river stampeded Monday evening, killing many people, a hospital official said. Hundreds more were hurt as the crowd panicked and pushed over the bridge to the mainland. (AP Photo/Heng Sinith)

An injured Cambodian is carried by visitors after a stampede onto a bridge at an accident site during the last day of celebrations of the water festival in Phnom Penh, Cambodia, Monday, Nov. 22, 2010. Thousands of people celebrating a water festival on a small island in a Cambodian river stampeded Monday evening, killing many people, a hospital official said. Hundreds more were hurt as the crowd panicked and pushed over the bridge to the mainland. (AP Photo/Heng Sinith)

Koh Pich update 2

2010-11-22T18:57:00.000-08:00

Dear All,

Hun Sen has just announced on Apsara TV as of 1am tonight that at least 180 people confirmed dead and the number is expected to be much higher after a stampede during the water festival in Phnom Penh, Cambodia.

Source from Phnom Penh at 01:30 AM-

Koh Pich update

2010-11-22T18:53:00.000-08:00

Source: DAP-news

DAP news reported as of 12:51 AM on 23 Nov 2010:

At Calmette Hospital: more than 100 dead, several hundreds injured

At Peth Lok Sang (Monk Hospital): 48 dead (including 31 women), over 300 injured

No number tallied from other hospitals yet.

As of 12:51AM, the situation has cleared up at Koh Pich after heavy police intervention.

The police asked that those who lost loved ones should visit Calmette Hospital because the victims have not been identified yet.

According to the victims, initially, 8 or 9 women selling beers ran back and forth to play with each other. Then they started shouting and causing panic among the revelers. Then everybody started to get out of Koh Pich, causing the jam and the ensuing stampede.

There is no bridge collapse at Koh Pich as was initially rumored.

Stampede in Koh Pich: At least 100 dead, several hundreds injured

22 Nov. 2010
By Sopisith
Cambodia Express News
Translated from Khmer by Soy

Phnom Penh – The stampede near the exit from Koh Pich area created at least 100 dead and several hundreds injured. This is the count made in the evening of 22 Nov. The event took place at 09:50PM near the north bridge exiting from Koh Pich.

No source could indicate the reason for this stampede, however a reliable source indicated that revelers came out in drove from Koh Pich, creating a major jam, then some people could not breathe and this started the stampede. Some decided to jump off the bridge to allow themselves to breathe easier.

Another source indicated that the jam initiated an electrical short circuit, then some people got electrocuted and the stampede took place.

At Calmette Hospital, several dozens injured people were brought in, and at least 17 were dead as of 11PM on 22 Nov. This is only the reported number from Calmette Hospital alone. At the location of the incident at least 80 were dead. Altogether, based on preliminary tally, about 100 died from this accident.

Immediately after the accident, the authority had a hard time intervening due to the large number of people in the crowd.

The authority decided to use boats to ferry people out and take them to the shore in front of the Royal Palace in order to ease the jam and help the victims. At Koh Pich, which is located in Tonle Bassac commune, Chamcar Mon district, entertainment program was set up there during the Water Festival.

Boy drowns during festival

2010-11-22T18:50:00.000-08:00

Boy drowns during festival

Dragon boat teams steer towards the bank of the Tonle Sap river on Saturday as the first round of competitions kicked off in Phnom Penh. Two racers were injured in Saturday’s competition, while five boats capsized. (Photo by: Heng Chivoan)
Monday, 22 November 2010
Buth Reaksmey Kongkea
The Phnom Penh Post

AN 8-year-old boy drowned on the first day of the Water Festival, while five boats were sunk after the first two days of races, leaving two competitors injured.

According to witness accounts reported to police, the boy was trying to collect bottles and empty cans that had been discarded at the Tonle Sap river’s edge on Saturday, when he was swept away by the river’s current and then submerged under the Royal Palace’s boat.

Phnom Penh deputy police chief Pen Rath said yesterday that authorities were still searching for the victim’s body.

“He disappeared on Saturday about noon near the Royal Palace’s parade, at the Water Festival ceremony, while he was swimming to collect the empty bottles and cans for sale,” he said.

He says the Water Festival attracts at least 100 children who swim in the river to collect rubbish for money every year, and that the police “have to prevent them from entry into the sites”.

He added that this year more police have been stationed along the river to prevent children from entering the water.

Meanwhile, five boats were sunk on the first two days of racing – two from a crash, and three from capsizing – which resulted in two injuries, one of which authorities said was serious.

“The reason why the boats sunk during the race is because some rowers do not have experience and they hit each other during the competition,” said Chea Kean, deputy general director of the National
Committee for Organising National and International Festivals. “However, they all are lucky because they were immediately rescued by competent rescue services.”

The NCONIF had little details about the injuries, but said that one paddler had sustained a serious arm injury, while another participant was in stable condition following a leg injury.

The other paddlers were picked up from the water by rescue boats. Police officials said that 5,000 officers have been deployed to the streets of Phnom Penh this year to ensure spectator safety and to regulate traffic.

Pen Rath said that four people had been arrested on allegations of theft, while two children who had been separated from their families were successfully returned once the parents were found.
The NCONIF said that 420 boats were taking part in this year’s festival, compared with 391 from last year.

According to Phnom Penh Municipality officials, an estimated 3 million people have travelled to the capital so far to take part in this year’s festivities.
-

Gold falls from record, dips below $1,050

2009-12-10T06:58:00.000-08:00

By Miho Yoshikawa

TOKYO (Reuters) - Gold fell to below $1,050 per ounce on Friday as the dollar edged up, snapping a rally that took prices to all-time highs for three consecutive days.

Spot gold hit a record high of $1,061.20 on Thursday as the dollar's weakness increased bullion's traditional appeal as a hedge against the U.S. currency.

The dollar rose on Friday, with comments from Reserve Chairman Ben Bernanke that indicated monetary policy might have to be tightened as a recovery takes hold, helping to pull the greenback off 14-month lows against a basket of currencies.

Apart from its strong inverse correlation with the dollar, fears of inflation have also fuelled gold's rise to historic levels this week.

"I think gold's uptrend remains intact," said Shuji Sugata, a manager at Mitsubishi Corp Futures & Securities' research team.

Technical analysts at Barclays Capital have also said their outlook on gold was bullish, with a push towards $1,120 now a possibility.

"There are new participants that are being attracted to the market now as it rises," Sugata said.

He said these new inflows of money could be seen in areas including gold-backed exchange-traded funds and physical buying

By Miho Yoshikawa

TOKYO (Reuters) - Gold fell to below $1,050 per ounce on Friday as the dollar edged up, snapping a rally that took prices to all-time highs for three consecutive days.

Spot gold hit a record high of $1,061.20 on Thursday as the dollar's weakness increased bullion's traditional appeal as a hedge against the U.S. currency.

The dollar rose on Friday, with comments from Reserve Chairman Ben Bernanke that indicated monetary policy might have to be tightened as a recovery takes hold, helping to pull the greenback off 14-month lows against a basket of currencies.

Apart from its strong inverse correlation with the dollar, fears of inflation have also fuelled gold's rise to historic levels this week.

"I think gold's uptrend remains intact," said Shuji Sugata, a manager at Mitsubishi Corp Futures & Securities' research team.

Technical analysts at Barclays Capital have also said their outlook on gold was bullish, with a push towards $1,120 now a possibility.

"There are new participants that are being attracted to the market now as it rises," Sugata said.

He said these new inflows of money could be seen in areas including gold-backed exchange-traded funds and physical buying

Palace says it will no longer ‘tolerate’ intrusion by paparazzi

2009-12-06T20:38:00.000-08:00

The Queen has issued a blunt warning that the Royal Family stands ready to take legal action against harassment and intrusion by paparazzi.

After years of what one aide yesterday called “a growing feeling of frustration” over repeated breaches of privacy, lawyers operating for the Queen have reminded newspapers of their obligations under the industry’s own code of practice.

Photographers will be closely monitored around the Sandringham estate in Norfolk, where the Queen and members of her family will gather for Christmas.

The use of telephoto lenses by paparazzi — who sometimes conceal themselves in the undergrowth or wear camouflage to snatch pictures from public roads near the estate — “will not be tolerated”, according to the aide.
Last Christmas there were a number of incidents, including publication of images allegedly showing the Earl of Wessex beating two gun dogs with a walking stick at Sandringham.

Prince William is also understood to have been dismayed that a shooting party with friends was spoilt by photographers “hiding in bushes”. Some members of the Royal Family blame the paparazzi for the death of his mother, Diana, Princess of Wales, in a car crash 12 years ago.

William has taken a keen interest in whether privacy laws have been broken by those following Kate Middleton, his girlfriend, over recent years. He came close to taking legal action when he and Ms Middleton were pursued by the paparazzi after leaving a nightclub.

Disclosure yesterday of the tougher approach towards intrusive photography renewed speculation that they might be planning to get engaged over Christmas. The bookmaker William Hill halved the price on such a prospect from 12-1 to 6-1. The palace, however, is playing down talk of an engagement and says it reflects long-standing concerns.

“We wrote to newspapers with a private letter two and a half months ago and you will have to ask The Sunday Telegraph [which run the story on its front page yesterday] why this is news right now,” said a senior official.

Paddy Harverson, the Prince of Wales’s communications secretary, was quoted by the newspaper saying: “Members of the Royal Family feel they have a right to privacy when they are going about everyday, private activities. They recognise there is a public interest in them and what they do, but they do not think this extends to photographing the private activities of them and their friends.”

The Republic Campaign, which calls for the monarchy to be replaced with an elected head of state, said the Royal Family must be open to scrutiny. “While everyone has a right to a level of privacy, the Queen cannot expect the media to dance to her tune,” said Graham Smith. “If people who claim a God-given right to head our nation are falling out of nightclubs, clearly there is a public interest.”

Obama’s Sunday on Capitol Hill

2009-12-06T20:23:00.000-08:00

A Call for Making ‘History’ | 5:13 p.m. President Obama exhorted Senate Democrats on Sunday to put aside their fierce policy differences and to make history by passing landmark health care legislation, according to The Times article now posted on our Web site.

Original Post | 2:35 p.m. President Obama arrived on Capitol Hill shortly after 2 p.m. Sunday for his meeting with Senate Democrats.

Mr. Obama offered a “Hey, guys, good to see you” greeting to the Capitol press corps but otherwise did not say anything as he walked briskly into the Mansfield Room, where Democrats hold their weekly party luncheon.

The Sunday session is unusual. Democrats remain divided over some important issues in the health care bill, and Mr. Obama was expected to urge them to band together to finish the legislation.

Climate change protesters take to London streets

2009-12-06T20:20:00.000-08:00

Thousands of people marched through central London on Saturday calling for a deal on climate change at next week's conference in Copenhagen.

Organizers of the Stop Climate Chaos Coalition had originally estimated that more than 10,000 people would participate in the event that began at Grosvenor Square and made its way to the Houses of Parliament on the River Thames.

But London's Metropolitan Police said there were about 20,000 people at the march.

"We wanted to make a positive statement," retired teacher Pip Cartwright, 72, from Witney, Oxfordshire said. "It's for the future. It's not my generation that's going to have the problem to solve."

The coalition — which includes groups such as Oxfam, Greenpeace, Friends of the Earth and the World Wildlife Federation — called the protest "The Wave," and organizers asked marchers to dress in blue.

The first stop for many in the march was the headquarters of BP, the large British-based oil company, because of its relationship with Alberta's tarsands project.

"We have to leave the tarsands oil in the ground," said one of the speakers.

The march was to climax with a mass "wave" around Parliament. Other "Wave" events were being held in Glasgow, Belfast, and Dublin. Similar demonstrations took place in Brussels and Berlin.

"The U.K. government must fight for a comprehensive, fair and binding deal at Copenhagen. That is our demand today and we expect it to be fulfilled," Oxfam GB chief executive Barbara Stocking said in a statement.

"They must return home with a strong, effective climate deal both for our own sakes in the U.K. and for the millions of poor people already suffering from the effects of climate change around the world," she said.
Data from 1,000 weather stations to be released

Also on Saturday, Britain's Met Office said it would publish some of the data it uses to analyze climate change, after thousands of pieces of correspondence between some of the world's leading climate scientists were stolen from the University of East Anglia and leaked to the internet.

Skeptics of man-made global warming have said the mails prove that scientists have been conspiring to hide evidence about climate change.

On Friday, the chairman of the Intergovernmental Panel on Climate Change, Rajendra Pachauri, said the issue raised by the emails was serious and would be looked at in detail.

Met Office spokesman Barry Gromett said data from 1,000 weather stations around the world, covering 150 years, will be released early next week. The office has written to 188 countries to ask for permission to release more data from a further 4,000 stations.

Ahead of the march through central London, Archbishop of Canterbury Rowan Williams offered prayers for negotiators in Copenhagen and urged people not to listen to those who say there's a choice between "looking after human beings and looking after the Earth."

"If we make ourselves a bit less comfortable, if we draw back from a little bit of our space and liberty so that others may have the space and comfort they need for life, thank God," Williams said.

A second group of climate campaigners was planning an action for later Saturday.

Richard Bernard, a spokesman for Camp for Climate Action, said protesters planned to pitch tents somewhere in central London to spotlight the talks in Copenhagen.

He said his group intended to march with the main protest, and then head off to their so-far secret site in London.

The Post-Imperial Presidency

2009-12-06T20:15:00.000-08:00

Even as Obama increases troop levels, he is scaling back American foreign policy.
If you take just one sentence out, Barack Obama's speech on Afghanistan last week was all about focusing and limiting the scope of America's mission in that country. His goal, he said, was "narrowly defined." The objectives he detailed were exclusively military—to deny Al Qaeda a safe haven, reverse the Taliban's momentum, and strengthen the Kabul government's security forces. He said almost nothing about broader goals like spreading democracy, protecting human rights, or assisting in women's education. The nation that he was interested in building, he explained, was America.
And then there was that one line: "I have determined that it is in our vital national interest to send 30,000 U.S. troops to Afghanistan." Here lies the tension in Barack Obama's policy. He wants a clearer, more discriminating foreign policy, one that pares down the vast commitments and open-ended interventions of the Bush era, perhaps one that is more disciplined even than Bill Clinton's approach to the world. (On the campaign trail, Obama repeatedly invoked George H.W. Bush as the president whose foreign policy he admired most.) But America is in the midst of a war that is not going well, and scaling back now would look like cutting and running. Obama is searching for a post-imperial policy in the midst of an imperial crisis. The qualified surge—send in troops to regain the momentum but then draw down—is his answer to this dilemma. This is an understandable compromise, and it could well work, but it pushes off a final decision about Afghanistan until the troop surge can improve the situation on the ground. Eighteen months from now, Obama will have to answer the core question: is a stable and well-functioning Afghanistan worth a large and continuing American ground presence, or can American interests be secured at much lower cost?

This first year of his presidency has been a window into Barack Obama's world view. Most presidents, once they get hold of the bully pulpit, cannot resist the temptation to become Winston Churchill. They gravitate to grand rhetoric about freedom and tyranny, and embrace the moral drama of their role as leaders of the free world. Even the elder Bush, a pragmatist if there ever was one, lapsed into dreamy language about "a new world order" once he stood in front of the United Nations. Not Obama. He has been cool and calculating, whether dealing with Russia, Iran, Iraq, or Afghanistan. A great orator, he has, in this arena, kept his eloquence in check. Obama is a realist, by temperament, learning, and instinct. More than any president since Richard Nixon, he has focused on defining American interests carefully, providing the resources to achieve them, and keeping his eyes on the prize.

In 1943 the columnist Walter Lippmann defined foreign policy as "bringing into balance, with a comfortable surplus of power in reserve, the nation's commitments and the nation's power." Only then could the United States achieve strategic stability abroad and domestic support at home. Consciously or not, President Obama was channeling Lippmann when he said, "As president I refuse to set goals that go beyond our responsibility, our means, or our interests." In his speech he quoted only one person, a president of the opposite party, Dwight Eisenhower, who said of national-security challenges, "Each proposal must be weighed in the light of a broader consideration: the need to maintain balance in and among national programs." Obama added that "over the past several years, we have lost that balance." He is hoping to restore some equilibrium to American foreign policy.

"In the end," said the president last week, "our security and leadership does not come solely from the strength of our arms." He explained that America's economic and technological vigor underpinned its ability to play a world role. At a small lunch with a group of columnists (myself included) last week, he made clear that he did not want to run two wars. He seemed to be implying that these struggles—Iraq and Afghanistan—were not the crucial path to America's long-term security. He explained that challenges at home—economic growth, technological innovation, education reform—were at the heart of maintaining America's status as a superpower.

It is now clear that Obama is attempting something quite ambitious—to reorient American foreign policy to-ward something less extravagant and adversarial. That begins with narrowing the war on terror; scaling back the conflict with the Islamic world to those groups and countries that pose serious, direct threats to America; and reaching out to the rest. He has also tried to develop a better working relationship between America and other major powers like Russia and China, setting aside smaller issues in hopes of cooperating on bigger ones. This means departing from a bipartisan approach in which Washington's role was to direct the rest of the world, pushing regimes large and small to accept American ideas, and publicly chastising them when they refused. Obama is trying to break the dynamic that says that when an American president negotiates with the Chinese or Russians, he must return with rewards or concessions—or else he is guilty of appeasement.

And then there is that line. It might seem hard to reconcile a more targeted and focused foreign policy with the expansion of a war and the introduction of 30,000 troops. But it is not unprecedented. When Richard Nixon and Henry Kissinger entered the White House in 1969, they inherited a war in Vietnam that they might have believed in at some theoretical level, but that they recognized was bleeding the country. Over their years in office, they focused on shoring up America's power position through diplomacy with the Soviet Union, China, Egypt, and Israel. But they also recognized that they had to deal with the crisis in Vietnam and said explicitly that they were going to try to scale back America's involvement there. In this they succeeded. By April 1969, soon after Nixon took office, there were 543,000 American troops in Vietnam. At the end of his first term, there were fewer than 20,000 left. But in between, in order to keep the enemy on the defensive, to gain momentum, and to create space for American troops to leave, Nixon and Kissinger ordered a series of offensive military maneuvers that were designed to hit the North Vietnamese hard. Surge and then draw down, you might say.

Although the Viet Cong were beaten back temporarily, ultimately the North took over the South in 1975. But it is instructive to think about why. First, our local ally lacked legitimacy and competence. The government of South Vietnam was simply unable to gain the confidence of its people, and the Viet Cong and its Northern allies were able to persuade or intimidate tens of thousands of Vietnamese to shift to their side. Second, the enemy had safe havens outside South Vietnam—mainly in North Vietnam and Cambodia—which provided them escape routes and supply chains. More significant, the insurgents had the active support of the other superpower, the Soviet Union, as well as some aid from China. Finally, the United States cut off all assistance to South Vietnam, abandoning a country it had lost 59,000 troops defending.

Gold rallies to fresh record, stocks up

2009-11-10T06:55:00.000-08:00

NEW YORK (Reuters) - Gold climbed to a record on Thursday as the dollar struggled, while U.S. stocks settled higher after Alcoa (AA.N) began the third-quarter earnings season with an unexpected profit.

Major U.S. equity indexes rose nearly 1 percent, led by Alcoa, a day after the Dow component and the largest American aluminum producer posted its first profit after a string of quarterly losses. Alcoa cited improving metal prices and cost savings as the main reasons for its profitable quarter.

Alcoa is the first major company to release earnings in the U.S. third-quarter reporting season.

Its profit surprise also played a factor in world equity markets on Thursday, as investors have been scouring for signs of any fundamental improvement in organic growth. The MSCI world equity index .MIWO00000PUS rose 1.32 percent to 1,137.84, near the year's high of 1,150.42.

For their part, the Dow Jones industrial average .DJI was up 61.29 points, or 0.63 percent, at 9,786.87, while the Standard & Poor's 500 Index .SPX was up 7.90 points, or 0.75 percent, at 1,065.48. The Nasdaq Composite Index .IXIC was up 13.60 points, or 0.64 percent, at 2,123.93.

But gold stole the spotlight again.

The yellow metal topped $1,060 per ounce to mark a record high for the third session in a row, versus its late New York Wednesday quote of $1,043.70. It closed the day at $1,055.45.

The move in spot bullion has primarily been driven higher by the weakening dollar, which makes the dollar-denominated metal more attractive to investors.

In some currencies -- the high-flying Australian dollar, for example -- gold has actually fallen in price this year.

"Investors are turning toward gold as a hedge in dollar weakness," said Adrian Koh, an analyst at Phillip Futures in Singapore.

The dollar was down against a basket of major trading-partner currencies, with the U.S. dollar index down 0.69 percent at 75.966, a 14-month low and below a previous session close of 76.494.

The currency has been hit by a combination of expectations that U.S. interest rates will stay low for some time and a belief that the global economy is on the mend, easing the motivation behind last year's flight to dollar safety.

The euro was up 0.63 percent at $1.4778 from a previous session close of $1.4685, while against the Japanese yen, the dollar was down 0.15 percent at 88.45 from a previous session close of 88.580.

The Australian dollar jumped 1.7 percent to US$0.9063, still benefiting from this week's rate hike. It has now gained nearly 28 percent against the U.S. dollar this year.

United Commercial Bank is shut down, sold to East West BancorpThis creates by far the largest U.S. bank focused on the Chinese American market and the largest bank based in Southern California. United Commercial was the 120th bank to fail in the U.S. this year.This creates by far the largest U.S. bank focused on the Chinese American market and the largest bank based in Southern California. United Commercial was the 120th bank to fail in the U.S. this year.

2009-11-08T08:42:00.000-08:00

This creates by far the largest U.S. bank focused on the Chinese American market and the largest bank based in Southern California. United Commercial was the 120th bank to fail in the U.S. this year.

Toppled by loan losses and misstated financial reports, San Francisco's United Commercial Bank was shut down by regulators Friday night and immediately sold to Pasadena's East West Bancorp, creating by far the largest U.S. bank focused on the Chinese American market.

The combination also will be the largest bank based in Southern California, surpassing City National Bancorp.

East West agreed to assume all of United Commercial's deposits, so no depositors will lose money, the Federal Deposit Insurance Corp. said. The bank's 63 U.S. branches, including 17 in Southern California, will reopen Saturday as branches of East West Bank.

United Commercial, a unit of UCBH Holdings Inc., was the fourth-largest bank to fail this year. That position was formerly occupied by California National Bank of Los Angeles, which failed last week and was acquired by U.S. Bancorp of Minneapolis.

Regulators also seized on Friday one bank each in Georgia, Michigan, Minnesota and Missouri, bringing to 120 the number of failures this year.

United Commercial's collapse may cause a greater-than-usual stir because a year ago the federal government invested $299 million in bailout funds in the bank in exchange for preferred stock, which was made worthless by the failure.

In addition, the FDIC said the collapse would cost the federal deposit insurance fund an estimated $1.4 billion.

East West raised $500 million in new capital to support the takeover, most of it from mutual funds and other existing shareholders, said Dominic Ng, chairman of the Pasadena-based lender.

The privately placed stock sales will enable East West to proceed slowly as it integrates the two banks, then have plenty of capital later next year to consider additional expansion by adding branches or making more acquisitions.

The takeover will greatly expand the reach of East West, which has concentrated on Southern California and the San Francisco Bay Area. In addition to 69 California offices, East West has full-service branches in Houston and Hong Kong.

United Commercial not only has dozens of branches in California but also has locations in key Chinese American areas, including New York, Boston, Seattle, Atlanta and Houston.

What's more, because of its 2007 acquisition of a Shanghai bank, United Commercial also has a banking license in China -- a "rare and hard-to-come-by" asset that makes it easier to operate and expand in that country, , said RBC Capital Markets analyst Joe Morford. It has full-service offices in Shanghai, Hong Kong and Shantou, China.

United Commercial, East West and Cathay General Bancorp of Los Angeles have vied for years to become the largest of the banks focused on the Chinese American market.

East West, which had $12.5 billion in assets at last report, agreed to acquire $10.2 billion of United Commercial's $11.2 billion in assets. That would put the combined bank, at almost $23 billion in assets, ahead of L.A.-based City National as the largest bank based in Southern California. At last report, City National had $18.4 billion in assets.

The FDIC agreed to absorb most of the expected losses on about $7.7 billion of the United Commercial assets acquired by East West.

Like its Chinese American rivals, United Commercial was burned by commercial lending losses, especially loans to developers and home builders during the housing boom. But it also was tainted by a financial scandal that resulted in a shake-up of its top management.

UCBH announced in September that its financial reports could not be trusted because of the "deliberate and improper actions and omissions of certain bank officers," who had understated losses in "an apparent desire to downplay deteriorating financial conditions."

The company's longtime chief executive, Thomas S. Wu, resigned in September, along with its chief operating officer.

Ng said he believed his new customers would happily accept a takeover by another California-based Chinese American bank rather than an institution "from somewhere else -- New York, or a foreign bank."

Ng said he anticipated only a few branch closures. Some back-office employees will be let go, he said.

US jobless rate rises to over 10%

2009-11-08T06:40:00.000-08:00

The unemployment rate in the US rose to 10.2% in October, which was its highest rate since April 1983, according to figures from the US Labor Department.

It rose from September's figure of 9.8%. The economy lost 190,000 jobs in the month.
Since the recession began in December 2007, the number of unemployed has risen by 8.2 million, while the jobless rate has risen from 4.9%.
President Barack Obama described the rise in unemployment as "sobering".
"I will not rest until all Americans who want work can find work," he added.
He also said he would be signing legislation to extend unemployment benefit, cut taxes for businesses and extend tax credits for home buyers.

Analysts were also downbeat after the worse-than-expected figures.
"It's pretty disappointing overall," said Richard Franulovich at Westpac.
"Job losses are not moderating as quickly as I had hoped despite those earlier indicators on jobs."
Dollar falls
The figures were particularly poor given Thursday's news of a fall in initial weekly jobless claims and the data earlier in the week that showed the US economy had grown by 3.5% between July and September.
The number of unemployed people rose by 558,000 to 15.7 million.
But there was some better news with the revision of September's figure from a loss of 263,000 jobs to a loss of 219,000 jobs.
The dollar fell against both the euro and the yen following the release of the figures.
Long-term unemployed
The sectors contributing the largest numbers of job losses in October were construction, manufacturing and retail.
It was the 22nd month in a row that the US economy had shed jobs, which is the longest run since records began 70 years ago.
There is concern that rising unemployment could scupper the recovery by restricting consumer spending, which accounts for 70% of the economy.
The number of people who had been out of work for at least six months rose to a record 5.6 million, accounting for 35.6% of the jobless total.

Berlin all fired up for wall-to-wall partying

2009-11-08T06:35:00.000-08:00

THE elderly lady with her shopping bag stood and stared at the armed policeman politely but firmly preventing her from crossing the 8ft-high barrier built across the street. “It’s like having the Wall back,” she said tetchily. But with a smile.
The policeman smiled back. Stretching away on either side, a chain of 1,000 wall-like slabs daubed with graffiti form a new 1.2-mile barrier from the Brandenburg Gate to Potsdamer Platz — now once again one of Europe’s busiest intersections.

Tomorrow night, at the climax of the biggest official party seen in Europe, with Angela Merkel, the German chancellor, hosting Gordon Brown, Hillary Clinton, the US secretary of state, Nicolas Sarkozy, the French president, and Dmitry Medvedev, the Russian president — to name but a few — the slabs will crash into one another like dominos, representing the chain of events that 20 years ago brought the cold war to an end.
The first “domino” will be pushed over, fittingly enough, by Lech Walesa and Miklos Nemeth, the veteran Polish and Hungarian anti-communist campaigners. They will be joined by two other main actors in the drama of 1989: the former Soviet president Mikhail Gorbachev and Hans-Dietrich Genscher, the then West German foreign minister.
The officially organised street party is costing £4.6m and kicks off with a Daniel Barenboim-led concert at the Brandenburg Gate, followed by Bon Jovi performing their single We Weren’t Born to Follow and an extravagant firework display as the thousand dominos fall.
All of Germany is celebrating what the newspaper Die Welt yesterday called “the unexpected joy” that hit the country on a cold night in November 1989 when popular unrest, democracy protests, and a series of misjudged measures and misunderstandings caused the Berlin Wall to fall.
In today’s difficult climate, nobody is claiming reunification came without economic pain, but with Germany having already climbed out of recession, one newspaper editorial could claim yesterday that “if we are not the happiest nation on earth, at least we are a happy nation”.
On that wintry, chaotic, euphoric November night 20 years ago, I met up on West Berlin’s showy Kurfürstendamm with Kerstin and Andreas, two friends from East Berlin who had escaped only weeks before on one of the sealed trains that brought asylum seekers from West Germany’s embassy in Warsaw through to the West.
On a night of tears, joy, fireworks, inebriation and incredulity — a far more spontaneous celebration than anything taking place tomorrow — Kerstin was reunited with the family she had left in the East and expected never to see again.
Karin, another East German friend, reluctantly trained as an engineer by the communist regime, was expelled from East Germany shortly before the Wall fell — her brother had spent months in prison as a failed escaper — and now runs a thriving business. She has moved to a leafy suburb so far west in West Berlin that, back then, it was in East Germany.
We walked along the banks of the Spree, past the Berliner Ensemble, Bertolt Brecht’s theatre, and Ganymed, old East Berlin’s stuffy, showcase restaurant. Twenty years ago the path ended a few yards along in darkness, concrete and barbed wire across the river.
Today the same riverbank leads to the restored Reichstag, again the seat of parliament, and is lined with restaurants. Instead of patrol boats with machineguns and searchlights, the Spree is home to river cruisers with beer and champagne bars. Potsdamer Platz, near the site of Hitler’s buried bunker, has been transformed from a no man’s land of wall and watchtowers into a bustling, 21st-century streetscape.
Berlin today has seized with both hands its role at the heart of an expanded Europe, symbolised by the vast new Central station, with high-speed trains on three levels hurtling east and west. Workers from western Poland returning from Britain fly to Berlin and catch the Intercity-Express to Poznan.
As the Cafe Varna, not far from the Brandenburg Gate testifies, there are now — thanks to European Union expansion — more Bulgarians, Czechs, Slovaks and Hungarians working in Berlin than there were when they were “fraternal allies” in the Warsaw Pact. More Russians too, if one does not count the 380,000 departed troops.
As part of the celebrations, an exhibition in the city centre is showcasing the Art of Socialist Realism, a collection of Stalinist-style paintings of happy children scattering grain to chickens, or Lenin addressing adoring workers. Nostalgia is a funny thing.
On Ebertstrasse, named after the first president of the pre-war Weimar Republic — save for a brief spell as HermannGöring-Strasse — Japanese tourists queue to be photographed astride the brick line in the pavement that shows where the Wall once ran.
Ironically, it is once glitzy western Berlin that now looks the shabbier part of the city, with the Ku’damm (as the Kurfürstendamm is known) in search of regeneration money.
A few statistics alone illustrate some of the superficial social changes in the old East. The number of cars has almost doubled from 3.9m to 7.5m, while — partly thanks to mobile phones — the number of telephones has soared from 49 per 100 households to 243.
The child mortality rate has fallen by two-thirds, life expectancy has risen from 69.8 years for men and 76.8 for women to 76.1 and 82.2 respectively, and although the number of hospitals has fallen from 392 to 254, they are far better equipped.
But the west’s longer established infrastructure still beckons: the population of the old East Germany has dropped from just under 17m to just over 14m, while that of the former West Germany has risen from 61.7m to 67.5m.
For those of us who lived in the East in the years before the Wall came down and were there to see it crumble, the emotion of the anniversary is still best summed up in the words spoken at the reunification ceremony in 1990 by Lothar de Maizière, East Germany’s last prime minister: “It is an hour of great joy, It is the end of some illusions. It is a farewell without tears.”
Inevitably, there is a new joke doing the rounds: East Berlin and West Berlin used to be fractious siamese twins, one dowdy, prudish and hypocritical, the other stylish, spendthrift and sluttish. Through the miracle of modern science they have been united, and what do you get? Angela Merkel.
Peter Millar’s book 1989 The Berlin Wall (My Part in Its Downfall) is published by Arcadia Books, £11.99.
History’s back from the dead, Bryan Appleyard, News Review, page 6

Texan police officer Kim Munley who shot Fort Hood gunman hailed as a heroine

2009-11-08T06:32:00.000-08:00

A police officer who intervened to stop a shooting spree at America's biggest military base was hailed today a heroine as she received treatment for the wounds received in a shoot-out with the gunman.
Major Nidal Hasan, an army psychiatrist due to be posted to Afghanistan, shot dead 13 people and wounded 30 others after opening fire with two handguns at Fort Hood yesterday afternoon.
But the death toll from the rampage could have been far worse had it not been for the actions of Sergeant Kimberly Munley, a civilian police officer stationed at the base who was the first on the scene as Major Hasan picked off his victims.
Sergeant Munley managed to hit Major Hasan four times but was herself hit by a bullet that passed through both her legs, according to witnesses.

Colonel John Rossi, briefing reporters at Fort Hood this morning, said that Major Hasan's victims, who were killed in a part of the base used to process soldiers for deployment to Iraq and Afghanistan, had all been unarmed. Sergeant Munley had been the first armed person on the scene and had immediately taken him on.
"Her efforts were superb," he said.
The base commander, Lieutenant-General Bob Cone, also paid tribute: “She happened to encounter the gunman. In an exchange of gunfire, she was wounded but managed to wound him four times,” he said.
“It was an amazing and aggressive performance by this police officer.”
Colonel Steven Braverman, commander of the base hospital and Major Hasan's supervisor, said that Sergeant Munley was in a stable condition in a nearby community hospital.
She is likely to return home to a hero's welcome, although her Twitter page – which features a picture of her with the country music star Dierks Bentley at the Fort Hood "Freedom Fest" on July 4 – suggests she is not the type to have her head turned.
Her Twitter biography reads: "I live a good life ... a hard one, but I go to sleep peacefully @ night knowing that I may have made a difference in someone's life."

It emerged today that Major Hasan, a Muslim who had argued with his comrades against the wars in Iraq and Afghanistan and had been trying to get out of the Army, shouted "Allahu akbar" – Arabic for "God is great" – as he launched the attack.

Fort Hood shooting: President Barack Obama will travel to Texas for Fort Hood memorial service

2009-11-08T06:25:00.000-08:00

The mass shooting by Army psychiatrist Major Nidal Malik Hasan on Thursday, left 13 dead and 38 wounded at America's largest military base.
A memorial service has been scheduled for Tuesday. The White House said Mr Obama and Michelle Obama, the First Lady, would be there. Mr Obama is due to leave the following day for a 10-day tour of Asia.

Earlier, he said the response to the tragedy had displayed "the best of America." He said: "Thursday's shooting was one of the most devastating ever committed on an American military base and yet, even as we saw the worst of human nature on full display, we also saw the best of America."

Mr Obama said he had met with FBI director Robert Mueller and Defense Secretary Robert Gates to be briefed on the investigation into the crime.
Hasan, 39, a specialist in combat stress, went on the rampage as he was about to be deployed to Afghanistan against his wishes.
Mr Obama said it might prove impossible to understand what the motive was.
He said: "We cannot fully know what leads a man to do such a thing. What we do know is that our thoughts are with every single one of the men and women who were injured at Fort Hood.
"Our thoughts are with all the families who've lost a loved one in this national tragedy.
"And our thoughts are with all the Americans who wear, or who have worn, the proud uniform of the United States of America.
"They are Americans of every race, faith and station. They are Christians and Muslims, Jews and Hindus and nonbelievers. They reflect the diversity that makes this America. But what they share is a patriotism like no other." Mr Obama praised the reaction of soldiers and civilians to the initial shootings at Fort Hood.
He said: "We saw soldiers and civilians alike rushing to aid fallen comrades, tearing off bullet-riddled clothes to treat the injured, using blouses as tourniquets, taking down the shooter even as they bore wounds themselves.
"We saw soldiers bringing to bear on our own soil the skills they had been trained to use abroad."

UPDATE: US Stocks Close Sharply Lower; DJIA Ends Month Flat

2009-11-01T03:46:00.001-08:00

By Donna Kardos Yesalavich
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--U.S. stocks tumbled Friday, with Bank of America, JPMorgan Chase and Alcoa leading the Dow Jones Industrial Average's components lower as investors again grew concerned about the economy after the short-lived excitement over Thursday's good report on gross domestic product.

The Dow Friday posted its biggest one-day point drop since April 20, and ended October just 0.45 point above where it began. Other major measures, including the Standard & Poor's 500 and the Nasdaq Composite, ended the month in the red, marking their first monthly declines since February.

The Dow closed down 249.85 points, or 2.51%, at 9712.73, marking its 10th triple-digit movement this month. Five of them were down and five up, reflecting how volatile the market has gotten as investors try to get a handle on whether the 48% surge in the Dow since March can be justified by economic fundamentals. For the week, the Dow fell 259.45 points, or 2.6%, marking its second consecutive week in the red.

Among the Dow's big movers Friday, Bank of America tumbled 1.15, or 7.3%, to 14.58, while JPMorgan slid 2.58, or 5.8%, to 41.77, and Alcoa dropped 58 cents, or 4.5%, to 12.42.

Across other measures, the Nasdaq Composite fell 52.44, or 2.50%, to 2045.11. It was down 5.08% for the week, and 3.65% for the month.

The Standard & Poor's 500 dropped 29.93, or 2.81%, to 1036.18. For the week, it dropped 4.02%; it was down 1.98% for the month.

Friday's declines come as the latest measure of consumer spending came in weak, reflecting the biggest drop since December 2008, although it was in line with economists' expectations.

Still, investors are growing hungry for economic data to start showing improvement and strength, rather than simply being above or in line with expectations. In addition, they are starting to wonder how much of the economic growth that was reported Thursday would have been there if it weren't for all the government support through such programs as the "cash for clunkers" funding for automobile purchases.

Nonetheless, some market participants said Friday's decline was typical of a market in recovery, and therefore no major cause for concern.

"It's not unprecedented after having such a strong rally," said Mary Ann Bartels, head of U.S. technical and market analysis at Bank of America Merrill Lynch. "Markets need to consolidate in order to achieve new recovery highs, and a correction will broaden out the base-building process we've been in since last year," giving stocks more support for a move higher, she said.

Life insurers fell in an exaggeration of the declines across the market, as the sector is exposed to equities through its variable-annuity guarantees and other equity-linked retirement-income products. MetLife was among the decliners, slumping 2.81, or 7.6%, to 34.03, after it swung to a third-quarter loss on $1.4 billion in investment losses. The life insurer's stock had climbed 7.8% Wednesday ahead of the report.

McAfee declined 1.87, or 4.3%, to 41.88, after the security-software company said its third-quarter profit fell 25% as higher costs led to lower margins.

Stereo maker Harman International Industries was a bright spot, surging 4.61, or 14%, to 37.61, after the company reported fiscal first-quarter sales above Street expectations. The company said its markets are stabilizing and it is gaining market share.

Estee Lauder also rose, climbing 1.36, or 3.3%, to 42.50, after its fiscal first-quarter profit more than doubled as the beauty-products company posted higher earnings across all of its businesses. Goldman Sachs raised its investment rating on the stock to neutral from conviction sell.

ITT fell 3.66, or 6.7%, to 50.70, after the defense and industrial conglomerate reported a 73% drop in third-quarter profit, stemming from a $131 million charge for asbestos-liability claims.

Cummins was down 2.86, or 6.2%, to 43.06, after the engine maker reported its third-quarter earnings fell 59% from last year's record results as it struggles in the face of weak North American and European trucking and construction markets.

Beckman Coulter fell 2.73, or 4.1%, to 64.33. The maker of biomedical instrument systems and test equipment posted a 94% plunge in third-quarter earnings as restructuring and acquisition costs masked higher sales and margins.

Universal Health Services' latest quarterly earnings beat analysts' expectations, but its shares fell 5.07, or 8.4%, to 55.65, as investors focused on the hospital operator's growing bad debt, which climbed more than analysts had been expecting. The news weighed on Tenet Healthcare, which fell 37 cents, or 6.7%, to 5.12.

Banks broken up: Q&A

2009-11-01T02:06:00.000-08:00

Three new banks are to appear on Britain's high streets as part of a major break-up of the sector to be announced by the Government this week, The Sunday Telegraph has learned.
Why is the government doing it?

Gordon Brown and Alistair Darling have little choice. Under European law, Royal Bank of Scotland (RBS), Lloyds Banking Group and Northern Rock have to pay a price for the billions of pounds of state aid they have received. However, there are likely to be smiles rather than frowns in Downing Street because gradually returning these troubled institutions to full private ownership is firmly on the to do list. The government’s stakes in RBS and Lloyds are also threatening to become an even bigger political headache should these banks shower their best performing staff with bonuses in the New Year. Expect to see the emergence of Williams and Glyn, the revival of TSB and the resuscitation of Northern Rock hailed by the Prime Minister as a return to an era of more sensible and conservative banking.
Who will own these new banks?

We know who the Government do not want to own the new High Street banks but less about who could be favoured. Hoping to introduce more competition and stability into the market, ministers will not encourage bidders with big UK presences such as Barclays, HSBC and Spain’s Santander, which subsumed Abbey National, Alliance & Leicester, and Bradford & Bingley during the financial crisis. Likely candidates are therefore new or fledgling entrants into the banking market or foreign groups with substantial operations in other countries. It is thought that supermarkets or other retailers with interests in building current account facilities such as Tesco, Sainsbury’s, Boots, WHSmith or Sir Richard Branson’s Virgin Money, could make bids. Building societies, co-operatives or other financial services institutions could also be in the running.

Is it good news for the taxpayer?

At the Labour party conference, Mr Brown pledged to make last October’s dramatic bank bail-out pay for the average UK taxpayer. The government remains tight-lipped about the sort of prices these new banks may be sold for, but it is highly unlikely to be enough to cover the cost of the intensive care the banks have been in. RBS and Lloyds received a capital injection of £37 billion, and that is before counting any losses that might eventually land on the taxpayers’ doormat from the government insuring billions of pounds of the most toxic assets of RBS. The government will hope that the sale of these banks will go at least some way to recouping some of the billions spent at a time when the public finances are in such a parlous state. But with the sales not happening before the next general election, the taxpayer will have to wait.

What will the new High Street look like?

Since the onset of the crisis, the big banks have been furiously consolidating branches and closing stores with the loss of thousands of jobs. The rise of internet and telephone banking as consumers seek convenience, and banks try to cut costs, has also led to the slow demise of the High Street bank manager that knows the name of every customer. But the revival of two historic brands associated with personal banking, Williams and Glyn’s and TSB could herald a return to the importance of a High Street presence. If the Government manages to generate more competition in retail banking, branches may once again vie for prize spots in town centres.

Is it good news for consumers and businesses?

In economic textbooks, more competition is usually deemed to be good news for the customer. It is likely that the new entrants will seek to improve on existing retail services as they try to win customers. However, smaller banks focused on the nuts and bolts of consumer and business banking are also likely to be less profitable institutions and that may come at the public’s cost. There may be more choice, but it is not clear if banking services will be any cheaper. The Government’s plan to force Lloyds and RBS to hand out more mortgages and loans to businesses has so far delivered mixed results. The banks argue that there is little appetite for loans from either consumers, who are cutting their spending, or businesses fearful of investing in this economic climate. When these new banks are sold by the government, compelling them to lend gets even harder. Ultimately, the pace of lending to the wider economy is likely to depend more on a broader recovery in Britain.

Will it improve the stability of the financial system?

The speed with which the financial system unravelled still remains shocking a year on. So these new entrants in the British banking universe are likely to be focused on the basics: providing current and savings accounts as well as lending to home owners and businesses. What’s more they will only be lending what they get in from depositors – a model far removed from the old Northern Rock and HBOS when they relied on their own borrowing to plug the gap between what they handed out in loans and what they had in the bank. That certainly ticks a box for financial stability. However, this week’s announcement from the Government will not really address the 'too big to fail’ question that is at the heart of the future shape of banking. Big banks, such as Barclays and HSBC, still provide the very basics like current accounts and savings accounts but at the same time own investment arms engaged in far riskier and typically more profitable activities. What’s more, there’s nothing to stop a big foreign institution like Bank of America buying one of these new banks

Pilots 'face same distractions as drivers'

2009-11-01T02:01:00.000-08:00

"I have my own ideas about this, but I'm going to work with the folks at the FAA and our department to deal with this issue," LaHood said. "We're going to take a very close look at that entire issue."

The Obama administration and lawmakers have already expressed interest in targeting distracted driving, including the use of mobile devices while behind the wheel. LaHood held a summit meeting in September that brought together researchers, regulators and other experts on distracted driving.

WASHINGTON - The two airline pilots who overshot their destination by 150 miles have prompted the Obama administration to broaden its look at distracted driving to include distracted flying, Transportation Secretary Ray LaHood said today.

The use of mobile devices and laptops while driving any type of vehicle is unsafe, LaHood told a hearing of the Senate Commerce, Science and Transportation Committee.

"We're not going to equivocate on this. Any kind of distraction, whether it's trains, planes or automobiles is a distraction and we should figure out ways to get these cell phones, the texting, ... and the use of laptops out of the hands of people who are supposed to be delivering the public to somewhere safely," LaHood said.

The pilots of Northwest Airlines Flight 188 told safety investigators they lost track of time and place while using their laptops to work out crew schedules. They said they were out of communications with air traffic controllers and their company's dispatchers for 91 minutes while cruising in their Airbus 320 at 37,000 feet, unaware that they had flown past their destination of Minneapolis in the upper Mideast until a flight attendant called them on an intercom.
The incident "raises serious safety concerns," said Sen. Jay Rockefeller, D-W.Va., chairman of the committee.

Sen. Frank Lautenberg, a Democrat, noted that the Federal Aviation Administration does not prohibit the use of laptop computers above 10,000 feet and asked whether the Transportation Department might regulate the use of laptops by pilots.
A group of senators proposed legislation that would offer incentive grants to states that approve laws to combat distracted driving.

"Texting takes your eyes off the road - long enough at high speeds to travel the length of a football field," Rockefeller said.

The FAA said that it had revoked the licenses of the Northwest pilots - Timothy Cheney, the captain, and Richard Cole, the first officer. Phone messages left at the homes of the pilots were not returned.

The pilots have 10 days to appeal the revocation to the three-member National Transportation Safety Board, the same agency that investigates air crashes and makes safety recommendations. If an appeal fails, they can apply for a new license after one year.

Flat incomes, weak consumer spending raise concern

2009-10-30T18:27:00.001-07:00

By MARTIN CRUTSINGER (AP) – 4 hours ago

WASHINGTON — Flat incomes suggest more weakness ahead in consumer spending, reinforcing concerns about a ho-hum holiday shopping season and a sluggish economic recovery.

"This recovery is going to be very weak. Consumers are in no position or mood to spend. Their wages are down and they can't get credit," said Sung Won Sohn, an economics professor at California State University's Smith School of Business.

Concerns about the economy sparked by disappointing government data on spending and incomes sent stocks down Friday, erasing the previous day's big gains. The Dow Jones industrial average lost about 250 points, and broader indexes also fell.

The Commerce Department reported that personal incomes were stagnant in September while the all-important wage and salary category dropped 0.2 percent, as unemployment rose.

Consumer spending — which accounts for 70 percent of total economic activity — dropped 0.5 percent, the first decline in five months and the biggest since December.

The spending retreat reflected a sharp falloff in auto sales following a spike in August from the government's Cash for Clunkers program.

The overall economy, as measured by the gross domestic product, actually grew at a 3.5 percent rate from July through September, signaling an end to the longest recession since the 1930s.

But analysts said the income and spending report underscored fears about a weak recovery. The most pessimistic worry the nation could be headed for a double-dip recession as consumers, concerned about further job losses and their tattered investment holdings, refrain from spending.

Some analysts believe that GDP growth, which received a big boost from the government's stimulus programs in the third quarter, will slow to 2 percent or less in the current quarter.

David Wyss, chief economist at Standard & Poor's in New York, said a recent spike in energy prices and other problems will depress sales in coming weeks, giving the nation's retailers another lackluster shopping season.

Gasoline prices have risen for 17 straight days to a new high for this year of $2.695 per gallon, according to auto club AAA. The increase will add about $50 a month to the typical customer's gas bill, meaning less to spend at stores during the holidays.

Sliding incomes and rising energy costs further darken the outlook for consumer spending during the holidays. People who do spend will stick to discounters like Wal-Mart Stores Inc. and Target Corp., and continue shying away from big-name department stores like Macy's, said John Lonski, chief economist of Moody's Capital Markets Group. Price will be key again this year.

"It most definitely limits the upside for consumer spending and scares the wits out of retailers," Lonski said, adding that consumers are "going to spend as though the economy is still in a recession."

"If you don't make it, you can't spend it, especially with the access to credit much reduced," he said.

A second report Friday showed that wages and benefits including health care rose just 1.5 percent for the 12 months ending in September. That's the smallest increase for the Labor Department's Employment Cost Index on records that date to 1982.

The Obama administration also released a new report that said about 650,000 jobs had been saved or created under the government's $787 billion economic stimulus program. Congress is currently debating expanding certain elements of that program including unemployment benefits and the first-time homebuyers tax credit. Many private economists said the new income and spending report showed the need to do that.

Unemployment, currently at a 26-year high of 9.8 percent, will edge up to 9.9 percent when the government releases the October jobless report next week and will peak at 10.5 percent in the middle of next year, Wyss said.

Last month's spending drop resulted in a boost in the savings rate to 3.3 percent of after-tax incomes, from 2.8 percent in August. Many analysts believe households will keep striving to increase savings and replenish nest eggs that were crushed by last year's stock market crash. That also would hold back spending in the months ahead, weakening the recovery.

But inflation remains in check. An inflation gauge tied to consumer spending edged up just 0.1 percent in September, after a 0.3 percent August rise. Excluding food and energy, the gauge rose 1.3 percent over the past year, well within the Federal Reserve's comfort zone.

Fed officials meet next week and economists believe they will again keep a key interest rate at a record low.

AP Economics Writer Christopher S. Rugaber in Washington, AP Retail Writer Emily Fredrix in Milwaukee and AP Energy Writer Mark Williams contributed to this report.

UPDATE: US Stocks Close Sharply Lower; DJIA Ends Month Flat

2009-10-30T18:25:00.002-07:00

Stock futures point to modestly lower opening

2009-10-30T18:25:00.000-07:00

By STEPHEN BERNARD
AP Business Writer

NEW YORK -- Stocks are headed for a moderate decline Friday, erasing some of the big gains racked up a day earlier after the government said the economy grew more than expected in the third quarter.

Overseas markets were mixed.

Investors welcomed a report showing the economy grew at 3.5 percent in the third quarter, but much of that growth was fueled by government stimulus programs. With those programs winding down, the economy might not be able to sustain such rapid improvement after the economy shrank for four straight quarters.

A Labor Department report due out Friday at 8:30 a.m. EDT on personal spending and income from September will provide further details into the health of the consumer. The strength of consumers is considered vital to a recovery because their spending accounts for more than two-thirds of all U.S. economic activity.

Without government incentives and stimulus programs, it is widely expected consumer spending will have to rise significantly to extend the economic recovery.

Economists polled by Thomson Reuters expect consumer spending dropped 0.5 percent last month, following a 1.3 percent jump in August. August's growth was fueled by the government's Cash for Clunkers auto program.

Spending likely dropped as income was flat in September after rising 0.2 percent in August.

Ahead of the opening bell, Dow Jones industrial average futures fell 45, or 0.5 percent, to 9,858. Standard & Poor's 500 index futures fell 5.30, or 0.5 percent, to 1,056.30, while Nasdaq 100 index futures declined 2.00, or 0.1 percent, to 1,705.50.

Stocks surged Thursday on the gross domestic product report, posting their best day in three months. The Dow rallied nearly 200 points, or 2.1 percent, after recording triple-digit losses in three of the four previous sessions.

The S&P rallied 2.3 percent on Thursday, while the Nasdaq jumped 1.8 percent.

Meanwhile, bond prices mostly rose Friday. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.47 percent from 3.50 percent late Thursday. The yield on the three-month T-bill, considered one of the safest investments, rose to 0.06 percent from 0.05 percent.

The dollar mostly rose against other major currencies, while gold prices fell.

Overseas, Japan's Nikkei stock average rose 1.5 percent. In afternoon trading, Britain's FTSE 100 gained 0.3 percent, Germany's DAX index fell 0.4 percent, and France's CAC-40 declined 0.2 percent.
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Hillary Clinton wraps up tough mission in Pakistan

2009-10-30T18:22:00.001-07:00

Hillary Clinton, the US secretary of state, talks to tribesmen from Pakistan's north-western areas in Islamabad. Photograph: EPA/AP of Pakistan

The US secretary of state, Hillary Clinton, wrapped up one of the toughest missions of her diplomatic career tonight after three days of bruising encounters with Pakistanis enraged by US drone attacks in the tribal areas.

The visit was never going to be easy for Clinton, who flew into Islamabad with the goal of blunting anti-Americanism in a country that seethes with hostility towards Washington.

In meetings with journalists, students and other leaders she came armed with a determined smile and a willingness to engage that disarmed even strident opponents. On the drones, she had no answer.

Time and again Pakistanis pressed her about the covert missile strikes by Predator or Reaper aircraft that have killed up to 1,000 people since 2006, according to one estimate.

"I can't answer that question," she told students in Lahore, according to one guest present. "It's a military to military matter."

The CIA-operated drone strikes have been embraced by the Obama administration, which considers them a key tool in disabling al-Qaida's ability to plot attacks from its tribal haven.

The US has carried out over 80 strikes since 2006, half of them since the start of this year. One such strike last August killed the Taliban leader Baitullah Mehsud.

Civilian casualties and the perceived infringement of sovereignty enrage most Pakistanis. The attacks enjoy only 9% support, according to a Gallup poll taken last August.

The level of civilian casualties is hotly disputed. But one recent study by the New America Foundation estimated that US drones have killed between 750 around 1,000 people in Pakistan since 2006, about one third of them civilians.

The deep public hostility to drones feeds latent anti-Americanism and leaves the Pakistani government in a difficult position. Although ministers publicly criticise the strikes, their officials privately assist the American spies and military officials who orchestrate them.

Analysts said Clinton's folksy but steel-edged charm worked well in public meetings - particularly in comparison with the more blunt style of Washington's envoy to the region, Richard Holbrooke. "In a bad situation she put up a sterling performance," said one.

One tribal leader who met her said afterwards he was impressed. But in a television interview later, one woman in the audience said the drones amounted to "executions without trial". Another asked Clinton if she considered drone strikes to be an act of terrorism similar to the bombing that killed more than 100 people in Peshawar on Wednesday. "No I do not," Clinton replied.

STIMULUS WATCH: Stimulus Jobs Overstated in Report

2009-10-30T18:21:00.000-07:00

The White House is promising that new figures being released Friday will be a more accurate showing of progress in President Barack Obama's economic recovery plan. It aggressively defended an earlier, faulty count that overstated by thousands the jobs created or saved so far.
Ed DeSeve, serving as Obama's stimulus overseer, said the administration has been working for weeks to correct mistakes in early counts that identified more than 30,000 jobs paid for with stimulus money. He said a new stimulus report Friday should correct many mistakes an Associated Press review found that showed the earlier report overstated thousands of stimulus jobs.
"I think you'll see a pretty good degree of accuracy," DeSeve said in an interview.
White House spokesman Robert Gibbs downplayed errors in job counts identified by the AP's review, telling reporters, "We're talking about 4,000, or a 5,000 error."

The AP reviewed a sample of federal contracts, not all 9,000 reported to date, and discovered errors in one in six jobs credited to the $787 billion stimulus program — or 5,000 of the 30,000 jobs claimed so far.
Even in its limited review, the AP found job counts that were more than 10 times as high as the actual number of paid positions; jobs credited to the stimulus program that were counted two and sometimes more than four times; and other jobs that were credited to stimulus spending when none was produced.

For example:
— Some recipients of stimulus money used the cash to give existing employees pay raises, but each reported saving dozens of jobs with the money, including one Florida day care that claimed 129 jobs saved.
— A Texas contractor whose business kept 22 employees to handle stimulus contracts saw its job count inflated to 88 because the same workers were counted four times.
— The water department in Palm Beach County, Fla., hired 57 meter readers, customer service representatives and other positions to handle two water projects. But their total job count was incorrectly doubled to 114.

Celebrating Stock Market Bears Take a Major Hit

2009-10-30T01:50:00.000-07:00

Yesterday we get some strong volume and blow through the 50-day exponential moving average on the Nasdaq. We fall only a bit below on the S&P 500 (4 points) and hold above it on the Dow. We didn't have all 3 major indexes trading below the 50-day exponential moving averages and that's what you want to see if you believe the market is ready for deeper selling than has already occurred. In addition, you don't want to clear by as little as we did on the S&P 500 as that's not a true breakdown. 4/10th's of 1% is not sufficient to say it's all clear for the bears.

So we had a nasty day and the bears were celebrating, but we also had something else take place and that's the reality that we got massively oversold on the 60-minute time frame charts. Stochastics below 5, and RSI's below 30, as low as 22, in fact, on the S&P 500. These types of oversold are conditions you NEVER add new shorts in to. Some type of bounce has to take place to unwind the oscillators and we sure did get that today. The thinking was you could add shorts on any move higher.

However, after studying the charts, WLSH, INDU, COMPQ, PowerShares QQQ (QQQQ), OSX, PowerShares DB US Dollar Index Bullish (UUP). It's clear to see that any move back down will create massive positive divergences. It'll also take place at very deeply compressed MACD cycle levels. That's not the best formula for shorting. It's in all likelihood the place to take some longs, even if just for a trade or two.

This is a very complicated market that's giving absolutely no one any satisfaction and that's the reason for so little on our end in terms of plays. When markets can't find a true trend near term, it's best to keep things extremely light. Always a time for aggressive playing in time. Patience is the hardest part of this game and unless you have lots of it, you can't do very well, especially in markets such as the one we're in now.

So what type of market are we in exactly!

It's a mature move up for sure. The very best of things have been seen for now. There's the lure or desire for more and it's very easy to get too caught in that. Conversely, there's the lure of thinking that because the move is mature, we should just start breaking down. Nice thought. No reality! Markets don't break that easily folks. Not after such a long protracted move higher over eight months. Folks are trained to buy weakness. The desire to get the next leg up. Distribution out, a bull in, to a bear, if that's indeed where we're headed, can take many months.

Yes, I said months.

That's not unusual. If you all would think back to 2000, the market started to mature in late 1999, but didn't top on the Nasdaq until March 9th, 2000. It was roughly four months of distribution before the house of cards came down. And we may not be headed back in to a bear. That's very unclear. Just stating that if we are, you can not expect a crash right back down. If you have been, you've been extremely disappointed with the results and will likely continue to be so for some time. We are in a mature market that's either handling out waiting for the next move higher in time, or is maturing and distributing. That will become very clear in time. For now things are very unstable and volatile. A market where less is more.

The dollar has broken out of its wedge in a bullish fashion and is now in the process of back testing. If it's truly bottomed and if the market is truly topping, it should not fall back in to its wedge. If it does, it tells us that the move out was nothing more than a head fake and makes future moves difficult to trust. However, once a move like that fails, normally the next move will take a long time to happen, which, of course, would make our market that much more difficult. So far it’s held, thus we should see at least another move lower soon, but as I mentioned above, that move will open the door to strong positive divergences on the 60-minute time frame chart. Let's just say things aren't easy here. The dollar needs to be watched very closely here.

1047 remains the 50-day exponential moving average on the S&P 500. The small breach yesterday was a false breakdown. Until the bears can close this below this level by at least 1%, you can't trust the move with any real confidence. The Dow has yet to close below its exponential moving average at 9677. These levels can change slightly each day. 2083 is the number on the Nasdaq. The bears need all three of these major averages to close approximately 1% below those levels to feel they have proper confirmation. We know 1101 is the recent S&P 500 high and that will be incredibly tough here. We simply are trading between roughly those 50-day exponential moving averages and the recent highs on all the indexes with lots of head fake type moves to draw in your emotions. This tells us to keep things very light for now until we get some convincing evidence of what's to come.

Oh, and one last thing. Things change over time. Life is all about change. The landscape may have changed today, with that better than expected. Gross Domestic Product (GDP) number at 3.5% growth. It may not be real, or may not last, but that's not how we play. This is probably the reason for the large move up today and why any move lower will now set positive divergences.

Stock Markets and Other Risky Assets Tumble on Recovery Fears

2009-10-30T01:48:00.000-07:00

I concluded a post on stock markets over the weekend saying: “After equities’ seven-month climb, stock markets certainly look vulnerable for a decline. Two downside reversal days - on Wednesday and Friday - would seem to indicate that stocks could commence a pullback to work off the overbought condition, allowing fundamentals to reassert themselves.”

Global stock markets, as well as other risky assets, closed sharply lower over the past few days as concerns mounted over the sustainability of the global economic recovery and the outlook for central bank policy.
Source: StockCharts.com

A summary of the movements of major global stock markets since the March 19 peak, as well as various other measurement periods, is given in the table below.

The MSCI World Index and the MSCI Emerging Markets Index have declined by 5.3% and 6.2% respectively since the highs of October 19, with markets like Ireland (‑13.2%), Brazil (-10.5%), Austria (-10.8%) and Belgium (-9.0%) falling by significantly more. Also, higher risk indices such as small caps have borne the brunt of the selling, with the Russell 2000 Index down by 9.0%. This is a pattern that one would expect as investors shift the emphasis to higher quality.

The major moving-average levels for the benchmark US indices, the BRIC countries and South Africa (where I am based) are given in the table below. A number of indices, including the S&P 500 Index, have fallen below their 50-day moving averages over the past few days, but all the indices are still holding above their respective 200-day moving averages. The 50-day lines are also above the 200-day lines in all instances.

The October lows are also given in the table as a break below these levels would indicate a reversal of the uptrend since March, i.e. reversing the progression of higher reaction lows.

Over the past few days a number of commentators have made pronouncements about the extent of a possible decline. For example, Jeremy Grantham (GMO) expects the S&P 500 to drop by 15% to 25%, David Rosenberg (Gluskin Sheff & Associates) sees markets falling by 20% and Doug Kass is looking at -5% to -12%.

This brings me to the topic of valuations. Based on operating earnings (i.e. stripping out everything that is bad), the historical price/earnings (PE) multiple of the S&P 500 is 27.0; using “as reported” (GAAP) earnings the figure shoots up to a giddy 95.7! Getting past the loss-making fourth quarter of 2008 and calculating prospective multiples through December 31, 2009 reduce the valuations to 19.0 and 24.4 respectively. Looking further out to the end of 2010, the prospective PEs are 14.1 and 22.9 respectively - still hardly the type of valuations that will inspire one to be a buyer across the board. (The earnings estimates are courtesy of Standard & Poor’s.)

Another way of looking at valuation levels, and cutting through the uncertainty of having to forecast earnings, is by means of Robert Shiller’s cyclically adjusted price-earnings ratio (CAPE), effectively muting the impact of the business cycle by averaging ten years of earnings. Using rolling ten-year reported earnings, my research (based on Shiller’s methodology, but including some refinements) shows that the “normalized” price-earnings ratio of the S&P 500 Index is currently 18.7. This compares with a long-term average of just more than 16.3 and implies an overvaluation of 15%. Considering a geometric rather than an arithmetic average of earnings, the overvaluation increases to 25%. The graphs below show data since 1950, but the actual calculations date back to 1871

Meanwhile, David Rosenberg highlights that this is not the onset of a sustainable secular bull market as we had coming off the fundamental lows of prior bear phases, such as August 1982, when:

• Dividend yields were 6%, not sub-2%.

• Price-to-earnings multiples were 8x, not 27x.

• The market traded at book value, not more than twice book.

• Inflation and bond yields were in double digits and headed down in the future, not near-zero and only headed higher.

• The stock market competed with 18% cash rates, not zero, and as such had a much higher hurdle to clear.

• Sentiment was universally bearish; hardly the case today.

• Global trade flows were in the process of accelerating as barriers were taken down; today, we are seeing trade flows recede as frictions, disputes and tariffs become the order of the day.

• A Reagan-led movement was afoot to reduce the role of government with attendant productivity gains in the future, as opposed to the infiltration by the public sector into the capital markets, union sector, economy and of course, the realm of CEO compensation.

Back to charting, Adam Hewison (INO.com) also sounded a cautious note on the outlook for the S&P 500 as explained in one of his popular technical analysis presentations. Click here to access the presentation.

I conclude with a comment from David Fuller (Fullermoney) who said: “At this stage of the bull cycle, I think a correction of approximately 10-15% for developed country stock markets and somewhat more for emerging markets would be good news for investors with cash to invest. Such a mean reversion towards rising 200-day moving averages would blow the recent froth off valuations and stem talk of an early change in monetary policy.”

I will bide my time while the fundamentals play catch-up. Meanwhile, caution remains the operative word.

By Dr Prieur du Plessis

Dr Prieur du Plessis is an investment professional with 25 years' experience in investment research and portfolio management.

More than 1200 of his articles on investment-related topics have been published in various regular newspaper, journal and Internet columns (including his blog, Investment Postcards from Cape Town : www.investmentpostcards.com ). He has also published a book, Financial Basics: Investment.

Prieur is chairman and principal shareholder of South African-based Plexus Asset Management , which he founded in 1995. The group conducts investment management, investment consulting, private equity and real estate activities in South Africa and other African countries.

Plexus is the South African partner of John Mauldin , Dallas-based author of the popular Thoughts from the Frontline newsletter, and also has an exclusive licensing agreement with California-based Research Affiliates for managing and distributing its enhanced Fundamental Index™ methodology in the Pan-African area.

Prieur is 53 years old and live with his wife, television producer and presenter Isabel Verwey, and two children in Cape Town , South Africa . His leisure activities include long-distance running, traveling, reading and motor-cycling.

Cockpit distractions go beyond laptops

2009-10-30T01:28:00.000-07:00

By Alan Levin, USA TODAY
The laptops that triggered two Northwest Airlines pilots to fly 91 minutes without talking to the ground may be relatively new technology, but distractions in the cockpit have led to accidents and incidents since the dawn of aviation.

As lawmakers and federal regulators called this week for banning laptops and certain other electronic devices in airline cockpits, experts who study why pilots make mistakes said the problem may be much more fundamental: People don't multitask very well.

Distractions ranging from a disgruntled passenger to a burned-out light bulb have been behind scores of crashes, according to federal accident reports and researchers.

DELTA CEO: 'Clear violation' involved in wayward flight
NORTHWEST: Investigators seek answers

"This has been recognized for decades now," said John Lauber, a former NASA researcher in human behavior who also served as a member of the National Transportation Safety Board (NTSB).

The pilots on Northwest Flight 188, which initially flew past its destination of Minneapolis on Oct. 21, told the NTSB that they were working on a new airline-issued computer program and didn't realize they had flown so far without talking to air-traffic controllers.

Distractions have been involved in numerous other airline accidents. The distractions range from frivolous conversations to pilots becoming overwhelmed by regular duties. Examples:

• On Dec. 28, 1978, 10 people died when a United Airlines jet ran out of fuel and crashed in Portland. The pilots were so focused on diagnosing a problem with the landing gear that they forgot to monitor their fuel, the NTSB found.

• On Aug. 27, 2006, pilots on a Comair regional jet tried to take off from a dark, closed runway in Lexington, Ky. The runway was too short, and the jet hit trees and burst into flames, killing 49 of the 50 people aboard. The NTSB concluded that the pilots' conversation about seeking other jobs contributed to the error.

Though he could not comment on the Northwest pilots, Key Dismukes, a NASA aviation researcher in human behavior, said that increasingly automated aircraft make distractions a potentially greater problem. Modern jets can fly for hours without any input from pilots, making distractions seem less critical.

"It's not astonishing to me at all that people get absorbed in a task and lose track of time and where they are," Dismukes said.

U.S. economy stabilized but risks remain: Geithner

2009-10-30T01:21:00.000-07:00

CHICAGO (Reuters) - The U.S. economy's return to growth during the third quarter shows stability has been regained but recovery is fragile and needs nurturing, Treasury Secretary Timothy Geithner said on Thursday.

The government estimated that gross domestic product grew at an annual rate of 3.5 percent from July through September. Still, Geithner said the government must be ready to reinforce growth if needed to avoid risks of a credit crunch.

In a one-hour question-and-answer session at the Economic Club of Chicago, Geithner said the United States can't borrow-and-spend its way to health and pledged every effort to encourage an investment-led recovery.

"The (GDP) number today was really encouraging....it was broad and strong and it wasn't just cash-for-clunkers and it wasn't just economic stimulus...but it's important to remember that it's very early," said Geithner.

U.S. economy grew in the third quarter for the first time in over a year as stimulus spending helped lift consumer spending and home building, fueling an unexpectedly strong advance.

BACK ON FIRM GROUND

"The economy is stabilized. You can see signs of growth here and around the world," Geithner said.

But he added: "It's going to be very hard going forward still. The important things that we're going to have to do are to recognize that recovery's going to have to be led by the private sector and it's going to have to be driven by private companies, private businesses."

Given the hefty budget deficits the government is running, which would be unsustainable over a long period, Geithner said it will be more important than ever that the private sector step up to keep growth going.

"It's going to have to be investment-led and led by exports to a greater extent than in the past because we're not going to be able to borrow-and-spend our way out of this," he said.

Geithner said there was still "a substantial amount of additional reinforcement" still to come from the $787-billion economic stimulus program that the government introduced earlier this year, only about half of which has been spent.

"That'll provide some ongoing support but we're going to have to continue to reinforce that process," he said.

"In the financial system, although there's been a remarkable improvement in confidence and credit is much more easily available...you face the classic risk of a credit crunch slowing the pace of recovery so we're going to have to reinforce the basic process of healing."

REAL ESTATE WOES MANAGEABLE

He expressed confidence problems in the U.S. commercial real-estate sector would not drag down the wider economy

Boeing picks South Carolina for Dreamliner plant

2009-10-29T02:49:00.000-07:00

WASHINGTON — US aerospace giant Boeing has chosen the state of South Carolina as the location for a second production line for the troubled 787 Dreamliner long-haul jet, a move slammed by a union leader.

The move "will expand our production capability to meet the market demand for the airplane," Jim Albaugh, president and chief executive of Boeing Commercial Airplanes, said in a statement late Wednesday.

"This decision allows us to continue building on the synergies we have established in South Carolina with Boeing Charleston and Global Aeronautica," he said, the latter being a company 50-percent owned by Boeing.

Boeing's South Carolina plant already assembles and installs parts of the 787 fuselage sections. Almost all Boeing planes are manufactured at its Everett plant outside Seattle, in the northwest state of Washington.

Delivery of the first 787 Dreamliner -- to Japanese launch customer ANA -- is now set for late 2010, more than two years behind schedule.

The company said that until the second assembly line is brought up to speed, Boeing will "establish transitional surge capability" in Everett that will be phased out once South Carolina comes on line.

The move to South Carolina puts employees there out of the reach of the union in Washington state that has had several contentious labor disputes in recent decades with Boeing management.

Union leader Tom Wroblewski slammed the move across the country, saying Boeing "has betrayed our loyalty once again, walking away from our discussions.

"Instead of investing in our shared future and a highly talented workforce in a region ideally suited for aerospace, Boeing has decided to double-down on its failed 787 strategy and place an ill-advised, billion-dollar bet on a strategy that's a proven loser," Wroblewski said in a statement.

WORLD FOREX: Euro Breaches Key Level, Could Sink Below $1.46

2009-10-28T11:43:00.000-07:00

NEW YORK (Dow Jones)--The dollar hit a more than two-week high against the euro in afternoon trading Wednesday, as investors reassessed their riskier holdings and shifted out of stocks, commodities and high-yielding currencies.

The euro has since bounced off its lows after having sunk to $1.4712, but is still down on the day. Recently, the euro was at $1.4728, down from $1.4802 late Tuesday, according to EBS via CQG.

The dollar was at Y90.70, from Y91.82, while the euro was at Y133.54, from Y135.88. The U.K. pound was at $1.6430, from $1.6389. The dollar was at CHF1.0262, from CHF1.0219.

The Dollar Index, a trade-weighted basket of six currencies, was at 76.344, from 76.288 late Tuesday.

Breaching a key technical level of $1.4720 signals the euro could sink further, perhaps below $1.46, said Tom Fitzpatrick, chief technical analyst at Citigroup in New York.

"We went too far, too fast in a lot of these moves" in higher-yielding currencies and riskier assets, Fitzpatrick said. "We're shaky on a number of these, and there's a domino effect taking place," with stocks, commodities and high-yielding currencies all flagging, he said.

Markets slid across the board, with the Dow Jones Industrial Average down 55 points by midafternoon. Oil was trading at around $77.50, from $79.47 late Tuesday. Commodity-backed currencies, such as the Australian and New Zealand dollars, also fell back, with both currencies hitting a more than two-week low against the U.S. dollar.

Fitzpatrick said the rally in riskier assets may have gotten ahead of the economic reality on the ground. Concerns over the strength of the global economic recovery are bringing prices back to realistic levels, he said.

The fears come as investors gear up for the release of U.S. third-quarter gross domestic product Thursday. Goldman Sachs earlier Wednesday cut its GDP forecast to 2.7% from 3% in response to lower-than-expected durable goods shipments.

"Ongoing concerns over a budding recovery have pushed to one side the appetite for high yield" and is supporting the dollar, said Andrew Wilkinson, senior market analyst at Interactive Brokers in Greenwich, Conn.

Euro dips under 1.48 dollars

2009-10-28T11:42:00.000-07:00

LONDON — The euro fell below 1.48 dollars on Wednesday while the yen gained ground as fresh worries over the outlook for the global economy prompted buying of "safe-haven" units, dealers said.

Investors were also waiting for fresh US data due out later in the day, including durable goods orders and new home sales.

In London morning deals, the European single currency slipped to 1.4798 dollars, from 1.4810 dollars late on Tuesday.

Against the Japanese currency, the dollar sank to 91.06 yen from 91.77 yen late on Tuesday in New York.

A disappointing US consumer sentiment report on Tuesday sparked concerns that the world's largest economy may not be recovering as quickly as hoped, reducing demand for higher-risk but also higher-yielding currencies like the euro.

"The euro will likely keep falling for now because share markets are bearish and unstable again, pushing currency dealers back into risk-aversion mode," Yuichiro Harada, a dealer at Mizuho Corporate Bank, told Dow Jones Newswires.

Other high-yielding units also declined against the yen. These currencies usually weaken when risk appetite falters.

"The market mood has definitely soured this week and there is little sign of any turnaround. This is good for the dollar but bad for risk trades," Calyon analyst Mitul Kotecha wrote in a note to clients.

Investors are worried that a premature hike in global interest rates may hamper a nascent recovery at a time when major economies are still limping out of recession, dealers said.

Traders were jittery ahead of monetary policy meetings in Malaysia, Norway and New Zealand this week, following a recent rate hike in Australia that fuelled speculation that other central banks may follow suit.

Norges Bank was widely expected to raise rates when it meets later in the day, as its economy recovers faster than other European nations due to brisk global demand for its commodities.

The Reserve Bank of India kept interest rates on hold Tuesday but began unwinding extraordinary stimulus measures by requesting lenders to set aside more bonds as reserves in order to restrain credit.

In London on Wednesday, the euro was changing hands at 1.4798 dollars against 1.4810 dollars late on Tuesday, at 134.67 yen (135.89), 0.9053 pounds (0.9039) and 1.5121 Swiss francs (1.5125).

The dollar stood at 91.06 yen (91.77) and 1.0224 Swiss francs (1.0210).

The pound was at 1.6337 dollars (1.6380).

On the London Bullion Market, the price of gold fell to 1,034.15 dollars an ounce from 1,036.50 dollars an ounce late on Tuesday.

U.S. welcomes yuan rise so far, wants more

2009-10-28T01:11:00.000-07:00

GUANGZHOU, China/BEIJING (Reuters) - The United States welcomes the rise in the yuan's exchange rate in recent years but wants the currency to climb further, visiting Commerce Secretary Gary Locke said on Tuesday.

However, a Chinese trade official said that despite pressure for the yuan to appreciate, the currency would probably not see a major adjustment until the country's exports improve noticeably.

"We think more progress needs to be made in that area," Locke told a news conference in Guangzhou, the capital of southern Guangdong province, which accounts for nearly a third of China's exports.

China has in effect re-pegged the yuan to the dollar since mid-2008 to help its exporters, who were hit hard by a slump in orders as the global financial crisis intensified.

Beijing revalued the yuan by 2.1 percent against the dollar in July 2005 and, over the following three years, gradually let it climb by another 19 percent before calling a halt to its rise.

"We're pleased with the movement so far, but of course more needs to be done," Locke said.

Speaking at a separate forum in Beijing, Jiang Jianjun, a deputy director with the Ministry of Commerce's Department of Foreign Trade, cited China's rising share of global output and its swelling foreign exchange reserves as pressures on the yuan to strengthen.

"However, according to our projections, until there's a noticeable improvement in exports, the exchange rate will not see a major adjustment," Jiang said.

He said it would take two or three years for China's combined exports and imports to regain pre-crisis levels.

COOPERATION ON ENERGY

The U.S. commerce chief will participate on Wednesday and Thursday in trade talks in Hangzhou, along with U.S. Trade Representative Ron Kirk and Chinese Vice-Premier Wang Qishan.

Locke said he expected the meetings to pave the way for "significant improvements and progress in the trade relationship between the two countries" when President Barack Obama visits China next month for talks with President Hu Jintao.

Locke did not delve into detail but said that energy co-operation would be a "big topic" between the two presidents, with U.S. firms seeking easier access to the potentially lucrative China market for clean energy, alternative fuels and energy-efficient products.

The yuan's exchange rate has dropped down the U.S. diplomatic agenda in the past year as Washington has looked to China for help in hauling the world economy out of recession.

The Obama administration said on October 15 that it continued to believe the yuan is undervalued but declined to declare that China was manipulating its currency.

DreamWorks' quarterly results beat low expectations

2009-10-28T00:47:00.000-07:00

DreamWorks Animation SKG posted a 48% decline in third-quarter profit, but the results were nonetheless better than what Wall Street had been expecting.

The Glendale studio also announced that it would not be producing a sequel to its latest movie, "Monsters vs. Aliens," which received a tepid response in keyoverseas markets.

DreamWorks reported net income of $19.6 million, or 23 cents a share, on revenue of $135.4 million in the quarter ended Sept. 30. That compared with net income of $37.4 million, or 41 cents a share, on revenue of $151.5 million during the same quarter in 2008, when the studio benefited from its hit film "Kung Fu Panda."

Analysts were expecting earnings of 16 cents a share on revenue of $129.3 million, according to the average estimate compiled by Thomson Reuters.

DreamWorks did not release a movie in the third quarter of this year. Instead, the studio's results were driven by home video and pay television revenue from its 2008 films "Madagascar: Escape 2 Africa," "Kung Fu Panda" and "Monsters vs. Aliens," which was released on home video Sept. 29. The film has sold an estimated 4.6 million units, in line with what several analysts had been expecting.

Some analysts have expressed concern that the anemic DVD market could hurt sales for "Monsters vs. Aliens," which came out in theaters in March. All the major studios have been buffeted by an industrywide slowdown in DVD sales as the recession forces consumers to curtail spending. U.S. sales of DVDs and high-definition Blu-ray discs dropped nearly 14% in the third quarter, according to Digital Entertainment Group.

DreamWorks executives, however, have repeatedly stressed that the studio's computer-animated movies are less vulnerable to the DVD downturn than live-action films. Chief Executive Jeffrey Katzenberg continued that theme Tuesday, telling analysts during a conference call that "Monsters vs. Aliens" was off to a "strong start in its initial home video release."

Katzenberg declined to give a forecast for DVD sales, saying it was too early to estimate future sales. "Madagascar 2" has sold 11.3 million units to date, while "Kung Fu Panda" reached 16 million units through the third quarter.

Katzenberg also said the studio did not plan to produce a sequel to "Monsters vs. Aliens," which generated $380 million at the box office but did not fare well in some key international markets.

When asked why, he said: "I'd like to tell you there's a perfectly rational, clear and easy answer as to why not, but there isn't."

"There was enough of a consensus from our distribution and marketing folks in certain parts of the world that we'd be pushing a boulder up a hill," Katzenberg said of the decision not to pursue a sequel.

The studio did not revise its outlook for the year, saying it expected earnings to be up slightly or flat from a year ago.

Biden to visit GM plant amid reports of reopening

2009-10-25T13:02:00.000-07:00

WASHINGTON (Reuters) - Vice President Joe Biden plans on Tuesday to visit a closed General Motors plant in Wilmington, Delaware, for an announcement, according to the White House.

The visit to the Boxwood plant comes amid media reports that start-up firm Fisker Automotive Inc is in talks to buy the plant to build plug-in electric hybrid cars.

The Wall Street Journal and the Detroit Free Press both reported on Friday that the talks for the purchase were at advanced stages and that an announcement was likely on Tuesday.

The White House statement announcing Biden's visit said he planned a major announcement about the assembly plant's future but gave no other details. Delaware is Biden's home state.

Brown: I will take us out of recession

2009-10-25T11:55:00.000-07:00

Gordon Brown has vowed to lead the UK out of recession by the end of the year and announced a crackdown on sharp practice by credit card providers.

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Gordon and Sarah Brown at the Labour Party Conference, Brighton 2009
Recession busting: Gordon Brown insists he can lead the UK out of recession this year
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The Prime Minister said he would continue to act on excessive bonuses in the financial sector following the news that the UK economy was stuck in its longest ever recession.

He said: 'My pledge to you is to make reform of the financial sector a reality and to see Britain's economy return to growth by the turn of the year.'

Brown added that 'the battle to stop this global downturn becoming a second Great Depression is being won' but said caution was needed despite 'confidence beginning to return in some areas.'

The Prime Minister made his comments in a podcast released on YouTube and the 10 Downing Street website marking the 80th anniversary of the Wall Street Crash.

Brown criticised credit card companies and pledged further reform to the financial sector in the wake of the FSA's announcement of new mortgage proposals.

He said: 'We are announcing measures to make the credit and store card companies clean up their act to get you a fairer deal.

'Sharp practices by lenders - such as hiking interest rates on existing debts without explanation, sending out unsolicited credit card cheques and raising credit card limits without being asked - these sharp practices should end.'

In a rebuke to calls to cut Government spending and the Conservative's pledges to do so, Brown said: "Now, more than ever, is the time for steady and clear policies. That is why it would be suicidal to put recovery at risk by suddenly cutting off the funding and investment that is supporting young people, families and businesses through the most challenging times in a generation.'

The Prime Ministers comments followed a week in which anger has grown at the level of prosperity being enjoyed in the City. News of big bonuses is sweeping the banks and trading floors after investment banking divisions have reaped large profits from the recession and the stock market has leapt by 50% from its low in March.

Public anger has been directed at the perception that banks are returning to the practice of large bonuses rewarding short-term gains less than a year after most major financial institutions had to be bailed out and the sector required global government intervention to prop it up.

Brown added his voice to the criticism, saying: 'We must bring financial markets into closer alignment with the values that everybody holds: hard work, responsibility, integrity and fairness.'

Will the U.S. buy Reva NXR, 120 miles per charge for $25,000?

2009-10-25T10:50:00.000-07:00

Reva Electric Car has a lot to prove.

The India-based company announced a deal with Bannon Automotive to produce 20,000 Reva NXR’s a year at a New York facility. The site could be fully optional already by fall 2010.

But check out Bannon’s Web site: http:/bannonautomotive.com. This sure doesn’t look like a technologically savvy company ready to hire 200 some employees and produce thousands of electric vehicles a year.

Although Bannon has already announced plans to start manufacturing the vehicles, the Long Island company has yet find all the financing, according to http:/syracuse.com.

And are there really people out there looking to invest in a $25,000 car that will get a maximum of 120 miles per charge? Apparently there are in Europe, where the car is already being built. But just because it’s possible in the crowded streets of Paris, doesn’t mean there’s hope hear in the New World.
The $17,000 version of the Reva NXR would only go 55 mph and get 50 miles on a charge. The hatchback model would cost up to $8,000 more but peak at around 100 mph and 120 miles per charge. This doesn’t really compare to hybrids like the Chevy Volt, also expected out in 2010, which promises 40 miles of gas-free driving before the gas motor kicks in. Of course the much-anticipated Volt doesn’t have a price yet. But assuming it doesn’t start much over $30,000, I’m betting most consumers will see it as having more bang for their buck.

And even before financing is complete, New York Gov. David Paterson is incentivizing the project with taxpayer dollars to the tune of $6.8 million, with the federal government kicking in $52 million in loans and loan guarantees to Bannon. That’s quite a commitment to a company with about a dozen words on its Web site.

Yes, with high unemployment the government should be in the business of job creation. But no, officials shouldn’t jump at underdeveloped ventures.

Earnings reports weigh on stocks

2009-10-25T10:48:00.001-07:00

U.S. stocks posted their first weekly decline in three weeks as several major companies forecast earnings that trailed Wall Street estimates.

Boeing slid 6.2 percent, the steepest drop among companies in the Dow Jones industrial average, as it posted a loss that was bigger than analysts forecast and reduced its full-year profit projection. Boston Scientific posted its biggest drop since February on concerns that sales of heart devices are slowing. Burlington Northern, meanwhile, fell 8.4 percent -- the most since March -- on concerns that shipments of consumer products will remain weak.

"Given that the market has moved up so far, investors are looking for more demand," said Richard I. Sichel, chief investment officer at Philadelphia Trust. "The earnings get more difficult to beat when it needs to come from sales, rather than just cost-cutting."

The Standard & Poor's 500-stock index fell 0.7 percent, to 1079.6. The Dow fell 0.2 percent, to 9972.18. The Nasdaq composite index dropped 0.1 percent, to 2154.47.

The S&P 500 has climbed 60 percent since March 9, pushing the market value of its companies to more than 20 times their reported operating income, the most expensive level since 2004. More than 150 S&P 500 companies will report third-quarter earnings this week, including Exxon Mobil, Procter & Gamble and Verizon Communications.

The Treasury will auction $29 billion of three-month bills and $30 billion of six-month bills on Monday. They yielded 0.07 percent and 0.18 percent, respectively, in when-issued trading. The Treasury will sell one-month bills the next day.

Dow finishes below 10,000

2009-10-25T10:44:00.000-07:00

Stock markets in the United States fell yesterday, with the major indexes slipping for the first week in three, as industrial companies' weak results overshadowed robust earnings from tech and retail heavy-weights.

The blue-chip Dow average finished below 10,000 for the second time this week.

The Dow Jones industrial average lost 109.13 points, or 1.1%, to 9972.18, marking its second finish this week below the 10,000 mark. The S&P 500 fell 13.31 points, or 1.2%, to 1,079.60. The Nasdaq slipped 10.82 points, or 0.5%, to 2,154.47.

For the week, the Dow slipped 0.2% and the S&P 500 declined 0.7%, while the Nasdaq dipped 0.1%.

Read more: http://www.financialpost.com/story.html?id=2139516#ixzz0UyFBc8Uc
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Community banks to get bailout money as Obama seeks to boost small business

2009-10-24T11:47:00.000-07:00

To spur lending to small businesses, it is 'essential that we make more credit available to the smaller banks and community financial institutions that these businesses depend on,' the president says.Reporting from Washington - President Obama, looking to boost lending to small business, will start using some of the leftover federal bailout funds to shore up smaller community banks and induce them to offer credit to firms he called the "backbone of the American economy."

Smaller financial institutions are in greater need of capital to grow and expand, whereas the country's large banks have moved past their need for what's left of the $700-billion Troubled Asset Relief Program, Obama said Thursday at a family-owned storage business in suburban Washington.

"The major banks that were in critical condition a year ago need no new assistance from the government," Obama said, "and so we are winding down that portion of the TARP program."

Less than $140 billion is left from the bailout that Congress approved a year ago. The Treasury will decide how much of that should go to smaller financial institutions by the end of the year after conferring with community bankers nationwide.

To spur lending to small businesses, Obama said, it is "essential that we make more credit available to the smaller banks and community financial institutions that these businesses depend on. These are the community banks who know their borrowers, who gave them their first loan, who have watched them grow from down the street, not from Wall Street."

The amount of money still on hand is enough to boost lending significantly to small business, one senior administration official said. That may help to allay Democratic lawmakers' concerns that the bailout money appeared to be skewed too much to big banks.

Some critics questioned whether the president was pursuing the most effective strategy to help small business. Officials of the National Federation of Independent Business said they appreciated the gesture but argued that lower taxes and less government regulation would be more helpful.

Conservative economists pointed out that the bailout was supposed to save banks so big the economy couldn't thrive without them. Already, bailout funds have been used to prop up struggling homeowners and the auto industry.

"Again, they're taking emergency money and using it as a slush fund," said David C. John, senior fellow at the Thomas A. Roe Institute for Economic Policy Studies.

In addition to the shift in bailout spending, Obama also is asking Congress to increase the maximum size of Small Business Administration loans, including those designed to encourage small businesses to invest in machinery, equipment, land and buildings and to expand payrolls.

Increasing the maximum loan size of so-called micro loans from $35,000 to $50,000 would help start-up companies in particular, administration officials said.

"America's 29 million small businesses have been hard hit in this recession," said SBA Administrator Karen Mills. "Increasing maximum loan sizes will allow the SBA to ensure that more small business owners and entrepreneurs can get access to the credit they need to expand their operations and create jobs."

As the stage for his announcement, Obama chose Metropolitan Archives, a small records storage business in Landover, Md., that recently expanded with an SBA loan.

Last February, almost five years after the business opened, co-owners Joe Incarnato and Doug Peters used the money to buy their storage warehouse. Incarnato said the partners would like to expand again, but they need another loan to make it happen.

That's the kind of enterprise the federal government should be trying to help, some lawmakers said Wednesday.

"These actions will help satisfy the capital needs of small businesses looking to start or expand their operations," said Sen. Olympia J. Snowe (R-Maine), whose proposals to raise the caps on SBA loans are part of the president's plan.

"They were good ideas when I introduced them nearly a year ago," she said. "They were good ideas when I reintroduced them in August, and I am pleased that others, including the president, are on board with these critical initiatives."

Obama Says Small Businesses Must Be at Forefront of Recovery

2009-10-24T11:45:00.001-07:00

By Catherine Dodge and Julianna Goldman

Oct. 24 (Bloomberg) -- President Barack Obama called small businesses the “engine” of the U.S. economy and said too many are still struggling to get the credit they need to operate.

In his weekly address on the radio and Internet, Obama said the nation’s banks, supported by taxpayers in the economic crisis, now need “to stand by the creditworthy small businesses.”

“It’s time for those banks to fulfill their responsibility to help ensure a wider recovery,” Obama said. “We’re going to take every appropriate step to encourage them to meet those responsibilities.”

The president this week announced measures to open up credit for small business, such as capital injections for community banks to spur lending. Obama also asked Congress to raise the limits for Small Business Administration loans from $2 million to $5 million and as much as $5.5 million for manufacturing.

“The goal here is to get credit where it’s needed most -- to businesses that support families, sustain communities, and create the jobs that power our economy,” Obama said.

The president has asked Treasury Secretary Timothy Geithner and SBA administrator Karen Mills, to convene a conference of regulators, congressional leaders, lenders, and entrepreneurs to come up with additional steps to improve the flow of credit to small businesses looking to expand.

Business and Insurance

In the radio address, Obama said his health-care overhaul plan would allow small businesses to buy insurance for employees through exchanges that may offer better coverage at lower costs.

The “crushing” costs of health-care are discouraging many entrepreneurs from even trying to start a business and causing others to cut benefits and jobs, or close their doors, Obama said.

“Small businesses have always been the engine of our economy -- creating 65 percent of all new jobs over the past decade and a half -- and they must be at the forefront of our recovery,” Obama said.

In the Republican address, Senator Mike Johanns focused on Obama’s number one domestic priority -- overhauling U.S. healthcare.

The Nebraska Republican said Obama’s plan would drive up costs and lead to higher premiums and more government mandates. Older Americans would see funding for hospice care and home health care services “cut off,” he said.

Impact on Paychecks

“We have a record budget deficit, and many families are working hard just to put food on the table and to pay the bills,” Johanns said. “Yet, there’s no doubt about it: these proposals will negatively impact pocketbooks and paychecks across America.”

The president’s aides worked behind the scenes this week with Senate leaders to merge legislation designed to curb costs while covering tens of millions of the uninsured. The changes could be the biggest since the creation of Medicare in 1965 and would affect one-sixth of the nation’s economy.

Johanns criticized Obama for not fulfilling a campaign promise to hold open and transparent health care negotiations televised on C-SPAN saying, “a 1,500 page bill, full of carve- outs and back room deals, is currently being brokered behind closed doors.”

UK economy remains in recession

2009-10-23T09:12:00.000-07:00

LONDON
The British economy shrank 0.4 percent in the third quarter of the year, according to official statistics released Friday, dashing hopes that the country had emerged from recession.

The fall in gross domestic product for the sixth consecutive quarter takes the total loss of output since the recession began last year to 5.9 percent, leaving Britain in the grip of the longest period of continuous decline since the Statistics Office began taking records in 1955.

Economists had expected the update from the Office for National Statistics to be a close call between growth and contraction -- but most had plumped for slight growth and few had forecast a fall of that size.

The persistent decline comes despite attempts by the government and Bank of England to boost the economy, including holding interest rates at a record low of 0.5 percent since March, an unprecedented 175 billion pound ($290 billion) injection into the money supply and billions more through fiscal measures.

The pound dropped more than 1 cent to $1.65 after the economic update as markets factored in the likelihood that the central bank will now increase the so-called quantitative easing program -- buying assets from banks to boost the amount of money in the economy -- when it meets next month.

"Sterling is taking a hit on surprisingly weak GDP figures which means that the UK is not following France and Germany out of recession," said Arifa Sheikh-Usmani, an equity trader at Spreadex LTD.

Both Bank of England governor Mervyn King and Treasury Chief Alistair Darling have said they expect some modest growth by the end of this year.

But some economists have warned of a so-called "double dip," or "W-shaped" recession as pressures intensify in 2010 as some stimulus measures, like a temporary cut in sales tax, come to an end. Unemployment is also rising.

Friday's figures showed the pressure on hard-hit consumers, with output from distribution, hotels and restaurants falling 1 percent over the quarter.

Overall service output, which represents almost three-quarters of the domestic economy, was expected to register growth after recent gains but instead disappointed with a 0.2 percent decline.

The construction sector also remained in the doldrums, falling 1.1 percent during the period. The industry has now contracted by 14.7 percent since the beginning of 2008.

Industrial production, meanwhile, shrank by 0.7 percent and is down by 13.7 percent since the recession began.

Friday's figures were compiled with around 40 percent of the required data and could be subject to changes in the next two months when more information has been gathered -- the office's first GDP estimate for the previous April to June quarter was a contraction of 0.8 percent, which was later revised to a 0.6 percent drop.

Many Bailed Out Execs Flee Before Pay Cuts

2009-10-23T09:10:00.000-07:00

The administration had tasked Kenneth Feinberg, the Treasury Department's special master on compensation, to evaluate the pay packages of 25 of the most highly compensated executives at each of seven firms receiving exceptionally large amounts of taxpayer assistance.

But Thursday, he ruled only on slightly more than three quarters of the pay packages that were to be under his purview. The balance reflected executives who have left since he began his work in June or will be gone by the end of the year.

Many executives were driven away by the uncertainty of working for companies closely overseen by Washington, opting instead for firms not under the microscope, including competitors that have already returned the bailout funds to the government, according to executives and supervisors at the companies.

"There's no question people have left because of uncertainty of our ability to pay," said an executive at one of the affected firms. "It's a highly competitive market out there."

At Bank of America, for instance, only 14 of the 25 highly paid executives remained by the time Feinberg announced his decision. Under his plan, compensation for the most highly paid employees at the bank would be a maximum of $9.9 million. The bank had sought permission to pay as much as $21 million, according to Treasury Department documents.

At American International Group, only 13 people of the top 25 were still on hand for Feinberg's decision.

Feinberg did not detail how he plans to tackle the politically sensitive issue of nearly $200 million in bonuses due in March to employees at AIG Financial Products, the unit whose complex derivatives contracts led to the collapse of AIG last fall. Feinberg has urged the company to find a way to scale back the bonuses in hopes of preventing another round of public outrage.

Watch CBS News Videos Online

Who cares if Wall Street 'talent' leaves?

2009-10-23T09:07:00.000-07:00

NEW YORK (Fortune) -- There's no need to fear a Wall Street brain drain -- despite the crackdown on pay by Washington.

On Thursday, White House pay czar Kenneth Feinberg outlined compensation restrictions at seven firms that got special bailouts, and the Federal Reserve proposed to review pay practices at 28 unnamed giant banks.

Critics warn that reining in pay makes it hard to keep talented employees. Hemmed in, institutions like AIG (AIG, Fortune 500),Bank of America (BAC, Fortune 500) and Citigroup (C, Fortune 500) could lose their best people.

These firms would then perform even more abysmally, if that's possible, leaving them hard pressed to repay tens of billions of dollars of taxpayer-backed loans.

Still, we say Godspeed to this "talent." After all, the traders and suits in the corner offices don't exactly have an unblemished track record. In 2008, Citigroup, BofA and Merrill Lynch (since acquired by BofA) posted a grand total of $51 billion in losses.

Yet even as they were running themselves into the ground, the firms managed to pay out more than $12 billion in bonuses -- including 1,606 million-dollar-plus bonuses, according to a report from the New York attorney general's office.

"Even a cursory examination of the data suggests that in these challenging economic times, compensation for bank employees has become unmoored from the banks' financial performance," the report said.

Meanwhile, it's hard to imagine that defection-hit firms would have a lot of trouble finding qualified replacements in the current job market.

Unemployment has doubled nationally since December 2007, when the recession started. Securities industry employment has fallen 10% nationwide and 14% in New York from a mid-2008 peak, according to Bureau of Labor Statistics data, costing some 90,000 jobs in the U.S. And Goldman Sachs' (GS, Fortune 500) charm offensive notwithstanding, it looks like the official response to runaway pay is just starting.

The Fed's plan to weigh big banks' compensation plans against their potential for undermining the economy could eventually put pressure on pay at all the big banks.

"This could be a game changer," said Simon Johnson, an economist at MIT. "There will be a lot of pressure on them in Congress to stick it to the big firms."

But maybe the best reason not to fret about talent flight is one familiar to cubicle dwellers everywhere: just because someone has a big, high-paying job doesn't mean they're good at it.

Take Bank of America, for instance. The bank's longtime CEO, Ken Lewis, unexpectedly announced his retirement this month, while agreeing to give back his 2009 salary.

Lewis didn't say why he was leaving, but it seems that criticism over his empire building, mishandling of the Merrill acquisition and outsize pay got to him. The Charlotte Observer reported he had grown tired of the "mud being thrown on him day by day."

Jump in U.S. home sales fails to lift stock market

2009-10-23T09:02:00.000-07:00

Ieva M. Augstums and Tim Paradis

New York — The Associated Press Published on Friday, Oct. 23, 2009 7:27AM EDT Last updated on Friday, Oct. 23, 2009 11:29AM EDT

Investors looked past a jump in home sales and strong profits at key technology companies as disappointing forecasts from major railroads stirred unease about the economy.

Stocks zigzagged early Friday as investors found little reason to buy into the market after a strong rally on Thursday.

A huge jump in sales of existing homes last month was seen as an aberration. The National Association of Realtors said that sales rose 9.4 per cent, nearly double the advance that had been expected. It was the highest level in more than two years as buyers raced to complete purchases before a tax credit expires at the end of November.

Profits at Amazon.com (AMZN-Q115.3721.9223.46%) and Microsoft (MSFT-Q28.381.796.73%) sailed past expectations and drew some buyers to tech stocks.

Cautious comments from the leaders of major railroad companies were a cause for worry. Union Pacific (UNP-N57.29-3.83-6.27%) chairman and CEO Jim Young said Thursday that he expects the economy to “limp along” until unemployment starts to fall. Burlington Northern (BNI-N79.27-5.35-6.32%) also issued a tepid forecast after the end of trading Thursday.

Union Pacific said its profit was off 26 per cent, while revenue fell 24 per cent. Burlington reported a 30-per-cent drop in third-quarter earnings, while revenue fell 27 per cent.

Railroads are often seen as a good early indicator of economic activity because of their role in shipping resources and goods to manufacturers and markets.

In midmorning trading, the Dow Jones industrial average (DJIA-I10,005.58-75.73-0.75%) fell 48.29, or 0.5 per cent, to 10,033.02. The broader Standard & Poor's 500 index (SPX-I1,083.59-9.32-0.85%) fell 5.84, or 0.5 per cent, to 1,087.07. The Nasdaq composite index (COMP-I2,164.62-0.67-0.03%) rose 6.43, or 0.3 per cent, to 2,171.72.

U.S. Stocks Retreat as Oil Slumps; Microsoft, Amazon Rally

2009-10-23T09:00:00.000-07:00

By Elizabeth Stanton

Oct. 23 (Bloomberg) -- U.S. stocks fell, wiping out a weekly gain for the Standard & Poor’s 500 Index, as a drop in oil weighed on energy producers and disappointing results at the nation’s largest railroad dragged down industrial shares.

Exxon Mobil Corp. and Schlumberger Ltd. led energy producers lower as crude slid for a second day. Industrial shares in the S&P 500 fell 1.3 percent as a group, led by railroad stocks, after Burlington Northern Santa Fe Corp. forecast profit that missed analyst estimates. Technology shares posted the smallest drop among 10 groups as Microsoft Corp. and Amazon.com Inc. jumped on better-than-estimated earnings.

The S&P 500 dropped 0.7 percent to 1,084.89 at 11:16 a.m. in New York. The Dow Jones Industrial Average lost 67.64 points, or 0.7 percent, to 10,013.67. The Nasdaq slipped 0.1 percent to 2,162.74 after earlier climbing as much as 1.2 percent.

“You have this skepticism in the equity market that is frankly irrational,” said Richard Campagna, chief executive officer of 300 North Capital LLC in Pasadena, California, which manages $600 million. “Given that the third quarter was the tail end of the recession and earnings are this good tells you earnings are going to snap back much faster than people expect.”

The S&P 500 is trading at its highest valuation relative to reported operating earnings in more than five years after climbing 62 percent since March 9 as the U.S. lent, spent or guaranteed $11.6 trillion to combat the worst recession since the 1930s. Worldwide, governments from Beijing to Berlin spent $12 trillion to help end the global contraction, according to data from the Washington-based International Monetary Fund.

The S&P 500 closed at a one-year high on Oct. 19, and earnings at companies from Caterpillar Inc. to Morgan Stanley topped estimates this week.

Earnings Analysis

Profits beat estimates at about 80 percent of the companies in the index that have released results, according to Bloomberg data. That would mark the highest proportion in data going back to 1993. Earnings fell for a ninth straight quarter in the July- to-September period, according to estimates compiled by Bloomberg, and are projected to return to growth in the final three months of the year.

Exxon, the largest oil producer, slumped 1.4 percent to $73.43. Schlumberger, the biggest oilfield-services company, sank 3.5 percent to $66.17.

Crude for December delivery fell $1.04, or 1.3 percent, to $80.15 a barrel in New York Mercantile Exchange trading. Futures are up 80 percent this year and touched a one-year high of $82 a barrel on Oct. 21.

Burlington Northern Santa lost 6.6 percent to $70.05. The largest U.S. railroad forecast fourth-quarter profit of $1.20 a share at most, trailing the average analyst estimate of $1.36 in a Bloomberg survey.

Microsoft climbed 7 percent to $28.44. The world’s largest software maker posted a smaller drop in profit than analysts estimated after slashing costs to make up for falling sales.

Amazon.com soared 23 percent to $114.66. Third-quarter net income increased 69 percent after discounts and the Kindle electronic book reader fueled sales.

U.S. Stocks Advance as AT&T, McDonald’s Top Earnings Estimates

2009-10-22T06:49:00.000-07:00

Oct. 22 (Bloomberg) -- U.S. stocks advanced as better-than- estimated earnings at AT&T Inc. and McDonald’s Corp. overshadowed a bigger-than-projected increase in jobless claims.

AT&T added 1.1 percent after new iPhone and television customers bolstered earnings. McDonald’s climbed 2.4 percent following a better-than-projected increase in global comparable sales. Gains were limited by a Labor Department report that initial applications for jobless benefits rose to 531,000 last week.

The S&P 500 increased 0.1 percent to 1,082.69 as of 9:37 a.m. in New York. The Dow Jones Industrial Average added 30.38 points, or 0.3 percent, to 9,979.74.

The S&P 500 is trading at its highest valuation in five years after climbing 60 percent from a 12-year low in March as the government lent, spent or guaranteed $11.6 trillion to combat the worst recession since the 1930s. The index is valued at more than 20 times the reported operating profits of its companies, twice its price-earnings ration on March 6.

Stocks in Europe and Asia retreated on speculation that China may consider withdrawing stimulus measures after economic growth accelerated.

AT&T, McDonald’s

AT&T added 1.1 percent to $26.23. Third-quarter profit excluding some items was 53 cents a share, beating the average analyst estimate by 3 cents.

McDonald’s rose 2.4 percent to $59.75. Earnings were $1.15 a share. The average analyst estimate in a Bloomberg survey was $1.11 a share.

EBay, the most visited U.S. e-commerce site, sank 4.9 percent to $23.80 after a shift to faster-growing yet lower- margin businesses hampered its profit forecast.

Amgen Inc., the world’s largest biotechnology company, dropped 3.9 percent to $57.06 on lower third-quarter sales.

Europe’s Dow Jones Stoxx 600 Index slid 1.2 percent, while the MSCI Asia-Pacific Index lost 1 percent.

China’s economy expanded at the fastest pace in a year as stimulus spending and record lending growth helped the nation lead the world out of recession. The acceleration in growth spurred concerns policy makers may consider withdrawing fiscal and monetary measures in coming quarters. Gross domestic product rose 8.9 percent in the third quarter from a year earlier.

U.S. stocks dropped in the final hour of trading yesterday after analyst Dick Bove downgraded Wells Fargo & Co., erasing a rally spurred by better-than-estimated results at Morgan Stanley and Yahoo! Inc.

The U.S. may lose its Aaa rating if the budget deficit isn’t cut within the next 3-4 years, Reuters reported, citing an interview with Steven Hess, head U.S. analyst for Moody’s Investors Service. Hess said the country’s Aaa rating “is not guaranteed,” the news service reported, in a dispatch carried in the Indian Economic Times.

WORLD FOREX:Dollar Slips Back Again As Risk Appetite Returns

2009-10-21T04:22:00.000-07:00

By Nicholas Hastings
Of DOW JONES NEWSWIRES
LONDON (Dow Jones)--Appetite for risk is returning a little, pushing the dollar lower and higher-yielders, such as the Australian dollar and even the pound, higher in Europe Wednesday.

Optimism about the global economy was also reflected in equities, with most European bourses opening higher.

The rallies mark the end of the downturn that swept through financial markets Tuesday after the Bank of Canada disappointed investors with its decision to leave interest rates unchanged.

The BOC had widely been expected to follow the Reserve Bank of Australia with a rate hike - a move that would have reinforced the view that G10 economies had recovered enough for the unwinding of emergency credit-crunch policies.

Instead, the Canadian central bank warned of the risks that the recent strength of the Canadian dollar posed to the economy and lowered its growth forecast for the next year or two.

After that, a spate of third-quarter earnings results from the U.S. failed to live up to expectations, giving investors more reason to sell equities and preventing the euro from having enough momentum to break resistance at $1.50.

The gloom spread into Asian trading with the Nikkei ending virtually flat and the Shanghai Composite falling 0.5%.

The price of crude oil, which had previously rallied up over $80 a barrel briefly, fell back again to trade as low as $78.46 before rebounding to $78.65.

The euro, meanwhile, lost its upward momentum and failed to make a sustained break over $1.50.

However, as European trading got underway some of the gloom appeared to be lifting with analysts suggesting that the euro - and even the pound - should be bought on dips.

Whether or not risk appetite recovers to former levels remains to be seen.

Sue Trinh, senior currency strategist with RBC Capital Markets, said this could depend on whether the S&P500 can break and hold over the 1100-1200 range. It is now just under 1100.

The currency strategist team at UniCredit Markets and Investment Banking said that firm gross domestic product data out of China later Wednesday could keep risk appetite high.

By 0930 GMT, the dollar was up at Y90.93 from Y90.71, according to EBS, while the euro was up at $1.4945 from $1.4929 and at Y135.85 from Y135.40. The dollar was also down at CHF1.0115 from CHF1.0127.

The pound rose to $1.6569 from $1.6361. At one stage it hit a one-month high of $1.6544 after the Bank of England published bullish minutes from its last meeting that suggested there is little pressure for quantitative easing to be extended next month as many had expected.

See chart at

Investors waiting for more clues about consumers

2009-10-21T04:20:00.000-07:00

By STEPHEN BERNARD
AP Business Writer

NEW YORK -- After getting worrisome signs about consumers from bankers' earnings reports, investors will be looking at a broad range of companies this week for further insights into the outlook for the economy.

Consumer-focused companies including Apple Inc., McDonald's Corp., appliance maker Whirlpool Corp. and toy maker Hasbro Inc. are among those reporting results during the week. Airlines, drug companies and more big banks are also scheduled to release their earnings.

The market is so focused on companies' third-quarter results and their outlooks for the coming months that economic data like the September existing home sales report expected this week isn't likely to move the market much.

"Right now earnings are critical," said Channing Smith, a vice president at Capital Advisors in Tulsa, Okla. "Earnings, revenues give us a better picture of what's happening. If the economic data turns out well, its just the cherry on the sundae."

Investors got a surge of optimism from results in the early part of last week and bought stocks enthusiastically, betting that the reports still to be released by hundreds of companies would also point to a recovering economy. The buying Wednesday sent the Dow Jones industrials over 10,000 for the first time in a year.

On Thursday and Friday, though, the news from Citigroup Inc. and Bank of America Corp. gave investors a reality check, as both banks reported billions of dollars in loan losses because consumers are struggling to pay their bills. They also reiterated warnings that the losses will continue.

Meanwhile, General Electric Co. said Friday its financial services business was weighed down by credit card and commercial real estate losses. Commercial real estate defaults are the latest wave of loans to start defaulting en masse.

That spate of bad news brought the market's rally to a halt, and the Dow, down as much as 151 points on Friday, closed with a loss that day of 67.

Despite that end-of-week slide, the Dow still rose 1.3 percent for the week, while the broader Standard & Poor's 500 index gained 1.5 percent. The tech-dominated Nasdaq composite index rose 0.8 percent.

The fear in the market is that consumers will not only keep adding to banks' losses, but that their inability to spend beyond the necessities will curtail sales at other companies.

That is making investors particularly anxious to see how businesses in general are making their money. Traders are trying to determine if year-over-year or even quarter-over-quarter earnings increases "are due to cost cutting or really due to market expansion," said Walter Gerasimowicz, CEO of Meditron Asset Management in New York. And, if companies are seeing their sales pick up, is that improvement likely to continue in the fourth quarter and beyond.

Since the stock market tends to trade based on expectations six or nine months into the future, the concern on Wall Street remains whether investors who have sent stocks soaring since early March might have been ignoring or underestimating the many problems in the economy. If companies' own expectations match investors', that is likely to reassure investors and keep them buying. But any more doses of reality are likely to put the rally on hold for at least a while.

While investors aren't concentrating on economic data right now, they will be interested in what the Federal Reserve has to say about where the economy is now and where it's like to be in the near future.

Fed Chairman Ben Bernanke is scheduled to give two speeches during the week. Bernanke speaks Monday at the Federal Reserve Bank of San Francisco Asia Economic Policy Conference and Friday at a Fed conference in Boston on financial regulation and supervision after the credit crisis.

The Fed is scheduled to release its beige book report on Wednesday, which breaks down economic activity on a regional basis.

Among the other reports expected are the Commerce Department's September housing start data on Tuesday. The report is expected to show housing starts rose to annual rate of 610,000 in September from 598,000 the previous month, according to economists polled by Thomson Reuters.

Another housing report comes from the National Association of Realtors, which releases its existing home sales numbers from September on Friday. Economists forecast sales rose to an annualized rate of 5.3 million from 5.1 million in August.

A private research group releases data on leading indicators, which project economic activity for the next three to six months. The Conference Board's index is likely to show continued signs of growth.

BEFORE THE BELL:US Stock Futures Point Lower Again

2009-10-21T04:16:00.001-07:00

By Steve Goldstein

U.S. stock futures on Wednesday pointed to a second straight day of declines, ahead of a slate of earnings from Wells Fargo and Morgan Stanley and an assessment of the economy from the Federal Reserve.

S&P 500 futures fell 5.7 points to 1,083.70 and Nasdaq 100 futures dropped 8.5 points to 1,749.70. Futures on the Dow Jones Industrial Average fell 47 points.

U.S. stocks on Tuesday returned a portion of the prior day's advance, with the Dow Jones Industrial Average down 51 points, the S&P 500 off 7 points and the Nasdaq Composite down 13 points. Disappointing economic data offset mostly well-received earnings updates from the likes of Caterpillar and Apple.

"Markets are being pulled between generally better corporate results, and occasional disappointments on the macro economic data. This is not perhaps unexpected, if the economic profile resembles the Nike 'swoosh' more than the classic V," said Paul Donovan, senior economist at UBS.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said the U.S. equity rally from the lows of March can continue. He sees nominal GDP rising and unit labor costs declining next year.

"If we're right, the spread between sales and cost growth next year should be nearly six percentage points, which is consistent with S&P earnings rising by around 25%," he said. That would put the S&P 500 on a forward earnings multiple of about 14.2%.

"On that basis, it is hard to argue that U.S. equities are overvalued."

Wednesday's focus will turn to the Beige Book, the Fed's release of economic anecdotes from across the country at 2 p.m. Eastern.

Two more speakers from the Fed will take to the podium, and weekly energy inventories data will be released as oil futures traded above $78 a barrel.

The dollar was up against most rivals save the British pound, as minutes from the last Bank of England meeting showed unanimity in keeping unchanged its money-printing quantitative easing program.

Wednesday's wave of results include Altria (MO), Wells Fargo (WFC), Morgan Stanley (MS), Boeing (BA), and after the close, eBay (EBAY).

Yahoo (YHOO) rose 4% in Frankfurt after it said its profit more than tripled as it clamped down on costs.

Deutsche Bank (DB) declined in Frankfurt after forecasting a third-quarter profit well ahead of estimates due to tax gains.

Overseas, the Hang Seng slipped 0.3% as China Mobile dropped after lower-than-forecast profit, and the pan-European Dow Jones Stoxx 600 weakened 0.8%.

-Steve Goldstein; 20 7842 9424; AskNewswires@dowjones.com

Among the companies whose shares are expected to actively trade in Wednesday's session are SanDisk Corp. (SNDK), Yahoo Inc. (YHOO) and SLM Corp. (SLM).

SanDisk swung to a third-quarter profit on surprisingly strong product sales and margins. Shares jumped 9.6% to $23.54 in after-hours trading as the flash-memory maker said "improving industry fundamentals" are likely to mean more growth in the fourth quarter and next year.

Yahoo's third-quarter earnings more than tripled despite a double-digit revenue decline, as the company reported smaller unusual charges. Shares rose 5.2% to $18.07 after hours.

SLM swung to a third-quarter profit as interest-rate spreads returned to more normal levels. Shares of SLM surged 7.8% to $9.59 in late trading.

Cree Inc.'s (CREE) fiscal first-quarter profit more than tripled on surging margins and revenue as the semiconductor and light-emitting-diode, or LED, lighting company easily topped estimates. The company also projected fiscal second-quarter results above analyst's expectations. Shares increased 3.7% to $42.67 after hours.

Gilead Sciences Inc.'s (GILD) third-quarter profit soared 36% on sales growth in all its product lines as results beat analysts' expectations. The company, which dominates the HIV treatment market, continued to post solid growth for those treatments despite the difficult economy. Shares slipped 2.2% to $45.10 in after-hours trading.

Seagate Technology Inc. (STX) posted its first profit in a year as its fiscal first-quarter earnings tripled on higher margins. The computer disk-drive maker also forecast fourth-quarter revenue generally higher than Wall Street expected. Shares fell 2.6% to $15.15 in after-hours trading.

Intuitive Surgical Inc. (ISRG) posted a 12% increase in third-quarter earnings, boosted by higher revenue and a gain from deferred revenue, offsetting lower margins. Shares fell 6.5% to $250.14 in late trading.

Tupperware Brands Corp.'s (TUP) third-quarter profit grew 18% on higher margins, though its revenue was hurt by foreign-currency exchange rates. Shares jumped 4.5% to $46 in after-hours trading as the personal-products maker's results topped its forecast and it raised guidance above analysts' estimates.

STMicroelectronics NV's (STM, STM.MI) third-quarter loss--its seventh in a row--narrowed despite a double-digit revenue decline on smaller one-time items. Shares rose 3.7% to $10.10 after hours as revenue came in just above the high end of the company's expectations, although the loss was bigger than Wall Street expected.

Stryker Corp.'s (SYK) third-quarter earnings fell 16% on restructuring charges, while revenue was flat. The company also shaved the top half of its full-year guidance. But shares gained 3.4% to $46.80 in after-hours trading.

NuVasive Inc. (NUVA) swung to a third-quarter profit as the medical-device company posted surging revenue and fewer charges. The company again boosted its 2009 guidance, but shares fell 3.9% to $42.11 in late trading.

Polycom Inc.'s (PLCM) third-quarter earnings fell 24% on lower sales and margins, but the maker of audio and data conferencing products pointed to sequential revenue growth and a sharp increase in orders from the second quarter. Shares fell 5.2% to $25 after hours.

South Financial Group Inc. (TSFG) estimated its third-quarter loss widened sharply as the company recorded big credit provisions and a tax-related write-down. Shares fell 17% to $1.19 in after-hours trading.

Watch List:

Amylin Pharmaceuticals Inc.'s (AMLN) third-quarter loss narrowed more than expected on cost-cutting, while revenue fell short of analysts' expectations.

C.H. Robinson Worldwide Inc.'s (CHRW) third-quarter profit climbed 2% as the trucking and logistics company again reported higher margins, offsetting sliding revenue.

Sonic Corp.'s (SONC) fiscal fourth-quarter profit dropped 17%, hurt by lagging sales at partner drive-ins, though results still topped Wall Street estimates.

Sun Microsystems Inc. (JAVA) said it plans to cut up to 3,000 jobs in the next year to align resources with its business plan as the closing of Oracle Corp.'s (ORCL) acquisition of Sun has been delayed.

Wall Street ends lower on profit taking

2009-10-20T22:46:00.000-07:00

NEW YORK (Reuters) - Stocks retreated from 12-month highs on Tuesday as disappointing housing and inflation data prompted investors to book recent gains despite strong results from bellwethers including Apple and Caterpillar.

New construction of U.S. homes rose less than expected in September and U.S. producer prices posted an unexpected decline, both pointing to an anemic economic recovery.

DuPont shares fell 2.2 percent to $33.87, making it a top drag in the S&P materials sector and the Dow industrials after the chemical maker posted higher-than-expected third-quarter profit, but revenue fell short of Wall Street estimates.

After the closing bell, Yahoo Inc, one of the largest sellers of online display advertising, said third- quarter profit more than tripled from a year ago, beating Wall Street's estimates and sending its stock up 4.1 percent to $17.88.

Flash memory maker SanDisk Corp also reported results after the bell that easily topped Wall Street's expectations. Its stock soared almost 10 percent in extended trading to $23.62.

During regular trading, shares of companies in the materials sector declined as commodity prices fell. The Reuters/Jefferies CRB commodity index was off for the first time in seven sessions and crude oil settled lower for the first day in nine.

Shares of home builders also fell, with the Dow Jones home construction index down 2.1 percent.

"The market is trying to absorb all the earnings news and see where the economy stands. The market has rallied recently pretty good, so it's giving back some of the gains," said Giri Cherukuri, head trader at OakBrook Investments LLC in Lisle, Illinois.

"Off the weaker housing data, people are forecasting a little bit weaker economy and that is hurting commodities, as the economy may not be as strong as previously expected."

Caterpillar Inc shares hit a 12-month high after the machinery maker's third-quarter earnings soared past expectations.

Caterpillar, up 3 percent at $59.61, was the Dow's best performer.

But the blue-chip Dow Jones industrial average dropped 50.71 points, or 0.50 percent, to end at 10,041.48. The Standard & Poor's 500 Index fell 6.85 points, or 0.62 percent, to 1,091.06. The Nasdaq Composite Index shed 12.85 points, or 0.59 percent, to close at 2,163.47.

Among other Dow components reporting on Tuesday, United Technologies Corp dipped 0.1 percent to $65.40 after its profit fell from the year-ago quarter. Pfizer Inc fell 0.3 percent to $17.93 despite beating profit expectations.

Coca-Cola Co fell 1.3 percent to $54.07 after reporting sales that also missed expectations.

Crude oil fell and hurt shares of energy companies. U.S. November crude oil futures expired at the close and settled at $79.09 a barrel, down 0.65 percent, or 52 cents