Justice Dept. Under Obama Is Preparing for Doctrinal Shift in Policies of Bush Years

Abstract: WASHINGTON — The Justice Department, probably more than any other agency here, is bracing for a broad doctrinal shift in policies from those of the Bush administration, department lawyers and Obama administration officials say. Eric H. Holder Jr. , whom the Senate is expected to confirm on Monday as the nation’s 82nd attorney general, plans to take the oath of office that evening to demonstrate a quick start, which will include overseeing the creation of a new detention policy for terrorism suspects. Mr. Holder will have to contend with that and other issues rapidly. Lawyers inside and outside the department say he will face crushing time constraints. Chief among them is a pledge by President Obama to close the detention facility at Guantánamo Bay, Cuba, within a year. Mr. Holder and a department task force must find a solution to the question of what to do with the remaining prisoners there and any apprehended in the future. “This will be a sea change of what went on before,” said an Obama administration lawyer, noting that the principal authority over detention policies will move from the Defense Department under the Bush administration to the Justice Department. Under Mr. Obama’s recent executive order, the Justice Department will be required to review the files of the 245 detainees at Guantánamo and draw up a proposal on their fate that will fulfill the pledge to close the facility. “The idea that it has to be closed within a year will drive the timing of many things,” said the Obama administration lawyer, who spoke on the condition of anonymity because Mr. Holder had not yet taken office. Mr. Holder will also have to make several quick decisions because of court-imposed deadlines. And he will have to do so with many of the senior positions in the department not yet filled. The department has to decide by next month whether it will reverse course from the Bush administration, which had repeatedly invoked the so-called state secrets doctrine to shut down legal challenges to several lawsuits dealing with national security. Officials also face a February deadline on whether to extend habeas corpus rights to detainees at Bagram Air Base in Afghanistan. “I can’t imagine a more challenging time to come in as attorney general,” said Walter Dellinger, a legal scholar who was an acting solicitor general in the Clinton administration. “The number of legal issues left behind to be resolved is really staggering.” In the Justice Department, there is considerable restiveness as employees await new direction. The civil rights division, which had been reshaped in a conservative direction under President George W. Bush, is ripe for sharp change, administration officials said. “Many of us cannot wait for the changes,” said one career lawyer in the division, who spoke on the condition of anonymity to describe the atmosphere. The lawyer said there were expectations that the division would be restored to its historic role of largely enforcing prohibitions against racial and ethnic discrimination. Under the Bush administration, the division significantly diminished its involvement in those areas and shifted resources to fighting instances of religious discrimination. Several Bush political appointees in the civil rights division have recently resigned. But some of the Bush policies were enforced with alacrity by nonpolitical career lawyers who saw their careers flourish. “A lot of us are waiting to see what happens to them now,” the lawyer said. The shift is expected to be more stark than that of a transition from one party to another. It may resemble the start of the Reagan administration, with its promise of wide philosophical change to be put into effect by a cadre of enthusiastic outsiders and academics, whose views on how to run the department have simmered after years of watching from the outside. The case dealing with the state secrets doctrine, which allows the government to rebuff lawsuits by invoking national security concerns, involves al-Haramain Islamic Foundation. A federal trial judge in San Francisco ruled that the government could not invoke the doctrine to block a lawsuit by al-Haramain, which has asserted that the government illegally listened in on its conversations. The Bush administration used the doctrine to block more than two dozen lawsuits. In timing that was a bit of a surprise, the Justice Department lawyers who have handled the lawsuit filed a motion with the court an hour before Inauguration Day that held to the same position. Some Obama administration figures regarded the filing before midnight on Jan. 19 as a rear-guard action to make it more difficult to reverse course. The Justice Department has to file a new brief by Feb. 13. Jon B. Eisenberg, who represents al-Haramain, said the schedule meant that “Holder and company have to decide pretty quickly if they want to keep opposing this case with the state secrets doctrine.” The case also provides an opportunity to have a court assess the Bush administration’s domestic wiretapping program. The Justice Department under Mr. Holder would also have to take a stand soon in a case involving four former Guantánamo detainees who sued former Defense Secretary Donald H. Rumsfeld and others for damages they say they had suffered as a result of torture and religious persecution at the facility. In December, the Supreme Court revived the lawsuit and asked a federal appeals court to revisit its earlier action in dismissing the suit in light of the justices’ ruling that Guantánamo prisoners could challenge their detentions in federal court. The Supreme Court also granted the Justice Department a 30-day delay, until March 23, to say where it stood in the case of Ali al-Marri. The Bush administration has made the far-reaching claim that it may indefinitely hold Mr. Marri, a legal resident of the United States, on suspicion of terrorism in a military brig without charging him with a crime. The new administration is also supposed to decide by Feb. 20 what position to take on whether detainees at the Bagram prison in Afghanistan should be allowed to challenge their detentions in federal court, as Guantánamo detainees can. While the Justice Department has rapidly grown in recent decades to more than 110,000 employees, there are only about 150 spots for political appointees who will steer policy. Only about 21 have begun work. Several of the most senior of the political appointees require confirmation by the Senate, and Mr. Holder was the first to be considered.

Holder Eric H Jr
Justice Department
Detainees
Obama Barack


New YouTube Music Plan Faces Challenge

Abstract: YouTube unveiled its long-awaited subscription music plan last week, giving the music industry a potentially big new source of revenue. But it has already run into an obstacle named Irving Azoff. Mr. Azoff, a powerful artist manager who is the former executive chairman of Live Nation Entertainment, has asked YouTube to remove thousands of songs by the Eagles, John Lennon and a few dozen other songwriters who are associated with Global Music Rights , Mr. Azoff’s new venture in music publishing. Global Music Rights competes with the two giant music clearing houses, Ascap and BMI, in representing the performing rights of songs — how royalties are paid when songs are played online or on the radio — on behalf of songwriters. YouTube’s new service, called Music Key, upgrades many aspects of its free site, and adds a paid subscription tier that will allow people to pay up to $10 a month to eliminate ads and gain other perks. YouTube, which said it attracts more than one billion users worldwide each month, is owned by Google. According to a letter dated Monday from Howard King, a lawyer for Global Music Rights, YouTube has not complied with two requests last week from the company “demanding the immediate cessation from public performance of almost 20,000 songs.” The brief letter does not list those songs or even the composers, but Global Music Rights has signed deals with more than 40 writers, including pop stars and major songwriters like Bruno Mars, Pharrell Williams and Smokey Robinson. YouTube confirmed that it had received the letters, but that they did not follow the standard procedure for take-down requests under the Digital Millennium Copyright Act, the federal law that protects websites that host copyrighted content from third parties. In a statement, YouTube said it would “keep working with both the music community and with the music fans invited to our beta phase,” which is set to begin this week. The letter from Global Music Rights may set up a dispute over exactly what rights the company can enforce. Many of its clients’ songs are still covered under licensing deals made while those writers were still with Ascap and BMI, a process known as “licenses in effect.” Randy Grimmett, a former Ascap executive who now works with Mr. Azoff at Global Music Rights, said that the company fully represented its writers’ songs when it came to the new service. “YouTube’s recently launched Music Key, as far as Global Music Rights is concerned, is not covered by existing licenses in effect because it is a service that has yet to launch,” Mr. Grimmett said in an interview on Tuesday. News of Global Music Rights’ letters to YouTube first appeared on the website of The Hollywood Reporter .

Copyrights
Video Recordings
Downloads and Streaming
YouTube
Irving Azoff


U.S. Indexes Find Little Reason to Rally

Abstract: Stocks were mixed on Wednesday after a private sector jobs report renewed concerns about the pace of the economic recovery, particularly in the labor market. There was little sign of the enthusiasm that drove the market in recent days, when speculation about widespread quantitative easing measures by central banks suggested there would be fresh liquidity. On Tuesday, that speculation propelled the Dow Jones industrial average to rise nearly 2 percent for its best close since May 3. Instead, Wall Street wavered on Wednesday after the payroll company ADP reported that private employers shed 39,000 jobs last month, the first downturn in several months. The Labor Department’s report on the job markets, scheduled for Friday, is expected to show that the private sector added 75,000 jobs in September and that the unemployment rate rose to 9.7 percent. Overall job growth is expected to be flat. The Dow Jones industrial average rose 22.93 points, or 0.21 percent, closing at 10,967.65, while the Nasdaq composite index fell 19.17 points, or 0.8 percent, to 2,380.66. The Standard & Poor’s 500-stock index dropped less than a point, to 1,159.97. After Tuesday’s rally, “you would expect a little bit of a retracement,” Uri Landesman, president of the Platinum Partners hedge fund, said of the market moves on Wednesday. The United States market defied the trend set by indexes in Asia and Europe, which closed higher as speculation grew that the Federal Reserve might soon take additional moves to stimulate the economy after a similar effort by Japan’s central bank. Analysts said that the prospect of easing by the Fed at its November meeting affected the bond market. The 30-year bond rose almost 1.5 points and the yield dropped. The benchmark 10-year note rose 21/32, to 101 31/32, and the yield fell to 2.40 percent, from 2.47 percent late Tuesday. “The big picture is the quantitative easing anticipated on the part of the Fed,” said Alan Schankel, director of fixed-income research at Janney Montgomery Scott. The Bank of Japan unexpectedly lowered its benchmark interest rate to a range of zero to 0.1 percent on Tuesday, a tiny change but a symbolic shift back into an age of zero interest rates. The Japanese central bank also plans to set up a fund of $60 billion to buy Japanese government bonds, commercial paper and other asset-backed securities amid concerns about weakening growth in the economy, the world’s third-largest after those of the United States and China. The Japanese move, the likelihood of the Fed’s quantitative easing and even expectations of action by the Bank of England, which meets on Thursday, have helped spur stocks. The European Central Bank also meets on Thursday. Traders are also starting to take in the latest financial results, with the aluminum maker Alcoa, which traditionally kicks off the earnings season, reporting on Thursday. Mr. Landesman said the coming earnings season, the potential for further mergers and acquisitions and the results of the midterm elections were potential market movers looking ahead. On Wednesday, General Electric said it had agreed to buy Dresser , a privately held energy infrastructure and services company, for $3 billion as the industrial conglomerate seeks to bolster its offerings in the sector. G.E. shares were up 39 cents, to $16.90. Energy and materials shares were up slightly, while technology shares slipped more than 1 percent. The prospect for weak jobs data in Friday’s monthly national report, as well as the continued news of Europe confronting its own banking crisis, suggested additional future moves to ease monetary policy to some market analysts.

Stocks and Bonds
Japan
Economic Conditions and Trends


Four Shuttle Flights Planned for 2007

Abstract: NASA will try to launch four space shuttle flights in 2007 to continue building the International Space Station, managers for the agency said. The launching dates will be June 8 for the Atlantis; Aug. 9 for the Endeavour; Oct. 20 for the Discovery and Dec. 6 for the Atlantis. NASA officials also announced dates for two of next year’s flights, although more shuttle missions are expected in 2008, including one to repair the Hubble Space Telescope. The Endeavour is scheduled to be launched on Valentine’s Day in 2008 and the Discovery is set to fly again on April 24, 2008. NASA managers had hoped to squeeze five shuttle flights into 2007, but a postponement in launching the Atlantis made that impossible and created launching delays for the rest of the year.

National Aeronautics and Space Administration


Iran’s Chief Cleric Says Country Is Not a Friend to Israelis

Abstract: TEHRAN — Iran ’s supreme religious leader on Friday rejected the notion that his country was a friend to the Israeli people, but he also called on critics of President Mahmoud Ahmadinejad to stop using the issue to undermine him. “We have to put an end to such small and petty issues,” said the leader, Ayatollah Ali Khamenei , referring to the public anger that boiled over after one of Mr. Ahmadinejad’s senior officials said that Iran had no hostility toward the Israeli people. “The enemy is trying to increase tension, and unfortunately some people inside the country are unknowingly helping,” Ayatollah Khamenei said, according to the ISNA news agency. Ayatollah Khamenei’s comments appeared to be a fresh sign of support for Mr. Ahmadinejad, who has come under increasing pressure for remarks by his vice president for tourism, Esfandiar Rahim Mashai, who said last month for a second time that Iran was a friend of the Israeli people. Mr. Ahmadinejad backed up Mr. Mashai on Thursday, saying that his remarks were the position of the government, and that “We have no problem with people and nations” despite Iran’s opposition to the state of Israel . Ayatollah Khamenei has publicly backed Mr. Ahmadinejad several times in recent months, and his comments Friday were expected to ease the pressure on Mr. Ahmadinejad to fire Mr. Mashai. Several senior clerics and some 200 members of Parliament had urged the president to dismiss Mr. Mashai for making the remarks, arguing in a statement that the Israeli people “have occupied the homes of millions of innocent and oppressed Palestinians and have created the army of the Zionist regime.” But after Ayatollah Khamenei’s comments on Friday, Ali Mottahari, one of the members of Parliament who urged the president to fire Mr. Mashai, told the Fars news agency that Parliament would no longer pursue the issue. Animosity toward Israel was one of the principles of the 1979 Islamic Revolution, and Mr. Mashai’s remarks have set off more protests from legislators than the scandal over a fake degree involving another one of Mr. Ahmadinejad’s senior officials, Ali Kordan. Mr. Kordan, the interior minister, had claimed to hold an honorary doctorate from the University of Oxford. But there were no public calls for the president to dismiss him, even after it became clear this month that he had lied about his credentials and that his real education amounted to a degree from a midlevel college. Without referring to Mr. Mashai by name, Ayatollah Khamenei also lashed out against Israel on Friday, saying that “it is wrong to say that we are friends with Israeli people like people in other parts of the world.” “They are partners to occupying the land and possessions of Palestinian people and are the instruments of the Zionist authorities,” he said, according to ISNA. “They are the occupiers of Israel, and this is the Islamic republic’s firm and official position,” he said. Mr. Mashai responded by writing to Ayatollah Khamenei, saying “I declare that I am a follower of your notion regarding the occupied land and consider myself a soldier to implement the policies of the country,” the Fars news agency reported. Ayatollah Khamenei’s comments came before Mr. Ahmadinejad’s trip to New York to address the United Nations General Assembly. Jewish groups have said that they will hold a rally against him.

Iran
Israel
Khamenei Ali
Ahmadinejad Mahmoud
International Relations
Politics and Government
Zionism
Islam
Palestinians


With Penn’s Loss, Harvard Reaches N.C.A.A. Tournament

Abstract: PRINCETON, N.J. — For the 18th consecutive year, Penn and Princeton met on the last Tuesday night of the Ivy League season. The two have combined for 51 men’s basketball championships in a league known as the Ancient Eight, and so it has not been unusual for this final matchup in downtown Philadelphia or suburban New Jersey to settle the league title and an automatic bid to the N.C.A.A. tournament. This Tuesday at Jadwin Gymnasium was no different. With stifling defense on Penn’s best player, Zack Rosen, Princeton won, 62-52 , leaving the Quakers’ bid to tie Harvard for the Ivy League title one game short and sending the Crimson to the N.C.A.A. tournament for the first time since 1946. “We are thrilled and honored to have an opportunity to compete in the 2012 N.C.A.A. tournament,” Harvard Coach Tommy Amaker said in a statement. “This is a tremendous moment for Harvard University, our basketball program and our community.” Penn (19-12), which had won seven consecutive games, finishes 11-3 in league play. For Princeton (19-11), the victory was the Tigers’ 17th straight at home. Keeping Penn from its 26th Ivy League championship, even if it was as a co-champion, was important motivation for Princeton. “I didn’t feel right letting Penn share the title by winning on our court,” said Tigers point guard Douglas Davis, whose buzzer-beating jumper in a one-game playoff last season kept Harvard from the N.C.A.A. tournament. Princeton’s Patrick Saunders agreed, although he was not entirely happy helping Harvard either. “We don’t have much love for either of them,” Saunders said. “It’s tough to swallow knowing that we put Harvard in the N.C.A.A. tournament and let them win the Ivy title.” For Penn, the disappointment was deep and surprising, especially since Rosen had carried the team with superlative play for the past month. A senior guard, he made just 8 of 24 shots Tuesday and had seven turnovers to go with 19 points. “We blew an opportunity,” Rosen said. “We didn’t play as hard as we could have and lost.” Rosen’s shooting problems began early, when he missed his first three shots as Princeton took a 10-2 lead. Princeton used its size advantage to force Penn into difficult shots, mostly from the perimeter, as the Quakers missed eight of their first nine shots. Princeton gave the 6-foot-1 Rosen trouble with the long-armed 6-7 Ian Hummer often covering him man-to-man or in a box-and-1 defense. “Ian is a terrific player on defense because he has size but can stretch to smaller players,” Princeton Coach Mitch Henderson said of Hummer, who finished with 18 points, 10 rebounds, 4 assists and 4 blocked shots. But Rosen, who came into the game with an 18.5-point scoring average , could not be held down completely. He did not hit his first jump shot of the night until Penn was down, 23-8, but his 12-foot fall-away jumper with three seconds left in the half cut Princeton’s lead to 27-17 at intermission. Penn started fast in the second half, but Princeton, behind Hummer, Saunders and Brendan Connolly, kept the Tigers’ lead at or around 10 points. The game’s final 12 minutes, unlike its nervous, sloppy beginning, were intense and fast-paced, pitting the team’s best players and 3-point shooters. Rosen came alive and helped the Quakers cut their deficit to 34-31. But Princeton had the bigger and more versatile frontcourt and continued its dominance on the boards, scoring the next 7 points. When Davis sank a long 3-pointer, Princeton’s lead was restored to double digits, 41-31. Rosen answered with successive 3-pointers. Princeton continued to feed the ball to its big men, which had a steadying influence and sent the Tigers to the foul line often — Princeton took 17 more free throws than Penn, which attempted just three. The Princeton lead was 50-41 with a little more than two minutes remaining. Rosen missed another 3-point attempt from the corner, and as Princeton grabbed the rebound, Penn’s stirring midseason surge had noticeably lost its magic.

NCAA Basketball Championships (Men)
Harvard University
Ivy League
Basketball
Princeton University
University of Pennsylvania
Basketball (College)


Hurricane, and Other Worries, Buffet Presidential Race

Abstract: WASHINGTON — In the dark of night, when they get what little sleep they get these days, the people running the campaigns for president have more than enough fodder for nightmares. Worse, come daybreak, they realize their worst fears may yet come true. Dancing in their heads are visions of recounts, contested ballots and lawsuits. The possibility that their candidate could win the popular vote yet lose the presidency. Even the outside chance of an Electoral College tie that throws the contest to Congress. Now add to that parade of potential horrors one more: a freakish two-in-one storm that could, if the more dire forecasts prove correct, warp an election two years and $2 billion in the making. Despite the meticulous planning, careful strategies, polling, advertising and get-out-the-vote efforts, the election could produce the sort of messy outcome that defies expectation and prognostication. Polls show such a tight race between President Obama and Mitt Romney heading into this final week that the two sides are playing out any number of wild possibilities. The approach of Hurricane Sandy reminded them just how out of their control democracy can be. “Obviously, we believe the more people participate in the election, the better,” said David Axelrod, the president’s senior strategist, “and the storm can be disruptive. But to the 50 million people in its path, there are more immediate and potentially grave concerns that transcend politics. We’ll have to wait and see its impact.” The storm forced both candidates to scrap campaign stops and, with eight days until Election Day, will require Mr. Obama to balance the roles of president in an emergency and candidate. That could benefit or hurt him, depending on how voters view his performance, and distract from efforts by both camps to advance a closing argument. Early voting, which Mr. Obama has counted on to bolster his chances of a second term, will most likely grind to a halt in some places along the Eastern Seaboard, while power failures could last much of the week and conceivably until Election Day in some places. It went unnoticed by no one that Virginia, among the most tightly contested states, may be among the most affected. Meteorology is only one wild card facing the campaigns in the final week. On Election Day, the winner may not be known right away; results in one or more states may be close enough to merit recounts. In Ohio, which could decide the election, so many provisional ballots may be cast — and by law are not counted right away — that it may be mid-November before a winner is declared. “The Boy Scout motto comes in handy — be prepared,” said Bradley Blakeman, a Republican strategist and veteran of George W. Bush’s recount fight in Florida. “I know that lists of local lawyers and national legal talent are amassed and will be deployed if need be. After the recount in 2000 and the nail-biter in 2004, the G.O.P. is ready with multiple scenarios already modeled.” The campaigns are so worried about every electoral vote that a pro-Romney “super PAC” even invested in ads in Maine, a largely Democratic state, because it allocates some electoral votes by Congressional district and Republicans have a chance of picking up a single vote there. Of all the messy outcomes, the one that seems likeliest is a candidate’s winning the presidency through the Electoral College despite losing the popular vote, as Mr. Bush did in 2000. If it happens again, it might be in the opposite way, with the Republican, Mr. Romney, in range of a popular plurality and the Democrat, Mr. Obama, with an apparently easier route to an Electoral College victory. Charlie Cook, a well-known political handicapper, said the chance of that happening was 10 to 15 percent. Stanley B. Greenberg, a longtime Democratic pollster, put the odds at “one in three.” “Not trivial,” Mr. Greenberg said of the chances. “If that happens, it is because the anti-Obama vote, mostly in the South, turns out in big numbers,” while the pro-Obama vote is not as overwhelming in Democratic states but pulls him over the top in vital places like Ohio, Iowa and Nevada. If Mr. Obama wins a second term while losing the popular vote, it would again throw a harsh spotlight on the Electoral College, an artifact of the 18th century. Each state has one elector for each of its members in the House and Senate. With 538 electors, it takes 270 to win. If no one does, the House decides who will be president. In 1800, Thomas Jefferson and Aaron Burr received the same number of electoral votes. The House sided with Jefferson. In 1824, none of four candidates received an electoral majority, and John Quincy Adams won in the House although he trailed Andrew Jackson in both the popular and the electoral votes. Two other presidents, Rutherford B. Hayes in 1876 and Benjamin Harrison in 1888, won in the Electoral College even though they lost the popular vote. The Electoral College has been attacked almost from the start. Over 200 years, more than 700 proposals to eliminate or revise it have been introduced in Congress, and more constitutional amendments have been proposed to change the system than on any other subject, according to the National Archives. A Gallup poll last year found that 62 percent favored a constitutional amendment making the popular vote decisive. “If you were to have a repeat of that except the popular vote winner was the Republican and the Electoral College winner was the Democrat this time, then you would have had each party burned by the Electoral College over the course of 12 years, and that might be conducive to a serious look at reform,” said Robert W. Bennett, a Northwestern University law professor who has written extensively on the Electoral College. Less likely is a tie, 269 to 269. If that happened, strategists envision an intense postelection campaign of state-by-state recounts, lawsuits, qualification challenges, efforts to flip electors, horse trading and pressure on members of Congress. The result would be a highly volatile 11-week obstacle course to Inauguration Day that would leave the country uncertain for a time about its next president and potentially undermine the credibility of the winner. “If this election does require some extra innings, we have plans in place to deal with that,” said Bill Burton, a former Obama aide and co-founder of a super PAC supporting the president. “But the odds of that are infinitesimally small.” If recounts did not change any Electoral College votes, both sides could lobby electors to switch before they met in state capitals on Dec. 17. While more than half the states have laws intended to force electors to cast ballots for the popular vote winner in their states, there have been “faithless electors.” In 2004, a Democratic elector in Minnesota wrote in John Edwards’s name instead of John Kerry’s. If no electors flipped, the issue would go to the newly elected House. Each state gets one vote, meaning that Delaware has the same power as California. In the current House, Republicans control 33 delegations, while Democrats have 16 and 1 is split. Few analysts believe the election will change the House enough to shift that balance. That would give Mr. Romney the advantage, although pressure would intensify if Mr. Obama won the popular vote. But even if Mr. Romney wins in the House, there is an extra wrinkle: The vice president would be chosen by the Senate, which may remain in Democratic hands. If the Senate is deadlocked, the tie could be broken by Vice President Joseph R. Biden Jr., presumably voting for himself. And the nation could wind up with President Romney and Vice President Biden.

2012 Presidential Election
Hurricane Sandy
Voting


Medtronic Links 13 Deaths to Faulty Heart Device

Abstract: Medtronic said Friday that at least 13 people might have died in connection with a heart device that it recalled in 2007 but was still in widespread use, including four patients whose deaths were related to efforts by doctors to surgically remove the product. The new data reflect the first fatality update by Medtronic since October 2007, when it recalled the device — a thin electrical cable that connects an implanted defibrillator to a patient’s heart. The company cited five deaths when it recalled the product, saying fractures in the cable could cause a defibrillator to fail to deliver a lifesaving shock to an erratically beating heart, or to fire for no reason. Separately, a previously undisclosed Food and Drug Administration report indicates that Medtronic began receiving reports soon after the device reached the market in late 2004 that the cable, known as the Sprint Fidelis, was fracturing. The company also revised its manufacturing process in the months before withdrawing the Sprint Fidelis from the market, according to the F.D.A. report, which was provided to The New York Times by lawyers suing Medtronic. A top Medtronic official said in an interview on Friday that the manufacturing change in question was unrelated to the reasons for the recall and that even at the time of the recall internal data did not suggest it was fracturing at a significantly higher rate than other company leads. When Medtronic may have known the Sprint Fidelis posed safety problems, and how it responded to that information, could be significant factors if patient lawsuits over the product were to start moving forward again. This month, top Democratic lawmakers introduced legislation that would effectively nullify a Supreme Court decision last year that has blocked lawsuits against medical device makers like Medtronic. The company recently said that about 2,000 legal claims involving the Sprint Fidelis had been filed against it. The death statistics Medtronic released Friday underscore both the scope of the Sprint Fidelis problem and the difficult choices that doctors and patients face in deciding what to do about it. About 150,000 people in this country still have the Sprint Fidelis leads in their bodies. Along with fatalities, the F.D.A. has received about 2,200 reports of serious injuries related to the leads. Medtronic officials said they believed that reflected the number of people who had undergone surgery to have a failed lead replaced with a new one. Dr. David Steinhaus, Medtronic’s medical director, said the updated figures, which the company distributed Friday to doctors, was based on a review of available data by company officials and a panel of five outside physicians. He said that the outside panel was particularly concerned with the four deaths related to surgical efforts to remove the lead. Doctors often choose to leave a fractured heart device lead in place when implanting a new one. In the advisory to physicians on Friday, the panel urged that doctors who think a patient would benefit from having a failed lead extracted have the procedure performed by a physician skilled in doing so. “If you are going to have it done, you ought to go to a place where they are doing a lot of them,” Dr. Steinhaus said. Besides the deaths related to the surgeries, the panel appears to have concluded that the nine other deaths may have been tied to the device’s failure to function properly. The F.D.A. report is based on a visit by regulators to a Medtronic facility in Mounds View, Minn., soon after the device was removed from the market, where the officials interviewed executives and inspected records. The report shows that by late 2005 the company had received 30 complaints about device fractures and had identified several possible ways in which the lead might be failing. About that time, the company opened an internal investigation into the problem, according to the report. What happened next is not clear, because the F.D.A. redacted portions of the report before releasing it. But the document indicates that Medtronic engineers met often about the problem throughout 2006 and that they performed a “statistical analysis of the three failure modes” of the lead in October of that year, the report states. It was in February 2007 that Dr. Robert G. Hauser, a cardiologist at the Minneapolis Heart Institute, met with Medtronic officials and informed them that his database of heart patients showed that the Sprint Fidelis was fracturing at a troubling rate. In a telephone interview this week, Dr. Hauser said Medtronic officials said nothing to him then about the company’s internal investigation. Asked to respond Friday, Medtronic issued a statement saying that fractures of heart device leads were not unusual and that at the time of the Hauser meeting it “had no data to demonstrate that there was a statistically significance difference” in failure rates between the Sprint Fidelis and the company’s other leads. Soon after meeting with Dr. Hauser, Medtronic sent a letter in March 2007 to doctors informing them of his data and saying it was investigating the issue. Two months later, Medtronic took steps to change how it manufactured the Sprint Fidelis, the F.D.A. report shows. Tim Samsel, the company’s vice president for quality and regulatory, said in a telephone interview that the manufacturing change was intended to address “acute” lead fractures at the time of implant, not the chronic fractures that eventually led Medtronic to recall the device. Between the company’s meeting with Dr. Hauser and its recall of the Sprint Fidelis, it is estimated that tens of thousands of additional patients received the device. Asked this week to review the F.D.A. report, Dr. William H. Maisel, a cardiologist at Beth Israel Deaconess Medical Center in Boston, said it suggested that Medtronic long knew there were issues with the Sprint Fidelis. “In 2006, the company recognized there was a problem,” said Dr. Maisel, who has been critical of Medtronic’s handling of the lead.

Medtronic Inc
Medical Devices
Recalls and Bans of Products


Opel to Go Ahead Without Government Aid

Abstract: FRANKFURT — General Motors ’ Opel/Vauxhall unit, expressing frustration with the slow pace of government decision making, said Wednesday it was no longer seeking aid from European countries and would finance a five-year, new-product drive with help from the parent company. Germany’s federal government last week turned down Opel ’s request for €1.1 billion, or $1.4 billion, in loan guarantees, amid a drive to cut government spending in response to Europe’s debt crisis. Opel’s plans call for an investment of €11 billion over five years in developing new products and for restructuring. Though the company might still have won backing from German states that have Opel factories, as well as Spain and Britain, the company said it could not afford to spend months in negotiations. “We would have had to go through some pretty long bureaucratic processes,” Nick Reilly, president of G.M. Europe, said during a conference call. “We just can’t afford that any longer.” He said he did not expect Opel to return to profit until next year. Going without government aid will require an additional €1.4 billion from G.M. above money the parent company has already committed, Mr. Reilly said. Because G.M.’s financial position has improved, the rate it pays to borrow the money may not be much different from what it would have been with government loan guarantees, Mr. Reilly said. Last month G.M., which is majority owned by the U.S. government after a bailout, reported first-quarter earnings of $865 million. The European operations lost $500 million. Opel’s cost-cutting plans were not tied to the receipt of aid and will proceed, Mr. Reilly said. Opel had already planned to close a plant in Antwerp, Belgium, and cut 8,300 jobs around Europe. Opel said it had 45,000 workers at the end of March. Some analysts have questioned whether Opel would be able to revive sales after years of bad publicity about its travails, which predate the financial crisis and economic downturn. Sales of Opel brand cars, sold as Vauxhalls in Britain, are down 6 percent this year in Western Europe to 404,000 vehicles at the end of May, largely because of the expiration of a cash-for-clunkers program in Germany. But Opel’s market share has also fallen, to 7 percent this year from 7.6 percent in the same period of 2009. “The automotive crisis is still not over in Europe,” said Christoph Stürmer, a director at IHS Automotive in Frankfurt, a market research firm. “The volume guys are getting a beating now.” Mr. Stürmer said that Opel could be successful if it took better advantage of the cost savings possible from being part of a huge international carmaker. The shift to hybrids, all- electric cars and other new technologies require huge expenditures in research and development, which are easier for larger carmakers. “There are so many new technologies on the horizon,” Mr. Stürmer said. “Guys with a better cost position now have a pretty good opportunity.”

Opel Adam AG
General Motors
Credit and Debt
Automobiles
Germany


House Passes Short-Term Farm Relief Bill

Abstract: WASHINGTON — An effort to provide emergency aid for American ranchers and farmers reeling from a year of drought, frost and other calamities collapsed on Thursday as members of Congress departed for their five-week August recess, leaving behind a pile of unfinished legislation as they go home to campaign for re-election. After refusing to consider a sweeping five-year farm measure, House Republican leaders jammed through a short-term $383 million package of loans and grants for livestock producers and a limited number of farmers. The measure passed 223 to 197, a narrow margin for a bill that has an impact on so many states. But Democrats balked in protest over the way the farm legislation has been handled and some Republicans objected to the costs. Democratic leaders in the Senate, which had already passed a bipartisan five-year bill, refused to take up the House measure, faulting House Republican leaders for failing to consider the broader legislation in time. “I’m not passing a bill that only covers some producers,” said Senator Debbie Stabenow, Democrat of Michigan, the chairwoman of the Senate Agriculture Committee. Moments after the House passed its bill, Ms. Stabenow took to the Senate floor to say that lawmakers would instead work informally over the August recess to try to put together a new measure to present to Congress when it meets in September. The White House would have considered the House measure, but she resisted, Senate aides said. Ms. Stabenow, who worked for months to arm-twist resistant Senate colleagues on both side of the aisle to usher her bill through her chamber , said she would begin meeting with House agriculture leaders on Thursday night. “I am extremely hopeful that we can get together around what really needs to be done, which is a five-year farm bill ,” she said. The failure to advance the farm bill or the emergency aid was all the more striking given the extent of the continuing drought, with county after county across the nation having been declared an agricultural disaster area . The farm bill, which has historically appealed to members on both sides of the aisle, was one of a series of measures that fell victim to partisan fighting — and occasionally infighting — in recent weeks. On Thursday, a bipartisan cybersecurity bill that would have established standards for the computer systems that oversee the country’s critical infrastructure was stopped by a filibuster as some leading Republicans yielded to the concerns of major business interests. The renewal of a measure to protect women from domestic violence — an issue that has also generally enjoyed bipartisan support in both chambers — stalled and routine spending bills and tax measures were also languishing, even as Congress faces a year-end pileup of expiring tax laws and spending cuts. “It’s not only the failure to take on the biggest single threat to our country right now, that of cyberattacks,” said Senator Susan Collins, Republican of Maine, a co-author of the cybersecurity bill. “Or to complete the farm bill. But also, we’ve yet to pass a single appropriations bill. Tax issues remain completely unresolved, as well. I think it’s really disappointing.” For lawmakers in states with large agriculture industries, August may be the longest month, as farmers, ranchers and producers clamor for a bill to extend programs that begin expiring in September. The relief bill sought to continue programs that have already expired, ones that indemnify livestock and forage programs and provide some assistance to producers of a handful of other crops, paid for by placing caps on conservation programs in the current farm law. Without the aid, livestock producers will now have no government safety net programs to aid them in their losses of feed. Without them there is little they can do except find another source of feed or start selling or killing off animals. Crop insurance will take care of growers of corn, soybeans, wheat and most other crops. Republicans criticized the Senate for declining to take up their measure. “It would appear this is the only vehicle,” said Representative Frank D. Lucas of Oklahoma, the chairman of the House Agriculture Committee, who has patiently endured his Republican leadership’s abandonment of his bill, the first time the House has declined to bring its own committee’s bill to the floor. “No matter what happens in the farm bill process, nothing can happen for months and months. If you want to leave people hurting, I guess that’s your choice.” Senator Roy D. Blunt, Republican of Missouri, expressed a similar view. “The idea that we would decide that we would put this off another month,” he said, “that we can put these families in jeopardy for another month, not knowing what their solution is, just seems to me to be totally unacceptable.” Many members of both parties said they felt they were returning home for the recess with little to show for their efforts and with the election just three months off. “Congress has a job to do and that among other things is to pass a farm bill,” said Representative Peter Welch, Democrat of Vermont, who is trying to use a petition to force the farm bill to the floor against the wishes of leadership, a difficult procedural maneuver that will require Republican help. But he said scores of Republicans had signed already. “People are pretty fed up about it,” Mr. Welch said, “and understandably so.” Despite the multiple impasses, Congress has made progress in some areas. Both chambers quickly agreed this week to tighten sanctions against Iran. House and Senate leaders reached a tentative agreement that would keep the government operating after the end of the fiscal year on Sept. 30, without the partisan drama that has almost caused a government shutdown in the past. But that measure must still pass the House and Senate next month. “I think we’ve got some good things,” said Representative Tom Cole, Republican of Oklahoma. “We did the transportation bill , the student loan bill, but I think we could have done more. I would have much preferred to have a full farm bill. But we’re not going to be able to make a lot of decisions that need to be made until the American people decide who the decision makers are going to be. And that’s the biggest challenge to legislating right now.”

Farm Bill (US)
United States Politics and Government
Agriculture and Farming
House of Representatives
Law and Legislation
Elections
United States
Congress


Florida A&M University President Loses Vote

Abstract: The board of trustees of Florida A&M University voted 8 to 4 on Thursday that it did not have confidence in the leadership of the university president, James Ammons. The trustees who voted against Dr. Ammons said they did not believe he could steer them out of a crisis that followed the hazing death of a drum major, Robert Champion, in November. More than a dozen people, mostly students, have been charged in the death. The university also remains embroiled in an inquiry into financial irregularities. Dr. Ammons, whose contract runs through June 2016, vowed to do better. “You have my commitment to fix them and get this job done,” Dr. Ammons said.

Florida A&M University
Ammons James H
Florida
Colleges and Universities
Champion Robert
Hazing


New Mexico Filly Challenges Citation’s Record

Abstract: Cigar could not do it. Neither could Citation. No horse in modern times has won 17 straight races, but now the record appears ready to fall, taken down by an unlikely source. Peppers Pride, a New Mexico-bred 5-year-old who has never left her native state, is far from the best thoroughbred around today, but a combination of her consistency and durability and her connections’ cautious nature has put her on the verge of racing history. She is expected to be heavily favored to win her 17th in a row, on Sunday in the $55,000 Lincoln Handicap at Ruidoso Downs in New Mexico. The Triple Crown winner Citation established the recognized record for consecutive victories with 16 from 1948 to 1950. It was assumed that the first horse to reach 17 straight would be another Citation, a superior animal who routinely bossed around stakes competition. Cigar seemed ready to fit that bill, but his winning streak was stopped at 16 when he was beaten in the 1996 Pacific Classic at Del Mar. Mister Frisky and Hallowed Dreams also flirted with the record in recent times but were defeated when vying for No. 17. For Peppers Pride, that does not figure to be a problem. She has never lost and routinely beats up on the same group of overmatched New Mexico-breds she will face Sunday. There has been nothing adventurous or daring about her campaign, but it has paid off. Taking advantage of purses fattened by profits from slot machines at the New Mexico racetracks, she has earned $861,665. “It’s real hard for us to leave New Mexico because of the purse structure here,” said her owner and breeder, Joe Allen, who owns a barbecue restaurant in Abilene, Tex. “I know that’s hard for a lot of people to understand. I’m not a wealthy man by any means. I can’t afford to do the things that some people can. It would be asinine for us to pay $5,000 or $6,000 to ship somewhere to run. I have to look at it from the economic side.” Allen said that he planned to run Peppers Pride five more times this year, all in races for New Mexico-breds, before she is retired and bred. That would mean she would never be asked to face off against the top-class fillies and mares who compete at places like Saratoga and Del Mar. “If we ever tried something like that, all I can tell you is that she would run the best possible race she could run,” Joel Marr, her trainer, said. “She would give 110 percent. Everybody has their own opinions about what would happen. I think she’d run well. I know other people disagree. It’s not something that concerns me.” Marr and Allen are quick to point out that they understand Peppers Pride does not belong in the same class as Cigar and Citation, but they also say it would be unfair to dismiss what she has done. “It would be a record, but you can’t compare what she’s done to Cigar or Citation,” said Michael Paulson, whose father, Allen, owned Cigar. “They won top-class races and received worldwide acclaim. “But should they get the record, they should be very proud of it. It’s very significant for any horse to win 16 or 17 in a row. I wish them well and hope they appreciate the accomplishment.” By an unraced stallion named Desert God out of the mare Lady Pepper, Peppers Pride was put up for sale before her debut by Allen, who let local owners know that she could be had for $12,500. After no one would meet his asking price, he placed her in a 2-year-old race at Ruidoso in 2005, which she won by four and a half lengths. Peppers Pride has since crisscrossed the state, also racing at Zia Park, Sunland Park and SunRay Park. At the least, she has proved that she has an innate determination to win. In her closest call, a 2006 race at Zia Park, she was passed by another horse near the top of the stretch and appeared beaten, only to battle back and win by a nose. “Whatever it is, she has it,” Marr said. “There are some nice horses around here. She’s just always able to find the wire.” Some, though, do not seem impressed. Allen said that he had been told a number of times that if she set a record, she would deserve to have an asterisk next to her name. Marr came across a thread in a racing blog that was initiated by the Peppers Pride Haters Club. “There are people out there who don’t know what it takes or how hard it is to win all these races in a row,” Marr said. “I’m not going to let them bother me. I don’t care who you’re running against, it’s not easy.”


Office Workers, Ivanka Trump Is Thinking of You

Abstract: Consumers need a voice in these tough times. And that voice is coming from Ivanka Trump. Ms. Trump — daughter of Donald, owner of a diamond jewelry boutique, executive overseeing multimillion-dollar hotel developments and star of “Celebrity Apprentice 2” — has taken to blogging about saving money on lunch. Last week, Ms. Trump began posting items at blog.ALunchTrade.com . She did not define what, exactly, a lunch trade was, saying only that on Oct. 21, she and a corporate partner would conduct one of them. But she did try to connect with the masses of office workers out there. “With gas and food prices on the rise, more and more people are skipping the deli line and bringing lunch to work to save money,” she wrote. “This is great, but all I hear is how boring a brown-bag lunch can get.” The drudgery of office lunches, Ms. Trump wrote, was “something I completely relate to.” Ms. Trump, as it turns out, was promoting a new line of microwave meals for ConAgra Foods . The meals are called Healthy Choice Fresh Mixers, available in varieties like Szechwan Beef and Southwestern Chicken, and they can be stored in a desk for up to a year with no refrigeration required. The link between Ms. Trump and ConAgra was not immediately revealed, a ConAgra executive said, so that they could drum up interest in the promotion. (However, there were only 20 responses to her five blog posts last week.) The lunch trade that Ms. Trump alluded to will happen on Tuesday, when ConAgra representatives will offer samples of the meals in two office buildings: the Grace Building on 42nd Street in New York, and 1 South Wacker Drive in Chicago. While it is difficult to imagine the former model lunching on processed chicken from a plastic tub, ConAgra executives said she was an ideal promoter. “We wanted somebody who would appeal to a younger office worker who’s technology-savvy,” said Michael Locascio, vice president at ConAgra. “We wanted someone they could identify with, someone they knew, but also not somebody that was on the front of every tabloid.” Ms. Trump, possibly slicing baloney for her sandwich at home, was not available for comment. Asked whether Ms. Trump was the best choice to discuss budgeting, Mr. Locascio said that “we want to have her talk in a way that’s credible, which is why we’re talking about this as a business venture for her.” “Because obviously, she has resources some don’t,” Mr. Locascio said. STEPHANIE CLIFFORD

Trump Ivanka
Blogs and Blogging (Internet)
ConAgra Foods Incorporated
Food


U.S. Home Sales in 2012 Highest in 5 Years

Abstract: WASHINGTON (AP) — Sales of existing homes dipped in December from November, in part because of a limited supply of available housing. But the total number of sales in 2012 rose to its highest level in five years. The National Association of Realtors said on Tuesday that home sales declined in December to an annual rate of 4.94 million. That rate was down from 4.99 million in November, which was revised lower but was still the highest in three years. Total home sales last year increased to 4.65 million. That is 9.2 percent higher than 2011 and the most since 2007. Sales finished below the roughly 5.5 million that is consistent with a healthy market. Still, most economists say that home sales are improving steadily and that the gains should continue this year. Stable hiring, record-low mortgage rates and a tight supply of homes available for sale have helped increase sales and prices in most markets. ”We remain convinced that the housing recovery is well under way and should continue through 2013,” said Dan Greenhaus, chief global strategist at BTIG, an institutional brokerage. Image The market is being held back by the shrinking supply of homes for sale. The inventory of available homes on the market dropped to 1.82 million in December, the lowest in 12 years. And first-time buyers, who are critical to a housing recovery, made up only 30 percent of sales in December. That is down slightly from a year ago and well below the 40 percent that is typical in a healthy market. Since the housing bubble collapsed six years ago, banks have tightened credit standards and are requiring larger down payments. Many would-be buyers are unable to qualify for the lowest mortgage rates on record. The rate on the 30-year fixed mortgage averaged 3.66 percent in 2012, the lowest annual average in 65 years, according to Freddie Mac. Sales are rising faster for more expensive homes, the Realtors group said. Sales of homes priced $1 million or more surged 62 percent in 2012, while sales of homes below $100,000 fell 17 percent. Home prices rose 7.4 percent on an annual rate in November, the real estate data provider CoreLogic reported. That is the biggest annual increase since 2006, when the housing bubble burst. CoreLogic forecasts that home prices will rise 6 percent nationally this year.


Proven Winner Finally Finishes First at Daytona

Abstract: Daytona Beach, Fla. Roger Penske has been in the racing business for 50 years, even drove himself for a while. He has won the Indianapolis 500 as an owner 14 times, but everybody knows that Nascar racing is where the action is this generation, and Penske had never won at Daytona. He’s a reserved man, who will turn 71 Thursday, and he has his scars. His first Indy champion, Mark Donohue, crashed in a Formula One race in Austria in 1975 and died of a brain hemorrhage the next day. Several other drivers of his have been killed. He’s a businessman, with 40,000 employees and fortunes in several automotive companies. His racing crews call him the Captain because of his attention to detail. He’s not the kind of owner to exhort his people to win one for the Captain. Finally it happened Sunday after the sun had gone down. After sending out 35 drivers in 23 Daytona races, Penske won the biggest event in racing these days. Ryan Newman gunned ahead in the final lap, and nobody could catch him. They do things backward in Nascar, running the event they dare to call the Great American Race at the very start of the season, like a Super Bowl on Labor Day, when football is just back from vacation. Yet somehow it works. Strange things happen at Daytona, like the confusion on the final lap last year, and terrible things happen, like Dale Earnhardt’s dying in a crash on the final lap in 2001. Now Newman’s spurt has made the austere Penske a champion of Daytona. “You needed to win the race to get in this class,” Penske said. “Certainly our races at Indy are important to us,” he continued. “For me to come and have the opportunity, this certainly goes to the top of the charts for Penske Racing.”  Penske keeps a diversified stable, finding room for Newman, with his Purdue degree in vehicular structural engineering, and Kurt Busch, a mercurial type who wore down Jack Roush, his previous owner. Penske makes suggestions, Busch said, and the drivers and the crew chiefs know they are something more than suggestions. “Roger never puts extra pressure on us,” Kurt Busch said when somebody mentioned that his boss had never won here. Then Busch added, “He does put a nice bonus in our contract if we do win.” Maybe the Penske attention to detail instilled the teamwork evident in the final lap, when Newman burst into the lead and Busch had two options — in the Super Bowl vernacular, either block or gamble for the end zone. There was a bit of a history behind the decision. Last week, Busch and Tony Stewart were rumored to have had a fistfight while speaking with officials after they had locked fenders on the Daytona track. For whatever reason, Busch hunkered down in Stewart’s path, and his stablemate Newman won Daytona. “I was doing what Kurt Busch needed to do,” Busch said, not gloating. Speaking of Stewart, he added: “If he would have jumped up ahead of me, I would have pushed him. Maybe he did think twice that that was me up there.” Newman later spoke of the tactics of Busch in the stretch: “He could have gone up the middle and made a mess of it.”  They had a mess here last year when officials ignored a nasty crash, failing to flash the customary yellow flag as Kevin Harvick caught the popular veteran Mark Martin at the end. Things happen here — like Earnhardt’s first Daytona 500 victory in 1998, or his son’s first 500 victory in 2004, or his deadly crash in 2001. Nascar has seen its television ratings drop in recent years, and it has lost some of the sheen of the past generation, when the sport moved into major population centers and abandoned some of the old haunts in North Carolina and elsewhere. In the process, Nascar has attracted refugees from open-wheel racing, including Juan Pablo Montoya, Dario Franchitti and Sam Hornish Jr., the third Penske driver. Hornish made his debut at Daytona on Sunday, after winning the Indy 500 in 2006. Although he would never say so, Penske is probably still an Indy guy, but he nodded when somebody noted there were coaches and athletes who were forever judged for never winning a Super Bowl or a World Series. “Coming down here has been tough,” Penske said. “We’ve been open-wheel champions.” “Rick Hendrick is a guy I look up to,” Penske said long after the race, referring to one of the owners who has been successful at Daytona. He said he had spoken with Hendrick early Sunday and said, “If I get in the victory circle, I want one of those H hats,” meaning a souvenir of the Hendrick stable. Champ that he is, Hendrick produced a cap for Penske after the race. And what would have happened if one of Penske’s drivers had not won Daytona on Sunday? “We would have come back,” Penske said softly. He’ll come back anyway. The Captain is a fixture here. But now he has won Daytona.

Penske Roger
National Assn of Stock Car Auto Racing
Automobile Racing
Newman Ryan


Emerging Markets Regain Their Footing

Abstract: ONE of the more startling developments of recent months has been the near-vertical recovery of emerging stock markets. Despite the collapse of those markets late last year, investors’ sentiment toward them has quickly switched from hate to love, with nothing in between. Emerging markets have soared above almost all others this year, especially in the second quarter, even as those other markets were swiftly gaining altitude themselves. The outperformance carried a broad-based MSCI Barra index of shares in the developing world close to record highs, relative to the firm’s broadest index of stocks in mature economies, after touching a three-year comparative low last fall. The rally provided an opportunity for shareholders in emerging-market funds to dig out of a very deep hole. The average portfolio specializing in them rose 35.1 percent in the second quarter, after falling 54.4 percent in 2008 and an additional 1.7 percent in the first quarter this year. Corresponding second-quarter returns were 17.5 percent for domestic stock funds; 27 percent for funds investing in Europe and 27.8 percent for Asia funds. You might think that after such stunning outperformance, investment advisers who comparison-shop would lighten up on emerging markets and spread the cash around mature markets. But they haven’t; the consensus seems to be that emerging markets remain the better bet, although it may be prudent not to place it just yet. Investors trying to fathom the enormous run-up in emerging markets should have their minds on something else, as one portfolio manager sees it. “The question to ask is: Why did they fall last year?” said Giles Conway-Gordon, co-chief investment officer at Cogo Wolf Asset Management in San Francisco. “That was the exceptional event, and now we’re seeing a return to normality in emerging markets.” Many developing economies are enduring the global recession and financial crisis in relatively solid shape, and their stock markets suffered more than others through little fault of their own, international fund managers say. One factor was a sudden scarcity of credit that forced many Western investors to sell assets to raise cash. “You had to sell what you owned, and that’s what everybody owned,” said John Maxwell, manager of the Ivy International Core fund. One reason markets like those of India, China and Brazil were so popular until the bear market is that sound government policy had become commonplace in the developing world. Officials “have learned from past mistakes,” said Kirk Brown, who runs foreign portfolios in the American Beacon fund family. “Many of these markets are running surpluses, and inflation is under control.” By contrast, fiscal and trade surpluses and other signs of sound economic management are hard to spot in many mature countries. “We think there are serious question marks” about the long-term prospects of developed economies, Mr. Conway-Gordon said. “Growth is going to be uninspiring. Japan is a country in decline. Europe has not faced facts about its financial system and is overbureaucratized.” Mr. Maxwell cited some uninspiring details of his own. Industrial production in Germany and Japan is running at 60 percent to 80 percent of prerecession levels, declines “that would have been unfathomable in the past” and are well below previous troughs, he said. Stock markets in mature countries have risen in the hope that their economies will stabilize, but he contends that the weakness is so severe that stability won’t do. “Things can’t stay that way without skyrocketing unemployment,” Mr. Maxwell said. “Stabilization isn’t good enough at this level. They have to see improvement, not a plateauing.” The ability to conduct business unfettered by the lingering effects of financial and economic imbalances should help emerging markets recover faster and keep a competitive edge, said Jason Hsu, chief investment officer at Research Affiliates, an asset management firm in Pasadena, Calif. “Economies that won’t have to deleverage will consume more and employ more capital,” Mr. Hsu said. “That’s a definite positive. Those economies are going to be in positions of relative strength, and you’re going to see investment flow reacting to that.” But doesn’t the rally mean that the reaction has already occurred? It’s possible that the choices open to international investors have been greatly curtailed — and that the low-hanging fruit, as well as a lot of the produce much higher up, has already been picked in emerging markets. “When you see a great run like you’ve seen in emerging markets, you’ve got to ask whether you want to keep riding the ride,” Mr. Maxwell said. “You’ve got to be sure you’re going to come out of this in good shape” before buying at these levels, he advised. “I’m not 100 percent ready to bet on that at this point.” The growth prospects he perceives for mature international economies, as well as the less dramatic yet sizeable rally they have already experienced, mean that they may not offer much of an alternative. One approach that Mr. Maxwell favors is buying companies in mature countries that do a lot of business in developing ones, like Nestlé, the Swiss food producer; Total, the French oil company; and Nissin Kogyo, a Japanese company that makes car parts. Others find emerging-market stocks tempting, if pricey. Mr. Brown at American Beacon acknowledges that valuations appear somewhat stretched, but says he expects higher long-term earnings growth to remedy the condition. His largest holdings lately have included PetroChina, HDFC Bank in India and Itaú Unibanco Holding, a Brazilian bank. HARRY HARTFORD, president of Causeway Capital Management in Los Angeles, likewise foresees stronger earnings growth, although he would not be surprised by a pullback in the short run. “I would argue that if you have anything other than a three-month investment horizon, you need to have emerging markets in your portfolio,” Mr. Hartford said. “It’s naïve to think that a number of these markets will not continue to do well and that companies don’t have the wherewithal to continue growing.” Mr. Hsu expressed similar sentiments. “After they’ve gone up this far, we’re more than likely to see a larger correction,” he said. “But it’s hard not to argue that over a longer horizon they offer more opportunity and fewer problems to deal with.”

Stocks and Bonds
International Trade and World Market
emerging markets


Britain: Court Approves Vasectomy for Disabled Man

Abstract: A British court has ruled for the first time that a man who lacks the capacity to give informed consent should have a vasectomy because it is in his best interests. The 36-year-old man, who has not been identified, has an I.Q. of 40, lives with his parents and has a long-term girlfriend who also has severe learning disabilities. In 2009, the man’s girlfriend became pregnant and had a child. According to the court decision, the man had insisted that he did not want any more children. His doctors and parents applied to the court for the vasectomy, arguing that he does not have the mental capacity to reach an independent decision.

Vasectomy
Medical Sterilization
Disability
Great Britain


After Close Australia Vote, Parties Seek Coalition

Abstract: SYDNEY, Australia — The two main candidates in Australia’s cliffhanger election began scrambling Sunday to win the support of three independent lawmakers and a newly elected Greens party representative who will decide which party forms a minority government in one of the tightest races ever seen here. By late Sunday, with nearly 80 percent of the vote counted, neither the governing center-left Labor Party nor a conservative opposition coalition had captured enough votes to claim a majority in the 150-member House of Representatives. About two million mail ballots have not yet been counted, and it could take at least a week before the final result is known. Prime Minister Julia Gillard and her conservative rival, Tony Abbott, began what many analysts expect to be a lengthy period of negotiations to win over the crucial bloc. Australia has not had a minority government since 1940. “We are clearly at a historic moment in our country,” Ms. Gillard said in Melbourne. Labor, which held 83 seats before the election on Saturday, lost at least 13 and is at risk of becoming the first government in nearly 80 years to be turned from office after just one three-year term. Talks were expected to begin in earnest in Canberra, the capital, on Monday. The Greens drew a record number of votes, mainly from traditional Labor supporters angry about the government’s decision to suspend its cap-and-trade policy on carbon emissions until 2013. The three independent lawmakers represent rural constituencies and have links to parties within the conservative coalition.

Australia
Elections
Gillard Julia
Abbott Tony


Nurse in Royal Prank Call Was Found Hanged, British Inquest Is Told

Abstract: LONDON — A nurse who apparently committed suicide after being tricked by a prank call from an Australian radio station involving the pregnant Kate Middleton, the Duchess of Cambridge, was found hanging by a scarf and had left several notes, a preliminary inquest hearing was told on Thursday. The details were the first to emerge of how the nurse, Jacintha Saldanha, 46, had died. The episode transfixed many in Britain and Australia , seeming to combine a fascination with the royal family, particularly the Duke and Duchess of Cambridge, with horror at the outcome of what two Australian disc jockeys pretending to be Queen Elizabeth II and Prince Charles have said began as a harmless stunt. The radio hosts convinced Ms. Saldanha that they were members of the royal family, and persuaded her to pass on their call to another nurse whom they duped into disclosing medical information about the duchess, who was being treated for acute morning sickness at the King Edward VII hospital. The call was broadcast on Australian radio and went around the world. Police officials initially declined to offer details of what had happened to Ms. Saldanha, who was married and had two children, beyond saying that an ambulance crew had found her body. Detective Chief Inspector James Harman told the preliminary inquest hearing at Westminster Coroner’s Court in central London on Thursday that Ms. Saldanha “was found by a colleague and a member of security staff. Sadly, she was found hanging.” There also “injuries to her wrist,” and three notes were found — two in her room and the third among her possessions. Details of the notes were not disclosed. “At this time there are no suspicious circumstances,” Mr. Harman said, meaning the police did not suspect the involvement of other people. Ms. Saldanha had been found hanging by a scarf from a wardrobe in her room in the nurses’ quarters at the hospital, the coroner, Fiona Wilcox, was told. The hearing lasted a matter of minutes and will resume next March 26, Ms. Wilcox said. Between now and then, Mr. Harman said, he expected officers from Scotland Yard to be in touch with police detectives in Australia to interview witnesses so as to “put the best evidence before you” when the inquest resumes. British inquests are supposed to determine the cause of death but do not apportion blame. The family of Ms. Saldanha, who was born in India, did not attend Thursday’s hearing. The events leading up to the nurse’s death are also unclear. The hospital where she worked — an upscale private facility favored by the British royal family — said it had not disciplined her after the hoax but rather had been “supporting her during this difficult time.” The royal family also indicated that it had not raised a fuss about the prank by the D.J.’s, Mel Greig and Michael Christian, whose impersonations of the duchess’s in-laws seemed unconvincing to many listeners. The queen is the grandmother of Prince William, the Duke of Cambridge; Prince Charles, the heir to the throne, is his father. Australian regulators are investigating whether the 2DayFM station breached the terms of its license to broadcast or the code of practice adopted by Australian broadcasters.


Jurors Hint at Deadlock in Tarloff Murder Case

Abstract: The jury considering murder charges against David Tarloff , a schizophrenic man accused of killing a psychologist in her Upper East Side office five years ago, sent a note to the judge Monday afternoon suggesting they might not be able to reach a verdict. The note requested “clarification of the consequences of a hung jury,” Justice Edward J. McLaughlin of State Supreme Court in Manhattan, said. The note continued, “We are at risk.” The judge instructed the jurors not to speculate on the consequences or definition of a hung jury and directed them to continue deliberations on Tuesday morning. The jury has deliberated for four days since receiving the case on Wednesday at noon, but Monday was the first full day the jurors spent deliberating. They spent much of Thursday in the courtroom, hearing testimony of mental health experts reread. Friday was a shortened day because of a juror’s scheduling conflict. Mr. Tarloff, 45, is charged with murdering the psychologist, Kathryn Faughey, 56, and assaulting a psychiatrist, Dr. Kent D. Shinbach, with whom she shared an office suite, on Feb. 12, 2008. Mr. Tarloff later told doctors that God had approved his plan to rob Dr. Shinbach so he could care for his mother in Hawaii. During the trial, Mr. Tarloff’s lawyers did not contest that he had attacked the two. They presented an insanity defense , which, if successful, would result in Mr. Tarloff being sent to a secure psychiatric facility, possibly for life. He faces up to life in prison if found guilty. Late Monday, the jurors asked the judge to repeat his explanation of the requirement that the defense must prove insanity.

Murders
David Tarloff
Kathryn Faughey
Manhattan
Edward J McLaughlin


N.B.A. Reassessing Its Olympic Involvement

Abstract: LONDON — Often obscured in the haze of celebration of the Dream Team is this fact: The United States actually voted against allowing N.B.A. players to participate in the Olympics in 1992. As it turned out, American self-interest was trumped by global embrace. The outcome was hugely beneficial. Basketball soared internationally and now can rightfully claim to be the world’s second-most-popular sport behind soccer. Two decades ago, the N.B.A. was viewed in 88 countries. Now it is 217 nations and territories. On opening day of the 1991-92 season, N.B.A. rosters featured 23 international players from 18 countries. As last season began, it was 74 players from 35 countries. Yet, as the United States opens play Sunday at the London Games, and corks pop on the 20th anniversary of the Dream Team , the N.B.A. is reassessing its involvement in the Olympics with an eye toward an even bigger and more popular international sporting event: soccer’s World Cup. Several trial balloons are being floated. One would mirror soccer’s age restriction and make Olympic basketball an under-23 tournament. Another would place the age limit at, say, 26. A third might place a limit of two Olympic appearances regardless of age. The N.B.A.’s concerns relate to player health, broadening the sport’s appeal, finances and perceived arrogance of the International Olympic Committee. At this point, any change seems more likely to occur for the 2020 Summer Games, yet to be awarded, than for the 2016 Olympics in Rio de Janeiro. “It might be time to step back and, if nothing else, to satisfy the owners so they can begin studying it,” David Stern, the N.B.A. commissioner, said in a telephone interview from New York. “Frankly, the more I whistled a little tune, the more I said, ‘Maybe you stumbled onto something.’ I’m not sure this changes anything, but it’s time to take a look.” Team owners, having invested hundreds of millions of dollars, worry that their star players will become fatigued and injured. The 12 United States players here are perhaps less of a concern than the 26 global N.B.A. players, who often face enormous nationalistic pressures to represent their countries at the Olympics and in continental tournaments, even when hurt. It is widely believed that Yao Ming’s career was shortened by foot problems developed from a grueling schedule of playing for the Houston Rockets and the Chinese national team. In 2008, the prime minister of Lithuania phoned Stern, asking him to help persuade Zydrunas Ilgauskas of the Cleveland Cavaliers to play at the Beijing Games. The country was considering allocating public money to provide insurance for the fragile Ilgauskas, whose pre-existing injuries left him less than fully covered for the Olympics. Stern declined to pressure Ilgauskas, and he did not play in Beijing. Increasingly, Stern has grown intrigued by soccer’s 32-team World Cup, held every four years, extending for an entire month, unencumbered by simultaneous competition from other sports. By contrast, Olympic basketball is limited to 12 teams over 17 days and must share the limelight with two dozen other sports. The N.B.A. and its players are also severely restricted in leveraging marketing opportunities with sponsors not associated with the Games. FIBA, basketball’s international governing body, does conduct a world championship every four years. Although that tournament is more popular than the Olympics in some countries, the Summer Games dwarf the world championships as a basketball showcase in the United States. Recently, the name of the tournament was changed to the World Cup in an attempt to broaden its appeal. Mark Cuban, the owner of the Dallas Mavericks, wants the N.B.A. to stage its own World Cup, without FIBA’s involvement. That way, money would be more equitably shared with various national basketball federations and N.B.A. players, Cuban wrote in an e-mail. He has also grown impatient with the I.O.C., which he views as supercilious, greedy and exploitative of the league’s players as Olympic programming for NBC. “They are risking their futures so that the Olympics organization can maximize sponsorship and TV deals,” Cuban wrote. “There is no good reason for the N.B.A. to risk our athletes so they can profit.” Stern is more diplomatic. He prefers not to simply decree that the N.B.A. will no longer release players older than 23 for the Olympics. He has spent 20 years engendering good will with FIBA and does not want to be viewed as a heavy-handed, ugly American. FIBA is also in a sensitive position. A number of countries fear that the United States, given its population and depth, would have a greater advantage in an under-23 Olympic tournament than it does now with N.B.A. players. FIBA’s secretary general, Patrick Baumann of Switzerland, is also an I.O.C. delegate and is said to be torn. On one hand, he wants to make the basketball World Cup more relevant. On the other hand, Baumann knows that an under-23 Olympic basketball tournament would be severely devalued, like the soccer competition. (Sepp Blatter, the president of soccer’s governing body, FIFA, is also an I.O.C. member, but he operates from a position of much greater strength, given soccer’s unmatched popularity.) Some Olympic officials would welcome reduced N.B.A. involvement in the Summer Games. Athletes in individual sports, effectively seen only once every four years, would have a greater chance to gain attention. But other officials see risks for the league in an under-23 format: accusations of hubris and lack of patriotism, a decline in global visibility of the sport, a threat to international development. “Maybe not in America, but in the rest of the world, the Olympics might be the only time people will see basketball at that level,” said Michael Payne, a former marketing director for the I.O.C. “If you suddenly think you’re so strong and no longer need that, well, how many other brands, how many other entertainment properties, think they’ve arrived and then, poof?” Expanding the basketball World Cup might also put greater physical demands on N.B.A. players. Soccer is locked in a continual struggle between club and country. Would the N.B.A. be willing to do what FIFA does, set aside dates during the season when clubs must release players for national team games, often requiring brutal travel? If the N.B.A. does maintain its current Olympic involvement, it may be for this reason: The players say they love it. They attract a global audience. They rub shoulders with top athletes from other sports. They have fun in a festival atmosphere while playing for a gold medal. According to USA Basketball, the national governing body, the performance of Olympic players often increases in subsequent N.B.A. seasons. Kobe Bryant dismissed the under-23 idea as stupid. Carmelo Anthony said players should be allowed to decide on their own, regardless of age, whether to represent their country. “David Stern’s views are based on him protecting his players,” said Pops Mensah-Bonsu, a British forward who formerly played for the Mavericks and the New Orleans Hornets. “But it’s the Olympics. If you put age limits, you’ll take away from what it really means.”

Olympic Games (2012)
Basketball
National Basketball Assn
United States
Soccer


Kansas: Democrats Win Right to Skip Race

Abstract: A court ruled Wednesday that Democrats can go without a United States Senate candidate after their nominee dropped out of the race against the Republican incumbent, Pat Roberts. A panel of three Shawnee County judges said state law did not require Democrats to fill the vacancy. Some Democrats pushed out the former nominee, Chad Taylor, because they saw the independent candidate, Greg Orman, as stronger and did not want to split the anti-Roberts vote. Secretary of State Kris Kobach, a Republican who tried to block Mr. Taylor’s removal from the ballot, said ballot printing must start Thursday.

Chad Taylor
Kansas
Pat Roberts
Senate races
Greg Orman
2014 Midterm Elections


Piling On: Borrowers Buried by Fees

Abstract: SLOWLY but surely, a handful of public-minded bankruptcy court judges are drawing back the curtain on the mortgage servicing business, exposing, among other questionable practices, the sundry and onerous fees that big banks and financial companies levy on troubled borrowers. It isn’t a pretty sight, if you are a borrower. But shining a light on this dark corner certainly qualifies as progress. The cases come out of bankruptcy courts in Delaware, Louisiana and New York, and each one shows how improper, undisclosed or questionable fees unfairly penalize borrowers already struggling with mortgage debt or bankruptcy. Given the number of new borrowers falling daily into the foreclosure mire, dubious practices by servicers are beyond troubling. Foreclosure filings rose 57 percent in March over the same period in 2007, according to RealtyTrac, the real estate and foreclosure Web site. It also said that banks repossessed more than 50,000 homes last month, more than twice the amount of one year earlier. If even one of those repossessions was owing to improper fees or practices, that would be one too many. The case out of the Eastern District of Louisiana, overseen by Judge Elizabeth W. Magner, is especially depressing. It involves Dorothy Chase Stewart, an elderly borrower and widow whose original loan of $61,200 was serviced by Wells Fargo. Judge Magner cited “abusive imposition of unwarranted fees and charges,” and improper calculation of escrow payments, among other things. She found Wells Fargo negligent and assessed damages, sanctions and legal fees of $27,350. The heart of the case is that Wells Fargo failed to notify the borrower when it assessed fees or charges on her account. This deepened her default and placed her on a downward spiral that was hard to escape. And Wells Fargo’s practice of not notifying borrowers that they were being charged fees “is not peculiar to loans involved in a bankruptcy,” the court said. During a 12-month period beginning in 2001, for example, Well Fargo assessed 13 late fees totaling $360.23 without telling Ms. Stewart or her late husband, whose name was on the loan before he died. Even though the terms of the mortgage required that Wells Fargo apply any funds it received from the Stewarts to principal and interest charges first, the late fees were deducted first. This meant that the Stewarts’ mortgage payments were insufficient, making them fall further behind — and keeping them subject to more late fees. Then there were the multiple inspection fees Wells Fargo charged the borrowers. Because its computer system automatically generates a request for property inspections when a borrower becomes delinquent — to make sure the property is being kept up — the $15 cost of the inspections piled up. The court noted that the total cost to the borrower for one missed $554.11 mortgage payment was $465.36 in late fees and property inspection charges. FROM late 2000 and 2007, Wells Fargo inspected the property on average every 54 days, the court found. But the court also determined that inspections charged to Ms. Stewart had often been performed on other people’s properties. Of the nine broker appraisals charged to Ms. Stewart from 2002 to 2007, two were said to have been conducted on the same September day in 2005 when Jefferson Parish, where the Stewart home was located, was under an evacuation order because of Hurricane Katrina . The broker appraisals were conducted by a division of Wells Fargo that charged more than double its costs for them, the court found. It concluded that the charges were an undisclosed fee disguised as a third-party vendor cost and illegally imposed by Wells Fargo. The bank also levied substantial legal fees and failed to credit back to the borrower $1,800 that had been charged for an eviction action but that had been returned by the sheriff because it never occurred. While Wells Fargo claimed that the borrower owed $35,036, the judge said the actual figure was $24,924.10. The judge ordered Wells Fargo to provide a complete loan history on every case pending with her court after April 13, 2007. A Wells Fargo spokesman said the bank “strongly disagrees with many aspects of the recent bankruptcy rulings in New Orleans and plans to appeal these matters. Wells Fargo continuously works to enhance its bankruptcy procedures to comply with the requirements of the bankruptcy courts throughout the country.” The second illuminating case emerged in federal bankruptcy court in Delaware and involved a problem that lawyers representing troubled borrowers say they often encounter: fees levied after a borrower has satisfied all obligations under a Chapter 13 bankruptcy and the case is discharged. Mortgage lenders argue that their contracts allow them to recover all the fees and costs they incur when a borrower files a Chapter 13 bankruptcy plan, even those not approved by the court and charged after a case is resolved. But borrowers contend that because such charges have not been approved, they should be disallowed. Judge Brendan Linehan Shannon put forward this example: If a lender imposed $5,200 in charges on a borrower to cover weekly property inspections and the court disallowed $4,000 of it, lenders still contend that they have the right to try to collect fees after the case concluded that the court did not approve. “This cannot be,” the judge wrote. “If the court and the Chapter 13 Trustee fully administer a case through completion of a 60-month Chapter 13 plan, only to have the debtor promptly refile on account of accrued, undisclosed fees and charges on her mortgage, it could fairly be said that we have all been on a fool’s errand for five years.” Finally, borrowers can be cheered by an opinion written this month by Cecilia G. Morris, bankruptcy judge in the Southern District of New York. The case involved Christopher W. and Bobbi Ann Schuessler, borrowers who had $120,000 of equity in their Burlingham, N.Y., home when their bank, Chase Home Finance, a unit of JPMorgan Chase , moved to begin foreclosure proceedings. The couple had filed for personal bankruptcy protection, which automatically prevents any seizure of their home. But the bank moved for a so-called relief from the bankruptcy stay, and claimed the couple had no equity. The Schuesslers got into trouble because Chase had refused a mortgage payment they tried to make at a local branch. Testimony in the case revealed a Chase policy of accepting mortgage payments in branches from borrowers who are current on their loans but rejecting payments from borrowers operating under bankruptcy protection. The Schuesslers did not know this. When Chase rejected their payment, they briefly fell behind on their mortgage, according to the court documents. Then Chase moved to begin foreclosure proceedings. “Without informing debtors, Chase Home Finance makes it impossible for JPMorgan Chase Bank branches to accept any payments,” Judge Morris wrote. “It appeared that Chase Home Finance intended to commence an unwarranted foreclosure action, due to ‘arrears’ resulting from Chase Home Finance’s handling of the case in its bankruptcy department, rather than any default of the debtors.” COURT documents also state that Chase was unable to show that it had tried to communicate with the borrowers before it began efforts to seize their home. The judge concluded that the way Chase deals with bankruptcy debtors is an abuse of the process. She instructed Chase to pay the borrowers’ legal fees. Thomas Kelly, a Chase spokesman, conceded that the bank had made some mistakes in the Schuessler case, especially the fact that the branch teller had not advised the borrowers where to send their payment when it was rejected. “Payments from customers in bankruptcy require special handling under bankruptcy law so tellers are requested to tell customers to mail in the payment or call the toll-free number on the back of the form,” he said. “In light of the judge’s concerns we are reviewing our practices.” He also said the bank had followed industry practice in moving to foreclose quickly “so we could meet the guidelines for servicing loans for investors.” “These cases clearly indicate that bankruptcy courts are no longer being fooled by the maze of fees, firms and flim-flams of the mortgage servicing industry,” said O. Max Gardner III, a lawyer who represents borrowers in Shelby, N.C. “The servicers and their lawyers should recognize the clear and present danger of these decisions while they still have time to turn their ships around and do the right thing.”

Mortgages
Prices (Fares Fees and Rates)
Housing
Ethics
Foreclosures
Morgan J P Chase & Co
Finances