Monday, January 31, 2011
Intel said on Monday it had stopped shipping a new chipset after discovering a design flaw that might cause 5 percent of the chips to fail over the next three to five years.
The loss in revenue and the fixing of the nearly half a million laptop and desktop computers that contain the chipset are expected to cost Intel $1 billion.
Intel said that the Series 6, or Cougar Point, chipset, which controls the movement of data to hard drives, DVD drives and monitors, has a failure rate of 5 percent over the typical three- to five-year lifespan of a computer. Over time, some of the connection ports on the chipset can degrade, potentially blocking consumers from reaching their stored data. However, Intel said that the problem did not delete the data and that consumers would still be able to get to it by moving a hard drive to another computer.
Computers with the flawed chip, which is for use with second-generation I5 and I7 quad core processors, started shipping on Jan. 9. By the time Intel identified the flaw and stopped production, it had already shipped eight million chipsets, not all of which had been placed in new computers.
A modified version of the chipset will start shipping late this month, Intel said. Full production is expected in April.
Intel, the largest maker of chips, had hoped that its new chips would help widen its lead over its nearest competitor, Advanced Micro Devices. Although analysts described the halt in production as an embarrassment, they said it was unlikely to have a long-term impact.
"I think Intel is being safe rather than sorry," said Craig Berger, an analyst with Friedman, Billings, Ramsey & Company. "They're doing the right thing, rather than have customer problems down the road."
Intel said that tests of the chipset before its public release uncovered no issues. Only after computer makers returned a few problem chips, after their tests, did Intel discover the flaw, said Stephen L. Smith, vice president for Intel's personal computer client operations.
"Intel believes that consumers can continue to use their systems with confidence while working with computer manufacturers for a solution," he said on a conference call on Monday.
Consumers who believe they may have bought a computer with one of the Intel's flawed chipsets are advised to contact the support desk of the computer manufacturer or that of Intel.
The interruption in production is expected to reduce Intel's first-quarter revenue by $300 million, Intel said. And $700 million more is expected to be spent on fixing the chipsets and replacing those already built into computers. Because of the chipset design flaw, Intel said it will take a charge that will reduce its fourth quarter 2010 gross profit margins by around 4 percentage points from the 67.5 percent it previously reported.
Separately, Intel tempered the bad news with an updated first-quarter forecast. It expects to gain from the acquisitions of Infineon Technologies' wireless unit and McAfee, the computer security company, which should offset the loss from the chip flaw. The McAfee deal should close by the end of March, Intel said.
First-quarter revenue is expected to be $11.3 billion to $12.1 billion, up from an earlier forecast of $11.1 billion to $11.9 billion. Gross margins should be around 61 percent, compared with the previous forecast of about 64 percent, Intel said.
For the full year, Intel said it expected the percentage growth in revenue would be in the mid- to high teens, versus about 10 percent growth, which it had previously predicted.
Intel's shares were unchanged on Monday at $21.46. Shares of Advanced Micro Devices were up nearly 5 percent, to $7.83.
British scientists have developed a low-cost and environment-friendly "artificial petrol" which may cost around Rs. 14 a litre and could be available at pumps in as early as three years.
The scientists who are refining the recipe for the new hydrogen-based fuel said it will run in existing cars and engines at the fraction of the cost of conventional petrol.
The "artificial petrol" is expected to cost around $1.50 a gallon or 19 pence (about Rs. 14) a litre.
With hydrogen at its heart rather than carbon, it will not produce any harmful emissions when burnt, making it better for the environment, as well as easier on the wallet, the Daily Mail reported.
Professor Stephen Bennington, who led the team involved in the project, said: "In some senses, hydrogen is the perfect fuel. It has three times more energy than petrol per unit of weight, and when it burns, it produces nothing but water.
"Our new hydrogen storage materials offer real potential for running cars, planes and other vehicles that currently use hydrocarbons."
According to the report, the first road tests are due next year and, if all goes well, the cut-price "petrol" could be on sale in three to five years.
Energy from hydrogen can be harnessed by burning the gas or combining it with oxygen in a fuel cell to produce electricity. But current methods of storing hydrogen are expensive and not very safe.
To get round this, the team from the Rutherford Appleton Laboratory, near Oxford, University College London and Oxford University have found a way of densely packing hydrogen into tiny beads that can be poured or pumped like a liquid.
Stephen Volker, of Cellar Energy, which is developing the technology, said: "We have developed micro-beads that can be used in an existing gasoline or petrol vehicle to replace oil-based fuels.
"Early indications are that the micro-beads can be used in existing vehicles without engine modification. The materials are hydrogen-based, and so when used produce no carbon emissions at the point of use, in a similar way to electric vehicles."
The scientists also noted that a tankful of the artificial petrol, which has yet to be given a brand name, is expected to last 300 to 400 miles, in line with conventional fuel.
Sunday, January 30, 2011
In order to stay safe and protect users from getting hacked, popular social networking site Facebook is rolling out a new set of security features.
Facebook, with over 500-million members, has added the ability for users to login and surf the site using a more secure encrypted connection, known as HTTPS.
The encryption is the same used on shopping and banking websites to secure connections, and was previously used on Facebook when passwords are checked.
"Starting today we'll provide you with the ability to experience Facebook entirely over HTTPS. You should consider enabling this option if you frequently use Facebook from public Internet access points found at coffee shops, airports, libraries or schools," the company said in a blog post.
Facebook noted that the site may function more slowly using HTTPS, and some features, including many third-party applications, don't currently support HTTPS.
In addition to the added encryption, Facebook said it will now also offer "social authentification," a unique form of the traditional "captcha" coding that will ask a user to identify Facebook friends from their photos.
The two new security features promise to prevent Wi-Fi hackers from fraudulently accessing accounts. Facebook already uses HTTPS when users log into an external site through Facebook Connect.
Your password, which gets sent back to Facebook from the third party site, remains encrypted.
This will now be extended to user activity within the site itself.
IT experts can already overcome internet security issues by adding third-party security measures and forcing an encrypted connection.
However, Facebook's decision to make full-session encryption a default setting for all users will remove the burden from those that are less aware of Wi-Fi hackers.
Facebook uses captchas to authenticate users when they log in from a country that is not associated with their account.
However, this is now being replaced in favour of a new photo-matching system.
Users will be faced with three photos of one of their Facebook friends, and will have to correctly identify them from a list of six friends' names.
"Hackers halfway across the world might know your password, but they don't know who your friends are," says Facebook engineer Alex Rice.
Rice admits inevitable drawbacks to the new security measures.
Page loading speed will take a hit under HTTPS and many third-party apps are not HTTPS enabled.
Social network users that that collect friends by the thousand may also have difficulty identifying photos of friends at random, and friends who have cartoons or 'lookalikes' tagged under their name could be unidentifiable.
HTTP settings will not change automatically, so users can opt in or out of the new feature.
Searching for file-sharing information via Google is going to take a little bit more effort now, thanks to new steps taken by the search engine to remove all sorts of references to torrents from its instant search and autocomplete features.
In December, Google said it was taking steps towards "making copyright work better online." Among other things, it promised that "terms that are closely associated with piracy" would no longer appear in autocompletes.
Although it may be seen as an effort to crack down on illegal file sharing, the move is a troubling one, particularly for those who provide BitTorrent services. No surprise, these companies are quick to point out that there are many legitimate uses for torrents.
Forbidden from Autocomplete Arbitrarily?
Part of the problem with this new implementation, as TorrentFreak noted when it broke the story, the list of banned terms is "seemingly arbitrary." No version of the word "torrent" will work for instant search - neither the software "uTorrent," nor "BitTorrent," the name of a protocol and a San Francisco-based company. But while the cyberlockers RapidShare and Megaupload are now forbidden, other sites like HotFile and MediaFire are not. Furthermore, you can still find the names of other popular torrent sites, including The Pirate Bay.
TorrentFreak cites a response from RapidShare, who say that "We knew about Google's plans for quite a few weeks now. We embrace that certain search suggestions will not put a wrong complexion on RapidShare anymore, but we are concerned that at the same time the legitimate interests of our users will also be affected."
The company adds that "RapidShare is one of the most popular websites worldwide. Every day hundreds of thousands of users rely on our services to pursue their perfectly legitimate interests. That is why Google has obviously gone too far with censoring the results of its suggest algorithm. A search engine's results should reflect the users' interests and not Google's or anybody else's."
For now, you can still search for torrent information. While your search queries won't autocomplete, the results aren't censored. Yet.
Tuesday, January 25, 2011
My Fellow Citizens,
On the eve of our 62nd Republic Day, I extend my warmest greetings to
all of you across the country and also to those living abroad. I convey my
special greetings to the members of our Armed Forces and Para-Military
Forces, who guard our frontiers and to our internal security forces. I also
compliment every citizen from every walk of life for contributing to the process
26th January is a very significant date in our nation’s calendar, when we
celebrate the establishment of free India as a Republic based on the ideology
of justice and equality. It is a day when we recall with gratitude the sacrifices
of our freedom fighters and the work of our Founding Fathers, for giving to us a
country where our dignity and individual freedoms are guaranteed by an
enlightened Constitution. It must also be an occasion when we rededicate
ourselves to maintaining harmony, peace and brotherhood. Most of all, it is a
time to introspect about how we have fared so far, and in which direction are
For our achievements, the foremost credit goes to the drive and the
dedicated hard work of millions of men and women of our country. We are
witness to the increasing influence of India and its steady economic growth
that has brought prosperity to an increasing number of people. We can be
proud of our successes, but there are many significant tasks that are yet to be
accomplished, in particular the pledge to empower the poor and the
marginalized sections of our population so that they too can become a part of
the growth story of our nation.
We are fortunate that we are the inheritors of the ideals and values of
one of the world’s oldest civilizations, which has bequeathed to us a rich
treasure of human experiences and thought. The concept of the human race
being one, the importance of living in harmony with each other and with
nature, the quest for knowledge and truth, find prominence in our age old
culture. These ideas provided inspiration for our freedom movement and after
our independence found a ready resonance in our Constitution. As citizens of
this country each one of us, therefore, has a duty and a responsibility to
demonstrate, that these principles have given to us the motivation and the
strength to build our great nation.
It is, however, a fact that there can be no society which does not need to
evolve to cope with the changing demands of time; and there can be no nation
which does not face challenges. India too has its share of problems and
obstacles, constraints and difficulties. We cannot evade these or wish them
away, but working in different fields, we must together find solutions. The
strength of a nation is not determined by the challenges it faces, but by its
responses to these challenges, especially so when it stands at a critical
juncture and at a decisive point. What we do in this coming decade in terms of
leveraging our advantages and addressing our shortcomings, will shape the
destiny of the nation. Wherever course correction is required, it must be
undertaken unhesitatingly and with urgency. There should be national
consensus on critical national goals. Among such goals, eradication of poverty,
empowerment of women, access to quality education and affordable health
facilities are essential for building human resources. Apart from this, civic
discipline, the readiness of people to work with dedication and integrity can
make an enormously positive impact.
Among our remarkable accomplishments has been an unwavering
adherence to democracy. The people of India have expressed their confidence
by participating time and again in the electoral processes. For us, democracy is
an article of faith, important both as a basic pillar of our Republic and as a
guarantor of our freedoms. Its sustenance is essential for the identity of India,
hailed as the largest democracy in the world, and one that functions well even
in situations of multiple complexities. We must not only reinforce democratic
institutions and processes, but also refrain from any action, taken wittingly or
unwittingly, that dilutes or is detrimental to democracy.
The Parliament of the country is the repository of the sovereign will of
the people, and its successful functioning is a joint responsibility of both the
Government and the Opposition. It is important that the decorum and dignity
of the House is upheld at all times. The image of Parliament in the public mind
should be one where proceedings, debates and discussions take place with a
view to resolve issues through a constructive and co-operative approach. If
this does not happen, people's faith in democratic institutions can be affected,
resulting in a feeling of despondency which is unacceptable in a healthy
democracy, as it may derail democratic institutions. Hence, dialogue among
stakeholders in democratic institutions is an integral part of democratic
The time has come for us to take a closer look at our social milieu. Is
there growing criminalization of our society? Is there increasing apathy towards
each other? Are we becoming too materialistic, shortsighted and unconcerned
about the impact of our actions on our brethren, society or the environment? It
is a matter of anguish and great concern when a person is killed for a petty
sum of money; or when a woman is raped because she protests against being
teased; or when over small incidents, due to lack of patience, there is a quick
flaring of tempers. Cases of ragging in educational institutions are also
disturbing. Ragging is violence. It is heinous and should not be tolerated, for it
can cause irreparable loss to the parents and to the country. Our social fabric
is deeply damaged by such incidents and it is essential that these tendencies
are curbed in the interest of social harmony and cohesion. I appeal to my
fellow citizens to never resort to violence. Our nation won its freedom by
travelling on the high path of non-violence and truth. In our journey as an
independent nation too, we must adhere to it and demonstrate moral courage.
Societies evolve in a positive direction when people work to bring about
constructive changes and to eliminate social evils. In my first address to the
nation on the eve of Republic Day in 2008, I had spoken on the need for social,
economic, administrative and political activities to be carried out on the basis
of moral values and social justice. I reiterate the great importance of integrity,
honesty, good conduct and high values, which our culture teaches us.
The youth of our country must carry forward this legacy. As the
architects of the future of the country, their upbringing with a value-based
education is paramount in the development of their character. It is said that
the first teacher of the child is the mother when the child is of tender age, and
the next is the primary school teacher. Both make lasting impressions on
children in their formative years. In primary schools, teachers are doing good
work. We should regularly assess issues relating to training of teachers and
quality of education including checking instances of absenteeism of teachers.
In addition, our special efforts to reach out to students from tribal and remote
areas, Scheduled Castes, Scheduled Tribes and other backward communities
must be augmented. Our endeavour should be to create a level playing field in
educational competitiveness so that students from all sections of society can
enter premier institutions like the Indian Institutes of Technology and the
Indian Institutes of Management.
As a nation, our aim is to grow and to create a just society. Our goal of
poverty eradication and of inclusive growth that embraces the disadvantaged
and marginalized sections of society can be achieved when our actions are
guided by a social conscience and are not devoid of sensitivity. We are
seeking good governance and a people-centric administration. In this, callous
and casual attitudes in the sphere of public service are unacceptable. Delivery
systems for schemes and programmes that promote the welfare of the people
and spur economic growth should have inbuilt mechanisms for greater
transparency and accountability. Education, health and skill building efforts will
create productive human resources for the future. Urban and rural
development schemes will make our cities and villages sustainable habitats.
Programmes for women, the youth, the girl child, the differently-abled and
marginalized sections of society will equip them to avail of opportunities and
face the future with confidence. We need to address the problems of orphans
and street children, as well as of the old and destitute. For the success of
welfare schemes, the total sum of developmental funds must reach the
intended beneficiaries. Corruption is the enemy of development and of good
governance. Instead of getting lost in this mire, it is necessary to rise above it
and seriously look at bringing systemic changes to deal more effectively with
corruption. Financial institutions, the corporate world and civil society - all
must uphold high standards of probity in their working. Only a genuine
partnership between the Government and its people can bring about positive
change to create a just society.
The media plays an important role in bringing information, news and
views to the public. This generates awareness, promotes discussion on issues
and creates perceptions. There are numerous examples of outstanding
conduct in the country where good samaritans are rendering yeoman service
to society, some civil society organizations are putting in selfless work in the
field as are some philanthropists, scientists and educationalists doing
pioneering work. By highlighting such actions the media can inspire others to
follow good examples, and I would urge the media to work in a positive spirit,
as it expands its reach and coverage. A responsive and responsible media is an
asset in maintaining the vitality of democracy and its institutions.
It is heartening that our economy is progressing at a stable pace and
that even in the face of difficult circumstances during the global financial
downturn, its performance was appreciable. We are now returning to the precrisis
growth pattern and are confident of growing at over 9 percent next year.
All sectors of the economy will be contributors to our growth trajectory.
However, rising inflation particularly food prices, are a cause of serious
concern and draw attention to the urgent need to take suitable action, and also
look at more innovative approaches towards food security, agricultural
production and rural development.
The Green Revolution which made our nation self sufficient in foodgrains
has run its course. We need a Second Green Revolution that maximizes
productivity, and yet generates income and employment opportunities for the
rural population. The First Green Revolution was almost confined to irrigated
areas, and now we should also focus on rain fed areas, which could become
the cradle for the Second Green Revolution. We should bear in mind that our
agricultural holdings are fragmented, small and are likely to further
decrease in size; making economic viability of farming a big issue. It is said
that small farmers are leaving farming, because of poor returns and scarcity of
agricultural labour. In such a situation, it would be advantageous to think of
modernization and mechanized farming, and there should be deliberations on
evolving suitable models for partnerships between farmers, private sector and
the Government in agriculture and rural development. In any arrangement, it
should be kept in mind that farmers are stakeholders in every aspect related to
agriculture, whether it is cultivation related activities, warehousing, processing,
marketing, research or development. Farmers, therefore, must be involved in
all these various activities, with a sensitivity that safeguards their rights on
their land and its produce. The corporate sector should take up responsibility
to make agriculture productivity remunerative, particularly in rain fed farming
areas, as food security is of prime importance for our country.
Every year there is drought in some or the other part of the country. A
national campaign for foodgrain productivity should be undertaken to create
awareness about sustainable food production for food security in every State
and in every block. Similarly, national planning for integrated production,
particularly of foodgrains like cereals, oilseeds and pulses is needed and
should be implemented, given that our population in the next 20 years is likely
to become 148 crore. Each State should, as far as possible and as per local
conditions, try to produce food grains required by it. This will result in saving
transport and storage costs, as also prevent wastage during transport and
handling, besides helping in quicker distribution of foodgrains.
In agriculture as in all other fields we need innovations more than ever
before. This decade has been designated as the 'Decade of Innovation' in India.
Our scientists and researchers have the talent and the capacity to look at highend
technology as also at cost-effective, location-specific and affordable
innovations for wider use in the country. Access to innovations is an integral
part of their practical use. In a situation of rapidly moving global knowledge
economy, our pace of research must accelerate. Larger funds should be
allocated for science and technology so that such scientists can undertake in
depth research in a wide range of subjects.
Development and progress require an environment of stability and
security. The work of our police and internal security agencies is critical in this
field, as also is our cooperation and dialogue with our neighbours for stability
in our region, and with the international community to create a peaceful world.
Terrorism poses the single most detrimental threat to the progress of
humankind. There is a crucial need for concerted action by all members of the
international community to eradicate the threat of terrorism. India's profile in
global affairs is the focus of international attention today. As India assumes its
seat as a non-permanent member of the UN Security Council, it will intensify
efforts to effect concerted and collective global action against terrorism, and
will also work with a deep sense of responsibility on all global issues.
Many developments in the last few years have brought to our attention
the importance of united action to achieve our goals besides emphasizing the
need to continue to adhere to the basic values of our country. Here, I am
reminded of some lines of a well-known poem:-
Compassion, non-violence, goodwill
May always flow in unison.
With these words, I once again greet all fellow citizens on the occasion of
TATA Group is running 96 businesses and out of which 28 Companies are publically listed on the various stock exchanges.
Tata Group is world's top 50 Group according to Market capitalization and Reputation.
TATA Group's 96 companies are held by its main Company "TATA Sons" and the main owner of this TATA Sons is not Ratan Tata but various charitable organizations developed and run by TATA Group.
Out of which JRD TATA Trust & Sir Ratan Tata Trust are the main. 65% ownership of TATA Sons which is the key holding company of the other 96 TATA Group Company is held by various charitable organizations.
So this 65% ownership ownership of Tatasons Limited is not reflected on Ratan Tata's personal Financial Statement but on the various charitable organizations. and this is the reason why Ratan Tata is not in the list of Billionaire club.
if we put this 65% ownership of Tata Sons in Ratan TATA's own personal financial statement then Ratan Tata's Net worth can become more than $ 70 billion. and that's much more than the Warren Buffet's Current Net Worth of $ 62 billion, the world's richest person according to Forbes magazine 2008.
However, it doesn't mean that Ratan Tata is poor. In one interviews he had told the reporter that, "I have my own Capital". He is the chairman of Tata Group so obviously he earns lots of money every year as a bonus, remuneration and salary. However, Ratan Tata's Net worth is not $ 1 Billion.
He is not a billionaire on paper. but in reality he is the richest
person of the world. His net worth in reality is more than Bill Gates and Warren Buffet.
SO the good thing about Tata Group is that, They do Charity out of their Money.
And that is the reason TATA Group has generated so much of Goodwill over last 5 generations.
Monday, January 24, 2011
Google Inc. says it has awarded $100 million worth of equity to Eric Schmidt, who is stepping aside as CEO but will stay with the company as executive chairman.
Google said in a regulatory filing on Monday the stock and stock options will be granted on Feb. 2 and will vest over four years.
Schmidt, 55, is being replaced as Google's CEO by co-founder Larry Page. Both men, along with Google's other co-founder Sergey Brin, have limited their salaries to $1 for years. But the three are Google's controlling shareholders.
Page, 37, takes over the CEO role in April.
Schmidt held about 9.2 million of Google's shares as of Dec. 31, 2010, according to a separate filing from last week. This amounts to about 2.9 percent of Google's outstanding shares and about 9.6 percent of the voting power. He plans to sell about 534,000 Class A shares as part of a pre-arranged trading plan. If he does, he will then hold about 9.1 percent of Google's voting power, the company said.
The world's highest restaurant situated 442 metres up in the sky on the 122nd floor of the world's tallest building Burj Khalifa here has opened its doors to the public.
'At.mosphere', located on the 122nd floor of 828-metre high Burj Khalifa, was opened yesterday.
However, dining at this height comes for a price.
The restaurant, which is reached by its own private elevator from the tower's corporate suites lobby, can accommodate 210 people over a lounge and grill and offers an unparalleled view of the emirate's skyline.
Those wanting to book the luxury restaurant's private dining area will be expected to fork out at least USD 176.9 per guest, while afternoon tea comes in at nearly USD 100.
For drinks and snacks in the lounge area, guests must spend USD 54.45 per head.
Diners keen to get a booking at the world's highest restaurant may need to save up after the Burj Khalifa eatery revealed patrons will be charged a minimum of USD 122 a head.
Marc Dardenne, CEO of Emaar Hospitality Group and Emaar Hotels & Resorts said the glass-walled restaurant raised the bar for Dubai's hospitality industry.
"I think it's going to set new standards for Dubai and maybe the world and even give people the opportunity to see something different when they stay in Dubai," Dardenne said, adding that the feedback has been tremendous as a lot of people insisted on being there for the first night.
The restaurant is said to be booked out for its first two days of opening.
The restaurant, spread over an area of 1,030 square meters, is 92 meter taller than the world's second highest eatery -- the revolving 360 Restaurant in Toronto's CN Tower.
Sunday, January 23, 2011
The news last week that Apple's Steve Jobs is taking a leave of absence was a big story. But something else about the company got far less attention and could be even more important to investors this year.
Corporations "are adding iPads to their approved device list at an amazing rate," Peter Oppenheimer, Apple Inc's chief financial officer, told analysts. Apple's products, more known for their consumer appeal, are now used in by employees of Wells Fargo, Archer Daniels Midland, DuPont and others.
Splurging on $500 iPads is a sign that the business cycle is starting to turn and that companies are starting to spend a record amount of cash they've accumulated. If the trend is real, companies will do what consumers haven't -- spark a strong economic recovery. That could push the Standard & Poor's 500 index to its third straight year of double-digit percentage gains. The last time that happened: the tech-boom days of the late 1990s.
"You're going to see a bigger commitment to growth this year because companies have underspent for quite some time," says Bill Stone, chief investment strategist at PNC Asset Management.
Financial, technology and energy companies are the most likely to benefit from business spending, says David Bianco, a market strategist at Bank of America. Each group is up about 3 percent this year, nearly one percentage point ahead of the overall S&P 500. Those three groups account for nearly half of index's value.
The continued success of financial, energy and technology stocks would point to a new stage of this bull market, which has returned nearly 100 percent since it began in March 2009. Consumer discretionary stocks, the group of hotels, retail stores and automakers that depend on consumer spending, outperformed the last two years after being left for dead during the 2008 financial crisis. Those companies are now lagging the market, suggesting that the bounce back from the lows of the recession is over.
"Consumers don't have the income growth to sustain a more rapid pace of spending," says Jeffrey Kleintop, a market strategist at LPL Financial. Instead, he says, businesses spending will eventually lead to a pickup in the jobs market.
Corporate spending on technology helped IBM Corp. beat analyst expectations last week. On Tuesday, IBM said that its 7 percent jump in revenue came in part from companies in the U.S. upgrading their computer systems. Its stock jumped almost 4 percent last week.
Energy companies, meanwhile, are leading the market this year with a 3.4 percent jump because of higher demand, a sign of an improving economy. Oil company Schlumberger said Friday profit in the most recent quarter rose 31 percent. And financial companies are benefiting from loans to businesses, a signal that those companies plan to expand. JPMorgan said on its earnings call last week that it added 400 middle-market companies as new commercial loan customers. Bank of America said Friday that demand for business loans stabilized last quarter, while US Bancorp said Wednesday that all of its commercial loans divisions were improving, with the exception of real estate.
Financial companies have the added benefit of being cheap. The price-to-earnings ratio of the financial companies in the S&P 500 index averages 11.6, about half of its historical average. Financial companies are cheaper than any other group except for health care, which costs 11.2 times earnings. Even utilities companies, whose slow growth rates typically make them the lowest priced group in the market, are trading at 13.6 times earnings.
Is it too early to make a prediction that the biggest sectors of the market will continue to do well? After all, investor sentiment is at a level not seen since the market hit its all-time in 2007. That makes some contrarian investors nervous.
The market should continue to rise if history repeats itself. Since 1970, the top performing industry groups in January have gone on to outperform the rest of the S&P index over the rest of the year nearly 75 percent of the time.
Saturday, January 22, 2011
1. Royal Penthouse Suite at the President Wilson Hotel
Cost: $65,000 a night. For a lofty price, guests can enjoy 18,083 square feet of luxurious accommodations overlooking sparkling Lake Geneva. Enter the marble bathroom and guests will find their own personal hot tub. By the way, you’ll be scrubbing up with Acqua di Parma bath products. Room service is 24 hours, and rumor has it, this suite is très secure -- with the ability to lockdown and watch suspicious hotel guests on closed-circuit TV. Of course there’s also satellite TV and a nearly limitless selection of movies and music. The suite also features a safe because if you can afford this room, you’ll be traveling with lots of treasures.
2. Royal Villa at the Grand Resort Lagonissi
Cost: $45,000 a night. Nearly 4,500 square feet in size and overlooking the Aegean Sea, the Royal Villa drips with decadence. Several fireplaces, marble bathrooms and BVLGARI bath products, an indoor heated pool -- and outdoor one -- are just some of the amenities. Also at a guest's disposal is a staff of four -- one for personal training, another for spa treatments, a butler and a limo driver. And guests might even enjoy the exclusive service of flying to Athens by private jet, though certain conditions apply.
Thursday, January 20, 2011
San Francisco will play host to a very different America’s Cup Finals. With a focus on enhancing the overall event experience, substantial enhancements are being added to both on and off the water elements.
“San Francisco couldn't be prouder to host the 34th America's Cup. With our natural stadium at the footsteps of the City and our consistent, heavy winds, San Francisco Bay will be an arena for some of the most spectacular racing the world has ever seen,” said Mayor Gavin Newsom. “Paired with the plans of the America’s Cup Event Authority to stage the ultimate fan experience on shore, the 34th edition of the America’s Cup will fast forward the sport of sailing globally.”
The America’s Cup Event Authority, the organization tasked with running the 34th edition, announced its on-shore plans for the Challenger Selection Series for the Louis Vuitton Cup and the America’s Cup Finals at a public celebration held at San Francisco’s famed City Hall.
“Our goal is to create a sustainable sports event that gives teams the opportunity to become long-term sports franchises,” said Richard Worth, Chairman, America’s Cup Event Authority. “We’re focused on creating a new era for the America’s Cup, one that both honors its history as well as grabs the attention of new audiences.”
New elements include:
•Groundbreaking new boats - the wing-sailed AC45 and AC72 catamarans - capable of close to 40 knots to enable unparalleled racing competition and on-the-water excitement
•New course formats to create tight, tactical racing that showcases the speed of the boats and the skill of the sailors
•Enhanced online broadcasting to deliver a personalized viewer experience
•New broadcast formats including magazine programs, reality formats and racing packaged for live television
•A comprehensive sustainability program focused on the world’s oceans
•New race formats in new race venues through the America’s Cup World Series
•A clear path for young athletes through the Youth America’s Cup
“The addition of these elements gives us the ability to respond to the needs of sponsors and broadcasters,” said Craig Thompson, CEO, America’s Cup Event Authority. “For example, the new World Series will provide access to more markets and more audiences. We’ll be able to showcase tighter, more tactical races on cutting-edge boats, which is more attractive to both broadcasters and fans worldwide.”
Plans call for Piers 30/32 for the team bases, the public Race Village to be staged at Piers 27/29, regatta operations on Pier 23, and the media center at Pier 19.
The world-famous San Francisco Bay will be home to the 2013 America’s Cup Finals and the Challenger Selection Series for the Louis Vuitton Cup, as well as an America’s Cup World Series event in 2012. This will be the first time the America’s Cup has been hosted in the United States since 1995.
In the summer of 2011, America’s Cup teams will commence racing in the new America’s Cup World Series in the new AC45 catamaran. The America’s Cup World Series calendar of events will be published in early 2011.
Google Inc. co-founder Larry Page is taking over as CEO in an unexpected shake-up that upstaged the Internet search leader's fourth-quarter earnings.
Page, 37, is reclaiming the top job from Eric Schmidt, who had been brought in as CEO a decade ago because Google's investors believed the company needed a more mature leader.
Schmidt, 55, will remain an adviser to Page and Google's other co-founder, Sergey Brin, as Google's executive chairman.
The changes will be effective April 4.
"In my clear opinion, Larry is ready to lead and I'm excited about working with both him and Sergey for a long time to come," Schmidt said.
Page praised Schmidt, too. "There is no other CEO in the world that could have kept such headstrong founders so deeply involved and still run the business so brilliantly," Page said.
"Eric is a tremendous leader and I have learned innumerable lessons from him."
The change in command overshadowed Google's fourth-quarter earnings, which soared past analysts' estimates as the company cranked up its Internet marketing machine during the holiday shopping season.
Google earned $2.5 billion, or $7.81 per share, during the final three months of 2010. That's a 29 percent increase from net income of $2 billion, or $6.13 per share, in the prior year.
Excluding stock-compensation expenses, Google says it earned $8.75 per share. That figure topped the average analyst estimate of $8.06 per share, according to FactSet.
Revenue climbed 26 percent from the prior year to $8.44 billion, from $6.67 billion.
After subtracting the commissions paid to Google's advertising partners, the company's revenue totaled $6.37 billion — about $300 million more than analysts anticipated.
Shares rose $5.64, or less than 1 percent, to $632.41 in extended trading after the announcement. In the regular session earlier, the stock fell $4.98, or 0.8 percent, to close at $626.77.
Tuesday, January 18, 2011
Get ready for the next generation of passenger airplanes.
NASA has taken the wraps off three concept designs for quiet, energy efficient aircraft that could potentially be ready to fly as soon as 2025, joining these planes of the future (and these). The designs come from Lockheed Martin, Northrop Grumman and The Boeing Company. In the final months of 2010, each of these companies won a contract from NASA to research and test their concepts during 2011.
According to NASA: "[E]ach design has to fly up to 85 percent of the speed of sound; cover a range of approximately 7,000 miles; and carry between 50,000 and 100,000 pounds of payload, either passengers or cargo. For the rest of this year, each team will be exploring, testing, simulating, keeping and discarding innovations and technologies to make their design a winner."
Apparently, NASA is aiming to develop a line of super-planes that larger, faster, quieter, and that burn fuel slower and cleaner than their present counterparts.
A former Swiss banker on Monday supplied documents to WikiLeaks that he alleges detail attempts by wealthy business leaders and lawmakers to evade tax payments.
Rudolf Elmer, an ex-employee of Swiss-based Bank Julius Baer, said there were 2,000 account holders named in the documents, but refused to give details of the companies or individuals involved.
He has previously offered files to WikiLeaks on financial activities in the Cayman Islands and faces a court hearing in Zurich on Wednesday to answer charges of coercion and violating Switzerland's strict banking secrecy laws.
"I do think as a banker I have the right to stand up if something is wrong," said Elmer, who addressed reporters at London's Frontline Club alongside WikiLeaks founder Julian Assange.
"I am against the system. I know how the system works and I know the day-to-day business. From that point of view, I wanted to let society know what I know. It is damaging our society," Elmer said.
Assange praised the ex-banker's attempts to expose alleged shady practices in the financial industry. He was making a rare public appearance since he was released on bail on Dec. 16 following his arrest on a Swedish extradition warrant.
Elmer claims his previous disclosures showed evidence of major tax avoidance in the Caribbean.
However, Assange said that with WikiLeaks focussed on other issues -- such as the publication of its cache of about 250,000 diplomatic cables, it could be several weeks before Elmer's latest files are reviewed and posted on the organization's website.
The organization has so far posted about 2,444 cables to the Internet since it began publishing the documents in November.
Assange said that, as with other WikiLeaks releases, media organizations -- he named the Financial Times and Bloomberg as possible candidates -- could be given the information ahead of time.
He said that the files, or parts of the files, may also be provided to British government fraud investigators to examine for any evidence of criminal wrongdoing.
"We will treat this information like all other information we get," Assange said. "There will be a full revelation."
The Julius Baer bank said it was aware of Elmer's decision to pass a new set of files to WikiLeaks.
"He didn't attack us at this press conference, he explicitly targeted not us but 'the system,'" the bank's spokesman Jan Vonder Muehll said.
Britain's tax authority declined to comment when asked about Assange's plan to supply details of alleged wrongdoing.
Under the terms of his release on bail, Assange must live at the mansion home of Vaughan Smith, the owner of the Frontline Club. He has compared the regime to "high-tech house arrest," but has recently promised that the flow of leaked documents published by his organization would increase.
Moments ago, Apple announced its fiscal year 2011 Q1 earnings. The Cupertino based technology firm sold a record 16.24 million iPhones, 7.33 million iPads, 4.13 million Macs, and 19.45 million iPods. Apple also reported a healthy $26.74 billion in revenue for the quarter with $6.43 in earnings per diluted share.
“We couldn’t be happier with the performance of our business, generating $9.8 billion in cash flow from operations during the December quarter,” said Apple CFO Peter Oppenheimer. “Looking ahead to the second fiscal quarter of 2011, we expect revenue of about $22 billion and we expect diluted earnings per share of about $4.90.”
The aforementioned figures handily exceed Wall Street’s expectations. Hit the jump to see the full earnings announcement
Apple® today announced financial results for its fiscal 2011 first quarter ended December 25, 2010. The Company posted record revenue of $26.74 billion and record net quarterly profit of $6 billion, or $6.43 per diluted share. These results compare to revenue of $15.68 billion and net quarterly profit of $3.38 billion, or $3.67 per diluted share, in the year-ago quarter. Gross margin was 38.5 percent compared to 40.9 percent in the year-ago quarter. International sales accounted for 62 percent of the quarter’s revenue.
Apple sold 4.13 million Macs during the quarter, a 23 percent unit increase over the year-ago quarter. The Company sold 16.24 million iPhones in the quarter, representing 86 percent unit growth over the year-ago quarter. Apple sold 19.45 million iPods during the quarter, representing a seven percent unit decline from the year-ago quarter. The Company also sold 7.33 million iPads during the quarter.
“We had a phenomenal holiday quarter with record Mac, iPhone and iPad sales,” said Steve Jobs, Apple’s CEO. “We are firing on all cylinders and we’ve got some exciting things in the pipeline for this year including iPhone 4 on Verizon which customers can’t wait to get their hands on.”
“We couldn’t be happier with the performance of our business, generating $9.8 billion in cash flow from operations during the December quarter,” said Peter Oppenheimer, Apple’s CFO. “Looking ahead to the second fiscal quarter of 2011, we expect revenue of about $22 billion and we expect diluted earnings per share of about $4.90.”
President Hu Jintao of China is coming to town this week, and American officials say President Obama will be taking a far more assertive stance as he greets his biggest global economic rival.
On the pomp and ceremony front, the Obama administration appears to be deploying much of the White House's considerable protocol arsenal.
The Chinese president is getting not one, but two, dinners with Mr. Obama: first an intimate meal at the White House on Tuesday night, and then a grand state dinner on Wednesday. There will also be a lunch at the State Department hosted by Vice President Joseph R. Biden Jr.; a joint news conference with Mr. Obama; a joint appearance with the president before American and Chinese business leaders; and chats on Capitol Hill with Democratic and Republican leaders.
But the White House has prepared for the visit in other ways in the past two weeks, dispatching several cabinet officials to publicly lay down challenges for Mr. Hu.
Defense Secretary Robert M. Gates had a testy series of meetings in Beijing last week, telling reporters beforehand that the United States would counter China's military buildup in the Pacific by stepping up investments in weapons, jet fighters and technology.
Last Wednesday, Treasury Secretary Timothy F. Geithner said the United States would grant China more access to high-tech American products and expand trade and investment opportunities in the United States only if China opened its own domestic market to American products. Mr. Geithner said China also needed to take additional steps to allow its currency, the renminbi, to appreciate in value -- an issue a bipartisan group of senators vowed on Monday to address with legislation this year.
Then on Friday, Secretary of State Hillary Rodham Clinton publicly criticized China's human rights record, citing the persecution of the pro-democracy group Charter 08 and the imprisonment of Liu Xiaobo, the political activist who was awarded the Nobel Peace Prize, but whose family was blocked from attending the prize ceremony in Oslo last month.
"The longer China represses freedoms," she said, "the longer that Nobel Prize winners' empty chairs in Oslo will remain a symbol of a great nation's unrealized potential and unfulfilled promise."
David Rothkopf, a national security expert who worked in the administration of President Bill Clinton, said: "There's been this well-orchestrated and clearly well thought-out campaign, over the past two weeks, involving the secretary of state, Treasury, defense and commerce making strong statements regarding currency, the trade imbalance, human rights and China's military stance." He added, "So you're welcoming the leader of the most important rival power in the world into the capital, and the way you pave his entrance into the city is laid with these four big thorny issues."
The more assertive strategy comes after Mr. Obama was criticized as appearing to kowtow to China in his visit there in 2009, and then again for allowing Beijing to get the upper hand against the United States at the Group of 20 summit meeting in Seoul late last year.
In Seoul, instead of getting hammered on its currency, China managed to persuade Europe to join it in rejecting core elements of Mr. Obama's strategy of stimulating growth before focusing on deficit reduction. In addition, several major nations accused the Federal Reserve of deliberately devaluing the dollar in an effort to put the costs of America's competitive troubles on trading partners, rather than taking politically tough measures to rein in spending at home.
The result was that Mr. Obama appeared on the world stage as a leader of a country losing ground to a rising China.
Administration officials are determined that this will not happen during the visit to Washington this week. For one thing, the slight improvements in the American economy, coupled with a handful of political successes for Mr. Obama at home, will put the president in a stronger position, administration officials and some Asia analysts said.
More significant, they said, is that administration officials have now concluded that they can publicly challenge China on security and economic issues and still build a mature relationship.
Eswar Shanker Prasad, a former economist with the International Monetary Fund who now teaches trade policy at Cornell University, said China may have helped to strengthen the administration's hand. Recent Chinese moves to restrict access to its domestic economy have so frustrated American companies that corporate leaders are pressing the Obama administration to take a tougher stance.
"That's why Geithner was so blunt about saying China has to provide more market access," Mr. Prasad said. "I think Geithner's speech set the tone very clearly about what they are trying to do. The language is very clear, and they are making the quid pro quo explicit."
Mr. Hu is bringing a number of Chinese business leaders with him. Xinhua, the Chinese news agency, reported that U.S. and Chinese business leaders on Monday signed deals in Texas worth $600 million, the first of what are expected to be billions of trade deals tied to Mr. Hu's visit, including one with General Electric and a Chinese state-owned company for aviation equipment.
And the White House has set apart 45 minutes on Wednesday for the two leaders to meet with American and Chinese corporate leaders.
"There will be American C.E.O.'s who have large interests and investments in China," Tom Donilon, the national security adviser, said at a White House briefing for reporters on Friday. "And I'm sure there will be discussion there about how American business can better do business in China, to talk about the access issues that are so very important and that Secretary Geithner talked about in his speech."
Monday, January 17, 2011
Japanese researchers will launch a project this year to resurrect the long-extinct mammoth by using cloning technology to bring the ancient pachyderm back to life in around five years time.
The researchers will try to revive the species by obtaining tissue this summer from the carcass of a mammoth preserved in a Russian research laboratory, the Yomiuri Shimbun reported.
"Preparations to realise this goal have been made," Akira Iritani, leader of the team and a professor emeritus of Kyoto University, told the mass-circulation daily.
Under the plan, the nuclei of mammoth cells will be inserted into an elephant's egg cell from which the nuclei have been removed, to create an embryo containing mammoth genes, the report said.
The embryo will then be inserted into an elephant's uterus in the hope that the animal will eventually give birth to a baby mammoth.
The elephant is the closest modern relative of the mammoth, a huge woolly mammal believed to have died out with the last Ice Age
Some mammoth remains still retain usable tissue samples, making it possible to recover cells for cloning, unlike dinosaurs, which disappeared around 65 million years ago and whose remains exist only as fossils
Researchers hope to achieve their aim within five to six years, the Yomiuri said.
The team, which has invited a Russian mammoth researcher and two US elephant experts to join the project, has established a technique to extract DNA from frozen cells, previously an obstacle to cloning attempts because of the damage cells sustained in the freezing process.
Another Japanese researcher, Teruhiko Wakayama of the Riken Centre for Developmental Biology, succeeded in 2008 in cloning a mouse from the cells of another that had been kept in temperatures similar to frozen ground for 16 years.
The scientists extracted a cell nucleus from an organ of a dead mouse and planted it into the egg of another mouse which was alive, leading to the birth of the cloned mouse.
Based on Wakayama's techniques, Iritani's team devised a method to extract the nuclei of mammoth eggs without damaging them.
But a successful cloning will also pose challenges for the team, Iritani warned.
"If a cloned embryo can be created, we need to discuss, before transplanting it into the womb, how to breed (the mammoth) and whether to display it to the public," Iritani said.
"After the mammoth is born, we will examine its ecology and genes to study why the species became extinct and other factors."
More than 80 percent of all mammoth finds have been dug up in the permafrost of the vast Sakha Republic in eastern Siberia.
Exactly why a majority of the huge creatures that once strode in large herds across Eurasia and North America died out towards the end of the last Ice Age has generated fiery debate.
Some experts hold that mammoths were hunted to extinction by the species that was to become the planet's dominant predator -- humans.
Others argue that climate change was more to blame, leaving a species adapted for frozen climes ill-equipped to cope with a warming world.
A group of more than 100 scientists and experts say in a new report that California faces the risk of a massive "superstorm" that could flood a quarter of the state's homes and cause $300 billion to $400 billion in damage. Researchers point out that the potential scale of destruction in this storm scenario is four or five times the amount of damage that could be wrought by a major earthquake.
It sounds like the plot of an apocalyptic action movie, but scientists with the U.S. Geological Survey warned federal and state emergency officials that California's geological history shows such "superstorms" have happened in the past, and should be added to the long list of natural disasters to worry about in the Golden State.
The threat of a cataclysmic California storm has been dormant for the past 150 years. Geological Survey director Marcia K. McNutt told the New York Times that a 300-mile stretch of the Central Valley was inundated from 1861-62. The floods were so bad that the state capital had to be moved to San Francisco, and Governor Leland Stanford had to take a rowboat to his own inauguration, the report notes. Even larger storms happened in past centuries, over the dates 212, 440, 603, 1029, 1418, and 1605, according to geological evidence.
The risk is gathering momentum now, scientists say, due to rising temperatures in the atmosphere, which has generally made weather patterns more volatile.
The scientists built a model that showed a storm could last for more than 40 days and dump 10 feet of water on the state. The storm would be goaded on by an "atmospheric river" that would move water "at the same rate as 50 Mississippis discharging water into the Gulf of Mexico," according to the AP. Winds could reach 125 miles per hour, and landslides could compound the damage, the report notes.
Such a superstorm is hypothetical but not improbable, climate researchers warn. "We think this event happens once every 100 or 200 years or so, which puts it in the same category as our big San Andreas earthquakes," Geological Survey scientist Lucy Jones said in a press release.
Federal and state emergency management officials convened a conference about emergency preparations for possible superstorms last week.
The U.S. Geological Survey, Multi Hazards Demonstration Project (MHDP) uses hazards science to improve resiliency of communities to natural disasters including earthquakes, tsunamis, wildfires, landslides, floods and coastal erosion. The project engages emergency planners, businesses, universities, government agencies, and others in preparing for major natural disasters. The project also helps to set research goals and provides decision-making information for loss reduction and improved resiliency. The first public product of the MHDP was the ShakeOut Earthquake Scenario published in May 2008. This detailed depiction of a hypothetical magnitude 7.8 earthquake on the San Andreas Fault in southern California served as the centerpiece of the largest earthquake drill in United States history, involving over 5,000 emergency responders and the participation of over 5.5 million citizens.
This document summarizes the next major public project for MHDP, a winter storm scenario called ARkStorm (for Atmospheric River 1,000). Experts have designed a large, scientifically realistic meteorological event followed by an examination of the secondary hazards (for example, landslides and flooding), physical damages to the built environment, and social and economic consequences. The hypothetical storm depicted here would strike the U.S. West Coast and be similar to the intense California winter storms of 1861 and 1862 that left the central valley of California impassible. The storm is estimated to produce precipitation that in many places exceeds levels only experienced on average once every 500 to 1,000 years.
Extensive flooding results. In many cases flooding overwhelms the state’s flood-protection system, which is typically designed to resist 100- to 200-year runoffs. The Central Valley experiences hypothetical flooding 300 miles long and 20 or more miles wide. Serious flooding also occurs in Orange County, Los Angeles County, San Diego, the San Francisco Bay area, and other coastal communities. Windspeeds in some places reach 125 miles per hour, hurricane-force winds. Across wider areas of the state, winds reach 60 miles per hour. Hundreds of landslides damage roads, highways, and homes. Property damage exceeds $300 billion, most from flooding. Demand surge (an increase in labor rates and other repair costs after major natural disasters) could increase property losses by 20 percent. Agricultural losses and other costs to repair lifelines, dewater (drain) flooded islands, and repair damage from landslides, brings the total direct property loss to nearly $400 billion, of which $20 to $30 billion would be recoverable through public and commercial insurance. Power, water, sewer, and other lifelines experience damage that takes weeks or months to restore. Flooding evacuation could involve 1.5 million residents in the inland region and delta counties. Business interruption costs reach $325 billion in addition to the $400 property repair costs, meaning that an ARkStorm could cost on the order of $725 billion, which is nearly 3 times the loss deemed to be realistic by the ShakeOut authors for a severe southern California earthquake, an event with roughly the same annual occurrence probability.
The ARkStorm has several public policy implications: (1) An ARkStorm raises serious questions about the ability of existing federal, state, and local disaster planning to handle a disaster of this magnitude. (2) A core policy issue raised is whether to pay now to mitigate, or pay a lot more later for recovery. (3) Innovative financing solutions are likely to be needed to avoid fiscal crisis and adequately fund response and recovery costs from a similar, real, disaster. (4) Responders and government managers at all levels could be encouraged to conduct risk assessments, and devise the full spectrum of exercises, to exercise ability of their plans to address a similar event. (5) ARkStorm can be a reference point for application of Federal Emergency Management Agency (FEMA) and California Emergency Management Agency guidance connecting federal, state and local natural hazards mapping and mitigation planning under the National Flood Insurance Plan and Disaster Mitigation Act of 2000. (6) Common messages to educate the public about the risk of such an extreme disaster as the ARkStorm scenario could be developed and consistently communicated to facilitate policy formulation and transformation.
These impacts were estimated by a team of 117 scientists, engineers, public-policy experts, insurance experts, and employees of the affected lifelines. In many aspects the ARkStorm produced new science, such as the model of coastal inundation. The products of the ARkStorm are intended for use by emergency planners, utility operators, policymakers, and others to inform preparedness plans and to enhance resiliency.
Sunday, January 16, 2011
The Dimona complex in the Negev desert is famous as the heavily guarded heart of Israel's never-acknowledged nuclear arms program, where neat rows of factories make atomic fuel for the arsenal.
Over the past two years, according to intelligence and military experts familiar with its operations, Dimona has taken on a new, equally secret role -- as a critical testing ground in a joint American and Israeli effort to undermine Iran's efforts to make a bomb of its own.
Behind Dimona's barbed wire, the experts say, Israel has spun nuclear centrifuges virtually identical to Iran's at Natanz, where Iranian scientists are struggling to enrich uranium. They say Dimona tested the effectiveness of the Stuxnet computer worm, a destructive program that appears to have wiped out roughly a fifth of Iran's nuclear centrifuges and helped delay, though not destroy, Tehran's ability to make its first nuclear arms.
"To check out the worm, you have to know the machines," said an American expert on nuclear intelligence. "The reason the worm has been effective is that the Israelis tried it out."
Though American and Israeli officials refuse to talk publicly about what goes on at Dimona, the operations there, as well as related efforts in the United States, are among the newest and strongest clues suggesting that the virus was designed as an American-Israeli project to sabotage the Iranian program.
In recent days, the retiring chief of Israel's Mossad intelligence agency, Meir Dagan, and Secretary of State Hillary Rodham Clinton separately announced that they believed Iran's efforts had been set back by several years. Mrs. Clinton cited American-led sanctions, which have hurt Iran's ability to buy components and do business around the world.
The gruff Mr. Dagan, whose organization has been accused by Iran of being behind the deaths of several Iranian scientists, told the Israeli Knesset in recent days that Iran had run into technological difficulties that could delay a bomb until 2015. That represented a sharp reversal from Israel's long-held argument that Iran was on the cusp of success.
The biggest single factor in putting time on the nuclear clock appears to be Stuxnet, the most sophisticated cyberweapon ever deployed.
In interviews over the past three months in the United States and Europe, experts who have picked apart the computer worm describe it as far more complex -- and ingenious -- than anything they had imagined when it began circulating around the world, unexplained, in mid-2009.
Many mysteries remain, chief among them, exactly who constructed a computer worm that appears to have several authors on several continents. But the digital trail is littered with intriguing bits of evidence.
In early 2008 the German company Siemens cooperated with one of the United States' premier national laboratories, in Idaho, to identify the vulnerabilities of computer controllers that the company sells to operate industrial machinery around the world -- and that American intelligence agencies have identified as key equipment in Iran's enrichment facilities.
Seimens says that program was part of routine efforts to secure its products against cyberattacks. Nonetheless, it gave the Idaho National Laboratory -- which is part of the Energy Department, responsible for America's nuclear arms -- the chance to identify well-hidden holes in the Siemens systems that were exploited the next year by Stuxnet.
The worm itself now appears to have included two major components. One was designed to send Iran's nuclear centrifuges spinning wildly out of control. Another seems right out of the movies: The computer program also secretly recorded what normal operations at the nuclear plant looked like, then played those readings back to plant operators, like a pre-recorded security tape in a bank heist, so that it would appear that everything was operating normally while the centrifuges were actually tearing themselves apart.
The attacks were not fully successful: Some parts of Iran's operations ground to a halt, while others survived, according to the reports of international nuclear inspectors. Nor is it clear the attacks are over: Some experts who have examined the code believe it contains the seeds for yet more versions and assaults.
"It's like a playbook," said Ralph Langner, an independent computer security expert in Hamburg, Germany, who was among the first to decode Stuxnet. "Anyone who looks at it carefully can build something like it." Mr. Langner is among the experts who expressed fear that the attack had legitimized a new form of industrial warfare, one to which the United States is also highly vulnerable.
Officially, neither American nor Israeli officials will even utter the name of the malicious computer program, much less describe any role in designing it.
But Israeli officials grin widely when asked about its effects. Mr. Obama's chief strategist for combating weapons of mass destruction, Gary Samore, sidestepped a Stuxnet question at a recent conference about Iran, but added with a smile: "I'm glad to hear they are having troubles with their centrifuge machines, and the U.S. and its allies are doing everything we can to make it more complicated."
In recent days, American officials who spoke on the condition of anonymity have said in interviews that they believe Iran's setbacks have been underreported. That may explain why Mrs. Clinton provided her public assessment while traveling in the Middle East last week.
By the accounts of a number of computer scientists, nuclear enrichment experts and former officials, the covert race to create Stuxnet was a joint project between the Americans and the Israelis, with some help, knowing or unknowing, from the Germans and the British.
The project's political origins can be found in the last months of the Bush administration. In January 2009, The New York Times reported that Mr. Bush authorized a covert program to undermine the electrical and computer systems around Natanz, Iran's major enrichment center. President Obama, first briefed on the program even before taking office, sped it up, according to officials familiar with the administration's Iran strategy. So did the Israelis, other officials said. Israel has long been seeking a way to cripple Iran's capability without triggering the opprobrium, or the war, that might follow an overt military strike of the kind they conducted against nuclear facilities in Iraq in 1981 and Syria in 2007.
Two years ago, when Israel still thought its only solution was a military one and approached Mr. Bush for the bunker-busting bombs and other equipment it believed it would need for an air attack, its officials told the White House that such a strike would set back Iran's programs by roughly three years. Its request was turned down.
Now, Mr. Dagan's statement suggests that Israel believes it has gained at least that much time, without mounting an attack. So does the Obama administration.
For years, Washington's approach to Tehran's program has been one of attempting "to put time on the clock," a senior administration official said, even while refusing to discuss Stuxnet. "And now, we have a bit more."
Paranoia helped, as it turns out.
Years before the worm hit Iran, Washington had become deeply worried about the vulnerability of the millions of computers that run everything in the United States from bank transactions to the power grid.
Computers known as controllers run all kinds of industrial machinery. By early 2008, the Department of Homeland Security had teamed up with the Idaho National Laboratory to study a widely used Siemens controller known as P.C.S.-7, for Process Control System 7. Its complex software, called Step 7, can run whole symphonies of industrial instruments, sensors and machines.
The vulnerability of the controller to cyberattack was an open secret. In July 2008, the Idaho lab and Siemens teamed up on a PowerPoint presentation on the controller's vulnerabilities that was made to a conference in Chicago at Navy Pier, a top tourist attraction.
"Goal is for attacker to gain control," the July paper said in describing the many kinds of maneuvers that could exploit system holes. The paper was 62 pages long, including pictures of the controllers as they were examined and tested in Idaho.
In a statement on Friday, the Idaho National Laboratory confirmed that it formed a partnership with Siemens but said it was one of many with manufacturers to identify cybervulnerabilities. It argued that the report did not detail specific flaws that attackers could exploit. But it also said it could not comment on the laboratory's classified missions, leaving unanswered the question of whether it passed what it learned about the Siemens systems to other parts of the nation's intelligence apparatus.
The presentation at the Chicago conference, which recently disappeared from a Siemens Web site, never discussed specific places where the machines were used.
But Washington knew. The controllers were critical to operations at Natanz, a sprawling enrichment site in the desert. "If you look for the weak links in the system," said one former American official, "this one jumps out."
Controllers, and the electrical regulators they run, became a focus of sanctions efforts. The trove of State Department cables made public by WikiLeaks describes urgent efforts in April 2009 to stop a shipment of Siemens controllers, contained in 111 boxes at the port of Dubai, in the United Arab Emirates. They were headed for Iran, one cable said, and were meant to control "uranium enrichment cascades" -- the term for groups of spinning centrifuges.
Subsequent cables showed that the United Arab Emirates blocked the transfer of the Siemens computers across the Strait of Hormuz to Bandar Abbas, a major Iranian port.
Only months later, in June, Stuxnet began to pop up around the globe. The Symantec Corporation, a maker of computer security software and services based in Silicon Valley, snared it in a global malware collection system. The worm hit primarily inside Iran, Symantec reported, but also in time appeared in India, Indonesia and other countries.
But unlike most malware, it seemed to be doing little harm. It did not slow computer networks or wreak general havoc.
That deepened the mystery.
A 'Dual Warhead'
No one was more intrigued than Mr. Langner, a former psychologist who runs a small computer security company in a suburb of Hamburg. Eager to design protective software for his clients, he had his five employees focus on picking apart the code and running it on the series of Siemens controllers neatly stacked in racks, their lights blinking.
He quickly discovered that the worm only kicked into gear when it detected the presence of a specific configuration of controllers, running a set of processes that appear to exist only in a centrifuge plant. "The attackers took great care to make sure that only their designated targets were hit," he said. "It was a marksman's job."
For example, one small section of the code appears designed to send commands to 984 machines linked together.
Curiously, when international inspectors visited Natanz in late 2009, they found that the Iranians had taken out of service a total of exactly 984 machines that had been running the previous summer.
But as Mr. Langner kept peeling back the layers, he found more -- what he calls the "dual warhead." One part of the program is designed to lie dormant for long periods, then speed up the machines so that the spinning rotors in the centrifuges wobble and then destroy themselves. Another part, called a "man in the middle" in the computer world, sends out those false sensor signals to make the system believe everything is running smoothly. That prevents a safety system from kicking in, which would shut down the plant before it could self-destruct.
"Code analysis makes it clear that Stuxnet is not about sending a message or proving a concept," Mr. Langner later wrote. "It is about destroying its targets with utmost determination in military style."
This was not the work of hackers, he quickly concluded. It had to be the work of someone who knew his way around the specific quirks of the Siemens controllers and had an intimate understanding of exactly how the Iranians had designed their enrichment operations.
In fact, the Americans and the Israelis had a pretty good idea.
Testing the Worm
Perhaps the most secretive part of the Stuxnet story centers on how the theory of cyberdestruction was tested on enrichment machines to make sure the malicious software did its intended job.
The account starts in the Netherlands. In the 1970s, the Dutch designed a tall, thin machine for enriching uranium. As is well known, A. Q. Khan, a Pakistani metallurgist working for the Dutch, stole the design and in 1976 fled to Pakistan.
The resulting machine, known as the P-1, for Pakistan's first-generation centrifuge, helped the country get the bomb. And when Dr. Khan later founded an atomic black market, he illegally sold P-1's to Iran, Libya, and North Korea.
The P-1 is more than six feet tall. Inside, a rotor of aluminum spins uranium gas to blinding speeds, slowly concentrating the rare part of the uranium that can fuel reactors and bombs.
How and when Israel obtained this kind of first-generation centrifuge remains unclear, whether from Europe, or the Khan network, or by other means. But nuclear experts agree that Dimona came to hold row upon row of spinning centrifuges.
"They've long been an important part of the complex," said Avner Cohen, author of "The Worst-Kept Secret" (2010), a book about the Israeli bomb program, and a senior fellow at the Monterey Institute of International Studies. He added that Israeli intelligence had asked retired senior Dimona personnel to help on the Iranian issue, and that some apparently came from the enrichment program.
"I have no specific knowledge," Dr. Cohen said of Israel and the Stuxnet worm. "But I see a strong Israeli signature and think that the centrifuge knowledge was critical."
Another clue involves the United States. It obtained a cache of P-1's after Libya gave up its nuclear program in late 2003, and the machines were sent to the Oak Ridge National Laboratory in Tennessee, another arm of the Energy Department.
By early 2004, a variety of federal and private nuclear experts assembled by the Central Intelligence Agency were calling for the United States to build a secret plant where scientists could set up the P-1's and study their vulnerabilities. "The notion of a test bed was really pushed," a participant at the C.I.A. meeting recalled.
The resulting plant, nuclear experts said last week, may also have played a role in Stuxnet testing.
But the United States and its allies ran into the same problem the Iranians have grappled with: the P-1 is a balky, badly designed machine. When the Tennessee laboratory shipped some of its P-1's to England, in hopes of working with the British on a program of general P-1 testing, they stumbled, according to nuclear experts.
"They failed hopelessly," one recalled, saying that the machines proved too crude and temperamental to spin properly.
Dr. Cohen said his sources told him that Israel succeeded -- with great difficulty -- in mastering the centrifuge technology. And the American expert in nuclear intelligence, who spoke on the condition of anonymity, said the Israelis used machines of the P-1 style to test the effectiveness of Stuxnet.
The expert added that Israel worked in collaboration with the United States in targeting Iran, but that Washington was eager for "plausible deniability."
In November, the Iranian president, Mahmoud Ahmadinejad, broke the country's silence about the worm's impact on its enrichment program, saying a cyberattack had caused "minor problems with some of our centrifuges." Fortunately, he added, "our experts discovered it."
The most detailed portrait of the damage comes from the Institute for Science and International Security, a private group in Washington. Last month, it issued a lengthy Stuxnet report that said Iran's P-1 machines at Natanz suffered a series of failures in mid- to late 2009 that culminated in technicians taking 984 machines out of action.
The report called the failures "a major problem" and identified Stuxnet as the likely culprit.
Stuxnet is not the only blow to Iran. Sanctions have hurt its effort to build more advanced (and less temperamental) centrifuges. And last January, and again in November, two scientists who were believed to be central to the nuclear program were killed in Tehran.
The man widely believed to be responsible for much of Iran's program, Mohsen Fakrizadeh, a college professor, has been hidden away by the Iranians, who know he is high on the target list.
Publicly, Israeli officials make no explicit ties between Stuxnet and Iran's problems. But in recent weeks, they have given revised and surprisingly upbeat assessments of Tehran's nuclear status.
"A number of technological challenges and difficulties" have beset Iran's program, Moshe Yaalon, Israel's minister of strategic affairs, told Israeli public radio late last month.
The troubles, he added, "have postponed the timetable."
Saturday, January 15, 2011
The United States just passed a dubious milestone: Government debt surged to an all-time high, topping $14 trillion — $45,300 for each and everyone in the country.
That means Congress soon will have to lift the legal debt limit to give the nearly maxed-out government an even higher credit limit or dramatically cut spending to stay within the current cap. Either way, a fight is ahead on Capitol Hill, inflamed by the passions of tea party activists and deficit hawks.
Already, both sides are blaming each other for an approaching economic train wreck as Washington wrestles over how to keep the government in business and avoid default on global financial obligations.
Bills increasing the debt limit are among the most unpopular to come before Congress, serving as pawns for decades in high-stakes bargaining games. Every time until now, the ending has been the same: We go to the brink before raising the ceiling.
All bets may be off, however, in this charged political environment, despite some signs the partisan rhetoric is softening after the Arizona shootings.
Treasury Secretary Timothy Geithner says failure to increase borrowing authority would be "a catastrophe," perhaps rivaling the financial meltdown of 2008-2009.
Congressional Republicans, flexing muscle after November's victories, say the election results show that people are weary of big government and deficit spending, and that it's time to draw the line against more borrowing.
Defeating a new debt limit increase has become a priority for the tea party movement and other small-government conservatives.
So far, the new GOP majority has proved accommodating. Republicans are moving to make good on their promise to cut $100 billion from domestic spending this year. They adopted a rules change by House Speaker John Boehner that should make it easier to block a debt-limit increase.
The national debt is the accumulation of years of deficit spending going back to the days of George Washington. The debt usually advances in times of war and retreats in peace.
Remarkably, nearly half of today's national debt was run up in just the past six years. It soared from $7.6 trillion in January 2005 as President George W. Bush began his second term to $10.6 trillion the day Obama was inaugurated and to $14.02 trillion now. The period has seen two major wars and the deepest economic downturn since the 1930s.
With a $1.7 trillion deficit in budget year 2010 alone, and the government on track to spend $1.3 trillion more this year than it takes in, annual budget deficits are adding roughly $4 billion a day to the national debt. Put another way, the government is borrowing 41 cents for every dollar it spends.
In a letter to Congress, Geithner said the current statutory debt ceiling of $14.3 trillion, set just last year, may be reached by the end of March — and hit no later than May 16. He warned that holding it hostage to skirmishes over spending could lead the country to default on its obligations, "an event that has no precedent in American history."
Debt-level brinkmanship doesn't wear a party label.
Here's what then-Sen. Barack Obama said on the Senate floor in 2006: "The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. government can't pay its own bills. It is a sign that we now depend on ongoing financial assistance from foreign countries to finance the government's reckless fiscal policies."
It was a blast by the freshman lawmaker against a Bush request to raise the debt limit to $8.96 trillion.
Bush won on a 52-48 party-line vote. Not a single Senate Democrat voted to raise the limit, opposition that's now complicating White House efforts to rally bipartisan support for a higher ceiling.
Democrats have use doomsday rhetoric about a looming government shutdown and comparing the U.S. plight to financial crises in Greece and Portugal. It's all a bit of a stretch.
"We can't do as the Gingrich crowd did a few years ago, close the government," said Senate Majority Leader Harry Reid, D-Nev., referring to government shutdowns in 1995 when Georgia Republican Newt Gingrich was House speaker.
But those shutdowns had nothing to do with the debt limit. They were caused by failure of Congress to appropriate funds to keep federal agencies running.
And there are many temporary ways around the debt limit.
Hitting it does not automatically mean a default on existing debt. It only stops the government from new borrowing, forcing it to rely on other ways to finance its activities.
In a 1995 debt-limit crisis, Treasury Secretary Robert Rubin borrowed $60 billion from federal pension funds to keep the government going. It wasn't popular, but it helped get the job done. A decade earlier, James Baker, President Ronald Reagan's treasury secretary, delayed payments to the Civil Service and Social Security trust funds and used other bookkeeping tricks to keep money in the federal till.
Baker and Rubin "found money in pockets no one knew existed before," said former congressional budget analyst Stanley Collender.
Collender, author of "Guide to the Federal Budget," cites a slew of other things the government can do to delay a crisis. They include leasing out government-owned properties, "the federal equivalent of renting out a room in your home," or slowing down payments to government contractors.
Now partner-director of Qorvis Communications, a Washington consulting firm, Collender said such stopgap measures buy the White House time to resist GOP pressure for concessions.
"My guess is they can go months after the debt ceiling is not raised and still be able to come up with the cash they need. But at some point, it will catch up," and raising the debt limit will become an imperative, he suggested.
Republican leaders seem to acknowledge as much, but first want to force big concessions. "Do I want to see this nation default? No. But I want to make sure we get substantial spending cuts and controls in exchange for raising the debt ceiling," said the chairman of the House Budget Committee, Rep. Paul Ryan, R-Wis.
Clearly, the tea party types in Congress will be given an up-and-down vote on raising the debt limit before any final deal is struck, even if the measure ultimately passes.
"At some point you run out of accounting gimmicks and resources. Eventually the government is going to have to start shutting down certain operations," said Mark Zandi, chief economist for Moody's Analytics.
"If we get into a heated, protracted debate over the debt ceiling, global investors are going to grow nervous, and start driving up interest rates. It will all become negatively self-re-enforcing," said Zandi. "No good will come of it."
The overall national debt rose above $14 trillion for the first time the last week in December. The part subject to the debt limit stood at $13.95 trillion on Friday and was expected to break above $14 trillion within days.
Friday, January 14, 2011
The United States has been advocating for higher wages in emerging market economies as better pay in countries like India and China helps prevent a drop in US wages, according to a senior US official.
"When wages rise in China, India, Brazil and elsewhere, it helps relieve downward pressure on American wages," US Labour Secretary Hilda Solis told the Labour Advisory Committee as low wages in emerging economies results in added pressure on the US.
"We have been engaging with the large emerging market economies - including China - to advocate for higher workers' wages, real collective bargaining rights, and safer working conditions. This helps foreign and American workers at the same time," Solis said.
US also has to ensure that its trading partners meet their commitments, including those related to labour standards, the official said.
"In today's inter-connected global economy, if workers in one country are denied their rights, workers rights in all countries are weakened. We want to ensure a level playing field for American workers while building a more prosperous global economy that benefits all workers."
The Obama Administration, she said, is committed to doubling US exports over the next five years. Increasing exports is a proven way to grow the economy and create more jobs. Exporting sectors also tend to pay higher wages and that is good for US workers.
"Another thing we can do to improve jobs and wages in America is to do all that we can to increase domestic consumption by the working households of our trading partners.
"If workers abroad earn more they can buy more of what they produce and what we produce. This expands our exports and also levels the playing field," she said.
US is working in partnership with other countries on programmes to eliminate the worst forms of child labour, she said. These projects target exploitive child labour in agriculture, mining, quarrying, seafood and shrimp processing sectors.