Turning Japanese

Monday Business Edition

This is the future Paul Krugman keeps warning us about.

Japan Goes From Dynamic to Disheartened

The Great Deflation

By MARTIN FACKLER, The New York Times

Published: October 16, 2010

For nearly a generation now, the nation has been trapped in low growth and a corrosive downward spiral of prices, known as deflation, in the process shriveling from an economic Godzilla to little more than an afterthought in the global economy.



The classic explanation of the evils of deflation is that it makes individuals and businesses less willing to use money, because the rational way to act when prices are falling is to hold onto cash, which gains in value. But in Japan, nearly a generation of deflation has had a much deeper effect, subconsciously coloring how the Japanese view the world. It has bred a deep pessimism about the future and a fear of taking risks that make people instinctively reluctant to spend or invest, driving down demand – and prices – even further.



After years of complacency, Japan appears to be waking up to its problems, as seen last year when disgruntled voters ended the virtual postwar monopoly on power of the Liberal Democratic Party. However, for many Japanese, it may be too late. Japan has already created an entire generation of young people who say they have given up on believing that they can ever enjoy the job stability or rising living standards that were once considered a birthright here.



Economists said one reason deflation became self-perpetuating was that it pushed companies and people like Masato to survive by cutting costs and selling what they already owned, instead of buying new goods or investing.

“Deflation destroys the risk-taking that capitalist economies need in order to grow,” said Shumpei Takemori, an economist at Keio University in Tokyo. “Creative destruction is replaced with what is just destructive destruction.”

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1 TNK-BP says to acquire BP’s Vietnam, Venezuela assets

AFP

1 hr 52 mins ago

MOSCOW (AFP) – Russian oil company TNK-BP said on Monday it had agreed a deal with its part-owner BP to acquire the troubled British oil giant’s assets in Vietnam and Venezuela for 1.8 billion dollars.

TNK-BP, Russia’s third-biggest oil company, is owned 50 percent by BP and 50 percent by a group of Russian billionaires including banking magnate Mikhail Fridman known collectively as Alfa Access-Renova (AAR).

The divestment is in line with a plan by BP to sell up to 30 billion dollars (21.2 billion euros) of assets by the end of 2011 to help meet its financial obligations from the Gulf of Mexico oil spill.

2 Rio Tinto, BHP Billiton axe iron ore merger

by Talek Harris, AFP

Mon Oct 18, 2:21 am ET

SYDNEY (AFP) – Mining giants Rio Tinto and BHP Billiton Monday abandoned a controversial merger of their Australian iron ore operations after anti-competition complaints from regulators and top customers including China.

The Anglo-Australian companies, both among the world’s top three miners, said they were disappointed at the collapse of the 116 billion US dollar deal, which was set to save 10 billion US dollars in shared costs.

“The large synergies from combining our West Australian iron ore assets with Rio Tinto?s have caused us to persevere in seeking to obtain regulatory approvals,” said BHP chief executive Marius Kloppers.

3 Europe gets ‘cold feet’ over budget fines

AFP

1 hr 55 mins ago

LUXEMBOURG (AFP) – European Union determination to penalise countries with high budget deficits seemed to be increasingly diluted on Monday, with talk of “cold feet” over powers for Brussels to impose fines.

Dutch finance minister Jan Kees de Jager said that EU states — led by Italy, with one of the world’s highest public debt ratios, and France, which presents new budget plans to parliament on Monday — were turning away from imposing automatic fines on EU rule-breakers.

Polish minister Jacek Rostowski, echoing concerns in a raft of former communist EU states, also warned that the “only circumstances” under which fixed penalties would be acceptable would be for pension reform costs linked to bloc accession to be stripped out of EU calculations.

4 France seeks to calm fuel fears as strike momentum builds

AFP

Sun Oct 17, 3:14 pm ET

PARIS (AFP) – France sought Sunday to calm fears of petrol shortages, with the oil industry admitting it cannot hold on forever as strikes against pension reform intensified ahead of another wave of mass protests.

Officials tried to head off panic buying of petrol amid the rolling strikes and protests that saw hundreds of thousands take to the streets for the latest day of action against President Nicolas Sarkozy’s key reform on Saturday.

Prime Minister Francois Fillon vowed to take any “necessary decisions” to ensure the country’s fuel supplies flowed.

5 AIA seeking up to 20 billion dollars in IPO

by Joyce Woo, AFP

Sun Oct 17, 3:32 pm ET

HONG KONG (AFP) – AIA Group Ltd said Sunday it could raise up to 20 billion US dollars in its global public offering this month, putting it on track to be the world’s second biggest IPO of 2010.

Announcing details of the sale at a press conference in Hong Kong, the Asian unit of US insurer AIG said it said it will initially offer 5.86 billion shares at between 18.38-19.68 Hong Kong dollars each, or up to 15 billion US dollars.

It said it could issue up to 8.08 billion shares if it exercised a greenshoe option, which would bring the total raised to around 20 billion US dollars and leave AIG with a stake of just 32.9 percent stake.

6 OPEC caught in dollar crossfire

by Ben Perry, AFP

Sun Oct 17, 1:36 am ET

VIENNA (AFP) – OPEC nations seeking higher oil prices to boost revenues may get their wish as the sliding dollar sees investment switch from the US currency and into crude and other commodities, according to analysts.

Yet higher commodity prices, which help to push up inflation, are also seen as a threat to the economic recovery.

The Organization of Petroleum Exporting Countries, which pumps 40 percent of world oil, chose last week to keep its official production target unchanged at a ministerial meeting in Vienna, home to the cartel’s headquarters.

7 China carmakers’ plans raise overcapacity concerns

by Boris Cambreleng, AFP

Sun Oct 17, 6:45 am ET

BEIJING (AFP) – Booming auto sales in China have spurred manufacturers to step up production so fast that concerns over “blind investment” and overcapacity in the sector are emerging, analysts said.

China’s auto market overtook the United States in 2009 as the world’s largest and will remain so this year with up to 17 million vehicles expected to be sold.

The Chinese market potential remains huge in the world’s most populous nation as the percentage of people owning cars is still relatively low, analysts have said.

8 Irish glass-making city shattered by economic crisis

by Frederic Pouchot, AFP

Sun Oct 17, 4:22 pm ET

WATERFORD, Ireland (AFP) – Ireland’s economic difficulties have hit especially hard in Waterford where the famous crystal factory closed last year, even if a new, smaller manufacturing plant has given residents some hope.

The oldest city in Ireland, Waterford boasts the highest level of unemployment in the country at 18.1 percent, compared to the national average of 13.7 percent.

The iconic Waterford Crystal factory’s heavy leaded cut glass put the city on the map, but it also dictated the fortunes of the southeastern port in the two centuries since it opened in 1783.

9 Germany to help Japan obtain vital rare earths

AFP

Sat Oct 16, 9:15 am ET

YEKATERINBURG, Russia (AFP) – Germany will help Japan gain access to vital rare earth minerals which are being withheld by China in a territorial dispute, German Economy Minister Rainer Bruederle said Saturday.

Bruederle was speaking on his way home from a visit to Tokyo where he had talks with Japanese trade and economy ministers Akihiro Ohata and Banri Kaieda.

He said they had raised the possibility of Japan running out of stocks of the commodities vital for the manufacture of electronic goods such as mobile telephones.

10 IMF meets central bank chiefs in Shanghai

by D’Arcy Doran, AFP

2 hrs 34 mins ago

SHANGHAI (AFP) – International Monetary Fund and central bank officials from around the world met in China Monday to discuss ways to boost the global economic recovery, amid mounting fears of a damaging currency war.

The People’s Bank of China hosted the conference in the country’s financial hub Shanghai, bringing together central bank chiefs and other officials from Asia, Africa, Europe, and North and South America, the IMF said.

The Shanghai conference follows IMF and World Bank annual meetings earlier this month, where finance officials discussed how to strengthen the recovery from the worst recession since World War II and the global financial system.

11 Global leaders mull joint governance ahead of G20

by William Ickes, AFP

Sun Oct 17, 9:59 pm ET

MARRAKECH, Morocco (AFP) – World leaders examined at the weekend frameworks for global governance ahead of a G20 summit in Seoul, with UN chief Ban Ki-Moon stressing no single power could tackle key issues alone.

Chinese Vice Foreign Minister Fu Ying told the World Policy Conference (WPC) in Marrakech: “We see eye to eye on the challenges,” and added that “we need to find a better way to cooperate, to find a partnership.”

The forum was also addressed by Ban, European Central Bank president Jean-Claude Trichet, EU commissioner Joaquin Almunia, government ministers and business and social leaders.

12 SE Asia should ‘de-dollarise’, but slowly: experts

by Michelle Fitzpatrick, AFP

Sun Oct 17, 1:10 am ET

PHNOM PENH (AFP) – Southeast Asian countries that rely heavily on the dollar might be alarmed at its recent steep decline, but analysts warn against sudden moves to reduce their dependence on the greenback.

In Cambodia, the dollar is far more prevalent than the riel, the local currency, while neighbouring communist-run Laos sees shoppers paying for goods in kip, dollars or even Thai baht.

In communist Vietnam, the local dong is popular enough, but dollars still account for 20 percent of all currency in circulation there. And in Myanmar (Burma) a volatile domestic currency has left locals distrustful of the kyat.

13 Wall of money leaves Asia swimming against tide

by Daniel Rook, AFP

Sun Oct 17, 1:00 am ET

BANGKOK (AFP) – A tidal wave of speculative money is pouring into Asia and driving up regional currencies, stoking political tensions in the run-up to crunch summits as nations raise the barricades to protect exports.

While the influx of foreign capital reflects investor confidence in a region that escaped the worst of the world economic crisis, it is making Asian goods more expensive on global markets and fanning fears of asset bubbles.

South Korea — where finance ministers from the Group of 20 nations meet on October 22-23 in preparation for a November summit — has warned that frictions over the currency upheaval are growing and could lead to trade protectionism.

14 French workers take to the streets as airport fears ease

by Dave Clark, AFP

Sat Oct 16, 4:02 pm ET

PARIS (AFP) – French trade unions staged another massive day of protests Saturday to defend their right to retire at 60, but fears of fuel shortages crippling Paris airports eased as supplies resumed.

Although government estimates of the turnout at the rallies suggested the movement might be losing steam, unions warned that strikes are spreading to more businesses and that a new nationwide protest would be held Tuesday.

Tension has been building since record demonstrations earlier this week with strikes in refineries cutting off fuel supplies to Paris airports and with high school students joining older workers to condemn pension reform moves.

15 BHP and Rio scrap $116 billion iron ore joint venture

By Sonali Paul, Reuters

Mon Oct 18, 3:30 am ET

MELBOURNE (Reuters) – BHP Billiton (BHP.AX) and Rio Tinto (RIO.AX) ditched plans to form the world’s biggest iron-ore joint venture, in a victory for steel makers and a move that could prompt both miners to step up competing expansion plans.

The deal’s long-expected demise marks the second failed attempt in three years by BHP CEO Marius Kloppers to buy into Rio’s superior iron ore assets and strengthens the hand of steel mills, which had feared the pair would gain too much pricing control.

Monday’s announcement also leaves BHP focusing squarely on a $39 billion hostile bid for fertilizer group Potash Corp (POT.TO), no longer distracted by the complex $116 billion marriage of the two miners’ mammoth Australian iron ore operations.

16 China vows breakthroughs to secure growth

By Chris Buckley and Wang Lan, Reuters

1 hr 51 mins ago

BEIJING (Reuters) – China must make a “major breakthrough” in its industry-heavy growth and advance “vigorous but steady” political reform to keep the world’s second-biggest economy from faltering, Communist Party leaders said on Monday.

China’s map for a new phase of growth driven by spending by hundreds of millions of workers and farmers was issued at the end of a Party Central Committee meeting, which settled on the nation’s next five-year development plan starting in 2011.

Over that time, the Chinese economy is forecast to grow by about 50 percent to $7.5 trillion, powering past Japan and moving closer to the biggest economy by far, the United States.

17 Will G20 change its currency tune?

By Emily Kaiser, Reuters

Sun Oct 17, 3:02 pm ET

WASHINGTON (Reuters) – If the G20 wants to soothe currency tensions, finance leaders may have to do more than simply repeat a well-practiced refrain that too much foreign exchange rate volatility is unwelcome.

These Group of 20 officials, meeting in South Korea beginning on Friday, face even greater pressure to deliver something substantive after the United States delayed a hotly anticipated report on whether China (or any other country) was manipulating its currency to gain a trade advantage.

South Korean President Lee Myung-bak, who will chair a G20 leaders summit in Seoul next month, said his biggest concern was that “conflicts of interest between countries could develop into trade protectionism.”

18 AIA to shut IPO book early on strong demand: sources

By Denny Thomas and Kennix Chim, Reuters

30 mins ago

HONG KONG (Reuters) – Heavy demand for AIA Group Ltd’s up to $20.5 billion share sale in Hong Kong prompted underwriters to shut the offer to funds two days ahead of schedule, sources said on Monday.

The strong interest from traditional funds and high-profile Chinese investors in the sale of the unit of American International Group Inc (AIG.N) comes amid a flood of Asian IPOs that have cemented the region’s dominance in initial public offerings this year.

AIA’s books will now close on Tuesday, U.S. time, as the underwriters and executives wrap up meetings with institutional investors in Chicago, Boston and New York, three sources with direct knowledge of the matter told Reuters.

19 ECB’s Trichet rejects Weber view on bond buying

By James Mackenzie, Reuters

Sun Oct 17, 2:29 pm ET

RIMINI, Italy (Reuters) – European Central Bank President Jean-Claude Trichet took issue with recent comments on ECB policy by Bundesbank chief Axel Weber, saying they did not represent the views of the central bank’s governing council.

In an interview with Italian daily La Stampa on Sunday, Trichet said the governing council as a whole did not agree with Weber’s remark last week that the ECB’s government bond-buying program had not worked and should be scrapped.

“No! This is not the position of the Governing Council, with an overwhelming majority,” he said, according to an English transcript of the interview published on the ECB’s website.

20 Foreclosure mess to test stocks’ rally

By Edward Krudy, Reuters

Sun Oct 17, 12:08 pm ET

NEW YORK (Reuters) – U.S. banks will be in the limelight this week as several household names report earnings and investors worry a forced halt to foreclosure proceedings could hit the sector and end the recent rally.

Bank shares fell sharply on Friday on very high volume, continuing a slide from the previous day. Although recovering some of their losses, Bank of America (BAC.N) shares hit their lowest in more than a year, while the KBW bank index .BKX> fell 2.4 percent.

Shares of Bank of America, the nation’s largest mortgage lender, fell 9 percent during the week. More than 595.9 million of its shares traded on Friday, the most since April 2009 and over four times the 50-day moving average.

21 Two Fed officials favor aggressive easing options

By Kristina Cooke, Reuters

Sat Oct 16, 1:46 pm ET

BOSTON (Reuters) – Two top Federal Reserve officials argued for further aggressive action by the central bank, with one saying the economy needs “much more” help and the other pointing to Japan’s painful lessons.

With nearly one in ten in the U.S. labor force unable to find work and already very low inflation threatening to drop further, the U.S. central bank is expected to offer the economy more support at its next policy meeting on November 2-3.

Most analysts expect the Fed will embark on a fresh round of Treasury purchases, over and above the $1.7 trillion in longer-term assets it has already bought.

22 Apple’s earnings to showcase one-two punch

By Gabriel Madway, Reuters

Sat Oct 16, 7:42 am ET

SAN FRANCISCO (Reuters) – Apple Inc should affirm next week that its six-month-old iPad tablet computer is selling well despite a shaky consumer market, while the iPhone continues to fend off a strong challenge from rival Google Inc.

Analysts expect fourth-quarter earnings to showcase Apple’s powerful one-two punch of the iPhone and the iPad, although some still question whether, with a plethora of rival products set to hit store shelves, Wall Street can justify Apple’s stratospheric valuation.

The shares of the second largest corporation in the S&P 500 jumped more than 4 percent on Friday as anticipation mounted ahead of Monday’s report.

23 Fiscal 2010 deficit thins to $1.29 trillion

By Donna Smith, Reuters

Sat Oct 16, 12:59 am ET

WASHINGTON (Reuters) – The budget deficit for fiscal 2010 narrowed to $1.294 trillion from last year’s record $1.416 trillion as tax collections started to recover and bailout spending fell sharply.

The Treasury Department said on Friday the deficit came to 8.94 percent of gross domestic product for the year ended September 30, versus 10 percent in fiscal 2009.

The government called the deficit-to-GDP improvement the biggest since fiscal 1987.

24 Mozilo settles Countrywide fraud case at $67.5 million

By Alex Dobuzinskis and Dan Levine, Reuters

Fri Oct 15, 9:02 pm ET

LOS ANGELES/SAN FRANCISCO (Reuters) – Former Countrywide chief Angelo Mozilo agreed to a settlement of $67.5 million to resolve charges of duping the home lender’s investors while lining his own pockets, but Bank of America Corp will pick up two-thirds of the tab.

The flamboyant poster boy of the subprime mortgage market’s boom and bust struck a last-minute deal with the U.S. Securities and Exchange Commission before his trial on civil fraud charges was to start next week.

The most prominent executive charged by regulators with wrongdoing linked to the housing market collapse, Mozilo on Friday became the recipient of the highest fine ever dished out to an executive of a public corporation.

25 Lehman bankruptcy a $1 billion payday for advisers

By Caroline Humer, Reuters

Fri Oct 15, 5:08 pm ET

NEW YORK (Reuters) – When Lehman Brothers collapsed, a whole lot of money vanished with it. Its bankruptcy, on the other hand, just keeps on paying.

Lehman’s record-breaking bankruptcy has produced a staggering $1 billion in fees — doled out to legions of lawyers, advisers and bankers over the past two years.

The financial firm has been paying out, on average, more than $40 million a month, and based on that rate, it passed the $1 billion mark last month. September’s details will be in the monthly operating report due in mid-October.

26 Flat U.S. card delinquencies warn of elusive recovery

By Maria Aspan, Reuters

Fri Oct 15, 4:47 pm ET

NEW YORK (Reuters) – Fewer Americans fell behind on credit card payments in September, but the pace of improvement slowed almost to a standstill, accelerating fears that banks will not recover from their consumer loan losses for years.

Credit card bank stocks declined on Friday, with shares of Capital One Financial Corp (COF.N) posting the worst decline among banks. Shares of other major U.S. banks also fell on Friday as investor expressed concern over a growing mortgage foreclosure crisis.

Credit card delinquencies, which indicate that consumers are late paying their bills, are an early sign of future losses, or charge-offs.

27 GE posts sales slump, rattles recovery hopes

By Scott Malone, Reuters

Fri Oct 15, 2:57 pm ET

BOSTON (Reuters) – General Electric Co posted a sharper-than-expected drop in revenue on slack demand for wind turbines, railroad locomotives and other heavy equipment, reflecting weakness in the economy.

The largest U.S. conglomerate’s 5.1 percent decline in sales overshadowed better-than-expected profit and sent GE shares down 5.5 percent on Friday in their steepest slide since July as some investors took it as another sign that the economic recovery is faltering.

The better-than-expected profit reflected lower corporate expenses and a stronger performance at the company’s GE Capital unit, which saw losses on loans decline and recorded more tax benefits than analysts had expected in the quarter.

28 Bankers balk at AOL-Yahoo deal scenario

By Nadia Damouni and Jennifer Saba, Reuters

Fri Oct 15, 12:16 pm ET

NEW YORK (Reuters) – A decade ago, America Online Inc, as the Goliath of the nascent Internet world, was the protagonist in a bold and ultimately quixotic deal — its much-hyped merger with Time Warner (TWX.N).

Now as AOL Inc (AOL.N), the shrunken successor to the onetime dialup behemoth, struggles to turn around its business as a standalone company, it is being cited as the protagonist in another transaction that has tech bankers buzzing: a private equity-aided takeover of much larger portal Yahoo Inc. (YHOO.O).

But there is a key difference. AOL negotiated the all-stock deal with Time Warner from a position of strength. Any Yahoo takeover would be done from a position of weakness. Some bankers and analysts are even calling it a desperation move.

29 Oil workers defy French govt demand to open depots

By GREG KELLER, AP Business Writer

6 mins ago

PARIS – French oil workers defied the government’s demand Monday to get back to work and end scattered fuel shortages, stepping up their fight against President Nicolas Sarkozy’s plan to raise the retirement age to 62. Youths and truckers escalated the protests.

Airlines, meanwhile, were told to drastically cut back their flights into France on Tuesday, when the next national street protests are planned, and severe disruptions to air travel, public transport, schools and other facilities are expected.

Strikers have blockaded a dozen French refineries and numerous oil depots in the last week as part of the widespread protests over Sarkozy’s pension reforms, which the French Senate will debate on Wednesday.

30 EU ministers struggle over budget rules

By GABRIELE STEINHAUSER, AP Business Writer

2 hrs 38 mins ago

LUXEMBOURG – European finance ministers locked horns Monday over stricter budget rules to avoid another government debt crisis as protests against spending cutbacks rattled France and Italy – a sign of the politically difficult choices ahead.

“This is now the moment of truth for EU member states, whether they are genuinely for reinforced economic governance or not,” Olli Rehn, EU monetary affairs commissioner, said on arrival at the two-day meeting.

Finance ministers considered two differing proposals spelling out penalties for overspending governments, after ballooning debt and deficit levels in countries like Greece, Ireland and Spain shook the foundations of the 16-nation eurozone this year.

31 TV viewers ensnared in Fox, Cablevision rate duel

By VERENA DOBNIK, Associated Press Writer

Mon Oct 18, 6:34 am ET

NEW YORK – Negotiators for Cablevision and Fox parent News Corp. planned to resume talks Monday in an effort to end a dispute that threatens to keep the cable company’s 3 million subscribers in New York and Philadelphia from seeing some of their favorite shows.

Cablevision viewers have already missed playoff baseball and Sunday’s New York Giants game. “House,” the medical drama that’s among Fox’s highest-rated shows, airs Monday night at 8 p.m. EDT.

Negotiators failed to reach an agreement over rates Sunday, more than a day after their deal expired amid negotiations for a new one. Fox pulled its channels and programming while the two sides discuss how much Cablevision will pay to carry them.

32 Disabilities no longer a death sentence for pets

By TOM BREEN, Associated Press Writer

Mon Oct 18, 5:49 am ET

RALEIGH, N.C. – When Beverly Tucker’s dog Tobi ruptured a disc in his back, the veterinarian gave her a stark choice: expensive surgery with little chance of success, or euthanasia.

Like a growing number of pet owners, Tucker opted for a third choice thanks to medical advances and shifting attitudes about animal care. She bought a wheeled cart specially fitted for Tobi’s hind legs, restoring mobility to her paralyzed pooch.

“I would never have my dog put down,” Tucker said. “Our option was the wheels, and we’re going strong ever since.”

33 Pa. man to give $1K for each jobless worker hired

By PATRICK WALTERS, Associated Press Writer

Sun Oct 17, 9:30 pm ET

NEWTOWN, Pa. – A suburban Philadelphia philanthropist who believes charity is a powerful incentive thinks he can help get Americans back to work one donation at a time.

Gene Epstein, 71, is promoting a $250,000 effort called Hire Just One, with plans to make $1,000 donations to charity in the name of businesses that hire an unemployed person and keep the worker on the payroll for at least six months.

Epstein, who amassed a personal fortune through car sales and real estate investments, has set aside his money for the first 250 hires – and thinks thousands more jobs could be created if others took on his idea, too.

34 Canada-US pipeline on hold amid oil’s recent woes

By JAMES MacPHERSON and JOSH FUNK, Associated Press Writers

Sun Oct 17, 1:23 pm ET

BISMARCK, N.D. – The steel is staged, and crews are waiting to lay the last and most expensive leg of TransCanada Corp.’s multibillion-dollar pipeline network that would carry Canadian oil to refineries along the Gulf Coast.

Yet final U.S. government approval for the massive project, once assumed to be on a fast track, is now delayed indefinitely, with little official explanation. The company had hoped to begin laying pipe by the end of the year, but those prospects have dimmed.

Some experts conclude the negative publicity surrounding oil-related disasters, particularly the offshore BP leak that polluted the Gulf Coast for months, has made the Keystone XL pipeline a victim of guilt by association.

35 Trump stymied in bid to build at NY’s Jones Beach

By FRANK ELTMAN, Associated Press Writer

Sun Oct 17, 2:30 pm ET

WANTAGH, N.Y. – After promising in typical Trumpian modesty to replace a restaurant at a landmark New York beach with “the finest dining and banquet facility anywhere in the world,” Donald Trump seethes four years later that visitors still must pass what he calls “a rat-infested dump.”

When he announced plans in 2006 for “Trump on the Ocean” at Jones Beach, designed by legendary urban planner Robert Moses, the real estate tycoon envisioned a facility with sweeping views of the Atlantic and beachfront dining for as many as 1,400.

What he didn’t anticipate was persistent civic opposition, or skeins of bureaucratic red tape.

36 Hard-hit British heartland braces for cuts

By JILL LAWLESS, Associated Press Writer

Sat Oct 16, 12:55 pm ET

SHEFFIELD, England – Sheffield knows all about cuts – and no one knows better than Philip Wright.

A scissors manufacturer, he remembers this city at the height of its steel-making glory, when Sheffield’s furnaces and factories produced ships and tools and cutlery for the dinner tables of the world.

The huge steelworks are mostly gone now, like so much British industry over the past few decades, the victim of international competition, changing technology and governments with other priorities.

37 Hawker Beechcraft machinists vote against contract

Associated Press

Sat Oct 16, 5:23 pm ET

WICHITA, Kan. – Machinists at Hawker Beechcraft voted Saturday against a new seven-year contract that would have included a 10 percent pay cut and other concessions aimed at keeping the company from moving all its operations out of Kansas.

Bob Wood, spokesman for the airplane maker’s union, said 55 percent of the members rejected the contract. The union had recommended accepting the contract to protect two-thirds of the workers’ jobs.

The contract required a simple majority for approval. There was no strike vote.

38 So you bought a foreclosed home. Now what?

By DAVE CARPENTER, AP Personal Finance Writer

Fri Oct 15, 5:28 pm ET

It seemed too good to be true: You bought a house in foreclosure at a fraction of the former price. Maybe you even knocked out a wall or two and remodeled with all the money you saved.

But now thousands of foreclosures around the country may be invalid because of bank paperwork problems. Should you worry?

“Anyone who’s purchased a foreclosed property in the last three years should really be concerned,” says George Babcock, a Providence, R.I., attorney who represents homeowners who have been foreclosed on.

39 Hispanic winemakers still rare but finding success

By OLIVIA MUNOZ, For The Associated Press

Mon Oct 18, 5:25 am ET

SONOMA, Calif. – Reynaldo Robledo was 16 when he arrived from his small hometown in Mexico’s mountains to work for $1.10 an hour in the vineyards of Northern California.

Now 59, Robledo is among a handful of Latinos who have built their own wineries on modest acreage and are catering in part to Hispanic wine drinkers interested in quality and a connection to their heritage.

“I would work my regular shift and then pester the vineyard manager with questions until I knew everything he knew,” Robledo said in Spanish.

40 Secret donations and gift tax – a new conundrum

By JIM KUHNHENN, Associated Press Writer

Mon Oct 18, 4:00 am ET

WASHINGTON – Donors to nonprofit groups that are spending millions on political ads this election have escaped public scrutiny because their donations don’t have to be disclosed. But can they escape a hefty a tax bite?

That’s a new question raised by lawyers familiar with nonprofit tax law and by at least one group that advocates for public financing of elections.

At issue is whether contributors to politically active tax-exempt nonprofit organizations – many of them donating in six- and seven-figures – have to pay the 35 percent gift tax on their donations. It is a murky area of the law and the Internal Revenue Service has not offered any instruction.

41 $900,000 for a 3-bedroom … in Haiti?

By JONATHAN M. KATZ, Associated Press Writer

Sun Oct 17, 3:46 pm ET

PORT-AU-PRINCE, Haiti – It’s just two miles from where Dominique Tombeau lives today to the house he dreams about at night, but the road runs straight uphill.

Nine months after the schoolteacher’s concrete home collapsed in front of his wife and 4-year-old son, the family and three in-laws are stuck under a plastic tarp that pours down water when it rains. All he wants is to move up, to a working man’s apartment in the tree-lined suburb of Petionville. But every place he can even consider costs double or triple the $43 a month he used to pay in rent, even though he and everyone he knows has less money than ever.

Haiti’s brittle housing supply was shattered by the Jan. 12 earthquake, which destroyed an estimated 110,000 homes and apartment buildings. Since then demand has soared, as the more than 1.5 million people who lost their homes compete for new ones at the bottom end of the market, and a rising tide of foreigners from the U.N. and aid groups flood in from the top.

42 Chile miners: From world fame to humble homes

By FRANKLIN BRICENO and EVA VERGARA, Associated Press Writers

Sun Oct 17, 3:42 pm ET

COPIAPO, Chile – Carlos Bugueno is out of the collapsed mine but still lives in close quarters, sharing his small wood-and-tin house with 16 relatives. His family welcomed him home by lining the street with white plastic bags filled with air – they had no money for balloons.

Despite donations and the promise of book and movie deals, most of the 33 Chilean miners trapped more than two months have returned to lives of struggle in improvised homes, often in gang-ridden neighborhoods lacking basic services. Some worry it won’t get better.

“Three months from now, what will I be doing? Selling candy on the beach? Wondering what the government has done for us? Nothing,” said Edison Pena. “I’m very afraid and I would like for things to change.”

43 With New England trains, ‘high-speed’ is relative

By STEPHEN SINGER, Associated Press Writer

Sun Oct 17, 2:53 pm ET

HARTFORD, Conn. – To passengers looking forward to riding high-speed trains in New England, planners have a message: Not so fast.

Washington is spending $8 billion in federal stimulus money to establish high-speed rail corridors nationwide. But in populated areas of New England where city streets and railroad tracks intersect and trains must negotiate curves, hills and tunnels, travel at speeds as high as 150 mph are out of the question.

In rural New England, cattle crossings halt high-speed trains, said John Zicconi, spokesman for the Vermont Agency of Transportation.

44 Gov’t: No increase for Social Security next year

By STEPHEN OHLEMACHER, Associated Press Writer

Fri Oct 15, 8:05 pm ET

WASHINGTON – Another year without an increase in Social Security retirement and disability benefits is creating a political backlash that has President Barack Obama and Democrats pushing to give a $250 bonus to each of the program’s 58 million recipients.

The Social Security Administration said Friday inflation has been too low since the last increase in 2009 to warrant a raise for 2011. The announcement marks only the second year without an increase since automatic adjustments for inflation were adopted in 1975. This year was the first.

House Speaker Nancy Pelosi promised to schedule a vote after the Nov. 2 election on a bill to provide one-time $250 payments to Social Security recipients. Obama endorsed the payment, which would be similar to one included in his economic recovery package last year.

45 Ohio co. seeks to buy Northrop Grumman shipyards

By ALAN SAYRE, AP Business Writer

Fri Oct 15, 7:31 pm ET

NEW ORLEANS – An Ohio company has written governors in three Southern states in a push to purchase the military shipbuilding division of Northrop Grumman Corp., pledging to keep a major Louisiana shipyard open.

Cleveland Ship LLC sent letters this week through its Cleveland Shipbuilding Division to Govs. Bobby Jindal of Louisiana, Haley Barbour of Mississippi and Bob McDonnell of Virginia

Northrop Grumman Corp. announced plans on July 13 to shutter the Avondale shipyard near New Orleans in early 2013 and consolidate its Gulf Coast military shipbuilding at Pascagoula, Miss. About 4,600 people now work at Avondale.

46 Bernanke tilts debate on key roots of unemployment

By CHRISTOPHER S. RUGABER, AP Economics Writer

Fri Oct 15, 6:15 pm ET

WASHINGTON – Federal Reserve Chairman Ben Bernanke on Friday gave an endorsement to one side in a debate among economists about why the unemployment rate is so high.

Bernanke agreed with those who see the problem being more tied to a weak economy, and less so to workers lacking the necessary skills for jobs that are available. That assessment is a big reason why the Fed is widely expected to take more steps soon to stimulate economic growth.

The “bulk of the increase in unemployment is attributable to the sharp contraction in economy activity … rather than to structural factors,” Bernanke said during a speech in Boston on Friday.

47 GE 3Q profit drops 18 pct, sales of equipment fall

CHRIS KAHN, AP Business Writer

Fri Oct 15, 5:43 pm ET

NEW YORK – General Electric’s return to its roots as an industrial company continues to proceed unevenly.

The industrial and financial giant said Friday that sales of industrial equipment – everything from wind turbines to jet engines to locomotives – lagged in the third quarter. Revenue of $35.9 billion was about $1.7 billion shy of Wall Street estimates and investors drove the stock down 5 percent.

GE has been de-emphasizing its finance unit, GE Capital, which accounted for more than half of GE’s profit in 2006 during a boom in financial services, but recorded billions in write-offs when the economy went into recession. Instead, it’s focusing on making products ranging from wind and natural gas turbines to sonogram machines to energy-efficient appliances.

48 Mattel sees cautious Christmas after 3Q net rises

By MAE ANDERSON, AP Retail Writer

Fri Oct 15, 5:33 pm ET

NEW YORK – Retailers are being cautious on ordering toys ahead of the holidays, Mattel’s CEO said Friday, which could make hot toys scarce this year.

“Retailers remain guarded with inventory and several are betting on a late holiday season this year,” CEO Bob Eckert said Friday in a call with analysts. “Yes, there will be a Christmas. That said, I suspect it will play out later than we’re accustomed to.”

Eckert made the comments as Mattel said its third-quarter net income rose 23 percent, helped by strong sales gains for dolls including Barbie and Disney Princesses and a tax benefit.

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  1. Reuters and Associated Press have both substantially increased the number of pages they devote to business news.

    I’m not harvesting daily and kind of keeping to a limit of before Friday is old news indeed so that the number of stories I look at from each of those services has only gone up 50%.

  2. Scooped Krugman!

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