"After revealing last week that a pilot installation of controversial, buggy border-security scanner towers had finally been accepted into service, the US government has now admitted that the project is a technical failure," Lew Page observes.

Read the whole story.

Posted by Muhammed El-Hasan at 9:15 AM | Permalink | Comments (0)

WASHINGTON -- Federal Reserve Chairman Ben Bernanke told Congress today that the nation isn't "anywhere near" the dangerous stagflation situation of the 1970s.

With the economy slowing and inflation rising, fears have grown that the country could be headed for the dreaded twin evils of stagnant growth and rising prices known as "stagflation."

"I don't anticipate stagflation," Bernanke told the Senate Banking Committee. "I don't think we're anywhere near the situation that prevailed in the 1970s."

"I do expect inflation to come down," he added. "If it doesn't, we will have to react to it."

High energy prices and rising inflation do complicate the Fed's job of trying to keep the economy growing and inflation contained, Bernanke acknowledged.

Energy prices are creating "inflationary stress," Bernanke said. And, that is "complicating" the Fed's work in terms of shoring up the economy, he said.

President Bush, at a news conference today, noted the slow economic growth but said the nation isn't headed into a recession.

He rejected calls for additional stimulus efforts, instead advising patience. "Why don't we let stimulus package one, which seemed like a good idea at the time, have a chance to kick in?" Bush said at the White House.

Bernanke's testimony in the Senate caps back-to-back appearances on Capitol Hill that started in the House on Wednesday. The Fed chief's overarching economic message was the same on both days: The Fed stands ready to lower a key interest rate yet again to bolster the struggling economy.

Many fear the country is hurtling toward a recession or is in one already.

The central bank started lowering a key interest rate in September. Over just eight days in January, the Fed shaved 1.25 percentage points, the biggest one-month reduction in a quarter century. Economists and Wall Street investors predict the Fed will cut rates again at its next meeting, March 18.

Just before Bernanke testified, the government reported that the economy nearly stalled in the final quarter of last year. It grew at a pace of just 0.6 percent, a big loss of momentum compared with the prior quarter's brisk 4.9 percent growth rate.

The committee's chairman, Sen. Christopher Dodd, D-Conn., described the nation's economic situation as "very serious, if not perilous."

Dodd said: "Growth is slowing. Inflation is rising. Consumer confidence is plummeting, while indebtedness is deepening."

Bernanke indicated he is prepared to lower rates even as high oil prices heighten inflation risks.

To energize the economy the Fed cuts rates. To combat inflation, it would boost rates. Rising inflation can reduce the Fed's maneuvering room in terms of revving up a slowing economy.

"We are concerned," Bernanke said. "We are trying to balance a number of different risks against each other," he told lawmakers.

Still, Bernanke is hopeful that energy prices -- and overall inflation -- will moderate somewhat this year.

And, he expresses hope that the economy will turn stronger in the second half of this year, helped by the Fed's rate reductions and the recently enacted rescue package of rebates for people and tax breaks for businesses.

"I realize that my testimony wasn't the most cheerful thing you'll hear today ... but I do very much believe that the U.S. economy will return to a strong growth path with price stability," Bernanke said.

Sen. Richard Shelby, R-Ala., however, worried that rising inflation could make it harder for the Fed to steady the wobbly economy.

Shelby wondered "how much more room the Federal Reserve will have to provide further monetary accommodation without threatening long-term price stability, which is very important to all of us."

He added: "While it's difficult to see our nation's economy experience minimal growth, the consequences of failing to restrain inflation will be far more painful and more difficult to unwind."

Bernanke, however, said the Fed's No. 1 battle right now is to shore up the economy. "At the moment, the greater risks are to the downside," Bernanke said, referring to shaky economic growth and turmoil in financial markets.

Posted by Muhammed El-Hasan at 5:24 PM | Permalink | Comments (0)

EL SEGUNDO, Calif. — Regional sporting-goods retailer Big 5 Sporting Goods Corp. said Thursday fiscal fourth-quarter net income fell 36 percent, hurt partly by the decline in demand for wheeled shoes.

Quarterly profit fell to $6.2 million, or 28 cents per share, from $9.6 million, or 42 cents per share, in the prior-year quarter.

Revenue fell 1 percent to $232.1 million from $234.5 million last year, hurt by lower traffic amid a difficult consumer environment, as well as lower demand for wheeled shoes.

Profit still beat the consensus estimate of analysts polled by Thomson Financial, who predicted a profit of 26 cents per share on revenue of $232.1 million.

Same-store sales fell 4.7 percent. Same-store sales, or sales in stores open at least one year, is a key measure of a retailer's financial health because it measures growth at existing stores rather than newly opened ones.

For the year, profit fell 9 percent to $28.1 million, or $1.25 per share from $30.8 million, or $1.35 per share last year. Revenue rose 3 percent to $898.3 million from $876.8 million a year ago.

"Like many other retailers, we experienced weak consumer spending during the holiday selling season," Steven G. Miller, company chairman, president and chief executive.

The company also issued first-quarter and yearly guidance below analyst expectations. Shares fell 85 cents, or 7.2 percent, to $11 in aftermarket electronic trading, having closed earlier down 52 cents, or 4.2 percent, at $11.85.

Posted by Muhammed El-Hasan at 3:33 PM | Permalink | Comments (0)

U.S. economic growth is continuing to slow, with additional unpleasant surprises possible in the credit and equity markets, three top financial analysts said in remarks prepared for a panel discussion presented
by the CFA Society of Los Angeles, according to the following release:

The panelists differed on the investment outlook, with one bearish on stocks, one
bullish and the other cautioning that commodities, which have recently attracted the
interest of more individual investors, may be the next "bubble." The analysts were
interviewed by Maria Bartiromo, anchor of CNBC’s Closing Bell with Maria Bartiromo.
The economy has already entered a recession, according to Donald H. Straszheim, Vice
Chairman of Roth Capital Partners, former global Chief Economist for Merrill Lynch &
Co., and an expert on China and Asia.
"It’s clear to me that the U.S. economy is in a recession," Straszheim said in remarks
prepared for the society’s 2008 Economic & Investment Forecast Dinner at the Biltmore
Millennium hotel Wednesday. The CFA Society of Los Angeles is a network of investment
management professionals that works to disseminate useful financial information and
increase awareness of the value of the Chartered Financial Analyst (CFA)
designation, which is intended to lead the investment profession by setting the highest
standards of ethics, education, and professional excellence.
"Recessions come and go and this one will too," Straszheim said. "The decline in
housing, the damage done to consumers by falling home and equity prices, and higher
energy costs, will sour consumer spending. The turmoil in the financial markets is not
over, nor is the ugliness in equities. History tells us that when market sentiment
turns as sour as it has, ultimately every stock gets taken apart."
While agreeing that the economy faces further challenges, Alison A. Deans, Managing
Director and Deputy Head of Private Asset Management at Neuberger Berman, noted that
her firm is positive on equities.
"We actually like the stock market at these levels," she said in her prepared remarks.
"We’re at a point in the Fed’s easing cycle that usually bodes well for equities. When
the Fed eases, 90% of the time equities do better - the exceptions being when stocks
have been significantly overvalued or when we’ve had a serious recession. Stock
valuations are not high at 15 times forward earnings, compared with 20 to 21 in the
late ‘90s. As well, we anticipate slow growth, but not a recession."
The nation’s credit markets, wèé;4´0»2±²picture improves, concerns about corporate cash
flows will subside, pushing investors out on the risk spectrum."
While noting that economic data may worsen in the coming months, Crescenzi agreed with
Deans that most of the bad news is already priced in and added that investors should
now be alert for buying opportunities. The key factors to watch, he said, are the
nation’s production cycle and consumer spending.
"Track whether consumer spending is picking up relative to output, because spending
levels that outstrip production will inevitably lead market-share minded companies to
raise output, lest they lose market share," he said in his remarks.
"This will turn the production cycle from vicious, where it is now, to virtuous,
leading to a renewed period of self-reinforcing economic expansion. By focusing on
spending, particularly chain store sales, car sales, and home sales, investors will be
able to spot the trough in the economic cycle. I emphasize that it is spending relative
to production that is key to watch. When you see a turn, start betting on an economic
recovery and don’t be deterred by sour news on employment and production, because it
will inevitably turn."
When production turns up, Crescenzi explained, payrolls rise and consumer spending
follows, leading to increased demand for goods and services - a virtuous cycle.
"More hours worked mean more income, resulting in increases in consumer spending and
round and round it goes, a virtuous cycle of increases in production, income, and
spending," he said.
"This is the stuff that expansions are made of. A turn in spending is probably a few
months away, but it could happen at anytime, so we must be on the lookout for contrasts
between spending and production. Spending could pick up for any number of reasons, the
most prominent which include the Fed’s rate cuts, which are reducing debt burdens and
resulting in a boom in mortgage refinancing. Fiscal stimulus will certainly boost
growth, although there is a debate about its lasting effects. I am hoping it jumpstarts
the production cycle, but much will depend on the mood of the nation at the time.
Pent-up demand can also help turn things around."
Deans said investors should be very choosy about stocks, adding that there may be
opportunities in the beaten-down financial sector.
"We’re being very selective, but we do think financial services and technology shares
could do well. We also think large-cap and global industrials -- because they aren’t
tied only to U.S. demand, which will slow -- will benefit from global demand. The
weaker dollar also helps companies that operate globally. Large cap and global are the
places to be right now."
Deans said portfolio managers at Neuberger Berman Private Asset Management have
adjusted their mix of international stocks.
"Overall, we are evenly split between domestic and foreign equities right now. We had
been overweight international, but as the dollar has come down we have become more
U.S.-centric," she said.
"Emerging markets in general, which rely on our consumption, could be soft for a while
and are not going to see the kind of growth they’ve enjoyed in the past, although some
specific markets have good prospects. As a whole, we are neutral to underweight
emerging markets."
Crescenzi said investors should be wary of the boom in commodity prices.
"If you are looking for the next price bubble, the commodity market is probably where
you will find it," he said. "The price action there fits with the mentality that grips
every bubble: ‘Just buy X and you will make money.’ In past bubbles, X stood for
dot-com stocks, housing, and credit instruments. Now it stands for commodities."
On other fronts, Straszheim anticipates new economic marching orders in China.
"The news coming out of China is about to change," he said in his prepared remarks.
"Over the last year, the talk has been that China is growing too fast with too much
inflation. China has been allowing their currency to appreciate rapidly and raising
interest rates to slow growth and to fight inflation. The recession in the U.S. and
near recessionary conditions in Japan and Europe will reduce China’s growth rate to
less than 9% in 2008 - the lowest rate since 2001. So Beijing’s concern is soon going
to shift 180 degrees, with their Number One worry being that the economy is at risk of
getting too cold, not staying too hot. Consequently, we see an end to their tightening
policy and an end to their rapid currency appreciation by mid-2008."

Posted by Muhammed El-Hasan at 1:36 PM | Permalink | Comments (0)

Hawthorne-based Space Exploration Technologies Corp. (SpaceX) said today that it has completed qualification testing of its Merlin 1C next generation liquid fueled rocket booster engine for use in the Falcon 1 rocket.

The single Merlin 1C will power SpaceX’s next Falcon 1 mission, scheduled to lift off in Spring of 2008 from the SpaceX launch complex in the Central Pacific atoll of Kwajalein.

Read the furll release below.

Final Production Design Cleared for Next Falcon 1 Flight in Spring 2008

Hawthorne CA - February 27, 2008 - Space Exploration Technologies Corp. (SpaceX) announced today that it has completed the qualification testing program of its Merlin 1C next generation liquid fueled rocket booster engine for use in the Falcon 1 rocket.

Tests were conducted at the SpaceX Texas Test Facility near Waco, TX, on a Merlin 1C configured for powering the first stage of a Falcon 1 rocket. After completing development testing in November of 2007, the qualification program began to verify the final design features on an actual production engine, clearing the way for full-scale manufacturing.

“Our propulsion and test teams finished the qualification program with a record-breaking day that included four full mission duration firings on the engine,” said Tom Mueller, Vice President of Propulsion for SpaceX. “This marathon run brought the total operating time on a single engine to over 27 minutes, which is more than ten complete flights. The engine meets or exceeds all requirements for thrust, performance and durability.”

“This was the final development milestone required for the next Falcon 1 flight,” said Elon Musk, CEO and CTO of SpaceX. “In the coming weeks we’ll begin qualifying Merlin for the higher thrust and performance levels required by our Falcon 9 rocket, keeping us on track for delivering the first Falcon 9 vehicle to Cape Canaveral by year end.”

The single Merlin 1C will power SpaceX’s next Falcon 1 mission, scheduled to lift off in Spring of 2008 from the SpaceX launch complex in the Central Pacific atoll of Kwajalein. The far larger Falcon 9 uses nine Merlins on the first stage, and a single Merlin in vacuum configuration powers the Falcon 9 second stage.

The Merlin 1C is an improved version of the Merlin 1A ablatively cooled engine, which lofted the Falcon 1 on its first flight in March 2006 and second flight in March 2007. The regeneratively cooled Merlin 1C uses rocket propellant grade kerosene (RP-1), a refined form of jet fuel, to first cool the combustion chamber and nozzle before being combined with the liquid oxygen to create thrust. This cooling allows for higher performance without significantly increasing engine mass.

In its Falcon 1 configuration, Merlin 1C has a thrust at sea level of 78,000 lbs, a vacuum thrust of 90,000 pounds and a vacuum specific impulse of 301 seconds. In generating this thrust, Merlin consumes 300 lbs/second of propellant and the chamber and nozzle, cooled by 90 lbs/sec of kerosene, are capable of absorbing 10 MW of heat energy.

The Merlin engine is the first new American booster engine in ten years and only the second in over a quarter century. The prior two American engines were the RS-68 developed in the late nineties by Pratt & Whitney’s RocketDyne division, used in the Boeing Delta IV launch vehicle, and the Space Shuttle Main Engine developed in the late seventies, also by RocketDyne. With a production rate of one engine per week by late 2008, SpaceX will produce more rocket booster engines than the rest of US production combined and more than any country except Russia.

Posted by Muhammed El-Hasan at 12:29 PM | Permalink | Comments (0)

Read the story here.

Posted by Muhammed El-Hasan at 11:21 AM | Permalink | Comments (0)

Honda Accord tops 'Forbes' best certified used car list

Think about a used car and you might think junky, dirty and old. But another market is catching the attention of savvy buyers who want updated rides without paying new-car prices.

Read the whole article.

Posted by Muhammed El-Hasan at 10:08 AM | Permalink | Comments (0)

Economy Slows to Near Crawl

OR

Bush: US is not headed into recession

Posted by Muhammed El-Hasan at 8:24 AM | Permalink | Comments (0)

WASHINGTON (AP) -- The House approved $18 billion in new taxes on the largest oil companies Wednesday as Democrats cited record oil prices and rising gasoline costs in a time of economic troubles.
The money collected over 10 years would provide tax breaks for wind, solar and other alternative energy sources and for energy conservation. The legislation, approved 236-182, would cost the five largest oil companies an average of $1.8 billion a year over that period, according an analysis by the House Ways and Means Committee. Those companies earned $123 billion last year.

Senate Democratic leaders said they would put the bill on a fast track and try to avoid a Republican filibuster. The White House said the bill unfairly takes aim at the oil industry. President Bush is expected to veto the legislation if it passes Congress.

House Majority Leader Steny Hoyer, D-Md., noted it was two years ago, when oil cost $55 a barrel, when Bush said oil companies need no government subsidies to pursue more oil or gas.

"With the price of oil hovering around $100 do we really believe this incentive is justified?" asked Hoyer. "Do these companies need taxpayer subsidies to look for new product? They don't need any incentive."

Republicans said the measure unfairly targeted a single industry.

"It punishes the oil and gas industry. This is wrongheaded. It will result in higher prices at the gasoline pump. It's spiteful and wrong," said Rep. Jim McCrery, R-La.

The top Republican on the Ways and Means Committee, which developed the tax proposals, he cited statistics that show that oil companies already pay more taxes than many other industries.

Hoyer acknowledged "this legislation alone will not bring down gas prices." But he said the measure will provide a needed boost to alternative energy industries -- solar, wind, biofuels, and geothermal -- and help promote energy conservation. "That may bring down gas prices three years from now, 10 years from now," he said.

The bill would roll back two lucrative tax breaks for the five largest U.S. oil companies. One helps manufacturers compete against foreign companies; the other gives American companies a tax credit related to oil and gas extraction outside the country. Democrats estimated that those current breaks would save the oil companies $17.65 billion in taxes over the next 10 years.

The House-passed bill would use that money to promote renewable energy industries -- such as wind, solar and cellulosic ethanol plants -- by extending tax credits that recently expired or are scheduled to end at year's end.

The bill would offer tax credits for more energy efficient homes and a credit for "plug-in" gas-electric hybrid cars that would capture electricity off the power grid, once such cars become available in showrooms.

House Speaker Nancy Pelosi, D-Calif., said the shift of tax benefits from oil to alternative energy development was critical to increased energy independence and lowering energy costs. "We have the opportunity to invest in clean, renewable energy and energy efficiency," she said.

She noted the House twice last year passed similar tax plans, but they died in the Senate. Since then, the price of gasoline has climbed and large oil companies have made record profits, Pelosi said.

During debate, Rep Jim McDermott, D-Wash., urged lawmakers to "stop the madness of subsidizing oil companies" when the industry earned $123 billion last year.

The oil industry has lobbied intensely against the House tax legislation, calling it a "discriminatory bill" that targets companies that already pay considerable taxes. "New taxes ... will even further reduce our energy security by discouraging new domestic oil and natural gas production and refinery capacity expansions," the American Petroleum Institute said in a statement.

But other energy industries and energy efficiency advocates have campaigned for the legislation because of the tax incentives that would be directed their way.

"These incentives must be extended immediately to void significant harm to the development of clean energy industries in the United States," said a letter to lawmakers from more than 100 businesses, electric utilities, environmental groups and energy efficiency advocates.

A similar tax proposal passed the House last summer, but it was abandoned in the Senate where Democrats couldn't muster the 60 votes needed to overcome a GOP filibuster. Senate Democrats were maneuvering to avoid a repeat of that with the newly passed House measure.

The chairman of the Senate Budget Committee, Democratic Sen. Kent Conrad of North Dakota, said Democratic leaders are considering advancing the House bill under fast-track procedures related to the budget. This process would not permit an indefinite GOP stall.

The White House says singling out the oil companies for higher taxes "would reduce the nation's energy security rather than improve it" and "lead to higher energy costs to U.S. consumers and business."

Senior advisers would urge Bush to veto the bill should it pass Congress, the White House said in a statement before the House vote.

Posted by Muhammed El-Hasan at 5:05 PM | Permalink | Comments (0)

Boeing Co.'s satellite have achieved a total of 2,500 years of service, the company said today.
Boeing makes commercial and military satellites at its Satellite Development Center in El Segundo.

Boeing has built 1/3 of the roughly 250 satellites in geosynchronous orbit today. Recent satellites to enter service include DIRECTV 10, Spaceway (broadband Internet), Thuraya 3 (mobile phone service), GOES 13 (weather prediction), and the U.S. Air Force's Wideband Global SATCOM spacecraft (military communications).

Boeing's space-based contributions to the world can be traced back to 1963, when the company achieved an industry first with the launch of Syncom, the world's first communications satellite to operate in geosynchronous orbit, 22,300 miles above the equator.

"When the nightly news warns of an approaching storm, when a car's onboard navigation system provides directions, when a credit card is swiped and approved for credit, and when a warfighter receives mission-critical information, chances are a Boeing satellite is at your service," said Craig Cooning, vice president and general manager of Boeing Space and Intelligence Systems, the unit responsible for the company's communications satellites.

Posted by Muhammed El-Hasan at 1:22 PM | Permalink | Comments (0)

HONG KONG (AP) — A Cathay Pacific Airways pilot was fired after he swooped down and buzzed a Seattle-area airfield without permission while taking delivery of a Boeing 777-300ER passenger jet, the airline said Wednesday.

The Hong Kong carrier — which would not identify the pilot — said it was still investigating the Jan. 30 fly-by event at Paine Field, 30 miles north of downtown Seattle and home to a Boeing plant.

Cathay spokeswoman Carolyn Leung said the pilot was dismissed last week because he did not seek or obtain approval for the fly-by, which has been done several times before at air shows with the airline's permission.

An airline statement said another pilot on the plane has been subject to disciplinary proceedings, but Leung would not elaborate on the case or other details.

Hong Kong's South China Morning Post reported Sunday that the airline's chairman, Christopher Pratt, was on the plane when the pilot swooped back over the Boeing plant shortly after taking off.

Images of the stunt were posted on YouTube and the Web site of a Seattle-area plane spotter, Matt Cawby.

The 777-300ER is 242 feet long, weighs about 350 tons and is listed at $264 million.

A Federal Aviation Administration spokesman, Mike Fergus, told The Seattle Times the flyby was under investigation.

Posted by Muhammed El-Hasan at 11:14 AM | Permalink | Comments (0)

Toyota Motor Corp. said it expects to produce 11.3 million of its own brand vehicles by 2012, up about 30 percent from 2007, amid rapid growth in Russia, China and other emerging markets.

Japan's top car maker, with its US sales headquarters in Torrance, forecasts that its annual output, excluding those of affiliates Daihatsu Motor Co and Hino Motors Ltd, will continue to grow by 600,000 vehicles a year, the Nikkei business daily reported, quoting an unnamed executive.

Posted by Muhammed El-Hasan at 10:59 AM | Permalink | Comments (0)

Honda Motor co. said it plans to stop producing motorcycles in the US in 2009, and will transfer production work to Japan.

Honda, whose North American headquarters is in Torrance, employs about 450 people at its motorcycle production plant in Marysville, Ohio.

Honda also makes motorcycles at the Hamamatsu factory in Japan. Production at both sites will be consolidated at a new motorcycle plant in Kumamoto, Japan, next year.

The move is part of a global effort to produce certain larger motorcycles, Honda said.

Honda said it will not layoff its ohio motorcycle workers when production ends in the spring of 2009. The workers will instead help produce cars, trucks, engines and parts and fill other jobs at Honda's other operations in west-central Ohio, the company said.

Honda's Ohio opened its motorcycle plant in 1979 as Honda's first US production facility. Last year, it produced about 44,000 Gold Wing touring and VTX cruiser bikes.

Posted by Muhammed El-Hasan at 9:45 AM | Permalink | Comments (0)

Peerless Systems Corp., the El Segundo-based provider of imaging and networking technologies and components for the digital documents market, has agreed to buy substantially all of the assets of Prism Software Corp of Irvine.

Peerless Systems will pay $1.75 million in cash in addition to providing the right to receive up to $1.5 million in Peerless common stock, provided certain conditions are met. The deal also includes an "earn-out provision." The purchase is expected to close within the next 90 days.

Prism will become a wholly owned subsidiary of Peerless Systems. Prism's management team will become part of the El Segundo company.

Irvine-based Prism makes software for work processes, document flow and document creation and distribution.

Posted by Muhammed El-Hasan at 9:36 AM | Permalink | Comments (0)

WASHINGTON (AP) -- It's a toxic economic mix the nation hasn't seen in three decades: Prices are speeding upward at the fastest pace in a quarter century, even as the economy loses steam.
Economists call the disease "stagflation," and they're worried it might be coming back.

Already, paychecks aren't stretching as far, and jobs are harder to find, threatening to set off a vicious cycle that could make things even worse.

The economy nearly stalled in the final three months of last year and probably is barely growing or even shrinking now. That's the "stagnation" part of the ailment. Typically, that slowdown should slow inflation as well -- the second part of the diagnosis -- but prices are still marching higher.

The latest worrisome news came Tuesday: a government report showing wholesale prices climbed 7.4 percent in the past year. That was the biggest annual leap since 1981.

"We're in a slowdown," Press Secretary Dana Perino said at the White House, where the economics talk was still upbeat until recently.

Once the twin evils of stagflation take hold, it can be hard to break the grip. People cut back on their spending as they are stung by rising prices and shriveling wages. Businesses, also socked by rising costs and declining demand from customers, clamp down on their hiring and capital investment.

That would be a nightmare scenario for Wall Street investors, businesses, politicians and most everyone else. They're already looking to the Federal Reserve for help, but the Fed's job is complicated by the situation.

The mission of Federal Reserve Chairman Ben Bernanke and his colleagues is to nurture economic growth and keep inflation under control. To brace the teetering economy, the Fed since September has been ratcheting down its key interest rate. Another cut is expected in March. However, to combat inflation, the Fed would be expected to boost rates instead.

"The Fed has its hands full. It is preoccupied with the economic slowdown at the front door, but inflation looks to be sneaking in the back door," said Greg McBride, senior financial analyst at Bankrate.com. "If that trend continues, the Fed would need to show the economy some tough love, meaning higher interest rates to keep inflation from getting out of hand."

On the other hand, Brian Bethune, economist at Global Insight, said Bernanke can fight only one war at a time, and the more pressing issue right now is to shore up the ailing economy. "That's the war that needs to be fought. The war on inflation will have to come another day," Bethune said.

Maybe things won't be so bad. Stock prices rose for the day, continuing a recent mini-rally. And Federal Reserve vice chairman Donald Kohn said in a speech that he doesn't expect the recent elevated inflation readings to persist.

"But the recent information on prices underlines the need to continue to monitor the inflation situation very carefully," he added.

Some numbers underscore the concerns:

-- Prices paid by consumers are up 4.1 percent over the past year, the biggest increase in 17 years. Those higher prices -- especially for heating homes and filling up gas tanks -- are taking an ever-bigger bite out of paychecks. Workers' weekly earnings are down 1.4 percent from a year ago when adjusted for that inflation.

-- Oil prices galloped past $100 a barrel to close at a record $100.88 on Tuesday. Those lofty energy prices are a double-edged sword: They can spread inflation through the economy by boosting the prices of lots of other goods and services, and they can leave people with less money to spend on other things, thus slowing overall economic activity. There are signs high energy prices are causing some damage on both of those fronts.

People are hunkering down. Earlier this month, nervous shoppers handed the nation's retailers their worst January in almost four decades. High gas and food prices, the toll of the housing bust, the credit crunch and a tougher job market all were to blame. Disappointing sales were widespread, hitting discounters like Wal-Mart Stores Inc. and upscale merchants like Nordstrom Inc.

Wary employers eliminated jobs in January, the first nationwide loss of jobs in more than four years.

With the economy on the edge of a recession -- if it hasn't toppled over already -- the Fed for the near term is much more likely to keep lowering rates. Yet, with its own forecast revised last week to show even slower growth this year as well as higher inflation and higher unemployment than previously anticipated, Bernanke and his colleagues have made clear they'll need to stay nimble.

Can a serious bout of stagflation be avoided? Many economists believe the Fed's aggressive rate cuts along with tax rebates for people and tax breaks for businesses will lift the economy in the second half of the year.

Until then, analysts warn that it could feel like country is suffering through a mild case of stagflation-- even if technically that is not the case. "It could feel like a bad flu," said Bethune.

In the past stagflation episode in the 1970s and early 1980s, inflation sometimes hit double digits -- much higher than the current rate. And unemployment was higher, too. In 1975, for instance, the jobless rate zoomed to 8.5 percent, which at the time was the highest since the early 1940s. Last year, by contrast, the jobless rate averaged 4.6 percent.

"In the real economy, activity looks slow but not disastrous," Alice Rivlin, former vice chair of the Federal Reserve, told Congress Tuesday. But she added: "Uncertainty remains great. ... The risks are mainly on the downside and gloomier forecasts are not hard to find."

Posted by Muhammed El-Hasan at 3:32 PM | Permalink | Comments (0)

DirecTV to get new owner?

WASHINGTON (Reuters) - Liberty Media Corp's acquisition of News Corp's stake in DirecTV Group Inc cleared a major hurdle on Monday as U.S. communications regulators conditionally approved the deal.

Read the whole story.

Posted by Muhammed El-Hasan at 1:39 PM | Permalink | Comments (0)

Posted by Muhammed El-Hasan at 12:49 PM | Permalink | Comments (0)

Redondo Beach's increase in median price pushed the beach city into two prominent top 10 lists produced each month by the California Association of Realtors.

Redondo Beach was No. 6 in California communities with the highest median home price. It took the No. 1 spot for communities with the greatest increase in median home price over a 12-month period.

Read about it.

Posted by Muhammed El-Hasan at 12:01 PM | Permalink | Comments (0)

NEW YORK (AP) -- Consumer confidence plunged in February as Americans worried about less-favorable business conditions and job prospects, a business-backed research group said Tuesday.
The Conference Board said its Consumer Confidence Index fell to 75 this month from a revised 87.3 in January.

The reading was the lowest since the index registered 64.8 in February 2003, just before the U.S. invaded Iraq, researchers said, and was far below the 83 expected by analysts surveyed by Thomson/IFR.

The index measures how consumers feel about the economy. It has been weakening since July, suggesting that wary consumers may retrench financially, which could fatigue the economy further.

The expectations index, which measures consumers' outlook over the next six months, fared even worse. The expectations index dropped to 57.9 from 69.3 in January. The February figure was a 17-year low, the Conference Board said, standing just a bit above the 55.3 of January 1991.

In midmorning trading, the Dow Jones industrial average rose 17.99, or 0.14 percent, to 12,588.21. Broader indexes, including the Nasdaq composite and Standard & Poor's 500, were down.

Lynn Franco, director of The Conference Board's Consumer Research Center, said in a statement that the consumer confidence survey -- which is based on a sample of 5,000 U.S. households -- indicated that consumers felt economic conditions were deteriorating.

"The weakening in consumers' assessment of current conditions, fueled by a combination of less-favorable business conditions and a sharp rise in the number of consumers saying jobs are hard to get, suggest that the pace of growth in early 2008 has slowed even further," Franco said in a statement accompanying the report.

She pointed to the low "expectations" reading and added: "With so few consumers expecting conditions to turn around in the months ahead, the outlook for the economy continues to worsen and the risk of a recession continues to increase."

A third reading, the index looking at current conditions, also dropped in February to 100.6 from 114.3 the month before.

Those saying jobs were "hard to get" rose to 23.8 percent in February from 20.6 percent in January, while those claiming jobs were "plentiful" decreased to 20.6 percent from 23.8 percent.

Anthony Chan, managing director and chief economist with JPMorgan Private Client Services in New York, said he believed "jobs and energy prices are weighing down on consumer confidence."

The weakening job situation also has been reflected in growing numbers of claims for unemployment benefits, he noted. The four-week average for claims, released by the Labor Department, rose to 360,500 last week -- the highest level since claims spiked in October 2005.

Chan said he expects the first two quarters of this year to be "challenging," with a 50 percent to 55 percent chance of a recession. He expects economic growth to resume in the second half because of Federal Reserve interest rate action and the Bush administration's tax rebates this summer.

"The Fed began easing last August and began lowering rates in September ... and monetary policy impacts the economy with lags," he said. "And the stimulus package in the second half of the year will be a nice shot in the arm for consumer spending."

In Washington, meanwhile, the Labor Department reported that inflation at the wholesale level soared in January, pushed higher by rising costs for food, energy and medicine. The monthly increase carried the annual inflation rate to its fastest jump in a quarter century.

The department said wholesale prices rose 1 percent last month, more than double the 0.4 percent increase that economists had been expecting. The January surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years.

And Standard & Poor's said Tuesday that U.S. home prices lost 8.9 percent in the final quarter of 2007, marking a full year of declining values and the steepest drop in the 20-year history of its housing index.

The S&P/Case-Shiller home price indices, which include a quarterly index, a 20-city index and a 10-city index, reflect year-over-year declines in 17 metropolitan areas with double-digit declines in eight of them.

Posted by Muhammed El-Hasan at 11:43 AM | Permalink | Comments (0)

Read an analysis.

Check the stock price.

Posted by Muhammed El-Hasan at 8:43 AM | Permalink | Comments (0)

California home sales dropped 29.8% in January compared with the same month last year, the California Asssociation of Realtors said today.

Meanwhile, the median price of an existing single-family detached home in California fell 21.9% to $430,370. It's also a 9.7% drop compared to December 2007.

The South Bay's median home price for all homes rose 0.4% to $612,500 in January, compared to a year earlier.

Redondo Beach made the top 10 highest prices communities in January at $800,100, up 11.1% year over year. That's mostly because many pricier area like Manhattan Beach or various cities on the PV Peninsula didn't sell enough homes in January to register in the report. Furthermore, a sharp rise like 11.1% for a city can often mean that more high-end homes sold than usual thereby skewing the median.

Torrance's median home price fell 1.3 % to $575,000.

LA County saw a median price drop of 12.4% for all homes to $460,000.

Posted by Muhammed El-Hasan at 3:19 PM | Permalink | Comments (0)

California home sales dropped 29.8% in January compared with the same month last year, the California Asssociation of Realtors said today.

Meanwhile, the median price of an existing single-family detached home in California fell 21.9% to $430,370. It's also a 9.7% drop compared to December 2007.

The South Bay's median home price for all homes rose 0.4% to $612,500 in January, compared to a year earlier.

Redondo Beach made the top 10 highest prices communities in January at $800,100, up 11.1% year over year. That's mostly because many pricier area like Manhattan Beach or various cities on the PV Peninsula didn't sell enough homes in January to register in the report. Furthermore, a sharp rise like 11.1% for a city can often mean that more high-end homes sold than usual thereby skewing the median.

Torrance's median home price fell 1.3 % to $575,000.

LA County saw a median price drop of 12.4% for all homes to $460,000.

Posted by Muhammed El-Hasan at 2:15 PM | Permalink | Comments (0)

"The unknown. The not knowing whether you have a great idea that will reach all its potential, or you're having crazy visions that no one will care about." -- William Timothy Rylott

Read the Q&A in today's paper.

Posted by Muhammed El-Hasan at 12:55 PM | Permalink | Comments (0)

AP - Visa Inc. said Monday its initial public offering could raise up to $19 billion — making it the largest in U.S. history — even though the credit card processor is entering the market at a difficult time.

The San Francisco-based credit card processor expects to see high demand for its stock, despite the housing-led credit squeeze that is threatening consumers' spending and their ability to keep up with debt payments.

But Visa, like its public rival MasterCard Inc., is a card processor, not a lender, and has a strong presence in other countries where many people are just starting to use plastic instead of cash. And Visa is the largest U.S. card company by market share — its transactions, in number and dollar amount, in 2006 outpaced those at MasterCard and American Express Co.

Visa said in a Securities and Exchange Commission filing it will offer 406 million shares at $37 to $42 per share. There will be an option for underwriters to buy an extra 40.6 million shares to cover any excess demand.

The Visa IPO, even if it prices at the low end of the estimated range, would surpass the $10.6 billion AT&T Wireless raised in 2000 when it went public. And if demand is strong enough, it could be almost as big as the two largest past deals combined — AT&T's offering and Kraft Foods' $8.7 billion offer in 2001.

Visa would follow MasterCard from being a privately held interest to a publicly traded company. MasterCard raised $2.39 billion in its IPO nearly two years ago.

At a midpoint price, Visa could raise about $15.6 billion, or more than $17 billion if underwriters exercise their option to buy the entire lot of 40.6 million shares. Even at the low-end price of $37 a share, Visa would raise about $15 billion.

Shares of MasterCard have risen fivefold since going public and are now trading at more than $203 each. But Visa's offer comes at a time of ebbing appetite for new shares. MasterCard shares have fallen more than 5.5 percent since the beginning of the month.

Visa made its initial IPO filing in June with the SEC. The shares will be listed with the New York Stock Exchange under the ticker V.

Visa will be the last of the major U.S. card companies to go public. Discover Financial Services LLC became publicly traded last July, and since then has seen its shares tumble. But Discover, like American Express, is a true card lender. The responsibility for Visa and MasterCard cardholders' debt, in contrast, is held by the banks that issue them.

For their most recent quarters, MasterCard posted a huge increase in profit while AmEx reported a 10 percent drop in earnings and Discover posted a loss.

A successful Visa IPO would be a boon for member banks including Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co., which have suffered big credit losses and are gearing up for more as consumer credit deteriorates.

More than $10 billion of the IPO's proceeds will go to the member banks. The rest will go toward Visa's legal costs and general corporate purposes.

Visa boasts the world's biggest retail electronic payments network. According to its filing, as of Sept. 30, banks and other customers said they had issued 1.5 billion Visa cards — which since 2006 have been advertised through the slogan, "Life Takes Visa."

The latest Nilson Report on card companies said that in 2006, Visa had 44 percent of the U.S. market share in cards and 48 percent of the U.S. market share in debit cards.

Visa said it intends to pay shareholders an annual dividend of 42 cents a share.

Posted by Muhammed El-Hasan at 10:54 AM | Permalink | Comments (0)

WASHINGTON (AP) -- Job growth is faltering, consumer confidence plunging. The fallout from the worst housing slump in a quarter-century grows. Wherever you look, the signs are unmistakable that the economy is in trouble.

Because of all the bad news, more and more economists foresee the country falling into a recession, according to the latest survey by the National Association for Business Economics.

The group said in a report being released Monday that 45 percent of the economists on its forecasting panel expect a recession this year. In September, only one in four economists was pessimistic enough to put the chance of a recession at 35 percent or higher.

The drumbeat of bad news since last fall has caused many analysts to consider a recession more likely now, said Ellen Hughes-Cromwick, chief economist at Ford Motor Co. and NABE's current president.

The survey shows that 55 percent still believe the country will be able to skate by without falling into an actual downturn, typically defined as two consecutive quarters of declines in the gross domestic output, the broadest measure of economic health. All the analysts, however, expect growth to slow considerably this year.

The forecasters believe GDP will expand by 1.8 percent this year, which would be the weakest growth in five years. That compares with an estimate of 2.5 percent growth for 2008 made in the previous survey, in November.

The new estimate is in line with a downgraded forecast from the Federal Reserve this past week.

The NABE forecast reflects the expectation the economy will grow only sluggishly or actually contract from January through June. Then it is seen starting to expand more strongly in the second half of the year. Helping accomplish that is a $168 billion federal aid plan, with its rebate checks for millions of families, and aggressive interest rate cuts from the Fed.

The panel of 47 top forecasters thinks "any recession, if it occurs, will be short and shallow," Hughes-Cromwick said.

The biggest change in the new survey involves the outlook for interest rates.

In November, economists expected the Fed would keep a key rate, the federal funds rate, at 4.5 percent through all of 2008. That rate, the target for overnight bank loans, already is at 3 percent, after significant cuts by the Fed in January. Fed Chairman Ben Bernanke has indicated that further rate cuts will be coming if the economy fails to rebound.

So the NABE experts now predict the funds rate will end this year at 2.5 percent.

Inflation is expected to moderate greatly this year as the weak economy cools price pressures. Inflation shot up by 4.1 percent in 2007, the biggest jump in 17 years.

The Consumer Price Index is forecast to rise by 2.5 percent. That is based in part on the NABE panel's view that demand will weaken for oil and the barrel price will drop to about $84 by December. The current trend, however, is up; crude oil jumped to all-time highs above $100 per barrel over the last week.

The weaker growth will mean higher unemployment, according to the forecasters. They predict that the jobless rate for 2008 will average 5.2 percent, compared with 4.6 percent last year.

Mark Zandi, chief economist at Moody's Economy.com and a NABE panelist, said he believed the economy entered into a recession in December and it will pull out of the downturn in June, aided by the rebate checks that begin going out in May.

If problems worsen for the financial industry, hard hit by the housing downturn, then Zandi said Washington will rush through a second rescue measure because nervous politicians will not want to be seen as dawdling before the November elections.

"A recession in an election year represents a problem for incumbents," Zandi said. "That is why the first stimulus package got passed so quickly and that is why I expect more of a policy response before this is all over."

A second panel member, David Wyss, chief economist at Standard & Poor's in New York, also believes the country is now in a recession. While he believes the economic aid plan signed by President Bush should make the downturn a mild one, he worries the economy could falter again next year.

"There is a danger that this could turn into a double-dip recession," he said. "Once the rebate checks are spent, we could go back down again."

The latest NABE forecast, however, shows the economy continuing to grow in 2009. It predicts a modest GDP increase of 2.7 percent for the whole year, compared with the 1.8 percent expected this year and the 2.2 percent actual GDP growth in 2007.

National Association for Business Economics: http://www.NABE.com

Posted by Muhammed El-Hasan at 5:40 AM | Permalink | Comments (0)

NEW YORK (AP) -- Wall Street will face a slew of data this week: on Americans' spending, inflation at the producer level, home sales and manufacturing.

So far this year, economic data has been mixed, but worrisome overall, and that has made for a turbulent stock market. And investors are bracing for more of the same -- for some time to come.

Last week, the Dow inched up 0.27 percent, the Standard & Poor's 500 index rose a modest 0.23 percent and the Nasdaq composite index dipped 0.79 percent. The three indexes are all down sharply for the year, and there's no sign yet of a true rebound in the stock market.

"Could it fall further? Sure," said Hans Olsen, chief investment officer in JPMorgan's private client services. He noted that particularly troubling news could easily push the S&P back under the 1,300 mark, a level it briefly sunk below in January.

It's possible for the stock market to end the year with decent returns, Olsen said, but "to say we're getting a bottom here might be premature."

Stock markets generally fall 30 percent, peak to trough, during a recession, said Christian Menegatti, lead analyst at the economic and financial Web site RGE Monitor. So it's quite possible, he said, depending on how weak the economy gets this year, for stocks to fall another 15 percent.

The biggest drag on the economy has so far been, of course, the housing market.

The National Association of Realtors reports Monday on sales of existing homes last month. According to the median estimate of economists surveyed Friday by Thomson Financial/IFR, existing home sales expected to have slipped by about 1 percent in January from December. Then on Wednesday, the Commerce Department reports on sales of new homes, which are anticipated to have slipped modestly in January.

Wall Street is concerned with not only sales, but inventories, which are at very high levels because demand is so weak. The housing market can only start bouncing back once inventories start edging lower -- something that many analysts don't expect to happen for a while.

But a cash-strapped consumer is also a problem.

The government releases its readings on consumer spending and income on Friday, with both expected to rise by 0.2 percent. Anything below those levels could raise red flags for investors.

And inflation worries remain -- the consumer spending report's inflation measure is forecast to come in at 2.2 percent, year-over-year, which is above the Federal Reserve's unofficial comfort zone. And last week, the Labor Department's consumer price index showed higher-than-expected upticks.

On Tuesday, the Labor Department issues its reading on prices at the wholesale level. The Producer Price Index is expected to have risen 0.3 percent in January after falling 0.1 percent in December, and the core index, which excludes food and energy, is expected to have risen 0.2 percent, the same as the prior month.

While the consumer is struggling, businesses are having a hard time offsetting that weakness.

Wednesday, the Commerce Department reports on orders of durable goods, which are expected to drop about 3.5 percent after rising 5.2 percent in December. And the Chicago Purchasing Manager's Index -- considered a precursor to the Institute for Supply Management's U.S. manufacturing report next week -- is expected to show that activity was flat, perhaps even contracting, in February.

What Fed Chairman Ben Bernanke implies the central bank's monetary policy during his testimony to Congress on Wednesday and Thursday could provide some short-term direction.

But doubts about the effectiveness of interest rate cuts in the tight credit markets -- not to mention the gloomy tone Bernanke adopted during his last congressional appearance -- could keep investors on edge for a while. Although rates have come down fairly sharply, banks have become less willing to lend and housing demand is low.

"You can make money cheap. You can't necessarily make people take out mortgages, or have institutions want to lend that money," Olsen said.

Posted by Muhammed El-Hasan at 9:20 PM | Permalink | Comments (0)

NEW YORK (AP) -- Gas prices jumped Friday to their highest level since June, a possible preview of what many analysts believe will be a record spike in pump prices this spring.

But the current price surge could be short-lived. While gasoline has risen sharply in recent days in response to oil's dramatic climb to a new record above $101 a barrel, gas supplies have quietly grown to their highest level in 14 years.

"We've got a major supply cushion," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates in Galena, Ill.

At the pump, gas prices rose 2.9 cents overnight to a national average of $3.115 a gallon, according to AAA and the Oil Price Information Service. That was the highest since June 8.

At the same time, March gasoline futures rose 1.17 cents to settle at $2.5337 a gallon on the New York Mercantile Exchange. Meanwhile, light, sweet crude for April delivery rose 58 cents to settle at $98.81 a barrel on concerns about potential supply disruptions and cold weather.

Many analysts believe gas prices will rise this spring to new records near $3.75 or $4 a gallon. But not everyone agrees.

Ritterbusch, for example, thinks the high level of supplies, and an eventual decline in oil prices, will pull pump prices down. He doubts prices will rise as high as $3.75 without a major overseas supply disruption or domestic refinery outage.

But Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service in Wall, N.J., argues that while gasoline prices won't rise as much this spring as they have in previous years, they are starting from a much higher level. Indeed, prices at the moment are 83 cents higher than a year ago. That means retail prices could peak between $3.50 and $3.75 a gallon, Kloza said, well above May's record of $3.227 a gallon.

The Energy Department's latest forecast calls for gas prices to peak near $3.40 a gallon this spring.

Of course, gasoline prices also respond to oil futures. Oil has traded in a band between about $86 and $100 a barrel for months, a trend many analysts expect to continue throughout the year. That will likely keep gas prices oscillating in their own narrow band around $3 a gallon for most of the year.

Oil prices rose Friday on word Turkish troops pursued separatist Kurdish rebels into northern Iraq. Concerns that the Kurds would retaliate against Turkish attacks last fall by sabotaging oil shipments out of Iraq had much to do with oil's rise to $100, analysts said.

Word that the key Houston Shipping Channel was closed to oil tankers and other ships for the second day in a row also gave oil traders reason to buy.

Other energy futures also rose Friday. March heating oil futures jumped 2.49 cents to settle at $2.763 a gallon on the Nymex and March natural gas futures rose 25.5 cents to settle at $9.146 per 1,000 cubic feet. Both contracts were being pushed higher by the winter storm pounding the Northeast.

In London, April Brent crude futures rose 77 cents to settle at $97.01 a barrel on the ICE Futures exchange.

Posted by Muhammed El-Hasan at 8:39 PM | Permalink | Comments (0)

WASHINGTON (AP) -- The Air Force is likely days away from handing out one of the biggest Pentagon contracts in years -- a deal valued at up to $40 billion to replace 179 planes in its fleet of aerial refueling tankers.

For the three companies bidding, there is more at stake than just the monetary award: jobs and reputation.

Boeing Co. has supplied the Air Force with refueling tankers for nearly 50 years and doesn't want to let go of that. The incumbent is considered the favorite to win -- an assumption already reflected in its stock price.

But European Aeronautic Defence and Space Co. and its U.S. partner, Northrop Grumman Corp., want to be in on the game. For France-based EADS, the parent of rival Airbus, the contract is an entree into the massive American military market just as overseas spending cools. And for Northrop Grumman, it would tap into a major new military revenue stream at a time when Pentagon spending may be leveling off.

Analysts say the tanker award could be announced any time after Pentagon officials meet Monday to sign off on the Air Force's tanker purchase plan.

The contract -- worth $30 billion to $40 billion over 10 to 15 years -- is the first of three deals to replace the Air Force's entire fleet of nearly 600 tankers, which allow aircraft to refuel without landing.

For Wall Street, the award's potential really takes off with the follow-on contracts likely going to the incumbent. As much as $100 billion over the next 30 years is at stake, says Loren Thompson, a defense industry analyst with Lexington Institute, a policy think tank.

Thompson said the Air Force will eventually buy more than 400 new tankers to modernize its full fleet in "the biggest new aircraft contract anywhere in the world." The Air Force currently flies 531 Eisenhower-era tankers and another 59 tankers built in the 1980s by McDonnell Douglas, now part of Boeing.

"This is one of the biggest defense contracts to come along in decades and will be for future decades," said Scott Hamilton, an aviation industry consultant based outside of Seattle. "You have to take the plums when they come along."

Because Northrop Grumman is considered an underdog, its shares likely will jump if it wins, but may not take a drubbing if the contract goes to Boeing. Yet Boeing's stock would almost certainly take a hit if the company loses, but only rise moderately if the award comes through since a win is already factored into the share price.

On Capitol Hill, members in both parties are lobbying hard for a victor whose spoils include local jobs.

Chicago-based Boeing would perform much of the tanker work in Everett, Wash., and Wichita, Kan., and use Pratt & Whitney engines built in Connecticut. The company says a win would support 44,000 new and existing jobs at Boeing and more than 300 suppliers in more than 40 states.

"The Boeing proposal is far superior," said Rep. Norm Dicks, D-Wash., a senior member of the House Appropriations Subcommittee on Defense who represents a district that is home many Boeing jobs. "I'm very hopeful that on the merits we're going to win."

Other Boeing supporters include Sen. Patty Murray, D-Wash.; Duncan Hunter of California, the top Republican on the House Armed Services Committee and former Speaker of the House Dennis Hastert, an Illinois Republican.

The EADS/Northrop Grumman team would perform its final assembly work in Mobile, Ala., although the underlying plane would mostly be built in Europe. And it would use General Electric engines built in North Carolina and Ohio. Northrop Grumman, which is based in Los Angeles, estimates a Northrop/EADS win would produce 2,000 new jobs in Mobile and support 25,000 jobs at suppliers nationwide.

Alabama Sens. Jeff Sessions and Richard Shelby, both Republicans, are cheering for the French to come to Mobile, as is Rep. Jo Bonner, R-Ala., who represents the district where Northrop has said it would assemble its tanker.

Presidential candidate John McCain, the top Republican on the Senate Armed Services Committee, also has a keen interest in the deal. McCain played a lead role in uncovering a procurement scandal in 2003 that sent a top Air Force acquisition official to prison for conflict of interest and led to the collapse of an earlier tanker contract with Boeing.

Despite that history, Wall Street expects Boeing to win the new award because of its well-established relationship with the Air Force and prior contract wins.

"For Boeing, this is a pride issue," Hamilton said.

It's become an issue of not just corporate, but national pride. Boeing has managed to paint the competition as a fight between an American company and its European rival. Although parts of both tankers would be made overseas, Boeing has raised pointed questions about why the Air Force would award such an important contract to a foreign company.

Analysts say Boeing also has an advantage because its KC-767 tanker is smaller and lighter than the KC-30 being offered by EADS and Northrop Grumman. That means the Boeing tanker would take up less space on the ground and burn less fuel. Still, the KC-30's larger size will enable it to carry more fuel, cargo or personnel on individual flights -- making it a more efficient plane using Air Force criteria, Northrop Grumman stressed.

EADS and Northrop Grumman estimate that compared with the KC-767, the Air Force would need 20 percent fewer KC-30 tankers to meet its refueling needs.

Despite all the drama, at least one analyst stressed that losing the tanker contract would not be a disaster for any of the companies bidding on it.

After all, the contract amounts to just over one tanker a month, noted Richard Aboulafia, an analyst with the aerospace consulting firm Teal Group. And with Boeing and Airbus each booking orders for 500 planes a year, that represents just a "drop in the bucket for the huge commercial jetliner market."

Associated Press Writers Matthew Daly and Ben Evans in Washington contributed to this report.

Posted by Muhammed El-Hasan at 11:00 AM | Permalink | Comments (0)

Posted by Muhammed El-Hasan at 9:53 AM | Permalink | Comments (0)

Dennis Lee, 29, an engineer at Raytheon Space and Airborne Systems in El Segundo, was recognized as a rising star in engineering by the National Engineers Week Foundation.

His accomplishments as a South Bay Engineer place him among 14 "New Faces of Engineering", selected from hundreds of candidates across the country by the National Engineers Week Foundation.

This is the second year in a row that Raytheon's SAS has had an engineer receive top honors in this field.

Lee's work is credited