Is Iraq ready to explode?

Scores killed by blasts in Baghdad and Kirkuk could be a forewarning as rival elites fight for power July 29, 2008

"HI, KIDS, CAN I COME IN AND PLAY, TOO?"



"THIS IS HOW I LIKE TO LOOK WHEN I AM LOOKING LIKE I AM BASHFUL AND SHY!"



"DO YOU LIKE MY HAIR?"

"I JUST HAD IT STYLED YOU KNOW!"

"DO YOU THINK I NEED MORE MOUSSE?"

"OR WOULD JELL BE BETTER?"



"I GOT MY TEETH DONE, TOO, WHILE I WAS AT THE HAIR SALON!"

"AREN'T THEY PRETTY AND WHITE?"

"DON'T I HAVE NICE TEETH?"

"THERE'S NO SPINICH IN THERE CAUGHT IN MY TEETH, IS THERE?"

"OH, I HOPE NOT!"

"THEY PROMISED THEY WOULD GET IT ALL OUT!"

I have to confess in here that I find myself totally fascinated by the thought of Monica Goodling as a high-ranking public official here in the United States of America ....

I wonder if her head is full of air ....

Or whether it might be some lighter gas such as helium ....

I wonder if they are going to make a BOBBLE-HEAD DOLL out of her, now .....

It sure would be a good one ....

MONICA GOODLING BOBBLE-HEAD DOLLS ON SALE HERE!

You'll see them on the dashboards of cars all across America, real soon, I bet ....

I might get one myself for the dashboard of my truck ....

And so ...

"Stocks soar after another drop in oil prices - Stocks jump as falling oil prices, upbeat confidence data lift Wall Street's consumer gloom"

By MADLEN READ, Associated Press

Last updated: 5:02 p.m., Tuesday, July 29, 2008

NEW YORK -- Wall Street shot higher Tuesday, gaining back the previous session's sharp losses and then some, after a drop in oil prices and a rise in consumer confidence gave investors some hope for a letup in Americans' financial woes.

The Dow Jones industrial average rose 266 points.

Crude oil prices sank $2.54 to $122.19 a barrel on the New York Mercantile Exchange, extending their two-week-long retreat from record highs above $147.

The prospect of lower energy costs for U.S. consumers, along with a modest uptick in the Conference Board's July index of consumer confidence to 51.9 from 51 in June, came as welcome news.

Consumer spending accounts for more than two-thirds of U.S. economic activity.

"The thinking is that oil prices are heading lower, and that's obviously a positive for the market," said Richard E. Cripps, chief market strategist for Stifel Nicolaus.

A stock bounce was hardly unexpected, though, after the Dow lost nearly 240 points Monday on worries about the sagging financial sector.

Wall Street is torn: Energy prices, if they continue on their downward path, could provide big relief to consumers and in turn help the economy, but credit losses keep mounting at the nation's major banks.

The result is big swings in the market but little consistent direction.

"We're living from one piece of news to the next," said Alan Gayle, senior investment strategist for RidgeWorth Capital Management.

The market's volatility, exacerbated by light summer trading volumes, is likely to continue unless it gets further evidence that oil prices are, indeed, on their way down, and that banks have already seen the bulk of their losses.

In a sign that there could be additional asset markdowns for banks, Merrill Lynch & Co. announced late Monday that it was writing down another $5.7 billion and selling assets tied to risky debt at a steep discount to Lone Star Funds, a distressed debt investor.

Still, Merrill's moves at least answered lingering questions about the health of the brokerage's balance sheet.

And many analysts said the asset sale could help to finally establish a market for all the hard-to-value securities held by various financial institutions.

"The bad news is, there's going to be write-downs."

"The better news is, we can estimate those write-downs with better clarity," Gayle said.

The Dow gained 266.48, or 2.39 percent, to 11,397.56.

Broader stock indicators also climbed.

The Standard & Poor's 500 index rose 28.83, or 2.34 percent, to 1,263.20, and the Nasdaq composite index rose 55.40, or 2.45 percent, to 2,319.62.

The Dow and the S&P are now less than 20 percent below their Oct. 9 record peaks -- technically out of bear market territory.

The Nasdaq is less than 19 percent below its Oct. 31 peak.

Still, another downturn will put the market back into bear territory, and some analysts would call an advance like Tuesday's a bear market rally.

Advancing issues outnumbered by nearly 4 to 1 on the New York Stock Exchange, where volume came to 1.40 billion shares.

Bond prices fell after advancing a day earlier.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.05 percent from 4.01 percent late Monday.

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

Merrill, which plans to issue new stock to raise $8.5 billion, initially saw its stock drop.

But shares later rallied to finish up $1.92, or 8 percent, at $26.25.

Most other financial stocks also bounced higher.

Citigroup Inc. rose $1.03, or 5.9 percent, to $18.46; Washington Mutual Inc. rose 46 cents, or 11.7 percent, to $4.40; Bank of America Corp. rose $3.97, or 14.2 percent, to $32.03; and Wachovia Corp. rose $1.98, or 14.5 percent, to $15.61.

Airline stocks also jumped due to slumping oil prices.

AMR Corp., the parent of American Airlines, rose $1.47, or 18.4 percent, to $9.47; Delta Air Lines Inc. rose $1.01, or 14.6 percent, to $7.91; and United parent UAL Corp. rose $1.50, or 21.4 percent, to $8.51.

Better-than-expected quarterly earnings helped shore up sentiment as well.

United States Steel Corp.'s profit more than doubled in the second quarter following an increase in demand and pricing.

The stock jumped $20.43, or 14 percent, to $165.76.

Colgate-Palmolive rose $5.59, or 8.2 percent, to $74.15 after reporting that its second-quarter earnings rose 19 percent.

Price increases helped the consumer products company offset rising input costs.

But on the downside, there was more data pointing to a still sinking housing market.

S&P/Case-Shiller said its 20-city index for May fell 15.8 percent from a year earlier -- the sharpest drop since its inception in 2000.

The narrower 10-city index is down 16.9 percent, the biggest decline in its 21-year history.

The Russell 2000 index of smaller companies rose 18.44, or 2.65 percent, to 714.55.

Overseas, Japan's Nikkei stock average fell 1.46 percent.

Britain's FTSE 100 rose 0.12 percent, Germany's DAX index rose 0.75 percent, and France's CAC-40 dipped 0.09 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

"Starbucks cuts 1,000 non-store jobs - Starbucks cuts 1,000 non-store jobs, employees question transformation strategy"

By LAUREN SHEPHERD, Associated Press

Last updated: 4:32 p.m., Tuesday, July 29, 2008

NEW YORK -- Starbucks Corp., which already plans to shut 600 stores, said Tuesday it is also cutting almost 1,000 office jobs as part of its bid to re-energize the brand and boost its profit.

Of the new cuts, 550 of the positions are layoffs and the rest are unfilled jobs.

The announcement came a day before Starbucks was set to report its third-quarter financial results, which analysts expect to show a substantial decline in profit because of slower traffic and a drop in sales at established stores.

For the company's investors, the store closures and layoffs offer some hope that the chain's declining traffic, profit and stock price may all rise again.

But optimism is absent among many of the company's employees, who say Starbucks is hurting its workers and customers to save its stock price.

The shares have sunk 47 percent in the past year.

"Closing stores is definitely not for the employee or customer's benefit," said Dave Ebert, a 21-year old barista in Minneapolis whose store is closing.

"It seems like a lot of their business decisions lately have been shareholder-focused."

The latest round of job cuts are in addition to the layoffs from the store closures, although not all employees at stores that are closing will lose their jobs.

In a letter to employees Tuesday announcing the newest wave of job cuts, Chief Executive Howard Schultz said about 70 percent of employees in stores set to be closed this month have been transferred to other locations.

As of September 2007, Starbucks had more than 172,000 employee worldwide.

Schultz also announced several management changes on Tuesday.

Martin Coles, chief operating officer, will be the new president of the company's international business.

The company said the COO position will be eliminated.

Former international president Jim Alling is leaving the company, Schultz said.

Starbucks has been considering making the management changes and the job cuts since at least July 1, when Schultz said the company was "conducting a rigorous evaluation" of its non-store organization "with the goal of realigning our organization to support the current business environment and improve efficiencies globally."

Some employees appeared to know their jobs may be on the line by Monday night, when their bosses requested they meet the next day.

On message boards used by Starbucks employees, workers were calling the day "Black Tuesday."

"I am a store manager and while I feel relatively safe at the moment, there is no real job security in watching the company you work for fail," said one employee who posted a message Monday night.

Analysts say the closures and cuts will let Starbucks focus on increasing sales at its remaining stores and selling its new products.

Those include two varieties of a new smoothie drink, called Vivanno, a new energy drink and changes to its warm breakfast sandwiches.

But they say it will take some time before the company sees any benefit from the moves.

And some baristas say the changes like automatic espresso machines and banana smoothies aren't likely to bring more coffee-loving customers in the door.

"Americans look for ray of hope in economic gloom - Gas and food are expensive, but Americans find flicker of sunshine in economic gloom"

By ANNE D'INNOCENZIO, Associated Press

Last updated: 4:02 p.m., Tuesday, July 29, 2008

NEW YORK -- Americans see a slice of sunlight for the economy, as a widely watched report Tuesday showed people are not as pessimistic about the future as they were a month ago.

The housing market is still falling, but so have gas prices -- at least a little -- and that was enough to spark a little hope amid the deepest economic gloom in 16 years.

But economists warn that the slight uptick, which reverses a six-month slide since January, is likely to be only temporary and doesn't signal the beginning of a rally.

The Conference Board said Tuesday that its Consumer Confidence Index stands at 51.9 for July -- about half of what it was a year ago and still the lowest since the index registered 54.6 in October 1992, when the economy was coming out of a recession.

But the reading was slightly higher than the revised 51.0 level for June and a bit better than the 50 economists expected.

Still, economists were cautious.

"The rebate checks have just been spent," said Bernard Baumohl, managing director of The Economic Outlook Group.

"This is hardly the backdrop normally associated with a rebound in consumer confidence."

"What we'll see at best is a bounce around at these low levels for the next six to nine months."

"We are not going to get an improvement unless we get an improvement in housing and the job market sectors."

In fact, Baumohl believes that the odds of a recession this year have increased, citing the fading benefits of the federal stimulus checks, deteriorating household wealth and the slowdown of foreign economies.

There was more bad news about housing Tuesday.

Home prices tumbled by the steepest rate ever in May, according to a closely monitored index.

Prices dropped by 15.8 percent, according to the S&P/Case-Shiller 20-city index.

The narrower 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.

Stocks, however, rebounded a day after their steep tumble, as investors latched on to a drop in oil prices and the rise in confidence.

The Dow Jones industrial average rose more than 188 points.

Economists and investors closely monitor sentiment since consumer spending represents about two-thirds of all economic activity.

The tax rebates helped lift retail sales in May and June, but those benefits have faded, and analysts worry about whether shoppers will have extra money to spend on clothing and other nonessentials in the important back-to-school season.

Baumohl noted that while a slight decline in gas prices has a psychological impact on consumers, whether they will fall more is uncertain.

The latest national survey shows gas prices have dropped a fraction below the $4-dollar mark.

The average price of regular gasoline at self-serve stations was $3.996 a gallon Friday, according to the Lundberg Survey of 7,000 gas stations nationwide, released Sunday.

Prices are at their lowest level since May 16, but the survey showed that the average U.S. price is $1.11 higher than it was a year ago.

The Conference Board's Present Situation Index, which measures shoppers' current assessment of the economy, was virtually flat at 65.3, compared to 65.4 in June.

But the Expectations Index, which measures their outlook over the next six months, increased a bit to 43.0 from 41.4.

"Consumers' assessment of current conditions was little changed, suggesting there has been no significant improvement, nor significant deterioration, in business or labor market conditions," said Lynn Franco, director of The Conference Board Consumer Research Center, in a statement.

She added, however, that while people remain grim about short-term prospects, the modest improvement in their outlook provides some glimmer of hope.

The slight improvement in the outlook "bears careful watching over the next few months," she said.

Economists are also keeping watch on the job market, since job security is key to consumers' confidence and willingness to spend.

Cautious employers, uncertain about the economy and their own prospects, have cut jobs each month so far this year.

Economists are bracing for more job losses when the government releases the employment report for July on Friday.

The Consumer Confidence report -- derived from responses received through July 22 of a representative sample of 5,000 U.S. households -- also showed that consumers' worries about business conditions and jobs aren't going away.

Those saying jobs are "hard to get" edged up, while those claiming jobs are "plentiful" declined.

Those expecting fewer jobs in the months ahead increased, while those anticipating more jobs remained flat.

The Consumer Confidence survey has a margin of error of plus or minus 2.5 percentage points.

"Trade talks failure deals blow to global economy - Trade talks collapse in major setback for seven-year effort to open up global economy"

By BRADLEY S. KLAPPER, Associated Press

Last updated: 4:02 p.m., Tuesday, July 29, 2008

GENEVA -- After coming tantalizingly close to a historic trade deal, World Trade Organization talks collapsed Tuesday in a dismaying blow to seven years of efforts to open up the global economy.

Once promised as a recipe for lifting millions of people out of poverty, the end to nine days of high-level talks left no new trade openings for farmers and manufacturers, no global economic boost and no grand deal for Third World development.

It was by all accounts a disaster.

"This is a very painful failure and a real setback for the global economy when we really needed some good news," said Peter Mandelson, the European Union's trade commissioner.

His disappointment was shared by top negotiators from the United States, Brazil and India, who have played leading roles since the World Trade Organization launched its current trade round in the Qatari capital of Doha in 2001.

While the talks have struggled before, this failure was perhaps the most devastating.

Faced with global unrest from rising food prices, credit problems from shaky financial markets and the threat of economic downturn, negotiators hoped that a deal this week to open farm and industrial markets would go some way to alleviating these problems.

It was all the more disappointing because the talks made greater progress than they had in years on issues such as farm subsidies and manufacturing tariffs -- which were responsible for scuttling previous high-level trade efforts.

The talks hit a snag over an obscure "safeguard" for protecting agricultural producers in the developing world from a sudden surge in imports or drop in commodity prices.

While farm import safeguards currently exist in rich and poor countries, they are rarely used and reflect only a minute portion of the billions of dollars in manufacturing, farm and services gains the WTO's Doha trade round was supposed to create.

"In the face of global food price crisis, it is ironic that the debate came down to how much and how fast could nations raise their barriers to imports of food," said U.S. Trade Representative Susan Schwab, who resisted attempts by China and India to ensure a loophole for developing countries allowing them to increase farm tariffs as part of an agreement.

Schwab called the measure "blatant protectionism."

India's trade minister, who was blamed by a number of rich and poor countries for his intransigence this week, said the U.S. demands were unreasonable.

"It's unfortunate in a development round we couldn't run the last mile because of an issue concerning livelihood security," Kamal Nath told reporters.

The most significant WTO meeting in three years aimed to pull off a broad compromise that, in short, would have let poor countries sell more produce to rich countries while giving the U.S., 27-nation EU and Japan new chances for their manufacturers and service providers in the emerging markets of Brazil, China and India.

This was the tradeoff that eluded a WTO ministerial meeting in Cancun, Mexico, in 2003, and Hong Kong two years later.

Gatherings in Geneva in 2006 and Postdam, Germany, last year also failed to produce the breakthrough, but pressure was higher because of the likelihood that the United States and other key trading powers would lose interest amid administration changes over the next couple of years.

"I am extremely distressed," said Foreign Minister Celso Amorim of Brazil, which broke with many developing countries by accepting a would-be deal last week brokered by WTO chief Pascal Lamy.

"It was hanging on a thread."

"The thread didn't hold."

Schwab appeared downcast when she first began to brief reporters.

She said negotiators were "so close" last week, but then stopped speaking.

Asked if the entire Doha trade round was over, she answered:

"I didn't say that."

Before abruptly walking away, Schwab said she was disappointed that Lamy's package "is not going to carry the day."

U.S. officials were bitter after agreeing under the deal to limit U.S. farm subsidies deemed to unfairly distort international trade to under $14.5 billion.

Although it is still above actual payments to American farmers, it was a far lower level than Washington had ever accepted and seemed to gain the support of all 153 WTO members.

Some took the U.S. movement as an important step, noting that it came after a contentious five-year, $291 billion farm bill that maintained and even extended a number of U.S. subsidy programs.

But others noted that offers were made without any congressional weight, citing President Bush's lack of a "fast track" authority to submit a trade deal to Congress for a yes-or-no vote.

India's Nath at one point called Schwab an "impostor."

The debate over farm subsidies has taken on added significance amid the recent spike in food prices around the world.

Poorer nations say the payments distort global farm markets and hinder the development of sustainable agriculture in the Third World.

But without a final deal, Europe will not be required to open up its farm markets to emerging powers in Latin America and elsewhere.

Brazil, China, India and other fast-growing developing nations won't have to ease access to manufacturing imports from the rich world.

And the U.S. will not have to make any tough decisions now on the billions of dollars in farm subsidies it pays out each year to American growers of cotton, soybean, rice and other staples.

"For any outside observer, someone coming from another planet, it must be hard to understand how, after all the progress we made, we were not able to conclude" a deal, Brazil's Amorim said.

The EU's Mandelson, who also tried to bridge differences at the end, said it was a "collective failure."

"But the consequences will not be equal," he said.

"They will fall disproportionately on those who are most vulnerable in the global economy, those who needed the chances and the opportunities most from a successful trade round, those from the developing countries who really needed and deserved a break."

"I am afraid they have not received that today."

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Associated Press writers Alexander G. Higgins and Eliane Engeler contributed to this report.

"Pilgrim's Pride swings to 3Q loss - Pilgrim's Pride swings to 3rd-quarter loss on big boost in animal feed costs"

By EMILY FREDRIX, Associated Press

Last updated: 6:42 p.m., Tuesday, July 29, 2008

MILWAUKEE -- Pilgrim's Pride Corp., the nation's largest chicken producer, said Tuesday that it lost $52.8 million in its third quarter because of record-high grain costs that have made animal feed far more expensive and prices charged to consumers aren't rising fast enough because of an oversupply.

But its shares surged because the loss was smaller than expected.

The Pittsburg, Texas-based company's loss amounted to 75 cents per share compared with a profit of $62.6 million, or 94 cents per share a year earlier.

Excluding discontinued operations, the company says it lost 69 cents per share.

Revenue rose 5 percent to $2.21 billion from $2.10 billion in the quarter.

Thomson Financial said analysts expected a loss of $1.19 per share on revenue of $2.14 billion.

Shares climbed rose 34 cents, or 2.3 percent, to $12.51 Tuesday, after trading as high as $14.72 earlier in the session.

A day earlier, Pilgrim's Pride shares lost 9.5 percent after rival meat producer Tyson Foods Inc. saw its quarterly profit plunge 90 percent.

Tyson, like Pilgrim's Pride, also attributed its loss to the record-high prices for grain.

Grains like soybeans and corn, which have skyrocketed in price over the past year, are a key ingredient in animal feed.

And the company says prices charged to consumers aren't rising fast enough because there's too much chicken on the market to sustain higher prices.

The company has been making production cutbacks, but says prices are still too low.

"Simply put, there's still too much breast meat available to drive market pricing significantly higher," Clint Rivers, president and chief executive officer, said in a conference call.

Pilgrim's Pride said its total feed-ingredient costs in the quarter rose 41 percent, or $266 million, compared to the year-ago period.

It estimates its total feed-ingredient costs for the year will be $900 million more than last year.

As input costs rise, the retail price for boneless chicken has fallen because of an oversupply.

Market breast prices now average about $1.33 per pound, Rivers said.

Market prices should be at least $2.15 for the industry to break even, he said, and the company would like to see chicken sell for a dime more a pound to turn a profit.

To force chicken prices higher, Pilgrim's Pride will have cut 5 percent of its production by the end of this year.

Total pounds were down 1.33 percent in the third quarter, and they're expected to be down 8.7 percent in the fourth quarter.

Pilgrim's Pride's competitors are making similar cuts.

Consumers should brace to see higher chicken prices as companies make these changes, Rivers said, though he didn't say how high prices could go.

"American consumers should brace themselves for sticker shock in the meat case over the next 12 months," he said.

Rivers said given all the cost pressures, the company expects an operating loss in the fourth quarter.

The company has already said it may take until the summer of 2009 to be profitable again.

Pilgrim's Pride has also been trying to shed its costs to further boost its bottom line.

Earlier this month, the company said it would cut 600 jobs at a plant in El Dorado, Ark., in response to the record-high prices for feed.

Rivers said the company has already eliminated about 1,100 positions so far this year, not including the upcoming cuts in Arkansas.

Pilgrim's Pride also sold 7.5 million shares of its common stock for $177 million to underwriter Lehman Brothers Inc., to give the company more money.

The company has been cutting costs, but higher pricing is critical to offset the rising input cost pressure, Deutsche Bank analyst Eric Katzman wrote in a research note.

He said the company's pricing has been insufficient so far this year, but current trends -- including the revenue-driven sales increase -- show it's making progress.

"7-square-mile ice sheet breaks loose in Canada - 7-square-mile chunk of ice breaks loose from Arctic ice shelf in Canada's far north"

Associated Press

Last updated: 5:52 p.m., Tuesday, July 29, 2008

EDMONTON, Alberta -- A chunk of ice spreading across seven square miles has broken off a Canadian ice shelf in the Arctic, scientists said Tuesday.

Derek Mueller, a research at Trent University, was careful not to blame global warming, but said it the event was consistent with the theory that the current Arctic climate isn't rebuilding ice sheets.

"We're in a different climate now," he said.

"It's not conducive to regrowing them."

"It's a one-way process."

Mueller said the sheet broke away last week from the Ward Hunt Ice Shelf off the north coast of Ellesmere Island in Canada's far north.

He said a crack in the shelf was first spotted in 2002 and a survey this spring found a network of fissures.

The sheet is the biggest piece shed by one of Canada's six ice shelves since the Ayles shelf broke loose in 2005 from the coast of Ellesmere, about 500 miles from the North Pole.

Formed by accumulating snow and freezing meltwater, ice shelves are large platforms of thick, ancient sea ice that float on the ocean's surface.

Ellesmere Island was once entirely ringed by a single enormous ice shelf that broke up in the early 1900s.

At 170 square miles and 130-feet thick, the Ward Hunt shelf is the largest of those remnants.

Mueller said it has been steadily declining since the 1930s.

Gary Stern, co-leader of an international research program on sea ice, said it's the same story all around the Arctic.

Speaking from the Coast Guard icebreaker Amundsen in Canada's north, Stern said He hadn't seen any ice in weeks.

Plans to set up an ice camp last February had to be abandoned when usually dependable ice didn't form for the second year in a row, he said.

"Nobody on the ship is surprised anymore," Stern said.

"We've been trying to get the word out for the longest time now that things are happening fast and they're going to continue to happen fast."

"Militants capture 25 Pakistani security personnel - Militant raids captures up to 25 Pakistani security personnel in new blow to peace deals"

By STEPHEN GRAHAM, Associated Press

Last updated: 2:22 p.m., Tuesday, July 29, 2008

ISLAMABAD, Pakistan -- Islamic militants seized a security post in Pakistan's troubled northwest Tuesday, capturing at least 25 police and troops in a raid that underscored the government's weak grip on territory near the Afghan border.

Extremists also killed two security officers elsewhere in the Swat Valley, a day after three intelligence agents died in an ambush in the same area in further blows to the hopes of Pakistani leaders that they can tame Islamic hard-liners through peace negotiations.

Tuesday's incidents came a day after Prime Minister Yousuf Raza Gilani won praise from President Bush, whose administration is pressing Pakistan for tougher action against militants, as a reliable ally against terrorism.

Pakistani officials said the abducted security force was manning a post near Deolai village in Swat when it was surrounded by an unknown number of militants Tuesday morning.

Police said about 30 officers and paramilitary troops were taken away, while an army statement put the number at "as many as 25."

"All personnel manning the post were taken hostage and shifted to some unknown location," the army's statements said.

The army also reported that "miscreants" killed two security force members and wounded 14 as they went to remove a militant checkpoint in another area of the valley where three intelligence officers were killed by ambushers Monday.

Security forces struck back, killing two militants and capturing six in an operation Tuesday, it said.

The military blamed the flare-up on followers of Mullah Fazlullah, a pro-Taliban cleric who last year took control of large tracts of Swat until an army operation drove his fighters out.

A spokesman for Fazlullah, Bakht Ali Khan, claimed responsibility for both the kidnapping at the security post and the ambushing of the intelligence agents.

He said the government was not sticking to the terms of a peace accord struck two months ago, accusing security forces of torturing suspected militants.

"The government is not honoring the peace agreement with Taliban and the government will be responsible for any consequences," Khan told The Associated Press.

"We will take revenge for any action against us."

Swat lies in a swath of northwestern Pakistan that has increasingly come under the sway of Islamic militants opposed to Pakistan's alliance with Washington in the war with terrorist groups.

Al-Qaida operatives and Taliban fighters from Afghanistan also are active in the region.

Pakistan's 4-month-old government has distanced itself from the policies followed under President Pervez Musharraf, the former army general who waged a series of unpopular military operations in the border region.

However, the government's strategy of offering peace to Pakistani militants who renounce violence in an effort to isolate hard-liners has yet to bear obvious fruit.

NATO blames the peace talks and associated cease-fires for rising insurgent violence in Afghanistan, and U.S. officials worry that approach is giving al-Qaida leaders believed holed up in the lawless region more freedom to plot another Sept. 11-style attack.

Officials in North West Frontier Province, which includes the Swat Valley, vowed Tuesday to protect the lives and property of people in Swat.

However, they wouldn't say whether they were ready to use force and abandon a peace accord that calls for the release of militants and concessions on their demands for the introduction of Islamic law in return for an end to fighting.

"Once the details are in, then the government's response will be there," provincial governor Owais Ahmed Ghani told reporters in Peshawar.

Pakistani officials were also wrestling with public anger over a suspected U.S. missile strike on a village near the Afghan border Monday.

Officials were investigating whether the attack killed Abu Khabab al-Masri, an al-Qaida explosives expert with a $5 million U.S. bounty on his head.

The army's spokesman, Maj. Gen. Athar Abbas, said angry tribesmen prevented troops from examining the site Tuesday.

If confirmed, al-Masri's death would be a significant triumph for Washington and its allies.

However, the incident put the government on the political defensive, with politicians and commentators expressing anger that Pakistan territorial integrity was not being respected.

In an interview with CNN on Monday, the prime minister said the strike was "certainly" a violation of sovereignty if the U.S. acted on its own.

Gilani said he told Bush that both countries should do a better job of sharing intelligence so Pakistan could fight extremists itself.

However, he gave no indication that Pakistan, whose economic and financial problems force it to rely heavily on billions of dollars in U.S. aid, would reduce its cooperation in protest over the missile attack.

------

Associated Press writers Riaz Khan in Peshawar and Sadaqat Jan in Islamabad contributed to this report.

"Afghan government detains critical talk show host - Afghanistan detains TV talk show host critical of government"

By RAHIM FAIEZ, Associated Press

Last updated: 12:32 p.m., Tuesday, July 29, 2008

KABUL, Afghanistan -- Afghan intelligence agents detained a TV talk show host critical of the government, the president's spokesman confirmed Tuesday, accusing private media of coming under the influence of foreign countries.

The government said in a statement that Nasir Fayaz, who hosted a weekly show called "Truth," made baseless accusations against two ministers and called for his prosecution.

"The Cabinet decided that such people, and any other persons who are working in the media and are making baseless accusations, should be prosecuted," the statement said.

Humayun Hamidzada, the chief spokesman for President Hamid Karzai, confirmed that Fayaz was still being held Tuesday by the Afghan National Directorate of Security.

On Sunday, Fayaz's show was taken off the air after the Ariana Television Network received a phone call from the intelligence service agent ordering them to stop the broadcast, said Abdul Qadir Mirzai, a spokesman for the station.

"(The intelligence officer) told me are you going to stop the program now or am I going to need to send someone to stop it," Mirzai said.

The channel complied.

Mirzai said Fayaz was detained on Monday.

Hamidzada claimed some foreign countries were trying to influence events in Afghanistan by financing media outlets.

"They want to attack the people of Afghanistan and the government of Afghanistan using these media," Hamidzada said, without naming any country or any media company.

It was unclear if he was referring to foreign governments and organizations, mostly from the West, that provide aid in the form of grants and training to Afghan media networks, or possibly to neighboring countries such as Pakistan or Iran.

Kabul has accused Pakistan of supporting the Taliban-led insurgency in Afghanistan -- a charge the government in Islamabad denies.

Hamidzada claimed that some Afghan media ran editorials sent by e-mail from abroad, but provided no examples or evidence.

Since the fall of the Taliban regime following the U.S.-led invasion in late 2001, private media have flourished in Afghanistan and have been touted as part of the success story of the country's new democracy.

Television and music was banned during the Taliban rule.

But religious conservatives often bristle over the content, including women singing on TV or presenting the news, and the government has not always taken kindly to criticism of its performance.

"Scientists aim camera at fossilized dino tracks - Scientists snap aerial photos of fossilized dinosaur tracks near Utah's Coral Pink Sand Dunes"

Associated Press

Last updated: 7:02 p.m., Tuesday, July 29, 2008

KANAB, Utah -- Call them the paleo-paparazzi.

Scientists trying to learn more about dinosaurs are snapping aerial photos of tracks left behind millions of years ago near southern Utah's Coral Pink Sand Dunes.

Researchers in a specially equipped helicopter crisscrossed an area called the Moccasin Mountain track site, shooting photos of fossilized footprints scattered across the red sandstone.

Alan Titus, a Bureau of Land Management paleontologist, said it's the first time a helicopter has been used to take detailed images of a track site.

The tracks were left by at least six species of dinosaurs -- some with three toes, others with five -- that roamed the landscape about 180 million years ago.

The camera, able to pick up tracks as small as a centimeter, will give scientists a bird's-eye view of footprints dotting the 3-acre site.

The photos will be used to help create maps of the tracks and three-dimensional images so scientists can better understand dinosaur behavior.

They'll also be used on interpretive displays for visitors.

"We will be able to make a precise map of the location of the tracks, their spatial patterns and possibly determine what the (dinosaurs) were doing," said Neffra Matthews, the geographer from the BLM's National Operations Center in Colorado who conducted the imaging work.

The fossilized tracks have been known locally for years at Moccasin Mountain, a popular spot for ATV riders.

BLM scientists investigated last fall and found tens of thousands of tracks, ranging from bird-size footprints to others left by animals that were probably 20 feet long.

"The site is outstanding for the quality and size of the tracks, the diversity of animals represented and the range of time they were created," Titus said.

The tracks have been linked to three-toed species similar to the horned Dilophosaurus and five-toed animals similar to crocodiles.

The site, which is now closed to motorized traffic, was probably an oasis where early Jurassic dinosaurs found water and relief from desert-like temperatures, Titus said.

Matthews has taken similar photographs at a track site near Grand Staircase-Escalante National Monument.

Those were taken with the help of a blimp.

------

Information from: The Salt Lake Tribune, http://www.sltrib.com

"S&P: Home prices drop by record 15.8 pct. in May"

By J.W. ELPHINSTONE, Associated Press

Last updated: 3:06 p.m., Tuesday, July 29, 2008

NEW YORK -- Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide.

Charlotte, N.C., posted the smallest drop at 0.2 percent.

Until April, the city had been the last metro still showing price gains.

The Standard & Poor's/Case-Shiller 20-city index dropped by 15.8 percent in May compared with a year ago, a record decline since its inception in 2000.

The 10-city index plunged 16.9 percent, its biggest decline in its 21-year history.

No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened.

The monthly indices have not recorded an overall home price increase in any month since August 2006.

Home values have fallen 18.4 percent since the 20-city index's peak in July 2006.

Nine metropolitan cities -- Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Seattle, Wash., Portland, Ore., and Washington, D.C. -- posted record declines in May.

And the value of housing in Detroit is now lower than it was in 2000.

But a possible bright spot in an otherwise dismal report, seven metros -- Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta -- showed smaller annual declines.

Las Vegas recorded the worst drop, with prices plunging 28.4 percent in the month.

Miami came in a close second, with prices down 28.3 percent.

White House press corps hasn't asked Perino about DOJ politicization.
Desipite yesterday's explosive report confirming that top Justice Department officials, including Monica Goodling and Kyle Sampson, had violated federal law, the White House press corps has not asked White House press secretary Dana Perino a single question about it. Both yesterday's and today's press briefings included no discussion of the report, nor a question on whether Attorney General Mukasey would follow through on a criminal perjury referral from Congress.

Preventing or Provoking Terrorism? Why do they hate us? Because we bomb the crap out of ’em. According to a US Institute for Peace report,

…the amount of munitions dropped or fired by U.S. and other NATO aircraft in Afghanistan has climbed from an average of 5,000 pounds per month in 2005 to some 80,000 pounds the following year to an average of 168,000 pounds in December 2007 …

So the reason we need more troops in Afghanistan, no "expletive deleted", is to kill fewer people. More troops means less bombing. They say.

Who Learns Faster, Congress or the Military? I was pleased to see that H.R. McMaster, who wrote the book on failures at the top of the Vietnam-era military command structure (Dereliction of Duty), was given his first star a couple weeks ago. He and Sean McFarland, who was also promoted, are called by the reliably informative Nancy Youssef

…legends of the Iraq War for what many in the military consider their masterful counterinsurgency skills. McMaster, who wrote a revered book called Dereliction of Duty, lead a successful counterinsurgency campaign in Tal Afar in 2005. And through that effort, he became a member of Gen. David Petraeus’ famed brain trust. He helped craft the surge strategy. And has monitored its progress throughout. He was passed over for a promotion the last time he went for a star, which caused an uproar through the ranks. McMaster speaks out, and in Iraq, made adjustments on the ground far outside his rank. Some of the senior officers didn’t like it; they saw such unilateralism as a threat to the Army’s structure. Others defended him, saying that is exactly the kind of soldier counterinsurgency requires. So when he didn’t get promoted, his career suddenly came to personify the Army’s struggle between its old way of fighting (and promoting leaders) and the new wars it faces.

Col. Sean McFarland was based in Anbar in 2006 when he crafted a system that eventually became a key part of surge. He built outposts in Ramadi, a onetime deadly city for U.S. troops. He reached out to Iraqis who had declared his soldiers the enemy and started negotiating. The violence fell, and suddenly the Army dropped its weapons and started considering other tactics to quell the situation there. That is, McFarland spurred a service-wide discussion about how the Army should approach Iraq differently.

So I think most will look at the list (which I have included below) and conclude that the Army is slowly adjusting what it looks at when putting a star on a soldier. Starting today, it is no longer as simple as following orders.

In general, the more hierarchical an organization is, the slower change tends to happen in it. So it’s heartening to see that US military folks are at least looking (being allowed to look) at what’s worked and what hasn’t, and updating doctrines accordingly.

Of course it’s what they’re supposed to do, but Congress is supposed to impeach law-breaking Presidents and Vice Presidents too, and Pelosi et.al. are preventing that. Here’s the stage our decline has reached: San Francisco Democrats are war- and torture-enablers, leading the rest of the party in ignoring the worst crimes a US administration has ever committed.

The July Harper’s includes a conversation (subscription req’d) titled “High noon for the Republican Party: Why the G.O.P. must die”. The following exchange is between Scott McConnell, editor of The American Conservative, and Kevin Baker, a novelist, historian, and Harper’s contributing editor. Luke Mitchell moderated the conversation.

…Read on
http://badattitudes.com/MT/

"Study questions US strategy against al-Qaida - Rand research group says US can defeat al-Qaida with change in strategy"

BARRY SCHWEID

AP News

Jul 28, 2008 23:32 EST

The United States can defeat al-Qaida if it relies less on force and more on policing and intelligence to root out the terror group's leaders, a new study contends.

"Keep in mind that terrorist groups are not eradicated overnight," said the study by the federally funded Rand research center, an organization that counsels the Pentagon.

Its report said that the use of military force by the United States or other countries should be reserved for quelling large, well-armed and well-organized insurgencies, and that American officials should stop using the term "war on terror" and replace it with "counterterrorism."

"Terrorists should be perceived and described as criminals, not holy warriors, and our analysis suggests there is no battlefield solution to terrorism," said Seth Jones, the lead author of the study and a Rand political scientist.

"The United States has the necessary instruments to defeat al-Qaida, it just needs to shift its strategy," Jones said.

Nearly every ally, including Britain and Australia, has stopped using "war on terror" to describe strategy against the group headed by Osama bin Laden and considered responsible for the Sept. 11, 2001 suicide attacks at the World Trade Center in New York and the Pentagon.

Based on an analysis of 648 terrorist groups that existed between 1968 and 2006, the report concluded that a transition to the political process is the most common way such groups end.

But the process, found in 43 percent cases examined, is unlikely with al-Qaida, which has a broad, sweeping agenda, the report said.

The second most common way that terrorist groups end, seen in about 40 percent of the cases, is through police and intelligence services apprehending or killing key leaders, Jones said.

Police are particularly effective because their permanent presence in cities helps them gather information, he said.

By contrast, the report said, military force was effective in only 7 percent of the cases.

Jones, in an interview, said, "Even where we found some success against al-Qaida, in Pakistan and Iraq, the military played a background or surrogate role."

"The bulk of the action was taken by intelligence, police and, in some cases, local forces."

"We are not saying the military should not play a role," he said.

"But unless you are talking about large insurgencies, military force should not be the tip of the spear."

Among the report's conclusions:

_Religious terrorist groups take longer to eliminate than other groups but none has achieved victory in the 38 years covered by the study.

_Terrorist groups from upper-income countries are more likely to be left-wing or nationalist, and much less likely to be motivated by religion.

_Large groups of more than 10,000 have been victorious more than 25 percent of the time, while victory is rare for groups with 1,000 or fewer members.

The report described al-Qaida as a "strong and competent organization," both before and after 9-11.

Its goals, the report said, are uniting Muslims to fight the United States and its allies, overthrowing regimes in the Middle East friendly to the West and establishing a pan-Islamic state, or caliphate.

Source: AP News

http://talkingpointsmemo.com/news/2008/07/...strategy_ag.php

DEMOCRAT NANCY PELOSI IS NOW THE DREAMWEAVER OF AMERICA ....

THE OPIUM LADY ...

SHE IS GOING TO LOOT OUT THE U.S. TREASURY TO PROVIDE DREAMS FOR HER FOLLOWERS AND ACOLYTES ....

AT THE EXPENSE OF THOSE IN AMERICA WHO AREN'T ...

And so ...

"Bush quietly signs mortgage relief measure - Avoiding public ceremony, Bush quietly signs measure offering mortgage relief for thousands"

By JENNIFER LOVEN, Associated Press

Last updated: 5:42 p.m., Wednesday, July 30, 2008

WASHINGTON -- President Bush signed a housing bill Wednesday intended to rescue about 15 percent of the cash-strapped homeowners in fear of foreclosure in the next year or so.

Early in the morning and out of public view, the president signed it without fanfare in the Oval Office, adding his signature to a measure he once threatened to veto.

The White House said he was accompanied by Treasury Secretary Henry Paulson, Housing and Urban Development Secretary Steve Preston and other administration officials.

"We look forward to put in place new authorities to improve confidence and stability in markets," White House spokesman Tony Fratto said.

He said the Federal Housing Administration would begin to put in place new policies "intended to keep more deserving American families in their homes."

The legislation is regarded as the most significant housing bill in decades.

It won approval from lawmakers eager, in an election year, to come up with an answer to the growing housing crisis.

"By expanding homeownership opportunities and protecting families against foreclosure, we are helping keep the American Dream alive," said House Speaker Nancy Pelosi, D-Calif.

The measure includes $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners; $3.9 billion for communities to fix up foreclosed properties causing blight in neighborhoods; and $15 billion in tax cuts, including an expanded low-income housing tax credit and a credit of up to $7,500, to be repaid, for some first-time home buyers.

The number of homeowners who could lose their homes to foreclosure by the end of 2009 is estimated by some to be around 2.8 million.

Under the legislation, 400,000 having trouble with payments could avoid it by trading their loans for new, more affordable mortgages through the Federal Housing Administration.

Their banks would have to agree to allow the swap and to take a large loss in exchange for avoiding the lengthy and costly foreclosure process.

To qualify, homeowners would have to be paying more than 31 percent of their incomes toward their mortgages and show they could afford to make the payments on a new, smaller loan.

The measure also is designed to help stabilize markets, in part by making credit more easily available amid rising defaults and falling home values.

The bill permanently increases to $625,500 the size of home loans in high-cost areas that the government-sponsored mortgage companies Fannie Mae and Freddie Mac can buy and that the FHA can insure.

It would otherwise have reverted to $417,000 for Fannie and Freddie and $362,790 for the FHA by the end of the year.

The White House sought to focus attention on parts of the legislation aimed at calming markets.

Those include the offer of a temporary but unlimited government line of credit for troubled Fannie Mae and Freddie Mac.

The Treasury Department gains power, until the end of 2009, to lend them emergency money or buy their stock.

This is considered crucial because investor fears about the health of the companies, which buy or guarantee about half of the nation's mortgage loans.

An overhaul of the Depression-era FHA also was requested by Bush.

So, too, was the provision to keep homeowners from making overly risky mortgage choices by requiring lenders to show how high a borrower's payment could get under the terms of his mortgage.

It provides $180 million in preforeclosure counseling.

Democratic leaders added an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

The House passed the bill a week ago.

Senators voted on Saturday to send it to the president.

The votes were supported by many Republicans, particularly those from areas hit hardest by housing woes.

Through the process, Bush did not like what he saw emerging from Congress and said he would veto it.

At first, he opposed the foreclosure rescue through the FHA as an overly cumbersome bailout.

Later, though, his veto threat was focused almost entirely on the $3.9 billion in neighborhood grants, which he said would encourage lenders to foreclose rather than work with borrowers.

The president also was sensitive to complaints by fiscal conservatives, who object to the raise in the debt ceiling and the bailout for Fannie Mae and Freddie Mac shareholders.

Some, but not all, were mollified by the bill's establishment of a regulator with stronger reins over the two companies and the new "consultative" role overseeing the companies for the Federal Reserve.

Bush withdrew his veto threat early last week, saying hurting homeowners could not wait for the outcome of a veto showdown that would take weeks -- though he predicted he would have won that fight.

The White House cast Bush's quiet signing of the bill as an act of expedience, not camouflage.

Press secretary Dana Perino said the early morning action was Bush's first opportunity to sign because the bill was transmitted to the White House on Tuesday night.

She also noted that most bills are signed without formal ceremonies -- though that is usually the case because they are minor measures, not legislation of this magnitude.

Bush's action seemed to indicate he wanted to play both sides: avoid being seen as not helping middle America in a crisis and avoid too close an association with a bill that many in the GOP opposed.

"We recognize that there were many people who did not support the bill."

"We agreed with them on almost every count when it came to that," Perino said.

She said the bill that set for signing ceremony Wednesday -- one to triple money to fight AIDS and other diseases around the world -- was the better choice for such attention.

"I would dare say that that deserves a larger signing ceremony than anything else that was passed this week in Congress," she said.

"Administration: US bond rating safe despite deficit - Administration says government's top-notch bond rating is safe despite soaring borrowing costs"

By MARTIN CRUTSINGER, Associated Press

Last updated: 1:22 p.m., Wednesday, July 30, 2008

WASHINGTON -- The Bush administration expressed confidence Wednesday that the United States would be able to maintain its top-notch credit rating even as the government scrambles to find new ways of expanding debt sales to cope with soaring budget deficits.

"It is a huge advantage to have that AAA-status and we are committed to that," Anthony Ryan, Treasury's acting undersecretary for domestic finance, told reporters as he unveiled plans for financing $171 billion in borrowing during the current July-September quarter, the second highest total on record.

Those borrowing needs have exploded this year as the government has had to cope with a sagging economy and the need to finance more than $90 billion in economic stimulus payments made over the past three months to individuals in an effort to keep the country out of deep recession.

Those problems are occurring at the same time that global financial markets have been roiled by reports of multibillion-dollar losses by giant banks and investment houses, reflecting soaring losses on mortgage debt.

"I am quite confident we will emerge from this with a stronger capital market," Ryan told reporters.

"I have a great deal of confidence in our economy and our ability to work through these challenges."

Ryan praised the decision by Congress to include an increase in the government's debt limit to $10.6 trillion, up by $800 billion, from the current level, when it passed a sweeping housing rescue package last week.

President Bush signed that bill which included the higher debt limit into law on Wedesday.

One of its provisions expands the authority of the government to throw a financial lifeline to Fannie Mae and Freddie Mac, the two financial giants who own or guarantee nearly half the nation's mortgages.

Ryan refused to make an estimate of how long the new debt ceiling will be in effect but said it was helpful that Congress had been "proactive in managing the debt limit."

Often raising the debt ceiling has sparked a huge political showdown with Democrats using the debate to criticize President Bush for presiding over a surge in the national debt while he has been in office.

The Treasury announced that it would raise $27 billion next week in two auctions of new 10-year notes and 30-year bonds, all part of $171 billion it will raise over the current quarter, a quarterly amount exceeded only by $244 billion the government borrowed in the January-March quarter this year.

The increased borrowing reflects the exploding federal budget deficit which is projected to more than double in size this year to $389 billion and to hit an all-time high of $482 billion in the 2009 budget year.

The previous record deficit was $413 billion set in 2004.

The administration released the new deficit forecasts on Monday.

It blamed the surge on the sagging economy and the effort to keep the country from falling into a deep recession by mailing out 130 million economic stimulus payments.

Democratic critics, however, charged that the soaring deficits showed the total failure of the Bush administration to put the government's fiscal house in order.

They contended that whoever wins the presidency in November will inherit a huge fiscal mess that will severely restrain the next president's ability to fulfill his own campaign promises.

Treasury officials said that a variety of options for increasing the government's debt sales were being considered including greater frequency of sales of 10-year notes and 30-year bonds, but that no decisions had yet been made.

In April, the government announced it was bringing back the one-year Treasury bill which it had stopped issuing in February 2001 during a period when the budget was in surplus.

The 2001 surplus, the fourth in a row, was also the last time the government's books were in the black as the 2001 recession and increased spending to fight wars in Afghanistan and Iraq and, Democrats contend, Bush's first-term tax cuts brought a return of deficits.

The deficit estimate of $482 billion for the 2009 budget year, which will cover the first year of the new president's term, could soar higher because it includes only a partial payment for the wars in Iraq and Afghanistan.

"Office supply retailers struggle in North America - Office Depot, OfficeMax 2nd-quarter results show persistent weakness in North America"

By MAE ANDERSON, Associated Press

Last updated: 5:42 p.m., Wednesday, July 30, 2008

NEW YORK -- Office supply retailers felt no relief from the pinch of weaker spending by consumers and small businesses, with both Office Depot and OfficeMax citing the struggling economy as they reported losses for the second quarter.

Office Depot Inc. reported a $2 million loss for the second quarter on Wednesday, hurt by lower-than-expected sales in its North American retail stores.

That followed word a day earlier that rival OfficeMax Inc. also posted a loss as sales fell and it took a hefty charge.

Shares in OfficeMax dropped nearly 16 percent, while Office Depot lost 1.7 percent.

The results show that the office-supply chins are feeling the pressure as consumers and businesses alike tighten their purse strings amid rising food and gas prices, declining home values and an uncertain job market.

"We continue to be negatively impacted by weakening business conditions in North America," Chuck Rubin, president of Office Depot's North American retail division, said during a conference call on Wednesday.

"Specifically, weakness in Florida and California continued to weigh heavily on our results."

Delray Beach, Fla.-based Office Depot said its loss amounted to a penny per share in the three months ended June 28.

That's a reversal from a profit of $105.6 million, or 38 cents per share, a year ago.

Excluding one-time items, it earned 4 cents per share.

Analysts polled by Thomson Financial, who typically exclude one-time items, predicted a penny per share profit.

Revenue fell less than 1 percent to $3.61 billion, topping analyst expectations for $3.56 billion.

Sales in U.S. and Canadian stores open at least one year, a key retail measure known as same-store sales, fell 10 percent.

Goldman Sachs analyst Matthew Fassler, who rates Office Depot as "Neutral," said in a note to investors that the retail result exceeded the bank's profit forecast, "but was still very soft."

"Sales did not deteriorate meaningfully in any business, but underlying profitability clearly trended lower than the firm expected at the end of the first quarter," he said.

Rival OfficeMax had reported after the market closed Tuesday that it swung to a second-quarter loss of $894.2 million, mainly due to a massive accounting charge related to reassessing the value of goodwill and intangible assets.

The charge stems from an accounting procedure required when certain triggers are met, such as a sustained low stock price, reduced market capitalization and a weak economic environment.

OfficeMax shares have fallen about 32 percent since the beginning of the year.

Excluding one-time charges, the Naperville, Ill.-based company would have earned $19.4 million, or 24 cents per share, while analysts expected a profit of 18 cents per share.

Revenue fell 7 percent to $1.98 billion, below analysts' expectations for $2.02 billion.

Same-store sales fell 10 percent during the quarter.

"As with our direct and broader retail peers, OfficeMax continues to be impacted by weaker consumer and small business spending," said Chief Operating Officer Sam Martin.

"We're operating in an environment with higher prices for fuel, food and other products along with declining home values and a choppy job market which are all impacting consumers' purchase decisions."

Fassler said OfficeMax, which he also rates as "Neutral," is managing profitability "exceptionally well" in a tough backdrop.

"At the same time, industry sales trends scare us -- same-store sales declines exceed levels easily attributable to macro factors -- and OfficeMax's sales trends within that industry context are particularly choppy," he wrote.

OfficeMax fell $1.46, or 10.4 percent, to $12.65 Wednesday.

The stock has traded between $10.89 and $37.21 over the past 52 weeks.

Office Depot shares fell 13 cents to $6.77, near the low end of its 52-week range of $5.68 to $26.02.

"Stocks surge higher, led by financial sector - Wall Street extends gains as financial stock rally offsets higher oil prices"

By TIM PARADIS, Associated Press

Last updated: 5:42 p.m., Wednesday, July 30, 2008

NEW YORK -- Wall Street soared for the second straight day Wednesday, rallying in the last hour of trading after a rebound in financial stocks and optimism about private sector jobs.

Investors brushed off a sharp jump in oil prices.

The Dow Jones industrials rose more than 180 points, bringing its two-day gain to more than 450.

Bank and brokerage stocks, many trading at multiyear lows, turned higher and led the late advance.

There was some relief in the market after the Federal Reserve said it would extend and expand its program to lend money to investment banks.

The central bank's move reassured the market that the banks would have cash if they needed it.

Investors have been worried that some of Wall Street's biggest names will be slashing prices on more of their assets -- and needing more money -- after Merrill Lynch & Co. unexpectedly announced a $5.7 billion write-down late Monday.

"There's a growing sense that what we saw out of Merrill Lynch is the beginning of the end for the financial cleanup," said Craig Peckham, market strategist at Jefferies & Co.

He added that the ADP number was also a good sign for the economy.

Earlier, Automatic Data Processing said private sector employment rose by 9,000 this month.

After seeing jobs disappear by the thousands in recent months, the stock market is eager for any insights into the Labor Department's take on the job market on Friday.

The ADP news helped offset a big spike in the price of oil after a weekly Energy Department report on domestic supplies showed a surprise increase.

Israeli Prime Minister Ehud Olmert's announcement that he plans to resign in September stirred concerns about the viability of Middle East peace efforts and rising tensions with Iran.

Light, sweet crude rose $4.58 to settle at $126.77 on the New York Mercantile Exchange.

Oil has fallen sharply, however, since hitting a high above $147 on July 11.

A drop in oil prices Tuesday contributed to a huge gain on Wall Street.

The late rally may also have been due to technical trading; in times of great volatility, many institutional investors start adjusting their holdings before the closing bell.

The Dow rose 186.13, or 1.63 percent, to 11,583.69.

On Tuesday, the blue chips jumped 266 points, more than wiping out a nearly 240-point loss from the previous session.

Broader stock indicators also surged.

The Standard & Poor's 500 index advanced 21.06, or 1.67 percent, to 1,284.26, and the Nasdaq composite index rose 10.10, or 0.44 percent, to 2,329.72.

Advancing issues outnumbered decliners by about 2 to 1 on the New York Stock Exchange, where consolidated volume came to 5.06 billion shares from 5.11 billion in the previous session.

Bond prices fell as stocks advanced, diminishing demand for the safety of government debt.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 4.05 percent from 4.04 percent late Tuesday.

The dollar was higher against other major currencies, while gold prices fell.

Shares of Morgan Stanley and Lehman Brothers Holdings Inc. climbed more than 5 percent, while Citigroup Inc. and Merrill Lynch rose about 2 percent.

Fannie Mae and Freddie Mac, the government-chartered mortgage companies which together hold or back nearly half of all U.S. mortgage debt, also rose on news of the Fed's latest moves.

Fannie Mae advanced 45 cents, or 3.9 percent, to $12.05, while Freddie Mac rose 6 cents to $8.48.

Wall Street has been juggling a number of intertwined worries in recent months as it tries to determine where the economy is headed.

There is continued concern about bad mortgage debt that many banks are holding because homeowners swept up in the pullback in the housing market are missing mortgage payments.

And the rapid rise in oil and other commodity prices this year has only made it harder for many consumers to keep up with their bills.

Any sign of an easing in the credit and housing markets, or a drop in energy prices, offers some investors hope that the economy could begin to recover.

Investors are anxious for the government's advance reading on second quarter gross domestic product, which is due Thursday.

Economists expect that, while it might not feel like it to many consumers, the economy is still eking out growth.

A good chunk of it may be due to government tax rebates.

In earnings news, Starbucks Corp. said costs related to its closure of 600 underperforming stores led it to post a loss in its fiscal third quarter.

However, it matched Wall Street projections.

The Walt Disney Co. said third-quarter profits surged nearly 9 percent thanks to revenue growth at ESPN and strong results from its theme park near Paris, where the weak U.S. dollar was helpful.

The Russell 2000 index of smaller companies rose 4.31, or 0.60 percent, to 718.86.

Overseas, Japan's Nikkei stock average rose 1.58 percent.

Britain's FTSE 100 jumped 1.91 percent, Germany's DAX index advanced 0.96 percent, and France's CAC-40 jumped 1.85 percent.

------

On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

"Fed takes steps to break through credit clogs - Fed takes steps to break through credit clogs, help economy get back on track"

By JEANNINE AVERSA, Associated Press

Last updated: 5:52 p.m., Wednesday, July 30, 2008

WASHINGTON -- Focused on getting the nation's credit gears smoothly working again, the Federal Reserve is letting Wall Street firms draw emergency loans into next year and giving financial companies more options to help them overcome credit problems.

The Fed's announcement on Wednesday marks its latest effort to get credit -- the economy's oxygen -- flowing more freely.

A global credit crisis that erupted last August has hobbled the U.S. economy, already reeling from a housing meltdown.

As financial companies have racked up multibillion dollar losses on soured mortgage investments and credit problems spread to other areas, firms have hoarded cash and clamped down on lending.

That has crimped spending by people and businesses, which in turn has weighed on the national economy -- a vicious cycle the Fed wants desperately to break.

To that end, the Fed announced that investment houses can now tap the central bank for a quick source of cash through Jan 30.

Originally the program, started on March 17, was supposed to last until mid-September.

Another program, where investment firms can temporarily swap more risky investments for super-safe Treasury securities also will continue through Jan. 30, the Fed said.

And, it also will let commercial banks, in a separate program, bid on cash loans that last longer -- for 84 days, besides the 28-day loans now available.

The Fed said it was taking these steps "in light of continued fragile circumstances in financial markets."

Earlier this week, Merrill Lynch & Co. announced plans to write down another $5.7 billion tied to bad mortgage debt, raising fears that other banks and financial firms will follow.

Merrill Lynch said it would sell repackaged mortgage-backed securities for just $7 billion -- only a few weeks after they had been valued at $31 billion.

The decision gave the securities a current value of about 22 cents on the dollar and set a new, low benchmark that other Wall Street banks -- including Citigroup Inc., Lehman Brothers Holdings Inc., Morgan Stanley, and JPMorgan Chase & Co. -- might have to meet when valuing their own investments.

"This is no time to pull the liquidity rug out from under financial companies," said Ken Mayland, president of ClearView Economics.

Although Fed Chairman Ben Bernanke has said the central bank's efforts thus far have helped ease some stresses, he also has said markets remain fragile and that it will take time to return them to good health.

On Wall Street, the Fed's moves reassured investors.

The Dow Jones industrials gained 186.13 points to close at 11,583.69.

Now that inflation worries have forced the Fed to halt a nearly yearlong campaign of bracing rate cuts, the central bank will be looking for other ways -- such as those announced Wednesday -- to help ease financial problems.

The Fed is expected to leave its key rate steady when it meets next week.

"Ramping up the liquidity facilities, while at the same time keeping benchmark borrowing rates steady, looks like the best strategy for dealing with the twin threats (financial stresses and inflation fears) at this particular juncture," said Brian Bethune, economist at Global Insight.

Investment houses were given similar, emergency loan privileges as commercial banks after a run on Bear Stearns pushed the nation's fifth-largest investment bank to the brink of bankruptcy.

The situation raised fears that other Wall Street firms might be in jeopardy.

In the swap program, which began on March 27, investment firms bidding on the Treasury securities can put up as collateral more risky investments.

These include certain mortgage-backed securities and bonds secured by federally guaranteed student loans.

The program is intended to make investment companies more inclined to lend to each other.

A second goal is providing relief to the distressed market for mortgage-linked securities and for student loans.

The Fed also said it will let Wall Street firms place bids on an option to borrow the Treasury securities.

Up to $50 billion would be made available for this.

The Fed didn't say when the first auction of this type would be conducted.

The notion here is to give firms -- unsure whether they might need the Treasury securities -- an insurance policy of sorts.

Starting on Aug. 11, the Fed will give banks the option of bidding on 84-day cash loans from the Fed, besides the 28-day loans now available.

Specifically, the Fed will conduct biweekly auctions.

They will alternate between making available $75 billion in 28-day loans and $25 billion in 84-day loans.

The steps expand a program started in December aimed at helping banks overcome their credit problems so that they can keep lending to customers.

The European Central Bank and the Swiss National Bank have informed the Fed that they also will make available to their banks similar 84-day cash loans.

To help on this front, the Fed also boosted its credit line with the ECB to $55 billion from $50 billion.

On the other side of the Atlantic, the ECB and the Swiss National Bank announced Wednesday they will make billions of U.S. dollars available to banks still starving for the currency.

The ECB -- the central bank for the 15 countries that use the euro -- said it will make 84-day loans available starting on Aug. 8.

The Swiss National Bank said it would start making 84-day loans available on Aug. 12.

--------

AP Business Writer Matt Moore contributed to this report from Frankfurt.

"Iraqi parliament deadlocks over Kirkuk - Iraqi parliament calls special session to discuss elections in disputed city of Kirkuk"

By QASSIM ABDUL-ZAHRA and KIM GAMEL, Associated Press

Last updated: 5:02 p.m., Wednesday, July 30, 2008

BAGHDAD -- Iraqi lawmakers on Wednesday scheduled an emergency weekend meeting during summer recess to resolve disagreements that have blocked a provincial elections law and threaten a new wave of bloodshed in the disputed northern city of Kirkuk.

The proposed law has raised ethnic tensions in the oil-rich area, which is emerging as one of the biggest threats to U.S.-backed efforts to heal the country's sectarian rifts and prevent a resurgence of violence.

The standoff over control of Kirkuk, 180 miles north of Baghdad, is also the latest example of Iraqi political deadlock despite impressive military gains against Shiite militias and Sunni insurgents.

Parliamentary speaker Mahmoud al-Mashhadani scheduled a special meeting for Sunday after a deadline passed for the elections law to be ratified in time for the lawmakers' monthlong summer break, which began after Wednesday's session.

"The committee discussing Kirkuk could not find a solution and has asked for more time," al-Mashhadani said.

"The problem of Kirkuk is a complicated one, and failure to reach a solution will lead to more bloodshed."

The law enabling elections in Iraq's 18 provinces would divide the ruling council in Tamim -- of which Kirkuk is the largest city -- equally among Kurds, Turkomen and Arabs.

But Kurds and their allies now hold a majority on the Tamim provincial council and oppose any move that would diminish their power.

Kurds consider Kirkuk part of their historical homeland, and are seeking to incorporate it into their semiautonomous region to the north.

Arabs and most Turkomen want the Kirkuk area to remain under central government rule.

Tensions escalated Monday after a suicide bomber in Kirkuk struck during a Kurdish demonstration against the legislation, killing 25 people and wounding 187.

The U.S. military and local officials said al-Qaida in Iraq was behind the attack.

But dozens of angry Kurds stormed the offices of a rival Turkoman political party believing that the ethnic minority was to blame.

Meanwhile, protests against the election bill have drawn thousands of people daily.

With negotiations at a standstill, U.N. officials put forward a compromise, suggesting provincial elections be delayed in the Kirkuk area while going ahead in the 17 other provinces, according to a copy obtained by The Associated Press from an Iraqi lawmaker.

It suggested a committee should offer new recommendations on the issue so parliament can set a date for the vote by Dec. 31 at the latest.

Sunni lawmaker Mohammed al-Daini welcomed the proposal.

"The only option we have is to delay the provincial elections in Kirkuk, but meanwhile we should have guarantees for the equal distribution of power there," he said.

Failure to compromise on a new law establishing rules and funding for the U.S.-backed provincial vote will likely force the vote to be delayed until next year.

Under previous legislation, the election had been scheduled for Oct. 1, but will now probably be put off until December at the earliest.

Lawmakers pushed through a draft of the elections law earlier this month despite a walkout by the Kurdish bloc, but the measure was vetoed by the presidential council, which is led by a Kurd, Jalal Talabani.

U.S. officials have pushed hard for the elections, considered a necessary step toward national reconciliation.

Many Sunni Arabs boycotted provincial balloting in January 2005, enabling Shiites and Kurds to win a disproportionate share of power at the local level.

The U.S. military has expressed hope that security gains from an American troop buildup would enable the Iraqi government to make political progress.

But the Iraqis have been unable to push through key laws needed to establish guidelines and funding for the provincial elections and to govern the equal distribution of oil.

Both issues have bogged down because of Kurdish objections.

Lawmakers on Wednesday also failed to approve a supplementary budget of $21 billion after the Kurdish bloc walked out of parliament to protest the elections law.

"We have walked out in protest to link this with elections law," prominent Kurdish lawmaker Mahmoud Othman said.

"We will not vote for the budget until we vote for the election law."

Finance Minister Bayan Jabr said the additional funding would increase the overall budget to $70 billion this year and was needed for government expenditures on food rations, fuel for power plants and raises for civil servants.

Parliament's summer recess began as the U.S.-backed Iraqi military pressed forward with a new operation aimed at routing al-Qaida in Iraq-led insurgents from Diyala province, one of their last major strongholds near the capital.

The house-to-house search operations, focused on the provincial capital of Baqouba, will be extended to rugged areas near the Iranian border, said Ibrahim Bajilan, the head of the regional council.

He said the crackdown involved about 50,000 Iraqi police and soldiers, and would last about two weeks.

Diyala has been one of the hardest provinces to control despite numerous military operations.

Baqouba has enjoyed security improvements recently but continues to see attacks, such as twin suicide bombings that killed at least 28 people on July 15 and a number of suicide attacks carried out by female bombers.

------

AP correspondent Sinan Salaheddin contributed to this report.

"McCain spokeswoman: Stevens' woes linked to 'pork' - McCain spokeswoman says Stevens' legal woes stem from his penchant for 'pork'"

By ANDREW TAYLOR, Associated Press

Last updated: 7:02 p.m., Wednesday, July 30, 2008

WASHINGTON -- Presumptive GOP nominee John McCain distanced himself from Sen. Ted Stevens Wednesday, a day after his longtime rival was indicted on charges of lying about more than $250,000 in gifts he got from an oil services company.

Through a spokeswoman, McCain suggested Stevens' legal troubles have resulted from his practice of "earmarking" pet projects to his state and his constituents.

The two have fought bitterly for years over the practice.

"This is a sad reminder that the next president will have his work cut out for him in rebuilding public trust by ending once and for all pork barrel spending and reforming Washington from top to bottom," said McCain campaign spokeswoman Nicolle Wallace.

In a seven-count indictment handed up Tuesday, federal prosecutors said Veco Corp., which gave Stevens about $250,000 worth of home improvements, has simultaneously asked him for numerous federal grants and contracts benefiting the company, its subsidiaries and business partners.

While some colleagues greeted the Alaska lawmaker with warm embraces, several Republicans distanced themselves from him Wednesday as he returned to work in the Senate.

"Hey, Ted ... say it ain't so," came the greeting from the longest serving senator in history, 90-year-old Robert C. Byrd, D-W.Va., reaching up from his wheelchair during a set of floor votes.

Blanche Lincoln, D-Ark., gave Stevens a warm hug.

But on the eve of his arraignment in federal court on felony charges of falsifying financial disclosure forms to hide gifts from Veco and its top executive, a half-dozen GOP colleagues of Stevens gave campaign contributions from him to charity.

Senate GOP Leader Mitch McConnell of Kentucky kept his views to himself for another day, as other Republicans also declined to comment on whether they support Stevens' decision to remain in office, much less seek a full seventh term.

About the only encouragement many Republicans would offer is that Stevens is presumed innocent until proven otherwise.

"I'm not going to talk about Sen. Stevens, OK?" said Mel Martinez, R-Fla.

"He's innocent until proven guilty," said Sam Brownback, R-Kan.

And Sen. John Ensign of Nevada, chairman of the campaign committee for Senate Republicans, declined to restate his endorsement of Stevens, running for re-election to a seventh full Senate term, in a six-way Aug. 26 GOP primary.

"There's an electoral process in place and a legal process in place, and we will let the process play out," Ensign said.

The responses seemed to suggest that Senate Republicans are flummoxed over what to do about Stevens, whose legal troubles could very well cost the party a long-held seat.

Unlike the harsh greeting afforded Idaho Republican Larry Craig last summer after he pleaded guilty to a misdemeanor related to soliciting sex in an airport bathroom, none of Stevens' GOP colleagues have demanded his resignation.

In Craig's case, McConnell, Ensign and a raft of others demanded his resignation.

Craig refused, and is serving out the last few months of his term.

Republicans such as Norm Coleman of Minnesota said the difference in Stevens' case is that he maintains his innocence.

Stevens, however, has only said he is innocent of "knowingly" submitting a false disclosure form; since his indictment, he has not addressed the underlying accusation of accepting gifts from Veco and Bill Allen, the company's former top executive.

Still, at least six Republicans up for re-election shed contributions from Stevens and his political action committee.

They included: John Cornyn, R-Texas; John Sununu, R-N.H.; Gordon Smith, R-Ore.; Susan Collins, R-Maine; Elizabeth Dole, R-N.C.; and Pat Roberts, R-Kan.

Their moves came after a bevy of Democratic candidates demanded their GOP opponents return "dirty" and "tainted" campaign cash from Stevens.

The shaky GOP support for Stevens was evident in the wake of accusations he lied about accepting gifts from oil services contractor Veco Corp.

His indictment on seven felony counts adds to his party's already bleak electoral prospects in November, and could cost the GOP a Senate seat that should be safe.

Stevens has a reputation for toughness and stubbornness and has vowed to fight the charges.

His campaign vows he is pressing on "full steam ahead" for re-election and circulated an e-mail Wednesday claiming "the most incredible in-pouring of calls and walk-ins in support for the Senator" since the charges were announced.

Even before the indictments, Stevens faced a difficult race against Democratic Anchorage Mayor Mark Begich.

Stevens refused to comment to a pack of reporters shadowing his moves around the Capitol.

He is scheduled to be arraigned in federal court Thursday.

It will be up to a judge to decide where Stevens can travel, whom he needs to check in with and what rules he must follow as he campaigns and continues working as a senator.

Stevens, 84, the first sitting U.S. senator to face federal indictment since 1993, declared Tuesday, "I am innocent of these charges and intend to prove that."

His campaign spokesman said his office had been flooded with calls and e-mails from supporters urging him to press on.

The Justice Department accused Stevens of accepting expensive work on his home in Girdwood, Alaska, a ski resort town outside Anchorage, from VECO and its executives.

VECO normally builds oil processing equipment and pipelines, but its employees helped do the work on Stevens' home.

Prosecutors said that work included a new first floor, garage, wraparound deck, plumbing and electrical wiring.

He also is accused of accepting from VECO a gas grill, furniture and tools, and of failing to report swapping an old Ford for a new Land Rover for his daughter Lily.

From May 1999 to August 2007, prosecutors said, the senator concealed "his continuing receipt of hundreds of thousands of dollars worth of things of value from a private corporation."

U.S.-China trade gap: Massive job losses for U.S. workers
Unbalanced U.S. trade with China since 2001 has had a devastating effect on U.S. workers. This week's Economic Snapshot reveals that between 2001 and 2007, the trade deficit lost or displaced 2.3 million jobs in all 50 states and the District of Columbia, including 366,000 last year. As the nation's economic woes mount, a new EPI briefing paper, The China Trade Toll, details the devastating impact that the growing U.S. trade deficit with China is having on American jobs, wages, and key industries. (Press release [PDF])

"Suicide attack targets Iraqi police, kills 3"

By SELCAN HACAOGLU and SINAN SALAHEDDIN, Associated Press Writers

31 JULY 2008

BAGHDAD - A suicide car bomber rammed an explosives-laden vehicle against the wall of a police station south of Mosul on Thursday, killing three policemen and wounding four others, authorities said.

It was the fifth suicide attack in Iraq this week and showed that insurgents can still carry out assaults despite security gains in urban areas of the country.

Four suicide bombers killed 57 people in Baghdad and the northern city of Kirkuk on Monday.

The Thursday attack occurred on a police station in the Qayara area about 30 miles south of Mosul, according to a police officer who spoke on condition of anonymity because he was not authorized to speak to the media.

A statement posted Wednesday on a Web site in the name of the Islamic State of Iraq, an al-Qaida front group, warned of a campaign of attacks in the Mosul area in retaliation for the killing of one of its "hero brothers."

U.S. and Iraqi forces have been battling al-Qaida-inspired insurgents for months in Mosul, where militants have carried out numerous car bombings and assassinations.

On Thursday, a judge died of wounds suffered in an attack the day before in Mosul, police said.

One of the judge's bodyguards was killed in the attack, police said.

The focus of the war against al-Qaida and other Sunni militant groups has shifted to the north after the Sunni revolt against the terror movement in Anbar province west of Baghdad.

Sunni militants have also suffered major losses in the Baghdad area since 2006.

About 50,000 U.S.-backed Iraqi military and police forces have launched a major operation against al-Qaida insurgents in Diyala province northwest of the capital.

Iraqi officials say Diyala is one of the last major al-Qaida strongholds near the capital.

Associated Press Television News footage on Thursday showed Iraqi troops transferring a handful of detainees in the back of a truck in Diyala.

One of the soldiers was seen feeding a blindfolded captive with a slice of orange as others were giving water to them.

Also Thursday, the U.S. military said American soldiers wounded a civilian woman after opening fire on a group of four suspected militants during an operation in Samarra, north of Baghdad.

The military said another woman was also killed in the confrontation but her status had not been determined.

AND WHILE THE AIR-HEADED, LOTUS-EATING "OPIUM LADY" NANCY PELOSI FROM "LA-LA LAND" IS KEEPING THE "AMERICAN DREAM" ALIVE FOR A HANDFUL OF AMERICANS WHO ARE HER FOLLOWERS AND ACOLYTES WITH MONEY SHE HAS LOOTED OUT OF THE FEDERAL TREASURY ...

THE FISCAL NIGHTMARE FOR THE MAJORITY OF AMERICANS WHO ARE NOT FOLLOWERS OF THE AIR-HEAD PELOSI CONTINUES TO GROW AND GROW ...

WHILE THE AIR-HEAD PELOSI DREAMS ON IN A STATE OF OBLIVION TO THE REALITY THAT MOST SANE AND RATIONAL PEOPLE IN AMERICA MUST LIVE WITH ...

WHICH IS THAT "GOVERNMENT" IN AMERICA IS LARGELY A MOCKERY ...

PELOSI IS TURNING IT INTO A WEIRD VERSION OF "LET'S MAKE A DEAL" AND "WHEEL OF FORTUNE" FOR HER HANDFUL OF FOLLOWERS USING MONEY THAT SHE HAS LOOTED FROM THE U.S. TAXPAYERS ...

And so ...

"Layoffs possible for 22K California state workers - California could lay off 22,000 temporary and part-time workers amid budget stalemate"

By DON THOMPSON, Associated Press

Last updated: 6:22 a.m., Thursday, July 31, 2008

SACRAMENTO, Calif. -- The California Department of Motor Vehicles, infamous for its long lines, recently cut in half the wait to get a driver's license.

The agency accomplished the feat largely by hiring part-time employees.

Residents may have to get reacquainted to long lines thanks to the state's fiscal crisis.

Gov. Arnold Schwarzenegger is threatening to sign an executive order laying off temporary, part-time and contract state workers.

About 22,000 such workers face layoffs.

That could mean fewer DMV workers, fewer food safety inspections and cutbacks in the programs that stock fish in the state's rivers and lakes, as well as other consequences.

The governor also was expected to order that many of the 200,000 regular state employees under his control be paid the federal minimum wage of $6.55 an hour until a state budget is passed.

Schwarzenegger issued the threat last week after he grew frustrated with lawmakers' inability to reach a budget deal for the fiscal year that started July 1.

He was expected to sign the executive order Thursday, the first day of the August pay period.

Schwarzenegger's order is designed in part as a way to pressure lawmakers to strike a budget deal quickly, but it also is expected to prompt immediate challenges.

Lawmakers have failed to agree on a spending plan for the fiscal year that began July 1, arguing over whether they should enact tax increases or steep cuts to close a $15.2 billion deficit.

The workers receiving the federal minimum wage will be reimbursed for their full salaries once a budget deal is reached.

The others will simply be out of work.

Schwarzenegger spokesman Aaron McLear said law enforcement, emergency, disaster and other critical workers would be exempt from the executive order.

The federal court-appointed receiver who runs the state prison health care system on Wednesday exempted all his state employees from the cutbacks.

Controller John Chiang, a Democrat, said he will defy Schwarzenegger and keep sending permanent employees their full checks, rather than paying them minimum wage.

State employee unions promise to seek injunctions blocking the entire executive order.

Both concede the governor likely has the power to lay off the seasonal and part-time workers.

Schwarzenegger said he has little choice because the state could run out of cash without a budget.

The administration projects that firing the employees, ending contracts and suspending overtime would save the state about $100 million a month.

"Being governor, I have to make sure that we pay our bills and that we have the money," Schwarzenegger said at a news conference on Tuesday.

While many state workers can get low-interest loans until they receive back wages, Kim Croff, 44, of Carmichael, is one of those set to lose her DMV job with little savings as a cushion.

"I'm very worried."

"Unemployment is up, jobs are very scarce."

"There's no one really hiring."

"The economy is really bad," Croff said while workers protested the pending cuts during their lunch hour Wednesday.

"It takes a toll on you, just worrying about it."

Jim Zamora, spokesman for Service Employees International Union, said seasonal fruit and vegetable inspectors also might be laid off -- "the people who protect you from salmonella."

"By getting rid of them at this time of year, you're potentially creating problems for the state," he said.

The governor's office said it's not clear whether food inspectors would be subject to the executive order.

"Deutsche Bank 2Q net profit down 64 percent - Deutsche Bank 2Q net profit falls 64 percent amid more subprime writedowns"

By GEORGE FREY, Associated Press

Last updated: 7:02 a.m., Thursday, July 31, 2008

FRANKFURT, Germany -- Deutsche Bank AG's net profit fell 64 percent in the second quarter as financial market turbulence from the U.S. credit crisis led to euro2.3 billion in writedowns, the bank said Thursday.

Deutsche Bank, Germany's biggest, said net profit in the April through June period fell to euro645 million ($1 billion) from euro1.8 billion in the second quarter of 2007.

Total net revenues were down 39 percent to euro5.4 billion ($8.42 billion) from euro8.8 billion a year ago, the Frankfurt-based bank said.

"The second quarter of 2008 proved to be another very challenging quarter for the banking industry," said Josef Ackermann, Deutsche Bank's chief executive in a statement.

Corporate banking and securities' loss before income taxes for the quarter were euro311 million ($485.2 million), the bank said.

Markdowns on residential mortgage-backed securities, bond insurers, commercial real estate, and other positions amounted to euro2.3 billion ($3.6 billion).

"The environment continued to affect the performance of our investment banking business, but our 'stable' businesses again proved their resilience."

"Despite additional markdowns, we produced a solid profit," Ackermann said.

"Looking forward, we remain cautious for the remainder of 2008."

"We will continue to strictly manage cost, risk and capital and to reduce our exposures in key areas."

"We will continue to invest in all our core businesses, both organically and by acquisition, but we will not relax our discipline."

Ackermann was not more specific on investing in acquisitions, nor did the report offer more of an outlook for the year.

"Blast outside Pakistani consulate in Afghanistan - Blast outside Pakistani consulate in western Afghanistan wounds at least 1"

By FISNIK ABRASHI, Associated Press

Last updated: 7:12 a.m., Thursday, July 31, 2008

KABUL, Afghanistan -- An explosion outside a Pakistani consulate in western Afghanistan on Thursday wounded at least one person, officials said.

Explosives placed on a bicycle detonated outside the gates of the consulate in the city of Herat, said Naeem Khan, spokesman for the Pakistani Embassy in the Afghan capital, Kabul.

He said a policeman was wounded but according to Mir Ahmad, a police official in Herat, two people were hurt -- a police guard and a woman.

No one was injured inside the consulate, Khan said.

Pakistan has four consulates in Afghanistan, he said.

Pakistan's government was quick to condemn the blast and remind the Afghan government of its duty to protect diplomatic offices.

"We hope that Government of Afghanistan will take its responsibility seriously," a statement from Pakistan's foreign ministry said.

Afghanistan is battling a raging Taliban-led insurgency, but much of the violence has occurred in the south and the east of the country, although the west has not been immune.

The growing instability in the country has strained relations with Pakistan, which Afghan officials contend is not doing enough to crack down on militants who hide out on its side of the border in the east.

Afghan-Pakistan relations hit a new low after a huge bombing outside the Indian Embassy in Kabul on July 7.

Indian and Afghan officials say their information indicates Pakistani involvement in the attack, which killed some 60 people.

In other violence, Taliban militants killed Bacha Khan, a tribal elder, and his two sons, and wounded his wife in Arghandab district of the southern Kandahar province, said district chief Zemarai Khan.

The militants kidnapped seven other elders during the Wednesday raid, Khan said.

Arghandab is seen as a strategic location that is key to controlling access to Kandahar city, the main hub of southern Afghanistan and the Taliban's former stronghold.

Insurgents have overrun the district, which is located 8 miles north of the city, at least twice this year, only to be pushed back by Afghan and foreign troops.

----

Associated Press writers Rahim Faiez in Kabul and Noor Khan in Kandahar contributed to this report.

"NATO must do more in southern Afghanistan: Canada"

31 JULY 2008

OTTAWA (Reuters) - NATO members must send more troops to southern Afghanistan, where Canada and a few other nations are bearing the brunt of combat against Taliban militants, Canadian Defence Minister Peter MacKay said on Wednesday.

Canada, which has 2,500 soldiers in the southern city of Kandahar and plans to send around 200 more, has long complained that many NATO members refuse to send soldiers to the most dangerous parts of the country.

"We're doing enough ... but NATO has to do more," MacKay told reporters in televised comments from Levis, Quebec.

"Southern Afghanistan is the flash point in this mission."

"It's the most vulnerable, the most volatile part of the country ... we're not going to let up or relent on our request for other NATO countries to come to the south," he said.

The majority of soldiers fighting in southern Afghanistan are U.S., British, Canadian and Dutch.

Canada's mission in Kandahar is due to end in 2011.

So far 88 of its soldiers have died.

The extra 200 troops will maintain and operate unmanned aerial surveillance vehicles (UAVs) and helicopters that Canada has pledged to buy before February 2009.

MacKay said that, in the interim, Canada was leasing between six and eight Russian-made Mil Mi-8 helicopters as well as an unspecified number of UAVs.

(Reporting by David Ljunggren; editing by Rob Wilson)

The way things work in Washington DC:

2005 White House hiring directive: 'Place as many of our Bush loyalists as possible.' A "little-noticed" email revealed in the new Justice Department report about the department's politicized and illegal hiring practices. A May 17, 2005 directive from the White House political affairs office said: "We simply want to place as many of our Bush loyalists as possible." The email urged agency officials to find jobs for 108 people on a list of "priority candidates" who had "loyally served the president."

CARTOON: "The Splurge is Working" Red ink abounds in Bush World.

Just to say how much I appreciate you putting these DOJ hiring-related articles in here, Snuf ....

You find stuff that I miss in that regard ....

And I think that this is stuff that should be FRONT AND CENTER here in America right now ...

So thanks again for putting it in here ....

And so ...

"Report: Iraqi journalist detained by US military - Reuters news agency says 1 of its Iraqi journalists detained by US military"

Associated Press

Last updated: 7:42 a.m., Thursday, July 31, 2008

BAGHDAD -- Reuters news agency said Thursday one of its Iraqi photographers had been detained by the U.S. military and called on the American command to make public the reasons for his detention.

Ali al-Mashhadani, who also freelances for the British Broadcasting Corp. and National Public Radio in the United States, was picked up Saturday in the U.S.-controlled Green Zone where he had gone to apply for a U.S. military press card, Reuters said in a statement.

Al-Mashhadani is being held at the U.S. detention facility at Camp Cropper near Baghdad International Airport, the agency said.

Reuters Editor-in-Chief David Schlesinger called on the U.S. military to make public its accusations against the photographer so they can be "dealt with fairly and swiftly, with the journalist having the right to counsel and present a defense."

"Iraqi journalists like Mashhadani play a vital role in telling this story to the world," Schlesinger said in a statement Thursday.

The BBC said it was concerned about al-Mashhadani's detention and urged the American military to "disclose as a matter of urgency the grounds on which he is being held and what charges, if any, he faces."

The Associated Press requested comment from the U.S. command but none was immediately available.

Reuters said two Iraqi journalists who were in the military press office at the time said they saw American soldiers frisking al-Mashhadani and leading him away.

The agency said two other witnesses said they saw U.S. soldiers escorting a handcuffed man with a hood over his head.

The U.S. military maintains that a U.N. mandate gives it the authority to detain indefinitely anyone believed to pose a security threat to U.S.-run coalition operations in Iraq.

Al-Mashhadani was detained in August 2005 after U.S. troops found photos of insurgent activity in his camera while searching his home in Ramadi, the capital of Anbar province.

He was released without charge in January 2006 but was detained for two weeks a few months later.

No charges were filed after the second detention.

U.S. forces have held other Iraqi journalists working for foreign news organizations for long periods without charging them.

In April, the U.S. military released Bilal Hussein, a Pulitzer Prize-winning photographer working for The Associated Press, after holding him for two years.

An Iraqi television camera operator working for the AP in Tikrit, Ahmed Nouri Raziak, was detained by U.S. forces in June.

He was recently ordered held for at least six more months.

The U.S. military said Raziak was held for "imperative reasons of security" and provided no further details.

THE NEW YORK TIMES

"Earlier Jail Seen as Incubator for Abuses in Iraq"

By DOUGLAS JEHL

Published: May 15, 2004

WASHINGTON, May 14 — An American-run detention center outside Baghdad known as Camp Cropper was reportedly the site of numerous abuses of Iraqi prisoners several months before the mistreatment of prisoners unfolded last fall at Abu Ghraib prison, according to documents and interviews.

The detention facility, on the outskirts of Baghdad International Airport, appears to have served as an incubator for the acts of humiliation that were inflicted months later on Iraqi prisoners at Abu Ghraib.

At both sites, the mistreatment has been linked to interrogations overseen by the 205th Military Intelligence Brigade, based in Wiesbaden, Germany.

The alleged abuses at Camp Cropper last May and June were severe enough to have prompted formal complaints to American commanders from visiting officials of the International Committee for the Red Cross.

After several visits to Camp Cropper, where they interviewed Iraqi prisoners, officials of the I.C.R.C. in early July 2003 cited at least 50 incidents of abuse reported to have taken place in a part of the prison under the control of military interrogators.

In one example cited to American officers in Baghdad that month by the committee officials, a prisoner said he had been beaten during interrogation, as part of an ordeal in which he was hooded, cuffed, threatened with being tortured and killed, urinated on, kicked in the head, lower back and groin, "force-fed a baseball which was tied into the mouth using a scarf and deprived of sleep for four consecutive days."

A medical examination of the prisoner by the committee's doctors "revealed hematoma in the lower back, blood in urine, sensory loss in the right hand due to tight handcuffing with flexi-cuffs, and a broken rib," said a final report by the Red Cross panel, which was presented to American officials in February 2004.

"Sometimes they treated them good, and sometimes they didn't treat them so good," Staff Sgt. Floyd Boone, a military policeman, said of the military intelligence interrogators from the 205th Brigade at Camp Cropper.

He and other members of the military police were not permitted to watch the interrogations, he says, but he remembers "all the noise, yelling and screaming" from trailers where interrogators from the 205th Brigade took Iraqi prisoners for questioning before returning them to the custody of the military police.

After the I.C.R.C. complaints, the military interrogation site at Camp Cropper where the abuses took place was closed down, senior military officials said, though they declined to discuss the committee's report or to say whether it had prompted that move.

"A decision was made to close the camp and consolidate at Abu Ghraib," a senior military officer said.

It remains unclear whether any disciplinary action was taken at the time against members of the 205th Brigade.

The brigade commander, Col. Thomas M. Pappas, who took command at the end of June 2003, was later put in charge of interrogations at Abu Ghraib and was implicated by the Army's investigation of abuses as being "either directly or indirectly responsible" for the actions of those who mistreated and humiliated Iraqi prisoners there.

Colonel Pappas and a spokesman for the unit, part of the Army's V Corps in Wiesbaden, have refused to comment on the affair.

To date, the Camp Cropper facility, one of the first opened by the United States military in Iraq, has largely escaped the public scrutiny attached to other facilities in Iraq, particularly Abu Ghraib, which did not open until August and became the site of the most horrific abuses.

Since August, Camp Cropper has served primarily as the detention site for about 100 former high-ranking Iraqi officials, who have been held in isolation in concrete cells.

The 205th Military Intelligence Brigade is now the principal focus of an internal Army inquiry that is expected to shed new light on the abuses, according to senior military officers.

In November, Lt. Gen. Ricardo Sanchez, the top American commander in Iraq, elevated the brigade to an even more prominent role, assigning it to overall responsibility for Abu Ghraib, over the 800th Military Police Brigade, an Army Reserve unit headed Brig. Gen. Janis Karpinski.

At Camp Cropper, as at most American-run prisons in Iraq, the military intelligence brigade, which was responsible for interrogations, operated in a structure parallel to the military police, who were in charge of the prison and its prisoners.

Some soldiers assigned to Camp Cropper, including members of the military police and of a military intelligence unit, have said they knew nothing of the abuse.

"I never saw anyone come out of interrogations looking stressed or abused," said Sgt. First Class James Glascox, 44, of Snow Hill, Md.

"I never heard complaints about maltreatment."

"I was never aware of any problem with the M.I. unit that was with us."

Maj. Robert Michnowicz, 43, an Army Reserve officer, commanded the 325th Military Intelligence battalion during its deployment in Iraq.

In a telephone interview on Friday, he said some members of his 300-member unit were among elements of three different military intelligence battalions assigned to Camp Cropper between June and September 2003, under the overall supervision of Colonel Pappas.

Major Michnowicz, who was based elsewhere in Iraq, said he visited Camp Cropper about once a week, and had not sat in on interrogations.

But he said he had never heard any reports from his soldiers about abuses there.

"Nobody came out and said anything," he said.

"There was nothing like what has been written about in the papers."

Still, by July 2003, alleged abuses of Iraqi prisoners at Camp Cropper were among problems that had prompted loud and repeated warnings, not just from the I.C.R.C. officials, but from others focused on human rights, including Amnesty International, and a top deputy to the United Nations high commissioner for human rights.

In May of 2003, according to the I.C.R.C. report, officials from that organization hand-delivered to officers of the United States Central Command in Doha, Qatar, a memorandum "based on over 200 allegations of ill-treatment of prisoners of war during capture and interrogation" during the period of major combat that followed the American invasion in March.

But it remains unclear how seriously those complaints were taken by American officials, and to what extent they were even addressed by American commanders in Iraq, by the American civilian authorities there, or by their superiors at the Central Command, the Pentagon and the State Department.

American military spokesman in Baghdad and at Central Command headquarters in Tampa, Fla., said they would not be able to comment by Friday night on any action that might have been taken in response to the Red Cross reports.

The abuses at Camp Cropper in those early months were largely outside the scope of the most detailed investigation to date, completed by Maj. Gen. Antonio M. Taguba, which focused on the conduct of the 800th Military Police Brigade.

But even in that report, submitted in March, General Taguba cited the 205th Brigade for possible wrongdoing, identifying Colonel Pappas, Lt. Col. Steve L. Jordan and two civilian contractors who worked for the unit as having been "either directly or indirectly responsible for the abuses at Abu Ghraib."

To date, the only American soldiers charged in connection with the Abu Ghraib abuses are seven members of the 800th Brigade, all from the 372nd Military Police Company, from Cresaptown, Md.

But in addition to those abuses, the Taguba report identified others, including "abuses committed by members of the 325th M.I. Battalion, 205th M.I. Brigade, and Joint Interrogation and Debriefing Center," which all reported to Colonel Pappas.

On the basis of the Taguba report, General Sanchez immediately "directed the suspension of a military intelligence officer and the initiation of a separate investigation into allegations of possible military intelligence involvement in the abuse of detainees," a senior military official said last week.

http://www.nytimes.com/2004/05/15/politics...artner=USERLAND

"Rebates helped economy _ some _ in second quarter - Rebate checks give economy a smaller-than-expected lift; new figures say it shrank late in '07"

By JEANNINE AVERSA, Associated Press

Last updated: 4:52 p.m., Thursday, July 31, 2008

WASHINGTON -- The prospects for a quick economic recovery dimmed Thursday, with new data showing the economy grew at a slower-than-expected rate this spring despite some oomph from tax rebate checks -- and actually shrank late last year.

Democrats called for a second economic stimulus package, while the Bush administration said the growth was proof the checks helped.

Armed with government stimulus checks of up to $600 per person, Americans boosted spending on food, clothing and other items in the second quarter, the Commerce Department reported.

But the gross domestic product still increased at a 1.9 percent annual rate, up from 0.9 percent in the first quarter but less than the 2.4 percent economists were looking for.

Government revisions showed the economy actually shrank at the end of last year at a 0.2 percent annual rate.

It was the first quarterly dip for the GDP since the 2001 recession.

Meanwhile, the Labor Department said the number of newly laid-off people rose to 448,000 last week, the most in five years.

More job cuts are expected in coming months, and Americans may cut back on spending, kindling recession fears.

Wall Street didn't like what it saw.

Following two days of gains, the Dow Jones industrials fell 205.67 points to 11378.02.

President Bush acknowledged the economic news was "not as good as we'd like it to be."

His commerce secretary, Carlos Gutierrez, said the growth showed the stimulus package was providing some relief.

"Some said the rebates would not have an impact."

"Well, they were wrong," Gutierrez told The Associated Press.

"The stimulus checks are having an impact in spite of the energy prices."

On the campaign trail, the economic policy director for Democratic Sen. Barack Obama said nothing in the new numbers was "positive for families" and said Obama supported a second stimulus package.

Republican Sen. John McCain said the report was disappointing but added that trade "provides one of the few bright spots in an otherwise gloomy economic picture."

Sales of U.S. exports grew at a 9.2 percent pace in the second quarter, up from 5.1 percent in the first quarter.

The weak dollar has made U.S. goods cheaper to foreign buyers.

Consumer spending for the second quarter rose at a 1.5 percent rate, better than the first quarter and the best showing since the third quarter of last year, when the economy was still chugging along despite the housing slump.

Slower growth or no, many Americans were grateful for the help as the checks rolled in.

"It was much needed," said Les Jewell, a 32-year-old technology teacher in St. Louis who has a 7-month-old son.

"It was very useful, especially when you look at areas like getting formula."

Economists have mixed views on what's to come.

A lot hinges on the whims of people who put their rebate checks in the bank:

Will they spend them, boosting growth, or keep them stashed away?

There was some evidence Americans saved at least some of the cash.

The savings rate rose to 2.6 percent of disposable income, a six-year high.

A growing number of analysts fear that the economy will slip into reverse again at the end of this year, as any effects of the tax rebates disappear.

And there are concerns exports could tail off as other countries' economies slow down.

A new poll by the nonpartisan poll by the Pew Research Center released Thursday showed about three in four Americans think the economy is in a recession -- at best -- already.

Two in three say their income isn't keeping up with the cost of living.

The GDP report also reflected the continuing fallout in housing.

Builders cut back at an annual rate of about 15 percent for the quarter -- although that was a better showing than early this year and late last year.

Businesses trimmed spending on equipment and software and reduced investment in inventories.

An inflation gauge tied to the GDP report showed all prices galloping ahead at a rate of 4.2 percent in the second quarter, the fastest pace since the end of last year.

Taking out energy and food, prices rose 2.1 percent, still outside the Federal Reserve's comfort zone.

The Fed meets next week and is expected to hold interest rates steady.

As a general rule, the economy is in recession when it shows two consecutive quarters of contraction.

That didn't happen in the last recession -- in 2001.

That was declared a recession by another reading, by a panel of academics at the National Bureau of Economic Research, that usually comes well after the fact.

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AP Business Writer Christopher Leonard contributed to this report from St. Louis.

"Wall Street slides on GDP, jobless data - Stocks sink on disappointing gross domestic product reading, jump in jobless claims"

By TIM PARADIS, Associated Press

Last updated: 5:22 p.m., Thursday, July 31, 2008

NEW YORK -- Wall Street sank Thursday, after weak readings on economic growth and the job market touched off renewed concerns about the financial health of businesses and consumers.

The Dow Jones industrial average fell more than 200 points.

The Commerce Department's report that gross domestic product grew at a 1.9 percent pace in the second quarter disappointed investors.

Economists polled by Thomson Financial/IFR had expected growth of 2.4 percent in the broad measure of the economy's health.

Investors were also concerned about Labor Department data saying that the number of people seeking jobless benefits jumped to the highest level in five years.

Economists warned the weekly figures can be volatile, however, and some dismissed them as an aberration.

A $4.5 billion cash offer from Bristol-Myers Squibb Co. for its cancer drug partner ImClone Systems Inc. kept the Nasdaq composite index from falling as sharply as other indexes.

In other positive news, oil prices declined, and an index of Midwestern business activity indicated growth.

But Wall Street could not shake off its worries about the economy -- particularly after sobering remarks from Former Federal Reserve Chairman Alan Greenspan on CNBC late in the afternoon.

Greenspan said he would be more surprised if the United States did not enter recession than if it did.

The comments came after Treasury Secretary Henry Paulson said in a speech in Washington that the economy will continue to grow at a moderate pace for the rest of the year, and the government's $168 billion stimulus package had helped grease the economy's wheels.

But Larry Smith, chief investment officer at Third Wave Global Investors in Greenwich, Conn., said tightness in credit markets and high oil prices continue to weigh on the economy and the stimulus package won't deliver a permanent fix.

"Tax rebates have been a very effective way of propping up the economy in the second quarter, and less so in the third quarter," Smith said.

"To fix the economic growth problems, you have to restore liquidity to the system."

According to preliminary calculations, the Dow Jones industrial average fell 205.67, or 1.78 percent, to 11,378.02, continuing its string of erratic, triple-digit daily swings.

Broader stock indicators also declined.

The Standard & Poor's 500 index fell 16.88, or 1.31 percent, to 1,267.38, while the Nasdaq fell 4.17, or 0.18 percent, to 2,325.55.

During the month of July, the Dow inched up 0.25 percent, the S&P fell 0.99 percent, and the Nasdaq rose 1.42 percent.

It was certainly a better showing than in June, during which the Dow dropped 10.19 percent, the S&P fell 8.60 percent, and the Nasdaq lost 9.10 percent.

Bond prices jumped following the economic readings.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.95 percent from 4.05 percent late Wednesday.

The dollar was mixed against other major currencies, while gold prices rose.

Light, sweet crude fell $2.69 to settle at $124.08 a barrel on the New York Mercantile Exchange after rising more than $4.50 on Wednesday.

Oil has fallen more than $20 since hitting a high above $147 on July 11, raising hopes that inflation pressures could ease.

Thursday's stock market pullback follows bets investors made this week that the beaten-down financial sector would rebound and that the Labor Department's employment report on Friday would show a less gloomy jobs market.

But other stock rallies have fizzled in recent weeks.

Investors have remained concerned about the housing and credit markets, the health of financial companies and the effect of high commodities prices.

The latest GDP reading, which reflected consumers cashing tax rebate checks, still shows the economy grew at a faster pace than the weak 0.9 percent seen in the first quarter.

But revised numbers also revealed for the first time that the economy shrank in the fourth quarter last year.

The mixed economic figures are making it hard for investors to have much conviction, observers say.

"I think in the short run, it's going to be a tug-of-war between the optimists and the pessimists," said Jack Caffrey, equities strategist at JPMorgan Private Bank.

"I think both sides are going to be able to find enough information to support their case."

At some point one side will give in, he said.

"The challenge is, you can't identify what the catalyst is that will change psychology."

Investors sifted through a flurry of quarterly profit reports for clues about the economy.

Exxon Mobil Corp. reported second-quarter earnings of $11.68 billion, the largest quarterly profit ever by a U.S. corporation.

But the per-share earnings fell well short of Wall Street's forecast, which assumed that record crude prices would push earnings even higher.

The stock fell $3.95, or 4.7 percent, to $80.43 and weighed on the Dow industrials.

The Walt Disney Co. fell $1.32, or 4.2 percent, to $30.35 after the company reported a slowdown in the U.S. advertising market in the current quarter and weak box office results in the period that ended in June.

Motorola Inc. jumped 96 cents, or 12.5 percent, to $8.64 after posting a surprise profit for its second quarter.

The company said it shipped more cell phones than in the first quarter.

Eastman Kodak Co. reported a second-quarter profit but the results missed Wall Street's forecast.

The stock declined $1.13, or 7.2 percent, to $14.64.

In other news, Wall Street applauded Bristol-Myers' offer $60 per share for ImClone, a 30 percent premium to ImClone's closing price of $46.44 Wednesday.

Bristol-Myers, which already owns about 17 percent of ImClone, is a U.S. partner for the colon and head and neck cancer drug Erbitux.

ImClone surged $17.49, or 37.7 percent, to $63.93.

Bristol-Myers slipped 39 cents to $21.12.

Declining issues outpaced advancers by about 3 to 2 on the New York Stock Exchange, where volume came to 1.45 billion shares.

The Russell 2000 index of smaller companies fell 4.34, or 0.60 percent, to 714.52.

Overseas, Japan's Nikkei stock average closed up 0.07 percent.

Britain's FTSE 100 fell 0.16 percent, Germany's DAX index rose 0.30 percent, and France's CAC-40 fell 0.19 percent.

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On the Net:

New York Stock Exchange: http://www.nyse.com

Nasdaq Stock Market: http://www.nasdaq.com

"Jobless claims hit 2003 high, linked to outreach - Weekly applications for jobless benefits soared to 448,000 last week, highest level since 2003"

By MARTIN CRUTSINGER, Associated Press

Last updated: 8:52 a.m., Thursday, July 31, 2008

WASHINGTON -- The number of people filing claims for unemployment benefits jumped last week to the highest level in five years, reflecting in large part a new government outreach effort to locate people eligible for benefits.

The Labor Department reported Thursday that the number of applications for jobless benefits soared to 448,000, an increase of 44,000 from the previous week.

That was far worse than the decline of 8,000 that economists had been expecting.

However, the government attributed much of the big jump to a special outreach program to notify people that they could qualify for up to 13 weeks of additional benefits because of legislation Congress passed in June.

When people came in to apply for the extended benefits, state claims officials discovered that many of them were eligible for another round of initial claims because they had held jobs for a brief period after exhausting their original benefits.

Labor Department officials said that these special factors played a big role in pushing claims higher last week.

The jump was the biggest one-week increase since claims soared by 94,000 the week of Sept. 10, 2005, following a wave of layoffs in the wake of the devastation from the Gulf Coast hurricanes that year.

The overall total of 448,000 claims for last week surpassed the previous high for the current slowdown of 406,000 in late March.

It was the highest claims level since they totaled 450,000 the week of April 19, 2003, a period when the country was struggling through a jobless recovery following the 2001 recession.

The economy is being battered by a severe slump in housing which has triggered heavy layoffs in construction and related industries.

Also, overall economic weakness and a surge in gasoline prices has resulted in heavy layoffs among auto manufacturers who have seen demand slump for their once-popular trucks and sport utility vehicles.

The government will report on the employment picture for July on Friday.

Many economists believe that report will show the jobless rate edged up to 5.6 percent in July from 5.5 percent in June.

Economists are looking for businesses to have cut jobs for a seventh straight month, and project that payroll employment will fall by 72,000 following a loss of 62,000 in June.

General Motors Corp. officials said this week that they plan to cut 15 percent of their U.S. and Canadian salaried work force -- or around 5,100 jobs -- as part of a program to slash billions of dollars in costs.

Also Starbucks Corp., which already planned to shut 600 of its stores, said it will cut almost 1,000 office jobs, which will include an expected 550 layoffs as it deals with falling sales.

"Mass. regulators accuse Merrill Lynch of fraud - Mass. regulators file fraud complaint against Merrill Lynch over auction-rate securities"

By DENISE LAVOIE, Associated Press

Last updated: 12:42 p.m., Thursday, July 31, 2008

BOSTON -- Massachusetts security regulators accused Merrill Lynch of fraud Thursday for allegedly promoting the sale of auction-rate securities when they knew the investments were becoming increasingly unstable.

The administrative complaint filed by Secretary of State William Galvin claims Merrill Lynch, Pierce, Fenner & Smith -- the main subsidiary of Merrill Lynch & Co. -- aggressively sold the securities while downplaying the risks.

Auction-rate securities have their interest rates set at periodic auctions, depending on the submitted bids.

The investments were once considered safe, but the market collapsed in February amid turmoil in the credit markets.

The market's failure left many investors with their cash frozen as buyers dried up.

New York-based Merrill Lynch denied it defrauded investors.

"We are disappointed that Massachusetts filed this action because it ignores the only reason our advisers sold auction rate securities: they believed they were good investments for clients willing to trade some liquidity for higher return," the company said in its statement.

"The inarguable fact is the number of auctions that had failed in nearly two decades of (auction-rate securities) sales was small."

"In 2007 there were no failed auctions of securities sold to retail clients and, in fact, none to these clients until late January 2008."

But Galvin claims in the civil complaint that Merrill Lynch knew several months earlier "that auction markets were not functioning properly and were, in fact, in significant danger of collapsing."

He said the company continued to aggressively promote the securities as safe.

The complaint cites a personal e-mail written by one Merrill Lynch executive on Nov. 19.

"Market is collapsing."

"No more $2k dinners at CRU," said the e-mail, referencing a Manhattan restaurant.

The complaint also alleges that Merrill Lynch "co-opted" its research department by allowing its sales and trading managers to push for written research to be published "endorsing the safety and high quality" of auction-rate securities.

Merrill Lynch also denied that allegation.

"Our research reflected the honest belief that ARS offered higher returns in exchange for less liquidity and noted that market changes had begun to occur," the company said.

Galvin said the complaint seeks an order for Merrill Lynch to make restitution to investors and pay an administrative fine.

"Our principal concern is to make people whole, particularly individuals and small businesses who have been completely upended by this," Galvin said.

"We want Merrill Lynch to undo the damage they did by selling these things knowingly to people, telling them they had liquidity ... then leaving them stranded when they knew these auction markets were in trouble."

The complaint will be heard by a hearings officer within the Securities Division of Galvin's office.

Merrill Lynch can appeal any finding in court.

It is the second action brought by the Securities Division since the market collapsed.

Last month, a similar complaint was brought against UBS Financial Services.

"GMAC posts $2.5 billion loss in 2nd quarter - GMAC posts $2.5 billion 2nd-quarter loss amid lower vehicle sales, weaker credit markets"

By BREE FOWLER, Associated Press

Last updated: 1:42 p.m., Thursday, July 31, 2008

NEW YORK -- GMAC Financial Services said Thursday it swung to a $2.48 billion second-quarter loss, pulled down by a steep drop in the values of used trucks and sport utility vehicles.

The loss, which exceeded GMAC's losses for all of 2007, compared with a profit of $293 million in the same quarter last year.

GMAC Chief Financial Officer Robert Hull called the results disappointing, blaming turmoil in the credit and housing industries and a weak U.S. economy, coupled with a drop used vehicle prices and soaring fuel costs.

"This is the perfect storm for our business and we see no signs of it blowing over," Hull told analysts and journalists in a conference call.

GMAC is majority owned by private equity firm Cerberus Capital Management, but Detroit-based General Motors Corp. still holds a large minority of the business.

That stake is expected to be a drag on GM's results when it reports second-quarter figures Friday morning.

Losses at GMAC's mortgage lending division, ResCap, widened to $1.86 billion from $254 million, as a result of losses from asset sales.

Meanwhile, GMAC's automotive finance division swung to a loss of $717 million.

The loss included a $716 million impairment charge resulting from lower used vehicle residual values, especially related to SUVs, GMAC said.

Deutsche Bank's Rod Lache said that charge would have been significantly higher without $1.5 billion in leasing support payments from GM.

Lache expects the automaker to take a $1.2 billion loss related to GMAC, along with the $1.5 billion charge, when it reports Friday.

"Overall, results were weaker than expected due to one-time charges and asset sale writeoffs in both ResCap and GMAC Auto," Lache wrote in a note to investors.

"We expect weak results in both businesses to continue at least through the end 2008."

Also on Thursday, Standard & Poor's cut its ratings for GMAC, along with all there Detroit-based automakers and their respective finance arms, to "B-" from "B," citing mounting cash losses at the automakers and the continued deterioration of the U.S. automotive market.

Both ratings are considered "junk" status.

Surging gas prices have pulled down the values of large pickups and SUVs this year, making automakers' lease portfolios less attractive and forcing them to take big losses when they try to sell the formerly leased vehicles.

Hull said the company is taking a number of steps to lower its lease-related losses, including cutting the volume of new leases in the United States and putting in place a program that will encourage customers to keep their vehicles once their leases expire.

GMAC also said earlier this week that it was eliminating leasing incentives in Canada at the end of July.

Meanwhile, GM told its dealers this week that it would continue U.S. leasing incentives in August, despite the tough market conditions.

GMAC isn't the only company taking steps to lessen its lease-related risks.

Ford Motor Credit, which took a $2.1 billion charge during the second quarter because of the drop used vehicle values, has said it will raise leasing prices on some models.

And Chrysler LLC said last week that its own finance arm would get out of the leasing business altogether by the end of July.

William Muir, president of GMAC Financial Services, said leases accounted for about 18 percent of GM sales during the first six months of 2008, but GMAC expects that percentage to fall by half in the "very near term."

Down the road, lease sales could trend below that percentage depending on market conditions, Muir said.

GM shares fell 31 cents, or 2.7 percent, to $11.09 in afternoon trading.

"Paulson says housing remains biggest threat - Administration says government stimulus was very timely and will continue to support growth"

By MARTIN CRUTSINGER, Associated Press

Last updated: 1:42 p.m., Thursday, July 31, 2008

WASHINGTON -- The $168 billion government stimulus effort has been a timely support for the economy and will continue to boost growth in the second half of this year, Treasury Secretary Henry Paulson said Thursday.

Paulson predicted in a speech to a Washington audience that the economy will continue growing at a moderate pace for the rest of this year, despite housing slump-induced problems.

"We are making progress although not in a straight line," Paulson said.

"Housing continues to be at the heart of our economic challenges and remains our most significant downside risk."

Paulson said the economy needs to work through adjustments in housing and credit markets, which have been roiled by huge losses on mortgage loans, for the country to "return to stronger growth next year and beyond."

Paulson spoke on a day the government released a report showing that the housing and credit crises continued to weigh on the economy.

The gross domestic product expanded at an annual rate of 1.9 percent in the April-June quarter, double the 0.9 percent increase in the first three months of the year.

The government estimated that the economy shrank in the final three months of last year, however, at an annual rate of 0.2 percent.

It's the first time GDP has declined since the 2001 recession.

The checks sent out to millions of households earlier this year have helped the economy, though, Paulson said.

"Clearly, the stimulus plan has supported the U.S. economy during this difficult period and couldn't have been timelier," he said.

"American families spent, companies invested and benefited from strong export growth."

Paulson said that from April to June, the Treasury Department had distributed almost 95 million payments totaling over $78 billion to U.S. households.

While many private economists worry that the effect of the stimulus payments will quickly fade, Paulson said the administration expects the stimulus program would continue to support growth in the second half of this year.

On housing, Paulson said he expected foreclosures and the level of unsold homes would likely remain "substantially elevated this year and next and home prices are likely to decline further on a national basis."

Nevertheless, he predicted that the bulk of the housing slump would be over in months, instead of years.

President Bush on Wednesday signed a sweeping housing rescue bill that is designed to help 400,000 families avoid losing their homes to foreclosures and to provide a financial lifeline to Fannie Mae and Freddie Mac, two mortgage giants that own or guarantee nearly half of the nation's home mortgages.

"Banks, Wall Street firms step up Fed borrowing"

By JEANNINE AVERSA, Associated Press

Last updated: 4:42 p.m., Thursday, July 31, 2008

WASHINGTON -- The Federal Reserve says banks and Wall Street firms stepped up their borrowing over the past week from its emergency lending program.

A Fed report released Thursday said commercial banks averaged $17.5 billion in daily borrowing over the past week.

That compared with $16.4 billion in the previous week.

For the week ending July 30, it says Wall Street firms averaged $3 million in daily borrowing.

In the prior week, the companies didn't draw such loans.

Their borrowing rose as high as $38.1 billion in early April.

"Oil falls to almost $124 on dour US economic data - Oil falls to just above $124 a barrel after weak US economic data stirs demand concerns"

By STEVENSON JACOBS, Associated Press

Last updated: 4:52 p.m., Thursday, July 31, 2008

NEW YORK -- Oil prices pulled back Thursday, wiping out some gains from the previous day's $4 a barrel rally, as traders bet that a cooling U.S. economy will continue to eat into U.S. demand for fuel.

At the pump, easing prices underscored Americans' waning consumption of gasoline.

The average price of a gallon of regular slipped 1.7 cents to $3.909, according auto club AAA, the Oil Price Information Service and Wright Express.

Light, sweet crude for September delivery fell $2.69 to settle at $124.08 a barrel on the New York Mercantile Exchange, a day after the contract soared more than $4 in the biggest one-day jump in two weeks.

Prices have now fallen in four of the last seven sessions and are 14 percent off their all-time trading high above $147, reached July 11.

The Commerce Department said U.S. gross domestic product rose just 1.9 percent in the second quarter despite government tax rebates aimed at jolting the economy.

Economists had expected growth of 2.4 percent.

The weak 1 percent GDP figure of the first three months of 2008 also was modified lower to 0.9 percent.

Meanwhile, a Labor Department report said the number of people seeking jobless benefits rose to the highest level in five years.

Economists warned the weekly figures can be volatile and some dismissed them as an aberration, however.

Still, the poor readings rekindled fears of a recession, prompting energy traders to dump oil contracts on expectations that more belt-tightening lay ahead for Americans who are already skipping vacations, giving up gas-gazzling SUVs and cutting back on driving to cope with almost $4-a-gallon gasoline.

"When you order grounding of planes and people are making significant driving changes in the U.S. because the price of food and gasoline has doubled, that's very bearish (for oil prices) moving forward," said James Cordier, president of Tampa, Fla.-based trading firms Liberty Trading Group and OptionSellers.com.

Given those circumstances, "$124 a barrel oil is still too expensive," Cordier said, adding that he expects prices to fall to $110 in coming months.

Prices were also pressured Wednesday as traders cashed in profits from Wednesday's rally.

Prices surged $4.58 on Wednesday to settle at $126.77 after the government reported a surprise drop in U.S. gasoline supplies.

"People looked at yesterday's frenzied rally and realized the fundamentals weren't there to support it," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

Some analysts attributed Wednesday's spike to low trading volume in oil markets, which can increase volatility.

Speculative traders, particular large investment funds, have been liquidating oil positions in recent months and are now shorting crude contracts, or betting that prices will fall, for the first time in 17 months.

"We're seeing a lower volume trade because this bull market seems to be over at least for the time being," Ritterbusch said.

Crude has fallen over the last three weeks from a record high of $147.27 on July 11, in part, on expectations that the spike in prices over the last year has begun to dampen U.S. demand for gasoline.

The drop in demand has been felt overseas as well.

China has been consuming less energy since imposing restrictions on driving and closing some factories in an effort to reduce pollution ahead of next month's Beijing Olympics, said Cordier of Liberty Trading Group.

"Even when those factories reopen, I think we've crossed a threshold where the speculative money isn't coming back into the oil market for the rest of 2008," he said.

In other Nymex trading, heating oil futures fell 8.16 cents to settle at $3.4387 a gallon while gasoline prices lost 8.71 cents to settle at $3.048 a gallon.

Trading of gasoline and heating oil was more volatile than normal because both contracts expired at the end of the day.

Also Thursday, the Energy Department's Energy Information Administration said in its weekly report that natural gas in storage in the U.S. rose last week but is 0.5 percent below the five-year average for this time of year.

Natural gas futures shed 12.9 cents to settle at $9.119 per 1,000 cubic feet.

In London, September Brent crude fell $3.12 to settle at $123.98 a barrel on the ICE Futures exchange.

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Associated Press writers Pablo Gorondi in Budapest, Hungary, Alex Kennedy in Singapore and Tim Paradis in New York contributed to this report.

"Judge: Congress can subpoena Bush aides"

By James Vicini

Thu Jul 31, 3:03 PM ET

WASHINGTON (Reuters) - A federal judge ruled on Thursday that Congress in its fight with the Bush administration can subpoena current and former top White House aides in its investigation over the firing of U.S. attorneys.

U.S. District Judge John Bates, who was appointed to the bench by President George W. Bush, rejected the administration's arguments that the aides were immune from such subpoenas and that Congress cannot force them to testify or turn over certain documents.

In a lengthy ruling totaling nearly 100 pages, he rejected the administration's request to dismiss the lawsuit that had been filed by the House of Representatives Judiciary Committee in March.

The lawsuit seeks to get testimony or documents from White House Chief of Staff Josh Bolten and former White House counsel Harriet Miers.

The lawsuit charged that Bolten and Miers, cited by the House for contempt of Congress, defied subpoenas by refusing to testify or provide documents in the long-running investigation into the administration's 2006 firing of nine of the 93 U.S. attorneys.

It marked the first time the House or the Senate had ever filed a lawsuit to enforce a subpoena aimed at the White House.

"We disagree with the district court's decision," said White House spokeswoman Dana Perino.

"We are reviewing it and once we've had a chance to do that we'll consider whether the decision should be appealed."

But House Judiciary Committee Chairman John Conyers viewed the decision as a victory for Congress.

"Today's landmark ruling is a ringing reaffirmation of the fundamental principle of checks and balances and the basic American idea that no person is above the law," the Michigan Democrat said in a statement.

Disclosure of the firings had prompted charges by Democratic lawmakers that the dismissals were politically motivated and led to the resignations of a number of top Justice Department officials, including the departure under fire nearly a year ago of Alberto Gonzales as U.S. attorney general.

Bates ruled that Miers is required to testify under the subpoena, but she still may invoke executive privilege in response to specific questions.

He also ruled that Bolten and Miers must produce all documents requested by the subpoena and must provide a specific description of any documents withheld based on executive privilege -- the power claimed by the president to keep private certain information regarding presidential decision-making.

The administration had argued that senior White House aides had immunity from being compelled to testify to protect confidential advice they provide a president.

(Editing by David Wiessler and Vicki Allen)

"Canada bus passenger stabs, decapitates seat mate - Passenger savagely stabs seat mate, then severs and holds up head on Greyhound bus in Canada"

Associated Press

Last updated: 5:33 p.m., Thursday, July 31, 2008

PORTAGE LA PRAIRIE, Manitoba -- A traveler aboard a Greyhound bus repeatedly stabbed and then decapitated his seat mate, pausing during the savage attack in central Canada to display the head to passengers who had fled in horror, witnesses said Thursday.

A 40-year-old man was arrested shortly after the grisly slaying Wednesday night aboard a bus traveling from Edmonton, Alberta, to Winnipeg, Manitoba, Royal Canadian Mounted Police Sgt. Steve Colwell told reporters Thursday.

Police apprehended the suspect when he broke a bus window and tried to escape, Colwell said.

A motive had not been determined.

Authorities declined to identify the suspect or the victim, and provided few details about the attack.

But passenger Gernet Caton said the victim, who appeared to be about 19, was sleeping with headphones on when his seat mate suddenly began stabbing him repeatedly.

"We heard this bloodcurdling scream and turned around, and the guy was standing up, stabbing this guy repeatedly, like 40 or 50 times," Caton said from a hotel in Brandon, Manitoba, where he and other horrified passengers were taken.

Caton said the driver stopped the bus as the savagery progressed and passengers scrambled to off.

He said the suspect then began methodically carving up the man's body.

"When he was attacking him, he was calm ... like he was at the beach," said Caton.

"There was no rage or, or anything."

"He was just like a robot stabbing the guy."

The bus driver, Caton and a trucker at the scene re-boarded to see what was happening.

Caton said he saw the suspect had the victim on the floor of the bus and "was cutting his head off and pretty much gutting him" with a large hunting knife.

The attacker turned toward them and the three men quickly left the bus, blocking the door as the attacker slashed at them through an opening.

The three secured the door to prevent the man from fleeing.

Caton said the driver disabled the vehicle after the attacker tried to drive it away.

As the three guarded the door with a crow bar and a hammer, the attacker went back to the body and calmly came to the front of the bus to show off the head.

Fellow passenger Cody Olmstead said the man "dropped the head and went back and started cutting the body."

Olmstead said the man later taunted police and dropped the head in front of them.

Greyhound spokeswoman Abby Wambaugh said 37 passengers and one driver were on the bus.

The victim had been on the bus since Edmonton.

Caton said the attacker boarded the bus in Brandon, Manitoba, about 80 miles west of Portage La Prairie.

The suspect had been on the bus about an hour and initially did not sit near the victim, Caton said.

"He sat in the front at first, everything was normal," Caton said.

"We went to the next stop and he got off and had a smoke with another young lady there."

"When he got on the bus again, he came to the back near where I was sitting.

"He put his bags in the overhead compartment."

"He didn't say a word to anybody."

"He seemed totally normal," Caton said.

"About a half an hour later, we heard this bloodcurdling scream."

Public Safety Minister Stockwell Day called the attack bizarre, but did not discuss details, saying he did not want to jeopardize the investigation.

"Mortar kills family of 7 in Pakistan's Swat valley - Police: Mortar shell kills family of 7 in Pakistan, militants burn girls school"

By RIAZ KHAN, Associated Press

Last updated: 1:12 p.m., Thursday, July 31, 2008

PESHAWAR, Pakistan -- A mortar shell hit a house in a valley where Pakistani security forces are battling Islamic militants, killing a family of seven, and militants torched a nearby girls school, police said Thursday.

Government officials struck a peace deal with militants in the northern Swat valley in May, hoping to curb the growing influence of militant groups through negotiations.

But U.S. and NATO officials complain that cease-fires and talks across Pakistan's wild border zone have allowed Taliban and al-Qaida insurgents based there to focus on attacks in neighboring Afghanistan.

Trouble flared in Swat on Tuesday when militants abducted 25 members of the security forces.

Since then, fighting has reportedly killed 27 rebels and seven troops and raised doubts about the new government's ability to combat militancy.

The provincial government described the situation in the Swat valley as "grave" and said it had requested more army troops to help bring peace, law and order.

The shell hit overnight in the village of Deolai, said Shakoor Khan, a police official in the nearby town of Kabbal.

A man called Mohammed Tahir died along with his wife and five children, Khan told The Associated Press by telephone.

It was unclear who fired the mortar round.

Khan also said that militants burned a girls school in the Khwazkhela area, the latest in a string of similar attacks blamed on Islamic fundamentalists opposed to female education.

The army reported sporadic overnight gunfire in the valley.

It didn't confirm Pakistani media reports of renewed fighting Thursday.

A valley-wide curfew was relaxed for two hours before noon to allow residents to buy provisions.

The valley lies just 90 miles from the capital, Islamabad and is a vital test of the government's resolve to prevent Taliban-style militancy from spreading into previously peaceful areas of the northwest.

Officials and militants in Swat blame each other for violating the peace accord, though neither side has declared the agreement dead.

While Western governments back the 4-month-old government's efforts to win over more moderate armed groups, they want Pakistan to take tougher action against hard-liners.

Followers of Mullah Fazlullah, a militant cleric who rallies support using a pirate FM radio station, seized parts of Swat last year before an army offensive drove them into the mountains.

Also Thursday, the military announced that it was abandoning a fort in the militant stronghold of South Waziristan that has repeatedly come under attack.

Maj. Gen. Alam Khattak, who commands paramilitary troops operating along the frontier, said security forces were leaving Ladha Fort at the request of tribal elders.

Khattak said the fort, which will be turned into a 20-bed hospital, was too close to residential areas and that the military was negotiating for a site to build a new fort.

He didn't say if the pullback was a condition for a peace deal with local tribes, which include top Taliban leader Baitullah Medsud, but added: "the fighting phase is over in his area, and now negotiations are being held with the people."

"More cities move aggressively to stop heat deaths - Heat waves to get more intense, longer; more cities take aggressive steps to prevent deaths"

By AMANDA LEE MYERS, Associated Press

Last updated: 5:12 p.m., Thursday, July 31, 2008

PHOENIX -- The homeless woman was nauseated, dizzy, drenched with sweat, dehydrated and sobbing with fear.

She had heat exhaustion and was on the verge of heat stroke.

But she had come to the right place, a church turned into a refuge from the overpowering heat.

"She was out of her mind almost, just mentally, emotionally and physically drained," said Arlene Atkin, a registered nurse and pastor at North Hills Church.

"She was absolutely at the point of going under."

Atkin put the woman under a shower and gave her all the water she could drink -- actions that may have saved her life that searing day last summer.

Not everyone in the same situation is so fortunate.

In recent years, deadly heat waves have killed dozens to hundreds of people at a time in various U.S. cities, often catching local officials unprepared.

Climate scientists say more killer heat waves lie ahead with global warming, and city officials are taking note.

A number of cities -- especially those hard-hit in the past, such as Chicago, Philadelphia and Phoenix -- get aggressive when a heat wave emerges.

They open cooling centers, hand out water bottles, go door to door to check on people, and even ask utilities not to shut off electricity to late-payers during a heat wave.

In recent days, much of the country has experienced dangerously high heat.

Denver just shattered a 134-year-old record of temperatures topping 90 for 19 days in a row.

An excessive heat warning is in place for Phoenix, which is expected to top 110, with lows falling only to around 90.

Nashville was forecast to reach a near-record 98 on Sunday.

High humidity made it feel like 100 degrees in much of South Carolina and 107 in Austin, Texas.

"It's already started," said Gerald Meehl, senior scientist at the National Center for Atmospheric Research in Boulder, Colo.

"As the average climate warms up, the heat extremes will become more extreme, and we'll have more intense, more frequent and longer-lasting heat waves as we progress through the 21st century."

So far this year roughly 50 people have died from the heat, according to news reports.

Heat waves lack the dramatic destruction of earthquakes, floods, hurricanes and tornadoes, but at 8,015 deaths, heat has killed more people in the U.S. than all those other weather events combined in the 24-year period ending in 2003, according to data from the Centers for Disease Control and Prevention.

"It's sort of been the quiet killer for many years," said Tony Haffer, meteorologist in charge for the National Weather Service in Phoenix.

Many cities have learned that the hard way.

Most of Phoenix's now extensive efforts began after the summer of 2005, when temperatures hit at least 110 on 24 days; 80 people died.

A decade earlier, it was Chicago that was suffering with more than 700 heat deaths.

During that heat wave, the morgue got so full that bodies were kept in refrigerated trucks.

Most of those who died were elderly, living alone and without air conditioning.

"It was a real awakening," said John Wilhelm, who was deputy commissioner of public health.

"There were a number of days where the body count kept increasing and there was absolutely nothing you could do because the heat had already taken its toll."

"It was a helpless feeling."

Now other cities are acting before they get to that point.

Seattle has begun educating the public about the dangers of heat and directing people to seek air conditioning.

At large public events, Boston has begun putting up "rain rooms," giant, portable, tent-like structures that spray a mist.

In the San Francisco Bay area, the National Weather Service recently implemented a heat/health watch warning system.

George Luber, an epidemiologist who studies heat wave deaths for the CDC, pointed to Philadelphia as a pioneer at preventing heat deaths.

After a 1993 heat wave killed at least 118, Philadelphia became the first in the country to begin a heat/health watch warning system.

It's now a worldwide model for forecasting heat, with 18 other metro areas copying it.

During a three-year period that began when Philadelphia instituted its system, an estimated 117 lives were saved because residents knew there'd be a dangerous heat wave, according to an article published by the American Meteorological Society.

Luber said about 18 to 20 cities nationwide have plans similar to one in Chicago, which opens cooling centers, holds news conferences and sometimes opens a command center with public safety and health officials.

There have been successes.

Last summer, one man in St. Louis became so concerned about his elderly neighbor that he broke in when the man didn't answer his door, said Pamela Walker, director of St. Louis' public health department.

Walker said the elderly man was severely dehydrated and unconscious.

"Another 24 hours, and he would have died," she said.

He didn't.

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On the Net:

Heat waves: http://heat-waves.org/

CDC: http://www.bt.cdc.gov/disasters/extremeheat/

Heat wave response: http://www.epa.gov/hiri/about/heatresponseprograms.html

"Salmonella probe likened to 'Keystone Kops' - Lawmaker pleads for restoration of tomato's good name; salmonella probe criticized"

By RICARDO ALONSO-ZALDIVAR, Associated Press

Last updated: 7:02 p.m., Thursday, July 31, 2008

WASHINGTON -- The government bungled the salmonella outbreak probe so badly, a House committee chairman said Thursday, that federal investigators reminded him of Keystone Kops.

A colleague hoped the maligned tomato can get its good name back.

The House Energy and Commerce Committee conducted its own investigation of the Food and Drug Administration's investigation of the salmonella scare.

The outbreak has sickened more than 1,300 people this summer and set off a consumer scare that cost the produce industry more than $200 million.

One agency probably zeroed in on tomatoes too early, the committee concluded, while a second failed to tap industry and states' expertise in trying to trace the source of the contamination.

To the chairman, Rep. John Dingell, D-Mich., the case reminded him of "a Keystone Kops situation."

An investigation that should have taken hours or days instead has stretched on for weeks and months, he said.

Federal investigators are now focused on hot peppers from Mexico -- jalapenos and serranos.

They still suspect that tainted tomatoes were involved at first, but they may never be able to prove it.

Holding up a bright red tomato, Rep. Bart Stupak, D-Mich., declared:

"We want their good name back."

Officials from the Centers for Disease Control and Prevention and the FDA, which share responsibility for handling outbreaks of foodborne illnesses, found themselves on the defensive at the hearing.

Several lawmakers said the fact that no single agency is in charge may be part of the problem.

The CDC is responsible for identifying the pathogen and the type of food that has been contaminated; the FDA is supposed to trace the outbreak to its source.

The FDA's food safety chief, Dr. David Acheson, said the agency plans to convene a panel of advisers to review the salmonella investigation.

A faster system for tracing suspect produce might have allowed the FDA to clear tomatoes more rapidly, he said.

While many major companies can trace their suppliers within hours, most smaller growers and shippers still rely on paper records.

The system "is what it is, and it worked," Acheson said.

"It was just slow."

Lonnie King, head of the CDC's center for foodborne illnesses, said that his agency's statistical analysis of detailed interviews with people who got sick found a very strong link to tomatoes.

But Rep. Diana DeGette, D-Colo., pointed out that exhaustive questionnaires used in those interviews failed to ask whether patients had eaten freshly prepared salsa, which might have put investigators on the trail of peppers earlier on.

King acknowledged that such information might have taken the investigation down a different road.

"I'd certainly go back and review that," he said.

Industry representatives told lawmakers they were frustrated with the government's investigation.

They said they could have helped the government clear U.S.-grown tomatoes quickly, but were kept at arm's length.

Thomas Stenzel, president of the United Fresh Produce Association, suggested that public health officials might want to tap outside sources.

"We're not asking to run the investigation, but there's an abundance of knowledge in the industry that can help protect public health," he said.

Separately, the FDA rejected the Mexican government's assertion that U.S. investigators had erred in identifying irrigation water at a Mexican pepper farm as a possible source of contamination.

Mexican authorities said Thursday the sample their U.S. counterparts called "a smoking gun" came from a tank that had not been used to irrigate crops for more than two months.

"We are surprised and disappointed by the statements of the Mexican government," the FDA said in a statement.

"We are confident of our findings."

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On the Net:

CDC investigation: http://www.cdc.gov/salmonella/saintpaul/

FDA investigation: http://tinyurl.com/45gsfx

"Wal-Mart denies that it told employees how to vote"

By CHUCK BARTELS AND ANNE D'INNOCENZIO, AP Business Writers

1 AUGUST 2008

LITTLE ROCK, Ark. - Wal-Mart Stores Inc., the world's largest retailer, denied a report Friday that it had pressured employees to vote against Democrats in November because of worries that a bill the party supports would make it easier for workers to unionize.

The measure, called the Employee Free Choice Act, would allow labor organizations to unionize workplaces without secret ballot elections.

It was co-sponsored by Barack Obama, the presumed Democratic presidential candidate, and opposed by John McCain, the presumed Republican nominee.

A report in The Wall Street Journal said the Bentonville, Ark.-based discounter — which has rigorously resisted being unionized — had held mandatory meetings with store managers and department supervisors in recent weeks to warn that if Democrats take power in November, they would likely push through the bill, which the company says would hurt workers.

Wal-Mart spokesman Dave Tovar told The Associated Press that the company did discuss the bill with its employees, including what it sees as the negative impact, and noted that the company's stand on the legislation is no secret.

"We believe the Employee Free Choice Act is a bad bill and we have been on the record as opposed to it," he said.

But he said the company wasn't advocating that its employees vote against backers of the legislation.

"If anyone representing Wal-Mart gave the impression... they are wrong and acting without approval," said Tovar.

In fact, he said that Wal-Mart has been working with both Republicans and Democrats.

"Half of our (political action committee) contributions are to members of each party," Tovar said.

"We regularly educate our associates on issues which impact our company, and this is an example of that."

The reported actions by Wal-Mart raised concerns among labor groups that the company, the nation's largest private employer with 1.4 million workers, has the power to exert influence in the elections.

"They're trying to bully the American political" scene, said Stewart Acuff, assistant to the president of the AFL-CIO, the nation's largest labor organization.

Wal-Mart may also be on thin ice as federal election rules allow businesses to push for specific political candidates to shareholders, executives and salaried managers, while prohibiting such actions for hourly workers, which typically include department supervisors.

The Wall Street Journal cited about a dozen unidentified Wal-Mart employees who had attended such meetings in seven states as saying they were told that employees at unionized shops would have to pay big union dues while not receiving any benefits in return.

Furthermore, workers said they were told that unionization would mean job losses as costs rise, according to the report.

The report said the Wal-Mart human resource managers who held the meetings didn't specifically tell the employees how to vote, but made it clear that a Obama victory would mean unionization.

Wal-Mart Watch, a union-backed group that has criticized the company for what it calls skimpy pay and benefits and poor treatment of its workers, said in a statement that the article "demonstrates once again that Wal-Mart intimidates its workers."

The group, which supplied some of the sources to The Wall Street Journal, said the stories cited in the article are "consistent" with numerous reports it has received in the past week.

The development deals a blow to Wal-Mart's reputation just as the company has started seeing its image improve and criticism diminish as it works to improve benefits and push through its "Save money, live better" campaign.

In a session with reporters after the company's annual shareholders meeting in June, Wal-Mart President and CEO Lee Scott said Wal-Mart was comfortable working with either presidential candidate.

In the past, Wal-Mart had lined up with the Republicans.

But the company's message of environmental sustainability, its program to offer $4 prescription drugs and improved benefits for workers helped move the company to the political center.

"We stand ready to work with the new Congress and whoever is elected (president)," Tovar said Friday.
___

Anne D'Innocenzio reported from New York. Associated Press Writer Ann Sanner in Washington contributed to this report.

"GM posts $15.5B 2Q loss, 3rd-worst in its history"

By TOM KRISHER and DEE-ANN DURBIN, AP Auto Writers

1 AUGUST 2008

DETROIT - General Motors Corp. posted a $15.5 billion second-quarter loss Friday, the third-worst quarterly performance in the company's nearly 100-year history.

The loss came as North American sales plummeted and GM faced expenses due to labor unrest and a massive restructuring plan aimed at preserving cash to weather a prolonged U.S. economic downturn.

The loss of $27.33 per share was in stark contrast to the year-ago period when GM recorded a net profit of $891 million, or $1.56 per share.

Revenue for the April-June period was $38.2 billion, down $8.5 billion from a year earlier.

The company said its loss included $9.1 billion in one-time charges, including $3.3 billion for the buyouts of 19,000 U.S. hourly workers, most of whom left at the end of June, as well as $2.8 billion in liabilities related to Delphi Corp., its former parts division.

It also included $1.3 billion worth of write-offs due to a reduction in the value of GM's 49 percent interest in its former financial arm, GMAC Financial Services.

Additionally, GM took a $2 billion charge to its bottom line because of huge drops in the value of pickup trucks and sport utility vehicles coming back to the company after lease terms end.

GMAC and GM have suffered big losses when they try to sell the now-unpopular vehicles at depressed prices.

GM also took a $197 million charge related to the settlement of a nearly three-month strike at supplier American Axle and Manufacturing Holdings Inc., which hurt production at more than 30 GM plants.

GM agreed to help American Axle fund worker buyouts as part of the settlement.

Without the one-time charges, GM lost $6.3 billion, or $11.21 per share.

Twelve analysts surveyed by Thomson Financial predicted a $2.62 per share loss on revenue of $44.57 billion.

GM shares fell 43 cents, or 3.9 percent, to $10.64 in midday trading after falling nearly 11 percent earlier in the day.

Ray Young, GM's chief financial officer, said the company burned through $3.6 billion in cash during the second quarter, which he attributed largely to reducing the company's inventory by nearly 90,000 vehicles to less than 800,000.

He said GM does not expect a similar reduction in future quarters, so the cash burn should be smaller for the rest of the year.

"In that respect, the negative cash flow in the second quarter is overstated," he said.

So far this year, GM has gone through about $1 billion in cash per month, including $3.4 billion in the first quarter.

Young said GM had $21 billion in cash and $5 billion available through credit lines at the end of June for total liquidity of $26 billion, which he called a strong position.

GM already has announced plans to generate another $15 billion in liquidity in the next 18 months.

"We're going to get the second quarter behind us and just move ahead," Young said.

GM's net losses since 2005 total $51.1 billion.

The $15.5 billion loss reported Friday is less than half of GM's record $39 billion loss in the third quarter of last year.

That loss was due to a charge for accumulated deferred tax credits.

The second-worst loss was $21 billion in the first quarter of 1992.

GM said its revenues outside North America rose by $1.7 billion to $20.8 billion in the quarter, but those gains were more than offset by losses in North America, where high gas prices and the weak economy have wreaked havoc on the auto industry.

The company said 55 percent of its automotive revenue was from outside North America.

North American revenues fell by nearly $10 billion to $19.8 billion for the quarter as sales in the region fell 20 percent.

Work stoppages at American Axle and several other facilities in May and June also contributed to the decline, GM said.

GM's revenue per vehicle in North America dropped 16 percent last quarter compared with the same period last year, from $21,375 to $17,940.

The figure includes the drop in value of vehicles coming back to the company from leases.

Young said the revenue decline included the drop in leased vehicle values and the reduction in inventory, plus the company didn't have enough factory capacity to feed demand for fuel-efficient cars in the first half of the year.

With GM adding shifts at plants making midsize and compact cars in the second half, it should gain revenue from additional sales, he said.

"But ultimately we're going to have to grow the business in a tough market," he said.

On July 15, GM announced a plan to raise $15 billion for its restructuring by laying off thousands of hourly and salaried workers, speeding the closure of truck and SUV plants, suspending its dividend and raising cash through borrowing and the sale of assets.

GM also said it would reduce production by another 300,000 vehicles, and that may prompt another wave of blue-collar early retirement and buyout offers, Young said.

"As our recent product, capacity and liquidity actions clearly demonstrate, we are reacting rapidly to the challenges facing the U.S. economy and auto market, and we continue to take the aggressive steps necessary to transform our U.S. operations," GM Chairman and Chief Executive Rick Wagoner said in a statement.

GM sold 2.29 million vehicles in the second quarter, down 5 percent compared with the previous year.

The company said a record 65 percent of those sales were outside North America.

For the first half of the year, Toyota Motor Corp. outsold GM by 277,532 vehicles.

It was only the second time Toyota beat GM in sales for the first six months of a year.
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On the Net:

http://www.gm.com