April 2008 Archives

Soon all auto companies will be doing it, I figure.

Toyota simulation tries to keep you in one piece

(CNET) Toyota has developed a computer simulation dubbed Total Human Model Safety (THUMS), which re-creates high-speed accidents to examine the impact it has on human physiology, according to Fareastgizmos. The system is part of a new study conducted jointly with the FIA Institute that is designed specifically to examine high-speed rear-impact collisions at the FIA Formula One World Championship and Indy Racing League.

Driving an F1 car, as you might imagine, is unlike steering a conventional automobile. The seat is lower than usual and the driver is reclined with legs stretched to reach the pedals. For first-timers, this somewhat awkward position takes some getting used to, and it doesn't help that your vision is limited only to what is immediately ahead. There are also other things to consider, such as the G-force when traveling at speeds in excess of 186 miles per hour and the immense stress on the driver's spine during rear-impact collisions.

Read the full story.

DaVita Inc., the El Segundo-based provider of kidney dialysis services, said it was honored for the fourth consecutive year by Training Magazine as one of the Top 125 firms of employee-sponsored workforce training and development.

The recognition is awarded to organizations that demonstrate a deep commitment to enhancing the skills of their employees.

This year, DaVita ranked No. 77 on the list. The publication noted DaVita as one of the best among US for-profit healthcare companies.

"DaVita's teammate orientation and leadership training is top-notch," said Bill
Shannon, Chief Wisdom Officer at DaVita, in a statement. "We have spent many hours developing an education curriculum that emphasizes the importance of both personal and professional development. We believe each of our teammates has the potential to become a great leader, and our job is to empower them with the appropriate tools to succeed."

Economy grows by only 0.6 percent in 1st quarter of 2008

(AP) The bruised economy limped through the first quarter, growing at just a 0.6 percent pace as housing and credit problems forced people and businesses alike to hunker down.

The country's economic growth during January through March was the same as in the final three months of last year, the Commerce Department reported Wednesday. The statistic did not meet what economists consider the classic definition of a recession, which is a retraction of the economy. This means that although the economy is stuck in a rut, it is still managing to grow, even if modestly.

Many analysts were predicting that the gross domestic product (GDP) would weaken a bit more -- to a pace of just 0.5 percent -- in the first quarter. Earlier this year, some economists thought the economy would actually lurch into reverse during the opening quarter. Now, they say they believe that will likely happen during the current April-to-June period.

"The economy is weak but not collapsing," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group. "A recession can't be ruled out, although the stars are not lined up at this point to definitively say one way or the other."

Gross domestic product measures the value of all goods and services produced within the United States and is the best measure of the country's economic health. Voters are keenly worried about the country's economic problems and so are politicians -- in Congress, in the White House and on the campaign trail.

The housing situation turned more bleak in the first quarter, as record-high foreclosures dumped more unsold homes on the market, adding to builders' headaches. Builders slashed spending on housing projects by a whopping 26.7 percent, on an annualized basis, the most in 27 years. That was the big drag on the economy.

Consumers -- whose spending is vital to the country's economic health -- turned much more cautious, also restraining overall economic growth in the first quarter. Their spending rose at just a 1 percent pace. That was down from a 2.3 percent growth rate and was the slowest since the second quarter of 2001, when the United States was suffering through its last recession.

Soaring energy and food prices are walloping people's pocketbooks, leaving them with less to spend on other things. The credit crunch also has made it harder for people to finance big ticket items, such as cars and homes. And, many homeowners -- watching their homes -- often their single-biggest asset -- slump in value, also are feeling less wealthy and less inclined to spend.

Another report from the Labor Department Wednesday showed that workers' compensation -- including wages and benefits -- grew 0.7 percent in the first quarter, the slowest pace in two years. Many economists were expecting a 0.8 percent rise. The report suggests that the weak labor market is making employers a bit less generous with their compensation.

Businesses, meanwhile, cut back spending on equipment and software at a 0.7 percent pace, the most since the final quarter of 2006. And, they trimmed spending on commercial construction at a 6.2 percent pace, the most since the third quarter of 2005.

However, businesses boosted their investment in building up stocks of supplies in the first quarter, a big force adding to GDP. Exports of U.S. goods and services also helped first-quarter growth. U.S. exports are being helped by the falling value of the U.S. dollar, which makes U.S. made goods and services less expensive to foreign buyers.

Spending by the government was another factor helping out GDP in the first quarter. That spending rose at a 2 percent pace for the second quarter in a row.

To bolster the economy, the Federal Reserve is expected to lower a key interest rate by one-quarter percentage point to 2 percent later Wednesday. That would mark a more moderate-sized rate reduction after a recent string of hefty cuts. Many economists believe the Fed, which started dropping rates last September, may be nearing the end of its rate-cutting campaign because policymakers don't want to aggravate inflation. Those rate reductions, which take months to affect economic activity, can sow the seeds of inflation down the road.

An inflation measure linked to the GDP report showed that prices grew at a rate of 3.5 percent in the first quarter, down from a 3.9 percent pace in the prior quarter.

Another gauge showed that the core prices excluding food and energy rose at a rate of 2.2 percent in the first quarter. That was a lower than the 2.5 percent pace registered in the fourth quarter but still outside the Fed's comfort zone. The upper level of the Fed's inflation tolerance is 2 percent.

Gas and food prices, however, have moved higher since the start of the year, adding to inflation pressures. Gasoline prices, which have recently set new record highs, have climbed to $4 a gallon in some parts of the country.

A growing number of economists believe the economy is in a recession and is indeed contracting now.

Under one rough rule, if the economy contracts for six straight months it is considered to be in a recession. That didn't happen in the last recession -- in 2001_ though. A panel of experts at the National Bureau of Economic Research that determines when U.S. recessions begin and end uses a broader definition, taking into account income, employment and other barometers. That finding is usually made well after the fact.

During the first three months of this year, job losses neared the staggering quarter-million mark. The unemployment rate has climbed to 5.1 percent and is expected to move higher in the coming months.

Fed Chairman Ben Bernanke, earlier this month, acknowledged for the first time that a recession this year was possible.

President Bush on Tuesday said the country was dealing with "difficult times." Bush said he understood Americans' anxiety over soaring gas prices, record-high home foreclosures and other economic woes.

The government's $168 billion economic-stimulus package -- including tax rebates that started flowing to bank accounts on Monday -- should help energize the economy in the second half of this year, the Bush administration and Federal Reserve officials say. Democrats in Congress insist more relief needs to be provided, including additional unemployment benefits to cushion the pain of joblessness. The administration has resisted, saying the rebates and other stimulative efforts should be sufficient once they fully kick in.

But will anyone notice?

Watch a video.

Clinton-McCain gas tax holiday slammed as bad idea

(AP) A gas tax holiday proposed by U.S. presidential hopefuls John McCain and Hillary Clinton is viewed as a bad idea by many economists and has drawn unexpected support for Clinton rival Barack Obama, who also is opposed.

"Score one for Obama," wrote Greg Mankiw, a former chairman of President George W. Bush's Council of Economic Advisers. "In light of the side effects associated with driving ... gasoline taxes should be higher than they are, not lower."

Republican McCain and Democrat Clinton, who is battling Obama for their party's nomination, both want to suspend the 18.4-cents-per-gallon federal gas tax during the peak summer driving months to ease the pain of soaring gas prices. The tax is used to fund the Highway Trust Fund that builds and maintains roads and bridges.

Economists said that since refineries cannot increase their supply of gasoline in the space of a few summer months, lower prices will just boost demand and the benefits will flow to oil companies, not consumers.

"You are just going to push up the price of gas by almost the size of the tax cut," said Eric Toder, a senior fellow at the Urban-Brookings Tax Policy Center in Washington.

Obama criticized the plan as pure politics and said the only way to lower the price of gas is to use less oil.

Read the full story.

The trickle of bad economic news has become a gusher.

US home price drop deepened in February-S&P index

NEW YORK (Reuters) - Prices of existing U.S. single-family homes extended their slump in February, with 17 of the 20 measured regions posting record annual declines, according to the Standard & Poor's/Case Shiller home price index on Tuesday.

The composite month-over-month index of 20 metropolitan areas fell 2.6 percent to 175.94 in February for an annual 12.7 percent drop. It has slumped 15.8 percent from its June 2006 peak.

S&P said its composite month-over-month index of 10 metro areas slid 2.8 percent in February to 190.58, for a record annual 13.6 percent decline. The index is now 14.8 percent below its highest level in July 2006.

"There is no sign of a bottom in the numbers," David Blitzer, chairman of the index committee at S&P, said in a press release.

Read the full story.

I'll try to shed a tear for the millionaires ... until I become one.

Millionaires see economy as weak, but expect rebound in 2009

(AP) NEW YORK -- Even millionaires are feeling the economic squeeze, with many saying they don't even "feel" wealthy. But as a group, they are optimistic that things will improve in the next year.

The Fidelity Millionaire Outlook, a survey of 1,000 people with at least $1 million in assets to invest, found that you don't have to be a laid-off worker in a rust belt state to have a negative view of the nation's economy.

Using a scale ranging from minus 100 as the worst to 100 as the best, the survey found that high net-worth individuals have a minus 50, or "very weak," view of the economy right now. But when asked where things will be next January, the grade rises to a positive 18.

That could mean millionaires see "today's problem as tomorrow's opportunity," said Jack Callahan, president of Fidelity Institutional Wealth Services, the unit that sponsored the survey, which was conducted by an independent research firm.

People with more than $10 million to invest other than their home and retirement savings -- what Fidelity called "deca-millionaires" -- have a more pessimistic view than those with less than $2.5 million.

Tellingly, about 19 percent of the people surveyed do not consider themselves wealthy, even though they have, on average, $3 million to invest and earn at least $270,000 a year.

Callahan suggested that reflects people in this category struggling to maintain a lifestyle their income can't support. "It says these folks are spending beyond their means," he said.

Overall, 31 percent of those surveyed intend to put more money in the next year into fixed-income vehicles -- typically bonds or preferred stocks that carry lower risk and guaranteed returns. Some 27 percent plan to buy more individual stocks, with about half that, 14 percent, planning to increase real estate investments.

"As they look at the future and look at the markets, they see fixed-income as the best," Callahan said. While fixed-income investments are usually considered safer, he noted that many have lost value in the last year because of the subprime housing crisis and credit crunch. Three-quarters of those surveyed said the subprime fallout hurt their investments, with 42 percent saying the effect has been at least moderate.

The 2008 survey, taken in January by Burke Inc., did not identify Fidelity as the sponsor. It has a margin of error of plus or minus 3 percentage points.

The outlook is the second such survey Burke did for Fidelity. Last year's results found a score of positive 41 for the economy a year ago, but just a positive 6 for where things would be at the beginning of this year.

While that didn't quite predict the recession many economists say the country is in now, it does indicate that millionaires saw a slowdown on its way. In particular, millionaires last year expected difficulties in the stock market and in real estate.

"It will be an interesting indicator to track over the years," Callahan said. "Millionaires, as business people, look to the future."

I will try to shed a tear for the millionaires ... until I become one.

Millionaires see economy as weak, but expect rebound in 2009

(AP) NEW YORK -- Even millionaires are feeling the economic squeeze, with many saying they don't even "feel" wealthy. But as a group, they are optimistic that things will improve in the next year.

The Fidelity Millionaire Outlook, a survey of 1,000 people with at least $1 million in assets to invest, found that you don't have to be a laid-off worker in a rust belt state to have a negative view of the nation's economy.

Using a scale ranging from minus 100 as the worst to 100 as the best, the survey found that high net-worth individuals have a minus 50, or "very weak," view of the economy right now. But when asked where things will be next January, the grade rises to a positive 18.

That could mean millionaires see "today's problem as tomorrow's opportunity," said Jack Callahan, president of Fidelity Institutional Wealth Services, the unit that sponsored the survey, which was conducted by an independent research firm.

People with more than $10 million to invest other than their home and retirement savings -- what Fidelity called "deca-millionaires" -- have a more pessimistic view than those with less than $2.5 million.

Tellingly, about 19 percent of the people surveyed do not consider themselves wealthy, even though they have, on average, $3 million to invest and earn at least $270,000 a year.

Callahan suggested that reflects people in this category struggling to maintain a lifestyle their income can't support. "It says these folks are spending beyond their means," he said.

Overall, 31 percent of those surveyed intend to put more money in the next year into fixed-income vehicles -- typically bonds or preferred stocks that carry lower risk and guaranteed returns. Some 27 percent plan to buy more individual stocks, with about half that, 14 percent, planning to increase real estate investments.

"As they look at the future and look at the markets, they see fixed-income as the best," Callahan said. While fixed-income investments are usually considered safer, he noted that many have lost value in the last year because of the subprime housing crisis and credit crunch. Three-quarters of those surveyed said the subprime fallout hurt their investments, with 42 percent saying the effect has been at least moderate.

The 2008 survey, taken in January by Burke Inc., did not identify Fidelity as the sponsor. It has a margin of error of plus or minus 3 percentage points.

The outlook is the second such survey Burke did for Fidelity. Last year's results found a score of positive 41 for the economy a year ago, but just a positive 6 for where things would be at the beginning of this year.

While that didn't quite predict the recession many economists say the country is in now, it does indicate that millionaires saw a slowdown on its way. In particular, millionaires last year expected difficulties in the stock market and in real estate.

"It will be an interesting indicator to track over the years," Callahan said. "Millionaires, as business people, look to the future."

The trickle of bad economic news has become a gusher.

US home price drop deepened in February-S&P index

NEW YORK (Reuters) - Prices of existing U.S. single-family homes extended their slump in February, with 17 of the 20 measured regions posting record annual declines, according to the Standard & Poor's/Case Shiller home price index on Tuesday.

The composite month-over-month index of 20 metropolitan areas fell 2.6 percent to 175.94 in February for an annual 12.7 percent drop. It has slumped 15.8 percent from its June 2006 peak.

S&P said its composite month-over-month index of 10 metro areas slid 2.8 percent in February to 190.58, for a record annual 13.6 percent decline. The index is now 14.8 percent below its highest level in July 2006.

"There is no sign of a bottom in the numbers," David Blitzer, chairman of the index committee at S&P, said in a press release.

Read the full story.

112 percent is too much to ignore.

The story is at the bottom. Here's a CNN video on the topic.

Homes facing foreclosure more than doubled in 1Q from 2007

(AP) The number of U.S. homes heading toward foreclosure more than doubled in the first quarter from a year earlier, as weakening property values and tighter lending left many homeowners powerless to prevent homes from being auctioned to the highest bidder, a research firm said Monday.

Among the hardest hit states were Nevada, Florida and, in particular, California, where Stockton led the nation with a foreclosure rate that was 6.6 times the national average, Irvine, Calif.-based RealtyTrac Inc. said.

Nationwide, 649,917 homes received at least one foreclosure-related filing in the first three months of the year, up 112 percent from 306,722 during the same period last year, RealtyTrac said.

The latest tally also represents an increase of 23 percent from the fourth quarter of last year.

RealtyTrac monitors default notices, auction sale notices and bank repossessions.

All told, one in every 194 households received a foreclosure filing during the quarter. Foreclosure filings increased in all but four states.

The most recent quarter marked the seventh consecutive quarter of rising foreclosure activity, RealtyTrac noted.

"What would normally alleviate the foreclosure situation in a normal market is people starting to buy properties again," said Rick Sharga, RealtyTrac's vice president of marketing.

However, the unavailability of loans for people without perfect credit and a significant down payment is slowing the process, he said.

"It's a cycle that's going to be difficult to break, and we're certainly not at the breaking point just yet," Sharga added.

The surge in foreclosure filings also suggests that much-touted campaigns by lawmakers and the mortgage lending industry aimed at helping at-risk homeowners aren't paying off.

Hope Now, a Bush administration-organized mortgage industry group, said nearly 503,000 homeowners had received mortgage aid in the first quarter. Most of the aid was temporary, however.

Pennsylvania was a notable standout in the latest foreclosure data. The number of homes in the state to receive a foreclosure-related filing plunged 24.4 percent from a year earlier.

Sharga credited the decline to the state's foreclosure relief measures, noting that cities such as Philadelphia put in place a moratorium on all foreclosure auctions for April and implemented other measures aimed at helping slow foreclosures.

Nearly 157,000 properties were repossessed by lenders nationwide during the quarter, according to RealtyTrac.

The flood of foreclosed properties on the market has contributed to falling or stagnating home values, yet lenders have yet to implement heavy discounts on repossessed homes, Sharga said.

Nevada posted the worst foreclosure rate in the nation, with one in every 54 households receiving a foreclosure-related notice, nearly four times the national rate.

The number of properties with a filing increased 137 percent over the same quarter last year but only rose 3 percent from the fourth quarter.

California had the most properties facing foreclosure at 169,831, an increase of 213 percent from a year earlier. It also posted the second-highest foreclosure rate in the country, with one in every 78 households receiving a foreclosure-related notice.

California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates in the first quarter, RealtyTrac said.

Many of the areas -- including Stockton, Riverside-San Bernardino, Fresno, Sacramento and Bakersfield -- are located in inland areas of the state where many first-time buyers overextend themselves financially to buy properties that have plunged in value since the market peak.

"California still hasn't hit bottom," Sharga said. "We have a lot of California homes that are in early stages of default that may not be salvageable because either there's no market or financing available, or both."

Arizona had the third-highest foreclosure rate, with one in every 95 households reporting a foreclosure filing in the quarter. A total of 27,404 homes reported at least one filing, up nearly 245 percent from a year ago and up 45 percent from the last quarter of 2007.

Florida had 87,893 homes reporting at least one foreclosure filing, a 178 percent jump from the first quarter of last year and a 17 percent hike from the fourth quarter last year. That translates into a foreclosure rate of one in every 97 households.

The other states among the top 10 with the highest foreclosure rates were Colorado, Georgia, Michigan, Ohio, Massachusetts and Connecticut.

112 percent is too much to ignore.

Homes facing foreclosure more than doubled in 1Q from 2007

(AP) The number of U.S. homes heading toward foreclosure more than doubled in the first quarter from a year earlier, as weakening property values and tighter lending left many homeowners powerless to prevent homes from being auctioned to the highest bidder, a research firm said Monday.

Among the hardest hit states were Nevada, Florida and, in particular, California, where Stockton led the nation with a foreclosure rate that was 6.6 times the national average, Irvine, Calif.-based RealtyTrac Inc. said.

Nationwide, 649,917 homes received at least one foreclosure-related filing in the first three months of the year, up 112 percent from 306,722 during the same period last year, RealtyTrac said.

The latest tally also represents an increase of 23 percent from the fourth quarter of last year.

RealtyTrac monitors default notices, auction sale notices and bank repossessions.

All told, one in every 194 households received a foreclosure filing during the quarter. Foreclosure filings increased in all but four states.

The most recent quarter marked the seventh consecutive quarter of rising foreclosure activity, RealtyTrac noted.

"What would normally alleviate the foreclosure situation in a normal market is people starting to buy properties again," said Rick Sharga, RealtyTrac's vice president of marketing.

However, the unavailability of loans for people without perfect credit and a significant down payment is slowing the process, he said.

"It's a cycle that's going to be difficult to break, and we're certainly not at the breaking point just yet," Sharga added.

The surge in foreclosure filings also suggests that much-touted campaigns by lawmakers and the mortgage lending industry aimed at helping at-risk homeowners aren't paying off.

Hope Now, a Bush administration-organized mortgage industry group, said nearly 503,000 homeowners had received mortgage aid in the first quarter. Most of the aid was temporary, however.

Pennsylvania was a notable standout in the latest foreclosure data. The number of homes in the state to receive a foreclosure-related filing plunged 24.4 percent from a year earlier.

Sharga credited the decline to the state's foreclosure relief measures, noting that cities such as Philadelphia put in place a moratorium on all foreclosure auctions for April and implemented other measures aimed at helping slow foreclosures.

Nearly 157,000 properties were repossessed by lenders nationwide during the quarter, according to RealtyTrac.

The flood of foreclosed properties on the market has contributed to falling or stagnating home values, yet lenders have yet to implement heavy discounts on repossessed homes, Sharga said.

Nevada posted the worst foreclosure rate in the nation, with one in every 54 households receiving a foreclosure-related notice, nearly four times the national rate.

The number of properties with a filing increased 137 percent over the same quarter last year but only rose 3 percent from the fourth quarter.

California had the most properties facing foreclosure at 169,831, an increase of 213 percent from a year earlier. It also posted the second-highest foreclosure rate in the country, with one in every 78 households receiving a foreclosure-related notice.

California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates in the first quarter, RealtyTrac said.

Many of the areas -- including Stockton, Riverside-San Bernardino, Fresno, Sacramento and Bakersfield -- are located in inland areas of the state where many first-time buyers overextend themselves financially to buy properties that have plunged in value since the market peak.

"California still hasn't hit bottom," Sharga said. "We have a lot of California homes that are in early stages of default that may not be salvageable because either there's no market or financing available, or both."

Arizona had the third-highest foreclosure rate, with one in every 95 households reporting a foreclosure filing in the quarter. A total of 27,404 homes reported at least one filing, up nearly 245 percent from a year ago and up 45 percent from the last quarter of 2007.

Florida had 87,893 homes reporting at least one foreclosure filing, a 178 percent jump from the first quarter of last year and a 17 percent hike from the fourth quarter last year. That translates into a foreclosure rate of one in every 97 households.

The other states among the top 10 with the highest foreclosure rates were Colorado, Georgia, Michigan, Ohio, Massachusetts and Connecticut.

Could GM's problems lead to layoffs for Toyota and Honda in Torrance?

GM to lay off 3,500 at 4 pickup truck and SUV factories

DETROIT (AP) -- Sagging pickup truck and sport utility vehicle sales have forced General Motors Corp. to shut down one shift each at four North American factories and lay off about 3,500 workers.

The world's largest automaker by sales said Monday that the cuts, to take effect starting this summer, were brought on by weak demand due to high gasoline prices and an economic downturn.

The cuts will affect pickup factories in Pontiac and Flint, Mich., and Oshawa, Ontario, as well as the full-size SUV plant in Janesville, Wis. The layoffs represent just over 4 percent of GM's hourly manufacturing work force of about 80,000 in North America.

The company said the cuts mean it will make about 88,000 fewer pickups and 50,000 fewer large SUVs this calendar year.

GM said the exact number of layoffs will be worked out with its unions. Workers will get unemployment benefits and supplemental pay that total 80 percent of their normal 40-hour gross pay, said GM spokesman Dan Flores.

"With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities," GM North America President Troy Clarke said in a statement.

For about the past three years, the U.S. auto market has been shifting away from pickup trucks and SUVs to cars and crossover vehicles, but the trend accelerated in recent months due to gas prices that have topped $3.50 per gallon across the nation.

The company expects the layoffs to take place starting July 14 at the Flint, Janesville and Pontiac plants, and Sept. 8 at Oshawa. Most of the factories had already seen layoffs and production cuts due to a parts shortage from a two-month strike at American Axle and Manufacturing Holdings Inc.

GM spokesman Tony Sapienza said the company will eliminate shifts with 750 workers each at Flint and Janesville, 1,150 workers in Pontiac and 900 workers in Oshawa.

"Those are the people that we believe will be impacted based on what the shifts are," he said. "We'll be working with our partners to determine how that's brought to fruition."

Greg Gardner, an analyst with the Oliver Wyman Group, said the cuts look like "a realistic assessment."

"The full-size pickup and SUV market is not going to rebound anytime soon," he said. "It looks like that they don't plan on making up very much of the production loss due to the American Axle strike."

Gardner said GM's announcement reflects the industry's overall production forecast this year, down to about 15 million light vehicles from an earlier forecast of 15.5 million.

"Obviously, the larger, heavier vehicles are taking the biggest hit," he said.

The Flint, Pontiac and Oshawa plants make the Chevrolet Silverado and GMC Sierra pickups, while Janesville manufactures the Chevrolet Tahoe and Suburban and GMC Yukon big SUVs.

GM said pickup sales overall are down 15 percent through March, while sales of large SUVs are off 26 percent. Dealers in much of the country say the bigger vehicles aren't selling because of the economy and gasoline prices.

George Tasker, the top salesman at Martin Chevrolet in Torrance, Calif., said buyers are sitting on the sidelines for most vehicles mainly due to economic uncertainty and declining home values.

"Everybody's going to drive a little bit longer until we can figure out where this thing is going," he said.

Los Angeles-area dealers still can get just about any truck or SUV a customer wants by trading with each other, despite curtailed production from the American Axle strike, he said.

Jesse Toprak, chief industry analyst for the auto information site Edmunds.com, said GM has a 92-day average supply of large trucks. A 60-day supply is considered optimal in the business.

He said the automaker will lose about $4.4 billion in gross sales because of the production cuts, but it's nearly impossible to determine the impact on GM's net profits.

The production cuts should help GM keep its inventory under control, said Catherine Madden, an analyst with the consulting firm Global Insight.

"They're not going to put themselves in a position where they're going to overbuild and sell at any costs," she said.

"They take the hit now instead of being forced with their back up against the wall in September."

GM said it did not forecast how many of those vehicles it expected to make this year, but it sold about 1.1 million of them in the U.S. last year, according to Autodata Corp.

The announcement was made after the close of regular trading. GM shares gained 56 cents, or 2.6 percent, to close at $21.94, and were unchanged in after-hours trading.

The cuts come as 74,000 U.S. workers represented by the United Auto Workers face a May 22 deadline to decide on GM's latest round of buyout and early retirement offers.

GM won't say how many workers it hopes to shed, but under its new contract with the UAW, it will be able to replace up to 16,000 workers doing nonassembly jobs with new employees who will be paid half the old wage of $28 per hour.

Story is below. Also, here's a link to the latest South Bay real estate story.

Vacant homes set new record high in first quarter

WASHINGTON (AP) -- The percentage of vacant homes for sale in the U.S. set a new record high in the first quarter of this year, the government said Monday.
The Census Bureau report shows that 2.9 percent of U.S. homes -- excluding rental properties -- were vacant and up for sale, compared with 2.8 percent in the fourth quarter of 2007. It was the highest quarterly number in records going back to 1956.

That works out to 2.28 million properties, up from 2.18 million in the same quarter last year, according to the report.

The West had the biggest gain in vacancy rates among homeowners, rising to 3.2 percent in the January-March period from 2.6 percent in the same quarter a year earlier. Vacancy rates inched up in the Northeast and remained steady in the Midwest and South. The national vacancy rate, including new and existing homes, has been steadily rising since mid-2005.

Global Insight economist Patrick Newport called the report "worrisome."

"The inventory problem has not gotten any better," Newport said. Although glut-fighting home builders have reined in construction, "they still will have to cut back more."

The Census Bureau's report also said that the U.S. homeownership rate remained at 67.8 percent in the first quarter, down from a peak of 69.2 percent at the end of 2004.

The housing market's five-year boom is quickly becoming a faint memory, as sales and home prices have fallen dramatically over the past two years in once hot areas such as California and Nevada.

Last week, a Commerce Department report said sales of new homes plunged in March to the slowest pace in 16 1/2 years.

Centex Corp., Pulte Homes Inc., Hovnanian Enterprises Inc. and other builders have been caught with unsold properties over the past year as mortgages became harder to get, sales slowed and the economy soured.

Builders have slashed prices, but the discounts have done little to lure buyers who are holding out, uncertain about when the price-drop will stop.

The National Association of Realtors reported last week that sales of existing homes also fell in March, dropping by 2 percent, with prices declining on a year-over-year basis by 7.7 percent.

Can it get any clearer than this?

Buffett says recession may be worse than feared

NEW YORK (Reuters) - Warren Buffett, the world's richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect.

Buffett made his comments on CNBC television after his Berkshire Hathaway Inc agreed to invest $6.5 billion in the takeover of chewing gum maker Wm Wrigley Jr Co by Mars Inc in a $23 billion transaction.

"This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow.

"I think consumers are feeling gas and food prices," he added, "and not feeling they've got a lot of money for other things."

He was not immediately available for further comment. Known for his frugality, the 77-year-old Buffett has lived in the same 10-room Omaha, Nebraska, house for a half-century, despite being worth an estimated $62 billion.

Read the full story.

Here's today's At Work profile.

He's whole-hog on bike parts
By Muhammed El-Hasan, Staff Writer

In 2002, Bryan Singer returned to his Redondo Beach home from an Air Force tour of duty in Qatar near Iraq.

Singer, an avid Harley Davidson rider, soon started using eBay to sell Harley parts out of his garage. His garage was so full of motorcycle parts that Singer could barely fit inside.

So in February of last year, he opened a shop called Hog Ties in Redondo Beach.

Singer, 36, runs the store with a laid-back manner fitting of Harley enthusiasts.

Q. What does your job entail?

A. I own the place. I do everything. Customer service, shipping, receiving, buying, selling.

Read the full story.

Here's today's story.

Waterworks
By Joanna Lin, Staff Writer

When driving by Mike Garcia's Redondo Beach house, people tend to stare.

They gawk, ogle and rubberneck - so much so that Garcia says the street could use a stop sign in front of his house. ("I don't want to cause accidents," he reasons.)

What's slowing traffic is a waterfall in Garcia's front yard. It's one of the more than 500 ponds and waterfalls Garcia and his company, Enviroscape, have built over the past decade.

Based in Redondo Beach, Enviroscape is a contractor specializing in residential and commercial landscapes and ponds. Enviroscape is one of only eight or nine certified pond builders in the world, according to the International Professional Pond Contractors Association.

"It's a very select group. ... We're more interested in quality than quantity," said Dave Jones, executive director of the Woodstock, Ga.-based IPPCA, which has 120 members throughout the U.S., Canada and Australia, and began certifying pond builders in 2004.

Read the full story.

Despite the Fed cuts' ability to spur the flagging economy, cutting too much will just make inflation even worse.

Fed likely to cut U.S. rates, could signal pause

CHICAGO (Reuters) - The U.S. Federal Reserve is expected to put an exclamation point on its string of interest- rate cuts with a small reduction this week and may signal that its rate-cutting cycle is done for now.

Rising global inflation and the Fed's hope that a blend of monetary and fiscal stimulus will shore up the anemic U.S. economy suggest the central bank is ready to pause in the sharp easing cycle it kicked off in mid-September.

Fed Chairman Ben Bernanke and his colleagues have lowered benchmark overnight lending rates 3 full percentage points to 2.25 percent over that span.

Read the full story.

The South Bay is not on the list.

(Forbes) Miami-area home sellers looking to unload their properties might want to make sure they have comfortable couches.

It looks like they're going to be there a while.

That's because Miami tops our list of the nation's most sedentary housing markets. These 10 spots feature a potent mix of dropping prices and sluggish sales rates. Also on the list: Denver, San Diego, Baltimore and Chicago.

Here's a slideshow.

(MarketWatch) -- Through his preset stock-trading plan, Mattel Chairman and Chief Executive Bob Eckert exercised stock options during the final two weeks of the toy maker's first quarter, resulting in the sale of 1 million company shares.

The sales, completed in separate transactions between March 20 and March 26, occurred when El Segundo-based Mattel's stock price was near its highest levels of the quarter. This week, the shares tumbled, hurt by the toy maker's disappointing earnings report.

The stock sales were Eckert's first since joining Mattel eight years ago. They were carried out in accordance with his 10b5-1 trading plan, approved by Mattel's board Feb. 20 and disclosed in a Securities and Exchange Commission filing at the time.

Senior executives at public companies use 10b5-1 trading plans to make prearranged trades at specified prices or dates in the future. So as not to run afoul of insider-trading laws, the plans are set up when an executive is not in possession of material nonpublic information that could affect the value of that executive's holdings.

At least we beat out LA County.

South Bay home price slide continues
By Muhammed El-Hasan, Staff Writer

The South Bay housing market continued its skid in March, with every local city and community cited in a new report seeing a drop in median home price.

The South Bay, excluding the Palos Verdes Peninsula, experienced an 8.5 percent year-over-year drop in median home price to $599,500 in March, the Los Angeles-based California Association of Realtors reported Friday.

The Hill saw a drop of 1percent to $1,225,000 in March.

The median price refers to the middle figure where half of homes sold for more and half for less.

Housing prices have been dropping statewide and across the nation as fewer buyers are able to qualify for home loans amid a tightening of standards and a souring economy.

"It hasn't been this tough in the South Bay for a while," said Adolph James, a Realtor with Shorewood Realtors in Manhattan Beach.

Read the full story.

Here's part of tomorrow's housing story:

The South Bay housing market continued its skid in March, with every local city and community cited in a new report seeing a drop in median home price.

The South Bay, excluding the Palos Verdes Peninsula, saw an 8.5-percent year-over-year drop in median home price to $599,500 in March, the Los Angeles-based California Association of Realtors reported Friday.
The Hill saw a drop of 1 percent to $1,225,000 in March.

The median price refers to the middle figure where half of homes sold for more and half for less.
Housing prices have been dropping statewide and across the nation as fewer buyers are able to qualify for home loans amid a tightening of qualification standards and a souring economy.

“It hasn’t been this tough in the South Bay for a while,” said Adolph James, a Realtor with Shorewood Realtors in Manhattan Beach.

James said he recently took a “knockout listing” in Rancho Palos Verdes off the market after about four months because the seller gave up.

Most South Bay cities cited in the report posted double-digit losses.
Hawthorne’s median home price plunged 27.4 percent to $429,500 in March. Carson’s median dropped 16.6 percent to $417,000.

San Pedro, Inglewood and Torrance also fell by double digits. Torrance saw a drop of 10.6 percent to $532,500.

Because of the relatively low number of homes sold during a single month in any individual South Bay city, the median price can skew up or down depending on what types of homes are selling during that period.

Last month, Redondo Beach was the only South Bay city in the report to post a tiny drop in the median price, down a mere 0.8 percent to $774,000.

The South Bay's median home price dropped 8.5 percent in March, compared to the same month in 2007, the California Association of Realtors reported Friday.

Also in March, Redondo Beach made the state’s top 10 list of communities with the highest median home price.

However, that was likely because many higher priced cities like Manhattan Beach did not qualify to be considered for the list because they had so few home sales in March.

What would happen if we invaded?

Oil prices up on word US ship fired on boats in Persian Gulf

NEW YORK (AP) -- Oil prices rose sharply Friday on news that a ship under contract to the U.S. Defense Department fired warning shots at two boats in the Persian Gulf. Retail gas prices as expected rose further into record territory, nearing $3.60 a gallon.

Crude prices rose on initial reports that a U.S. ship had fired on two Iranian boats; the news raised concerns that a conflict between U.S. and Iranian forces could cut oil supplies from the region. A Navy spokeswoman said the origin of the boats was unclear.

The news was enough to send light, sweet crude for June delivery up to $119.55 before the contract retreated to settle up $2.46 at $118.52 a barrel on the New York Mercantile Exchange.

The incident worried investors because at first it appeared to be the latest in a series of encounters between U.S. forces and Iranian boats in the Gulf. Early this month, the USS Typhoon fired a flare at an Iranian boat that came within about 200 yards of the ship. In January, several Iranian boats made what the Navy described as provocative moves near a U.S. ship in the Strait of Hormuz. And in December the USS Whidbey Island fired warning shots at a small Iranian boat officials said was rapidly approaching the ship.

On Friday, oil prices were already up before the report on news of a pipeline attack in Nigeria and a looming refinery strike in Scotland.

In Nigeria, the Movement for the Emancipation of the Niger Delta, or MEND, said its fighters hit an oil pipeline late Thursday, the fourth conduit the group has attacked in the past week. MEND said the pipeline belongs to a Royal Dutch Shell PLC joint venture. A Shell spokesman confirmed one of its pipelines had been hit, but provided no additional details.

Earlier this week, Shell said an earlier attack cut its Nigerian oil production by about 170,000 barrels a day.

Separately, workers at an ExxonMobil Corp. joint venture in Nigeria cut production by an unspecified amount to demand more pay.

Adding to the supply concerns, BP PLC said it will shut down a 700,000 barrel-a-day pipeline system that carries oil from the North Sea to refineries in the U.K. on Saturday in anticipation of a strike at Scotland's Grangemouth refinery expected to begin Sunday. The refinery supplies power and steam to the pipeline; if it shuts down, the pipeline can't operate.

Oil's rise came as the dollar strengthened. A stronger dollar typically encourages selling by making commodities such as oil less effective hedges against inflation, and by making oil more expensive to overseas investors. Analysts say the dollar's steady decline over the past year is the chief culprit behind this year's rapid rise in oil prices.

But, notes Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill., "that connection between oil and the dollar can be broken easily by supply issues," which drove trading on Friday.

At the pump, meanwhile, gas prices rose another 2.1 cents Friday to a record national average of $3.577 a gallon, according to AAA and the Oil Price Information Service. Gas prices have been following oil futures higher, but are also rising due to concerns about whether gasoline supplies are adequate to meet peak summer driving demand.

Analysts expect gas prices to continue rising for at least another month to $3.70 to $4 a gallon. To a large extent, how high gas prices peak depends on what oil does.

Lately, analysts have recently raised their oil price predictions to $125 to $130 a barrel. Earlier this week, the expiring May crude contract rose as high as $119.90 as investors scrambled to square positions.

However, the Federal Reserve is expected to cut interest rates less sharply next week than originally thought. Because rate cuts tend to weaken the dollar, a smaller than expected cut could push the dollar higher, and send oil prices down.

In other Nymex trading Friday, May gasoline futures rose 3.51 cents to settle at $3.0537 a gallon after earlier rising to a new trading record of $3.0815, and May heating oil futures rose 4.45 cents to settle at $3.3028 a gallon. May natural gas futures rose 17.3 cents to settle at $10.963 per 1,000 cubic feet.

Associated Press writers Lolita C. Baldor in Washington, Sebastian Abbot in Cairo, Egypt, Edward Harris in Lagos, Nigeria, and Gillian Wong in Singapore contributed to this report.

But will it get even worse?

Consumer sentiment at a 26-year low

NEW YORK (Reuters) - Consumer confidence fell for a third straight month in April, hitting its weakest in 26 years, on heightened worries over inflation and the sagging housing market, a survey showed on Friday.

The Reuters/University of Michigan Surveys of Consumers said its final index of confidence for April fell deeper into recessionary territory, to 62.6 from 69.5 in March and below economists' median expectation of 63.2 in a Reuters poll.

The April result is the lowest since March 1982's 62.0, when the "stagflationary" period of low growth and high inflation was still an issue for many Americans.

This morning, I filled up my 2001 Toyota Corolloa at a Redondo Beach 76 gas station.

I heard that if you fill up in the morning, it's cheaper because the gasoline inside the tanks are cooler and therefore take up less volume. So you get more for your money.

I don't know if I saved anything from filling up in the morning, but I do know that I paid more per gallon than I ever have. For regular unleaded, I paid $3.959 a gallon, or $34.32 for 8.67 gallons.

I'm not sure how much of a dent a tax rebate check will put into the rising cost of gas (and food).

It's a sign of the times.

And not a minute too soon.

Bush says rebates going out Monday should help economy

(AP) President Bush said tax rebates will start going out Monday, earlier than previously announced, and should help Americans cope with rising gasoline and food prices, as well as aid a slumping economy.

"Starting Monday, the effects of the stimulus will begin to reach millions of households across our country," Bush said Friday in remarks on the South Lawn of the White House.

The Internal Revenue Service had been saying direct deposits wouldn't start until next Friday. Bush said paper checks would begin going out on May 9, a week earlier than previously announced.

"The money is going to help Americans offset the high prices we're seeing at the gas pump, the grocery store, and also give our economy a boost to help us pull out of this economic slowdown," Bush said.

Bush's emphasis on fuel and food prices differed from other comments he's made since signing the economic stimulus legislation, intended to aid the economy by boosting overall consumer spending — which accounts for roughly two-thirds of the nation's economic activity.

Bush suggested the rebates could trigger a spending spree. "When the money reaches the American people, we expect they will use it to boost consumer spending," he said last month.

By saying expressly that people could use these one-time checks to pay for such necessities as food and gas, Bush underscored the deepening challenges facing the economy.

As he had earlier in the week, Bush used the word "slowdown" to describe the state of the economy. He has denied that the nation is in a recession, although many economists say it is.

"It's obvious our economy is in a slowdown. But, fortunately, we recognized the signs early and took action," Bush said.

The rebates — up to $600 for an individual, $1,200 for a couple and an additional $300 for each dependent child — are the centerpiece of the government's $168 billion stimulus package, enacted in February. Roughly 130 million households are expected to get them.

Bush made the comments before boarding his helicopter at the start of a day trip to Connecticut.

People must file a tax return for their 2007 income to be eligible for a rebate check.

The IRS now says all checks for those who filed tax returns on time are scheduled to be deposited or mailed by July 11.

The economy — burdened by the collapse of home prices, a financial and credit crisis, and now rising energy and food prices — grew at an anemic 0.6 percent in the final three months of last year and is believed to have gotten even weaker in the first three months of this year.

The government will report on the first quarter's performance next week.

With the economy faltering, the nation's unemployment rate has climbed to 5.1 percent, the highest since September 2005, when it suffered from the devastating blows of the Gulf Coast hurricanes. Job losses in the first three months of this year neared the quarter-million mark.

Foreclosures have surged to record highs and financial companies have taken multibillion losses on mortgage investments that soured. The situation has sent a tremor through Wall Street and has sent the administration, Congress and presidential contenders looking for ways to provide relief.

The new headquarters is scheduled to open this summer in Manhattan Beach.

I'm sure they'll keep the unusual hamburger shape.

Arby's owner buying Wendy's for $2.34 billion stock deal

COLUMBUS, Ohio (AP) — After at least two rejections, billionaire Nelson Peltz has finally succeeded in landing Wendy's in a $2.3 billion deal that would add the chain known for its square burger and chocolate Frosty dessert to his ownership of Arby's and its roast beef sandwiches.

Now, the investor known for agitating corporations to boost their stock price has to figure out how to make both profitable while the economy slumps and more Americans are saving money on food and fuel by staying home to eat.

Atlanta-based Triarc Companies Inc., owned by Peltz, said Thursday it will pay about $2.34 billion in an all-stock deal for the nation's third-largest hamburger chain started in 1969 by Dave Thomas. Wendy's had rejected at least two buyout offers from Triarc.

Thomas' daughter Pam Thomas Farber said the family was devastated by the news.

"It's a very sad day for Wendy's, and our family. We just didn't think this would be the outcome," said Farber, 53.

If her father were alive to hear news of the buyout, "he would not be amused," she said.

Triarc will pay about $26.78 per share for the company, which has about 87 million shares outstanding. Wendy's shares rose 4 percent to $26.39 in trading Thursday. They traded as high as $42.22 last summer, not long after Wendy's announced the formation of a special committee to boost its stock price.

The offer is well below the $37 to $41 per share that Peltz said last summer that he was ready to offer for Wendy's.

Under the terms of the deal, expected to close in the second half of the year, Wendy's shareholders will receive 4.25 shares of Triarc Class A stock for each share of Wendy's stock. Triarc said its shareholders will have to approve a charter amendment in which each share of its Class B stock will be converted into Class A stock.

Peltz has pushed for change at Wendy's — including the spinoff of the Tim Hortons coffee-and-doughnut chain and cutting corporate expenses — since 2005 to increase the company's stock price. His Trian Fund and his allies own 9.8 percent of Wendy's stock.

It's a similar tactic Peltz has used at other companies where Trian has become a significant investor, such as Cadbury Schweppes PLC and H.J. Heinz Co. Trian also owns shares of Tiffany & Co. and the Cheesecake Factory Inc., according to regulatory filings.

The deal comes as Wendy's struggles with declining profits and weak sales compared with rivals McDonald's Corp. and Burger King Holdings Inc.

Wendy's said Thursday that its first quarter profit was down 72 percent to $4.1 million, or 5 cents a share, in part because of expenses tied to the work of a special board committee that has been studying ways to boost the company's stock. Revenue fell to $513 million from $522 million a year ago.

Sales at company-owned stores opened at least a year, considered a key indicator of a retailer's strength, fell 1.6 percent in the quarter and 0.1 percent at U.S. franchise restaurants.

Wendy's also has failed to connect with consumers in several advertising campaigns that have been tried since Thomas' death in 2002 and it has limited success in adding new products and with its breakfast menu. Thomas, always wearing a white short-sleeved shirt and red tie, became a household face when he began pitching his burgers and fries in television commercials in 1989.

"It's a company that's sort of lost its way," said Bob Goldin, executive vice president of Technomic Inc. in Chicago.

Still, even with a slumping economy in which other restaurant chains have seen sales decline recently, there is value, analysts say.

"We've always felt Wendy's had a decent chance of a turnaround in its business," said John Owens, an investment analyst with Morningstar, citing its new chicken wrap sandwich and the addition of breakfast at many restaurants.

Improved cost controls over food, labor and other expenses should generate $100 million a year in operating profits over time, Triarc said in the statement announcing the deal.

Eliminating duplicate corporate functions and streamlining support services are expected to eventually save $60 million, said Triarc, which operates 3,700 Arby's restaurants.

Triarc also said expansions for both brands are planned for the U.S. and overseas and that the company will look at a dual-concept unit in high-cost real estate markets. Triarc said it will also change its name to include the Wendy's name.

Wendy's deferred comment to Triac, which had nothing further to say right away.

Several lunchtime customers at a Wendy's in Columbus wondered how Thomas would have reacted to the news, were he still alive.

"I think he's probably rolling over in his grave right now," said John Knape, 36. "But it's business, and that's what you need to do to survive, right?"

The deal caps two chaotic years for Wendy's in which it has sold or spun off operations, slashed its corporate staff and had its wholesome image tarnished by a woman who falsely claimed she found part of a finger in her chili.

Farber said the family didn't think much of Peltz' and Triarc's tactics.

"They came after them (Wendy's) and came after them and came after them. They spun Tim Hortons off, they did this, they did that. They did everything they asked but it wasn't enough."

Thomas opened his first restaurant in a former steakhouse on a cold, snowy Saturday in downtown Columbus on Nov. 15, 1969. He named the chain after his 8-year-old daughter Melinda Lou — nicknamed Wendy by her siblings.

Wendy's, based in suburban Dublin, operates about 6,600 restaurants in the United States and abroad. It trails McDonald's and Burger King Holdings Inc. in the burger business.

Northrop has huge operations in Redondo Beach and El Segundo.

(AP) Century City-based Northrop Grumman Corp. said Thursday first-quarter earnings fell 32 percent as the company was forced to take a charge due to rising costs and delays with an amphibious assault ship program it is building for the U.S. Navy.

The Los Angeles-based company also lowered its profit estimates for the full year, although it beat Wall Street estimates for the quarter, boosting its shares.

Northrop Grumman (nyse: NOC - news - people ) reported net income of $264 million, or 76 cents per share, in the quarter ending March 31. That compares to earnings of $387 million, or $1.10 per share, in the year-ago period.

Revenue for the quarter rose 6 percent to $7.72 billion from $7.34 billion.

Analysts expected the company to post earnings of 63 cents a share on sales of $7.7 billion, according to a Thompson Financial poll.

Its shares rose $2.73, or about 3.9 percent, to $72.21 in afternoon trading.

Results were hurt by a pretax charge of $326 million, or 61 cents per share, related to the problems with the LHD-8 amphibious assault ship program. The company had previously warned that wiring problems with the ship would delay delivery by six months.

The LHD-8 ship, the Makin Island, is being built in Pascagoula, Miss., and has been plagued by costly delays. The company took a $55 million charge in the second quarter of 2007 due to problems with the project.

Management said it expects the LHD-8 to be ready for delivery in the second quarter of 2009.

"Although the LHD-8 charge is deeply disappointing, the remainder of our first quarter performance was strong," Chief Executive Ronald D. Sugar said during a conference call with Wall Street analysts. "Looking ahead, we are winning major competitions, generating report backlog, growing our sales, expanding our margins and executing our balanced cash deployment strategy."

Northrop Grumman estimated its full-year profit will range between $4.90 and $5.15 per share, down from prior estimates. The company reiterated its 2008 sales would hit $33 billion.

Northrop said it received $12.1 billion in funded contracts during the quarter. That brought its total backlog of funded and unfunded orders to $68.1 billion as of the end of March.

Higher defense contract volume from established Northrop programs, such as the remotely piloted Global Hawk aircraft, and newer offerings, such as the KC-45 refueling tanker, helped drive sales growth during the quarter.

Excluding the company's Gulf Coast shipyard operations, Northrop saw growth across all business segments.

Northrop's information and services division generated sales of $3.1 billion, a 6 percent jump from the year-ago quarter.

Growth in the segment was driven by an increase in sales for intelligence, surveillance and reconnaissance programs, among others.

Sales in its aerospace unit rose 4 percent to $2.1 billion, while the electronics division saw sales increase 2 percent to $1.5 billion.

The aerospace segment's sales were led by increased demand for programs such as the Global Hawk and the KC-45, offsetting weaker sales for other programs, including the F-35 aircraft and E-10A radar.

The company's shipbuilding division generated sales of $1.3 billion, up 9 percent from a year earlier largely due to higher demand for surface combatant and fleet support programs.

The segment recorded a $218 million operating loss during the quarter compared to income of $79 million a year earlier.

Among the new contracts won by Northrop during the quarter was a $35 billion order from the U.S. Air Force for 179 of Northrop's KC-45 tanker aircraft. Northrop beat out Boeing (nyse: BA - news - people ) Co., which has filed a formal protest of the Air Force decision with the Government Accountability Office. A ruling on the matter is expected by June 19.

Phenomenex Inc., the Torrance maker of chemical separation technologies, won an award recently at the American Red Cross’ annual Awards Ceremony in Los Angeles.

The Red Cross presented Phenomenex with the Platinum Special Recognition Award, recognizing the company as a leader among the hundreds of firms that work with the Southern California Chapter
of the American Red Cross.

The Red Cross’ highest award recognizes organizations for long-standing support of the Red Cross and year-over-year excellence in blood donation levels.

In 2007, Phenomenex increased the number of employee donations by 91%. In addition to the semi-annual drives, last year Phenomenex hosted two emergency blood drives during periods of low blood supply.

I doubt we'll get food riots like in Haiti and other countries. But let's see the shape we're in after a few more months if the economy keeps dropping and food prices keep rising.

Read the AP story at the bottom and/or watch the CNBC video.

Sam's Club, Costco limit rice purchases as prices rise

(AP) The two biggest U.S. warehouse retail chains are limiting how much rice customers can buy because of what Sam's Club, a division of Wal-Mart Stores Inc., called on Wednesday "recent supply and demand trends."

The broader chain of Wal-Mart stores has no plans to limit food purchases, however.

The move comes as U.S. rice futures hit a record high amid global food inflation, although one rice expert said the warehouse chains may be reacting less to any shortages than to stockpiling by restaurants and small stores.

Sam's Club followed Seattle-based Costco Wholesale Corp., which put limits in at least some stores on bulk rice purchases.

Sam's Club declined to say if this is first time it has restricted sales of bulk foods. The limits affect 20-pound bags, not retail-sized portions. Costco President and CEO Jim Sinegal declined to discuss the issue Wednesday with an AP reporter.

Sam's Club said it will limit customers to four bags at a time of imported jasmine, basmati and long grain white rice.

The warehouse chain caters heavily to small businesses, including restaurants. Sam's Club spokeswoman Kristy Reed said she could not comment on whether the problem was caused by short supplies or by customers stocking up in anticipation of higher prices.

USA Rice Federation spokesman David Coia said there is no rice shortage in the United States.

"It's possible that small restaurants and bodega-type neighborhood stores may be purchasing rice in larger quantities than they do typically to avoid higher prices," Coia said about the warehouse chain restrictions.

A smaller chain, Natick, Mass.-based BJ's Wholesale Club Inc., said it is not imposing limits for now.

"At the present time, BJ's Wholesale Club is not limiting the amount of rice purchases made by our members, but, due to the current market situation, that could change at any time," spokeswoman Sharyn Frankel said in a statement.

In New York's Chinatown, shop owners said that they haven't seen people stocking up amid fears of rice shortages.

At Bangkok Center Grocery, one of the main suppliers of Thai food products in New York City, manager Tom Pongsopon said the price of a 25-pound bag of Jasmine rice at his Chinatown store has gone up from $15 to $20 in a matter of months.

People continue to buy rice, but the supply is OK at this point.

"We have enough for now, but I'm not sure about the future," Pongsopon said.

The Sam's Club restriction is effective immediately at all locations where quantity restrictions are allowed by law. It does not apply to other staples such as flour or oil.

"We are working with our suppliers to address this matter to ensure we are in stock, and we are asking for our Members' cooperation and patience," Reed said in a statement.

Sam's Club has 593 stores compared with 2,523 Wal-Mart Supercenters that combine a full grocery section with general merchandise.

Costco has 534 warehouses worldwide, most of them in the United States.

Wal-Mart spokeswoman Deisha Galberth said Wal-Mart stores have no plans for restrictions similar to those at Sam's Club.

"We are not seeing any signs of concern in the supply chain that would cause us to limit the sales of any items," Galberth said.

U.S. rice futures soared to an all-time high Wednesday as investors bet that surging world demand will continue to pressure already dwindling stockpiles. Rice for the most actively traded July contract jumped 62 cents to $24.82 per 100 pounds on the Chicago Board of Trade, after earlier rising to a record $24.85.

Relentless demand from developing countries and poor crop yields have pushed rice prices up 70 percent so far this year, raising concerns of severe shortages of the staple food consumed by almost half the world's population.

The steep increases have followed similar jumps in the price of wheat, corn and soybeans that have added to Americans' growing grocery bill and led to violent food riots in poor countries including Haiti, Senegal and Pakistan.

Most of the rice eaten in the world is consumed within 60 miles of where it was grown, said Nathan Childs, an economist and rice expert with the U.S. Department of Agriculture. Traditionally very little of it was traded in the world market.

But as populations crossed borders, the taste for specialty rices such as the Indian basmati, or Thai jasmine rice, which grow only in their areas of origin, spread.

U.S. production of long grain and medium grain rice is strong, and the global crop is larger than ever, Childs said. But with some of the principal exporters of the higher-priced rices, such as India and Vietnam, shunning foreign sales to control prices at home and the cost of food generally going up, the price of rice has been climbing to new heights.

What adds to the price spike — and the run on specialty products like basmati — is that rice consumers tend to be very loyal. The market is highly segmented by type of rice and quality, and buyers will generally not take a substitute, Childs said.

"California's had a pretty good crop, but basmati and jasmine consumers have a history of not switching," he said. "They could always have bought cheaper Calrose. But they don't."

Comerica Bank will officially open its third South Bay branch today at 2795 Pacific Coast Highway, Torrance.

Here's what they'll have there:

Comerica will host a grand opening and ribbon-cutting ceremony on Thursday, April 24 at 4:30 p.m. at the banking center for guests including customers, community leaders and employees and other VIPs. Torrance Mayor Frank Scotto will be attending the celebration. Guests will receive a complimentary chair and hand massage provided by Burke Williams and Comerica Bank financial planners will be available for free consultations. One lucky guest will win a Comprehensive Financial Plan from our Senior Financial Planner. Yalda Noorzai, a resident of Palos Verdes, is the new banking center manager. Noorzai will present a grant to the Torrance South Bay YMCA.

What will happen when McDonald's gourmet coffee gets into gear?

Starbucks expects 2Q earnings below analysts' view

(AP) Starbucks Corp. warned Wednesday that its second-quarter earnings would fall short of analysts' expectations due to the weak U.S. economy and the cost of its turnaround plan.
The world's largest coffee retailer said it expects second-quarter earnings of 15 cents per share on a 12 percent revenue increase, down from earnings of 19 cents per share a year earlier. Analysts polled by Thomson Financial were predicting a profit of 21 cents per share for the quarter ended March 30.

Starbucks also warned yearly earnings could fall below the 87 cents per share reported for fiscal 2007. Analysts were expecting a profit of 97 cents per share this year. The company plans to release a full quarterly financial report April 30.

The news sent Starbucks shares tumbling in after-hours trading. They fell to $16.00, down 10 percent from their regular-session close Wednesday of $17.85.

Starbucks has spent the last few months sharpening its focus on basics as part of its efforts to reinvigorate its U.S. business, which has suffered amid the soft economy and growing competition from rivals including McDonald's Corp. and Dunkin' Donuts.

The company also has scaled back the number of new U.S. stores it plans to open this year, while ramping up growth overseas.

Those initiatives brought down earnings by about 3 cents per share in the second quarter, Starbucks said Wednesday. Softness in revenue was partially attributed to a mid-single-digit decline in comparable store sales, a key measure of a retailer's health.

Starbucks said in January it would stop releasing quarterly comparable sales figures in hopes of lessening the focus on short-term performance. It was not expected to elaborate further on comparable sales during its upcoming earnings report.

Linking its performance to the overall economy, Starbucks said the California and Florida markets that were hit particularly hard by the housing downturn have typically accounted for 32 percent of the company's U.S. retail revenue.

Howard Schultz, who returned as the company's chief executive less than four months ago, said Starbucks' turnaround efforts are in the early stages and will eventually show financial benefits as the national economy rebounds.

"In the interim, we are rigorously managing our expenses and seeking additional opportunities to reduce costs," Schultz said in a release.

In February, Starbucks announced it was laying off about 220 support staff who worked at the coffee retailer's Seattle headquarters and in field operations, and would leave about 380 open jobs unfilled.

Starbucks has a long-term goal of 40,000 stores worldwide. The company now has about 16,000 stores worldwide, more than two-thirds of them in the United States.

Skechers USA, the Manhattan Beach-based maker of trendy shows, said Wednesday that it had acquired property neighboring the new corporate headquartes the company is building.

The additional land will allow Skechers to accommodate future growth, the company said.

The shoe maker will move into its new Manhattan Beach headquarters this summer. Near that property, Skechers acquired two adjacent lots just across the border in Hermosa Beach. The land at 2851 Pacific Coast Highway is 18,000 square feet and the lot at 2901 Pacific Coast Highway is 45,000 square feet.

The company said this newly acquired land "will allow for offices in a campus type structure." The company will begin detailing plans for the new land after completion of its new corporate headquarters this summer.

“In the last two years, Skechers’ annual revenues have grown by almost $400 million. At $1.394 billion in net sales for fiscal 2007, we are one of the largest footwear companies in the United States, and Manhattan Beach is our home,” Michael Greenberg, president of Skechers, said in a statement. “We are glad to keep our headquarters in the South Bay where we began almost 16 years ago. We love being a part of this vital community – what it has to offer can’t be obtained elsewhere, and we enjoy giving back to it by providing jobs to local residents, income to local businesses and donating to the community through appropriate avenues. We believe the new property in Hermosa Beach will be a beautiful and valuable addition to the community.”

Realtor Joyce Reese of Exit Realty in Torrance told me this during an interview on foreclosures and people trying to sell their homes in a hurry:

"Pretty much that's all you get. Either the people are losing their home, filing bankruptcy or there's a death in the family, which is forcing the sale."

Read the full story.

Even more may open over the coming years.

Fresh & Easy stores much anticipated By Muhammed El-Hasan, Staff Writer

Harbor City optometrist Sienne Van Enk can't wait for the new Fresh & Easy Neighborhood Market to open a few doors down.

"I'm very intrigued," said Van Enk, who has never shopped at one of the specialty grocery stores.

The market is one of hundreds of locations planned in the western United States by British supermarket giant Tesco.

The South Bay will get its first two Fresh & Easy stores this year in Manhattan Beach and Harbor City.

The Manhattan Beach store, at 1700 Rosecrans Ave., will likely open in the summer, Tesco spokesman Brendan Wonnacott said.

The Harbor City store, at 26640 Western Ave., plans to open later this year, he said.

Read the full story.

Here's a taste of a story that will run in Wednesday's Daily Breeze.

From El Segundo to Sylmar and nationwide, aerospace firms sent exports to an unprecedented level last year. The U.S. aerospace industry’s trade balance hit a record $60.4 billion in 2007, an increase of nearly 11 percent over 2006, the Aerospace Industries Association reported Tuesday. “The sustained growth in aerospace trade is a good sign not only for our industry, but the U.S. economy as a whole,” AIA president and CEO Marion Blakey said in a statement. “Our industry’s track record as a major net export earner for the United States helps to offset the nation’s chronic trade deficit.” Civil aircraft accounted for about half of all aerospace exports last year, helped by growing demand abroad in both emerging and established markets, AIA said.

You can read the rest tomorrow.

I'd need at least three years -- maybe more -- to earn that much on my Daily Breeze wage.

CEO at El Segundo-based DirecTV is paid $26 million

(AP) DirecTV Group Inc. paid its Chief Executive Officer Chase Carey compensation valued at $26.4 million in 2007, more than four times what he made in 2006, according to a securities filing Monday.

The El Segundo-based satellite TV broadcaster paid Carey a salary of $2.2 million, incentive pay of $4.2 million, and stock and option awards valued at $19.6 million when they were granted.

Read the full story.

How long will this last?

Gas guzzlers a hit in China, where car sales are booming

BEIJING (AP) -- High, wide and fuel-hungry, the gleaming black Cadillac Escalade on display at the Beijing auto show is an unlikely car for an era of record oil prices.

But while sport utility vehicle sales in the U.S. are tumbling, automakers are finding that for China's newly prosperous car buyers, bigger is still better.

So General Motors Corp. has made the Escalade a star of its auto-show display and is eager to get it on the market here.

"If you look at the fastest-growing market segments in China, there are two -- SUVs and luxury cars," said Joseph Y.H. Liu, GM China's vice president for sales and marketing.

Auto sales in China are booming, with analysts and automakers forecasting growth at 15-20 percent this year. But demand for the biggest vehicles is even stronger, with sales of luxury cars and SUVs expected to surge by 40-45 percent.

The phenomenon is welcome news for automakers seeing little or no growth in the United States, Europe and Japan. They also make fatter profits from sales of high-end vehicles than from economy models.

Sales have been boosted by economic growth that has topped 10 percent for five straight years and a surge in real estate and stock prices that created a new crop of Chinese billionaires.

Buyers of land yachts have also been unintended beneficiaries of a government policy meant to help the poor. Beijing has tried to shield farmers and the urban poor from high oil prices by freezing pump prices for gasoline and diesel, keeping them among the world's lowest. That takes the sting out of filling up a gas guzzler.

Gas costs 5.34 yuan (76 cents) a liter or 20.5 yuan ($2.90) a gallon. State oil companies are barred from passing on rising crude costs to consumers, instead covering their losses out of profits from their drilling units.

Both foreign and Chinese automakers are using the Beijing show to highlight luxury sedans, muscle cars and SUVs. It opens to the public Thursday after a weekend press preview.

On Sunday, Daimler AG CEO Dieter Zetsche was joined onstage by film star Zhang Ziyi to unveil a top-of-the-line Mercedes-Benz SUV, the GLK, which goes on sale in China next year.

Daimler says Mercedes sales in China surged 42 percent in the first quarter. Sales of R-class minivans jumped 110 percent while those of M-, G- and GL-class SUVs doubled. The company says China is the second-biggest market for its S-class sedans, behind only the United States, and accounts for one-third of global Mercedes sales.

GM showed off its new Cadillac CTS sedan, which it said was designed with China in mind. It added a bigger back seat to the basic CTS model sold worldwide, since many Chinese owners sit in back while a chauffeur drives.

Cadillac's entry in the SUV competition, the Escalade, can seat up to eight people and gets an estimated 12 miles per gallon. It goes on sale in China next year.

For SUV sales, "the volume is low but the growth rate is high, and we're all trying to get into this segment," said Robert Socia, executive vice president of Shanghai General Motors, a GM joint venture with a Chinese partner.

By contrast, GM's SUV sales in the United States fell 22 percent in March from the same month last year.

China's auto market is still dominated by smaller, low-cost models such as the popular QQ made by Chery Automobile Co., the country's biggest domestic producer.

But even at prices below luxury levels, drivers are willing to pay for bigger wheels. Toyota Motor Corp. sold 170,000 Camry sedans in China last year, despite a price of more than 210,000 yuan ($30,000), according to J.D. Power & Associates. That is ten times the average Chinese worker's annual income.

"Chinese buyers typically like bigger cars and they have the resources to go for them," said Tim Dunne, J.D. Power's director of Asia-Pacific market intelligence.

Chrysler LLC, looking to China to help drive its resurgence as an independent company following its split with Daimler, unveiled two SUVs to be sold in China and said Sunday its new Jeep Wrangler goes on sale this month. The company says sales in China doubled in the first quarter over the same period of 2007.

Also Sunday, Volkswagen AG unveiled two sedans designed with a local partner for the China market.

Infiniti, Nissan Motor Co.'s luxury brand, announced it will launch its EX35 SUV in China this year, adding to a range of three sedans already on sale. Carlos Tavares, a Nissan executive vice president, said that portfolio should grow to 10 models in coming years.

Chery's lineup included an SUV, while Chinese maker Huanghai Motors Corp. was showing an SUV and an American-size pickup truck.

Beijing is trying to encourage the growth of China's auto industry and domestic sales -- but communist leaders are alarmed at pollution and rising dependence on imported oil, which they see as a strategic weakness. China is the world's No. 2 oil consumer after the United States, and imports rose 12.3 percent last year.

Beijing and other major Chinese cities are among the world's smoggiest, and the rise of big engines and more horsepower is adding to the haze.

Authorities are expected to try to clear the air for August's Beijing Olympics by getting half the capital's 3.3 million cars off the streets during the games. No final plan has been issued, but during a four-day test last summer drivers were ordered off the road on alternate days, based on license plate numbers.

Regulators are phasing in tougher emissions standards and higher sales taxes for bigger engines. They are pushing Chinese automakers to develop fuel cells and other clean propulsion.

But bigger models reign even among customers willing to pay more for hybrids and other cleaner technology.

General Motors says it will start selling a gas-electric hybrid in China in July. It will be the first manufactured in China and the second in the market following Toyota's Prius.

GM's hybrid will be a Buick LaCrosse, a full-size sedan, after research found likely buyers wanted a car that size, said Liu, the China GM vice president. He said sales are expected to be modest.

"The Chinese consumer is still back on the curve of satisfying their basic need for transportation," said John Parker, Ford Motor Co.'s executive vice president for Asia, "rather than looking at being green."

Rupert Murdoch is known for playing hardball.

Source: Wall Street Journal managing editor stepping down

NEW YORK (AP) -- The top editor of The Wall Street Journal is planning to step down after less than a year on the job and four months after the paper was taken over by Rupert Murdoch's News Corp., according to a person familiar with the situation.

The reasons for Marcus Brauchli's departure weren't immediately clear, but Time magazine's Web site, which first reported the news late Monday, said Brauchli had tried to find a "middle path" between the paper's old guard and Murdoch's new vision for the paper.

Time said the departure could be announced as early as Tuesday.

The person familiar with the situation, who asked not to be named since the decision had not yet been made public, said Brauchli was expected to stay on with the company in a yet-to-be-determined role.

Robert Thomson, whom Murdoch named publisher of the Journal in December, may take over as interim managing editor, the Journal reported on its Web site, citing people familiar with the situation.

Wall Street Journal spokesman Robert Christie declined to comment, as did News Corp. spokeswoman Teri Everett.

Brauchli formally took the reins last May, shortly after News Corp.'s $5 billion bid to acquire the Journal's parent company Dow Jones & Co. became public.

Murdoch succeeded in buying Dow Jones only after an extended campaign to win over the fractious Bancroft family, Dow Jones' former controlling shareholders, some of whom expressed concerns about preserving the Journal's editorial quality and independence.

News Corp. eventually agreed to create an editorial oversight board that would have to sign off on the appointment or removal of the managing editor or other top editorial roles.

Murdoch has said he wants to position the Journal as more of a direct competitor to The New York Times for readers and advertising dollars.

The paper has shown clear signs of evolving in the few months Murdoch has owned it, putting a greater emphasis on political news, adding a regular sports page, and reformatting the front page from five columns to six.

On Monday, the paper also announced changes to its opinion section including the addition of a third page to allow for more regular columnists and opinion articles. Former Journal publisher Gordon Crovitz's column, which will deal with technology issues, debuted Monday.

Brauchli, 46, was named managing editor in April 2007 and formally assumed the role in May, replacing Paul Steiger, who led the paper since 1991.

Brauchli had been a foreign correspondent for most of his more than two decades at the paper. As deputy managing editor under Steiger, he oversaw the Journal's 2005 redesign, which trimmed its width in a move to cut printing costs by $20 million a year.

The managing editor is the top news executive at the Journal, reporting to Thomson, who oversees all editorial operations at Dow Jones. Thomson had formerly been editor of Murdoch's The Times of London.

You'll have to read the full Q&A to find out.

Designing woman creates home settings that fit lifestyles By Muhammed El-Hasan, Staff Writer

In 2001, after five years of selling electronic components and a decade before that as a paralegal, Jill Mitchell decided to start over.

"It was always a passion and dream, and one day I started calling every interior designer I could find," Mitchell, 40, said recently.

She landed two internships in a row with interior designers.

Then a family friend with a new 5,000-square-foot Spanish-style house in Malaga Cove hired Mitchell to decorate his house. That led to other jobs.

Seven years later, Mitchell runs interior design firm J Mitchell Design out of her Torrance house.

What does your job entail?

Initial client consultation. Determining the scope of the project and then design research. Coordination of all the different vendors involved to make a project happen and final installation.

Read the full Q&A.

That China lead issue was a factor.

Mattel cites costs for 1Q loss; Hasbro earns rise 14 pct

PROVIDENCE, R.I. (AP) -- Barbie maker Mattel Inc., struggling with higher costs and a big drop in sales of its Fisher-Price toys following last year's lead-related recalls, disappointed Wall Street on Monday with a $46.6 million loss in the first quarter.

Its chief rival, Hasbro Inc., had a surprise of its own, reporting a 14 percent profit increase that beat analysts' expectations on strong growth in its Transformers and Playskool brands.

Shares of El Segundo-based Mattel, the world's biggest toymaker, fell $1.83, or 8.4 percent, to $19.95, while shares of No. 2-ranked Hasbro rose $2.65, or 8.4 percent, to $34.19 in afternoon trading after peaking at a 52-week high of $35.07.

Mattel lost 13 cents per share in the three months ended March 31 compared with last year's quarterly profit of $12 million, or 3 cents per share. Its sales fell 2 percent to $919.3 million from $940.3 million in the year-ago period, despite the benefits of a weak dollar that helped boost sales overseas.

Analysts surveyed by Thomson Financial had expected profit of a penny per share on sales of $926.6 million.

Chief executive Robert Eckert said commodities such as resin and oil, as well as labor cut into profit margins.

"Labor costs are increasing dramatically in China," Eckert said. He said profits were expected to improve in the latter half of the year after a price increase in June.

Mattel's suit against a former employee and MGA Entertainment Inc. over the Bratz doll line also drove up legal costs, which were expected to trend higher at least through the second quarter. Mattel says a former doll designer illegally sold designs for the doll to the privately held company.

Lehman Brothers analyst Felicia Hendrix said there were some bright spots, including a 10 percent increase in sales of American Girl products thanks to store openings in Atlanta and Dallas.

"While we believe these positives are notable in this overall disappointing quarter, we remain neutral on Mattel," she wrote in a research note.

Mattel's Fisher-Price brand, which was plagued by recalls for lead last year, was the company's weakest category, with a decline in worldwide sales of 13 percent. By contrast, Hasbro's Playskool brand was up 17 percent for the quarter, the company said.

Hasbro, based in Pawtucket, had no recalls for lead last year. It did recall about 1 million Easy-Bake ovens after reports of about 250 children getting their hands caught in the oven's opening.

Hasbro said growth in brands such as Transformers and Littlest Pet Shop helped it beat expectations, driving earnings up to $37.5 million, or 25 cents per share, for the three months ended March 30. That was up from $32.9 million, or 19 cents per share, during the same quarter a year ago.

Analysts polled by Thomson Financial had forecast net income of 14 cents per share.

Hasbro's sales grew 13 percent to $704.2 million from $625.3 million a year ago. International revenue rose 22 percent to $248.3 million, while revenue in the U.S. and Canada segment grew 6 percent to $428.5 million.

Chief Financial Officer David Hargreaves said Hasbro had some higher shipping and distribution costs due to the rising price of oil and gasoline, but he said the company anticipated those costs would reach just $5 million for the year.

Chris White, an analyst at Wedbush Morgan Securities, said in a note to investors Hasbro was defying the commodity-related pinch that was hurting other toy companies.

Hasbro's boys brands grew 29 percent in the quarter. Hasbro Chief Executive Alfred J. Verrecchia, who will step down May 22, said the company was optimistic about the business for the rest of the year with strong shipments of toys tied to the upcoming "Iron Man" movie and shipments coming up for "Indiana Jones and the Kingdom of the Crystal Skull" and "The Incredible Hulk."

Hasbro's girls business was up 24 percent on the performance of brands like Littlest Pet Shop and Baby Alive. By contrast, Mattel's girls and boys brands rose 5 percent, with sales of Barbie flat.

Verrecchia will be succeeded as Hasbro CEO by Chief Operating Officer Brian Goldner.

test

How long will this record last? Weeks? Days? Hours?

Retail gas hits record $3.50 a gallon as oil marches higher

NEW YORK (AP) -- Retail gas prices hit another milestone Monday, tightening the squeeze on drivers by jumping to an average $3.50 a gallon at filling stations across the country.
Crude oil, meanwhile, set a new record of its own, spiking above $117 a barrel after an attack on a Japanese oil tanker in the Middle East.

"It's killing us," said Jean Beuns, a cab driver in New York who estimated he is making $125 to $150 a month less than in the fall because of costlier fuel. "And it was so quick. Every day you see the price go up 5, 6, 10 cents more."

Diesel prices at the pump also struck a record high of $4.20 a gallon, according to AAA and the Oil Price Information Service, putting pressure on truckers and other shippers who rely on the fuel to transport goods to market.

Prices are expected to keep climbing as they trace the path of crude, which has surged to new records for six trading sessions in a row. Oil prices are rising along with a host of commodities, from corn and wheat to gold and platinum, that are enticing speculators seeking hedges against a weakening dollar.

Light, sweet crude for May delivery rose to a record $117.60 a barrel on the New York Mercantile Exchange but later fell back to $116.29, down 40 cents from Friday's close.

Nationally, retail gas prices jumped more than a nickel over the weekend, and are up 23 percent from a year earlier. Drivers are paying the lowest prices in New Jersey and the most in California, where a gallon of regular is now averaging $3.86 for a gallon.

For motorists, the worst may be still to come. That is because the summer driving season, when demand is at its greatest, has yet to begin.

"People want to drive, they need to drive, they have to go to their job," said Samer Katib, manager of a Marathon station on Chicago's South Side. "But people who would drive around or go places for fun, they're not doing that any more. It's just go to your work and go home."

The Energy Department predicted earlier this month that monthly average gasoline price will peak at over $3.60 per gallon in June and could possibly reach the $4 threshold.

"It's uncharted territory," said Tom Kloza of the Oil Price Information Service, Wall, N.J. "I don't think we're done, but I have to believe we're in the eighth or ninth inning" of price increases.

The higher prices are already prompting some drivers to cut back.

In New York, Elvis Ragbir and Anthony Winckler said they are driving less and taking the subway more.

"I'm spending all my gas money on metro cards," Winckler said in the waiting room of a vehicle inspection station in Manhattan. Ragbir, a delivery truck driver, said he is looking to trade in his Lexus LS 400 for a smaller car.

In downtown Chicago, Sharon Cooper spent $52 to fill up three-quarters of the tank in her Toyota Highlander SUV. She said she tries not to let the prices get to her, although she also is changing her habits: "I am buying a bike to commute to work this summer," she said.

Energy Department data show gasoline consumption fell more than 1 percent during the four weeks ended April 11, compared with the same period a year ago.

That change in consumption patterns, while not drastic, is significant, said Mariano Gurfinkel, project manager at the Center for Energy Economics at the University of Texas at Austin, who expects per-capita demand to drop further this summer if gas prices rise or even remain at the current levels.

Americans will continue to drive, but some may change a summer vacation destination as gasoline costs continue to make a bigger dent in their pocketbooks, Gurfinkel said.

Crude prices came under increased pressure Monday after the 150,000-ton tanker Takayama was struck off the coast of Yemen as it headed for Saudi Arabia, its Japanese operator, Nippon Yusen K.K., said in a statement posted on its Web site. None of the ship's 23 crew members was injured, but several hundreds of gallons of fuel leaked before a 1-inch hole in the tanker's stern was repaired, the company said.

Kyodo News agency reported that the Japanese tanker was fired on by a rocket launcher from a small boat.

"There's clearly some geopolitical tension in the market," said Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia. "This will die down, but the market is pretty jittery at the moment.

Adding to the worries were claims Monday from the main militant group in Nigeria's restive south that it had launched two more attacks on oil pipelines in the region. Attacks since early 2006 on Nigerian oil infrastructure by the militant group have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices. Nigeria is a major supplier of oil to the U.S.

Comments over the weekend by an OPEC official that the group was not likely to increase production also supported prices Monday. Abdalla Salem el-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said Sunday that oil prices would likely go higher and that the group was ready to raise production if the price pressure was due to a shortage of supply -- something he doubted.

"Oil prices, there is a common understanding that has nothing to do with supply and demand," el-Badri said on the sidelines of an energy conference in Rome.

In other Nymex trading, heating oil futures fell 0.49 cents to $3.2874 a gallon while gasoline futures fell 2.52 cents to $2.9641 a gallon. Natural gas futures rose 6.3 cents to $10.65 per 1,000 cubic feet.

Associated Press Writers Dave Carpenter in Chicago, Dan Caterinicchia in Washington, Pablo Gorondi in Budapest and Thomas Hogue in Bangkok, Thailand, contributed to this report.

A big oops.

Air Force One Guidance Systems Allegedly Sent to Russia

(ABC News) State Department investigators found that a subsidiary of a major defense contractor provided portions of the computer source code of Air Force One to a company in Russia in 1998, according to a little-noticed consent agreement reached earlier this month.

The documents, filed by the State Department, noted that the alleged violation by a subsidiary of defense contractor Northrop Grumman "resulted in harm to the U.S. national security."

Specifically, the source code involved the inertial navigation software systems that are unique to the presidential aircraft.

The violations were allegedly committed by Litton Industries, which Northrop Grumman bought in 2001. Northrop has agreed to pay a $15 million fine for 110 violations of the Arms Export Control Act and the International Traffic in Arms Regulations.

Read the full story.

Maybe Boeing should send candy.

Reversing Air Force tanker deal comes down to one GAO official

(Seattle P-I) WASHINGTON -- The Boeing Co.'s push to overturn the Air Force decision awarding a Northrop Grumman/EADS consortium the lucrative aerial tanker contract rests on convincing Guy Pietrovito.

Pietrovito, 54, a deputy assistant general counsel at the Government Accountability Office, is responsible for weighing Boeing's appeal of the Air Force tanker award.

The GAO -- which has approximately 30 attorneys working on contractor protests -- typically assigns one attorney for each case. The GAO's protest docket lists Pietrovito as the lead attorney on the Boeing appeal.

The Air Force in February rejected Boeing's bid to build the new midair refueling tankers and instead chose a team of Airbus parent European Aeronautic Defense and Space Co. and Los Angeles-based Northrop Grumman. The initial program is valued at around $35 billion but could grow to $100 billion if the Air Force places additional orders.

The GAO is scheduled to render its verdict in the tanker case by mid-June.

Read the full story.

Will signal crunching make HDTV meaningless?

HD enthusiasts crying foul over cable TV's crunched signals

MINNEAPOLIS (AP) -- In Brent Swanson's basement home theater, there should be nothing drab about "Battlestar Galactica." He's got a high-end projector that beams the picture onto a wall painted like a silver screen, and speakers loom in the corners, flanking two big subwoofers.

Yet when he tuned in Sci Fi HD for a recent episode filmed in high definition, the image was soft and the darkest parts broke up into large blocks with no definition. Explosions, he said, were just dull.

"It kind of looked like they took the standard definition and just blew it up," said Swanson, a 33-year-old graphic designer and videographer who subscribes to Comcast Corp.'s TV service. "I couldn't really tell if what I was seeing was really better than what I saw on regular television."

As cable TV companies pack ever more HD channels into limited bandwidth, some owners of pricey plasma, projector and LCD TVs are complaining that they're not getting the high-def quality they paid for. They blame the increased signal compression being used to squeeze three digital HD signals into the bandwidth of one analog station.

The problem is viewers want more HD channels at a time when many cable and satellite providers are at the limits of their capacity, said Jim Willcox, a technology editor for Consumer Reports magazine.

"They have to figure out a way to deliver more HD content through their distribution networks," he said.

Compressing the signal is cheaper than costly infrastructure upgrades to increase capacity. Satellite TV providers -- including DirecTV Group Inc. and Dish Network Corp. -- also have the option of launching satellites to boost the number of HD channels on their systems.

While information is nearly always lost when signals are compressed and then uncompressed, the process can theoretically be made unnoticeable to eyes and ears -- and Comcast says it should be.

But some viewers say they can see it. Willcox said complaints about compression have been showing up on Web forums, including the AV Science Forum, a site for serious audio visual enthusiasts.

"It's not exclusively Comcast, although Comcast, being the largest cable provider, is probably the largest target," he said.

Derek Harrar, a Comcast senior vice president in charge of video, said the company recently began using new technology on some channels to compress three HD channels into the bandwidth of one analog station. Other channels continue to get the previous 2-to-1 compression.

In a posting on the AV Science Forum, Ken Fowler of Arlington, Va., compared Comcast signals with those on Verizon Communications Inc.'s all-fiber-optic network, which doesn't have the same capacity limitations. Fowler found the higher-compressed HD stations, including Sci Fi, Animal Planet, the Discovery Channel, the Food Network and A&E, fared particularly poorly.

He analyzed the signals by recording them on a digital recorder, then transferring them to a personal computer for analysis. He found there was much less data, measured in bit rates, flowing to some channels than others.

For example, Discovery's bit rate was 14.16 megabits per second on Verizon's FiOS system but only 10.43 Mbps on Comcast; A&E HD was 18.66 Mbps on FiOS compared with 14.48 Mbps on Comcast. The FiOS system didn't offer Sci Fi HD, which Fowler's testing showed at 12.59 Mbps on Comcast.

He found the signals from the major networks and ESPN weren't getting the increased compression.

In an interview, Fowler said he reran his analysis about two weeks ago and found "basically the same thing."

Philadelphia-based Comcast wouldn't identify specific signals that are 3-to-1 compressed, and a Sci Fi channel spokeswoman referred questions back to Comcast.

Harrar said the company works to make sure any new compression technology is invisible to consumers, but Comcast is "constantly monitoring our network and making adjustments" for best picture quality. The company has been rolling out the new compression technology at different times around the country.

In fact, postings on the AV Science Forum from early April suggest the Comcast network has improved in some places.

And there are other reasons a high-definition picture can appear subpar: The source image might not have been recorded in HD, or the television's settings, the viewing angle and even the ambient lighting in the room could be the cause.

New York-based Time Warner Cable Inc. has avoided many of the criticisms aimed at Comcast, although the companies are technologically similar and face the same capacity limits.

Time Warner spokesman Alex Dudley attributed it to his company's testing procedures. He said that before Time Warner rolls out new technology that may affect image quality, it sets up two identical televisions in a lab, one with the old signal and one with the new. Technicians make adjustments until the pictures can't be told apart.

"The testers are our engineers who we call 'golden eyes,' who have a proven track record of picking up subtle differences in picture quality," he said.

Verizon's FiOS doesn't compress the signal once it receives it, and Willcox said it's considered the picture quality "benchmark." However, Verizon said the system is growing but is now available only in parts of 17 states and has just over a million subscribers -- compared with more than 24 million for Comcast.

He said two possible solutions are on the horizon, an improved version of compression, called MPEG-4, and something called "switched digital video."

Comcast and Time Warner Cable have introduced switched video on a trial basis across their networks. In concept, it's like on-demand videos. The company sends only the channels the viewer is watching, instead of all the channels at once.

But switched video has its own issues, including possible slower channel switching times and compatibility problems with digital video recorders.

Willcox said cable providers can't afford to ignore quality complaints. Many customers are already picky about quality after paying $800 to $3,500 for an average-size, HD-ready LCD television.

Swanson, the "Battlestar Galactica" fan, is sticking with Comcast for now.

"It hasn't gotten bad enough for me to consider changing," he said.

By Muhammed El-Hasan, Staff Writer

Joe Aro, one of the South Bay business community's most visible advocates, will leave his longtime post.

Aro, 67, said he will not renew his contract as executive director of the Torrance-based South Bay Economic Development Partnership. His last day is June 30.

The Rancho Palos Verdes resident said he is leaving to devote more time to the South Bay Science Foundation, which promotes science education. Aro has been executive director of the nonprofit foundation since 2003.

"You just see a great need to create more emphasis on science and technology," Aro said.

Read the full story.

What are the chances the tanker deal can be reversed?

Pentagon to House: Hands off tanker deal

(Seattle P-I) WASHINGTON -- The Pentagon's top acquisition official warned Congress on Friday to avoid interfering with the Air Force's decision to buy new aerial tankers from a Northrop Grumman/EADS consortium.

John Young, the undersecretary of defense for acquisition, technology and logistics, told reporters that moves by some House members to override the Air Force decision by canceling funding would open up "slippery slopes and dangerous precedents."

The Air Force rejected a competing bid from The Boeing Co. when it awarded the Northrop team with the tanker contract.

Some lawmakers from Washington state and Kansas, where Boeing plants are located, have launched efforts to cancel funding for the program.

Read the full story.

Today's real estate story:

By Muhammed El-Hasan, Staff Writer

March sales of homes in much of the South Bay was less than half of what it was a year ago, a sign of the continued weakness in the real estate market, according to a new report.

Last month, 149 single-family homes sold - a drop of 52 percent - and 84 condominium and town homes changed hands, representing a fall of 64 percent, according to the report released Friday by the South Bay Association of Realtors.

Read the full story.

Will Dubai become the new Orlando?

Hollywood hopes theme parks, superheroes fly in Middle East

(AP) Wonder Woman, King Kong and Shrek are heading for the Persian Gulf as part of the rush to build what could become the world's largest theme park playground.

But even as the ink dries on the billion-dollar deals in the United Arab Emirates, movie studios are grappling with ways to make their signature characters and amusement parks fly in the conservative Muslim region.

Politically sensitive characters such as Captain America could be left at home. Prayer rooms will join the list of accommodations, and menus will likely feature falafel and humus alongside pizza and hot dogs.

There's even a move afoot to offer Bollywood dance shows to lure Indian visitors.

Investors, studios and park operators are all aiming to cash in on what some observers call the Middle East's decades-long fascination with American culture. Hollywood movies are popular in the region, and Western fashions are hot commodities among residents who travel abroad.

"On the one hand, they hate America. On the other hand they love America to the bone," said Michael Izady, an expert on Middle East culture who teaches history at Pace University in New York.

The theme park market is open -- with no major facilities currently operating in the Middle East.

The projects are no-brainers for the entertainment companies that have jumped at what amounts to free brand expansions with no capital at risk. Few details have been provided about the deals, which entertainment companies simply describe as licensing arrangements for intellectual property and help on designing the parks and attractions, with no mention of possible royalty payments.

Their investment partners have money and land to build the parks but lack the star-powered attractions to draw the millions of visitors needed to make them profitable.

Dubai, one of the seven constituents of the UAE, has thrived and turned into a magnet for the wealthy as oil money flowed in. The government wants to more than double the number of annual visitors from nearly 7 million last year to 15 million by 2015.

In recent months, eight major licensing deals have been struck between oil-rich investors and entertainment giants such as Viacom Inc.'s Paramount Pictures and Marvel Entertainment Inc. for theme parks and other attractions.

The first, a $2.2 billion Universal Studios park based on franchises such as King Kong and Jurassic Park, is set to open in an area dubbed Dubailand on the city's desert outskirts in 2010.

Designs for the parks are moving quickly, despite lingering doubts about the long-term availability of financing and the lack of highways and other infrastructure to support the huge developments. Several projects are planned for a manmade island being reclaimed from the sea called Palm Jebel Ali.

Most of the parks are proposed for Dubai and Abu Dhabi, the region's most Westernized and cosmopolitan cities, where expatriates outnumber local citizens, bars and restaurants serve alcohol and foreign women stroll some beaches in bikinis.

Kevin Tsujihara, president of Warner Bros. home entertainment group, is convinced that Superman, Batman and other DC Comics characters licensed by Warner will be readily accepted by those who visit the park from the Middle East, Europe, Africa and Asia.

Even the bare-shouldered Wonder Woman shouldn't raise too many eyebrows "unless we depicted her as a Muslim woman," said Tsujihara, who is spearheading the Warner theme park in Abu Dhabi.

Even so, "we probably wouldn't have her running around in costume around the park," he said.

With plans to help build a $1 billion theme park in Abu Dhabi by 2011, Marvel Entertainment Inc. is downplaying Captain America, a World War II creation draped in the American flag, in favor of attractions based on popular characters such as Spider-Man, Fantastic Four and X-Men -- none of whom carry the same political baggage.

"One of the things that's nice about our characters is they're either about individuals helping people or they're about teams of people of different types, like mutants, that band together and solve problems," Marvel chairman David Maisel said.

"If anything, that's a good message for today's world with all the different cultures," he said.

Park designers also plan to tweak the models used for North American theme parks.

Budweiser brewer Anheuser-Busch Cos. Inc. will include beer-tasting zones in its four-park complex anchored by SeaWorld, set to open in Dubai in 2012. The discreet zones will receive little advertising, in accordance with UAE government guidelines.

"Realistically, Dubai is a very cosmopolitan market. It's not unlike visiting Paris or New York or London or Berlin or Milan," Busch Entertainment president Jim Atchison said.

The Walt Disney Co., the world's largest theme park operator by far, is notably absent from the rush to the region. Disney parks and resorts chairman Jay Rasulo said Disney is studying the market.

Some observers said the cultural barriers might be easier to overcome than financial and infrastructure hurdles. Massive construction on a variety of projects is causing traffic jams as road construction has failed to keep pace with the building.

"The development in the UAE is outrunning the ability of the infrastructure to keep up," said Keith James, president of Jack Rouse Associates, which is helping develop a Ferrari automobile theme park in Abu Dhabi to open next year.

"I'm not going to say they're not going to happen, I just don't know that they're going to happen on the tight timeframe that everybody is talking about," he said. "There's simply not enough labor and design effort to pull it off."

The scale of the theme park plans, estimated to cost a total of at least $20 billion, puts them on par with developments in Orlando, Fla., home to a dozen parks including Walt Disney World, SeaWorld and Universal Studios.

"Up until very recently, the Middle East has been theme-park deprived," said Paul Ruben, North American editor of Park World magazine. "They've suddenly joined the 21st century."

The parks will also provide Dubai, and to a lesser extent Abu Dhabi, with an economic buffer against diminishing oil reserves, expected to run out in Dubai in a decade or more.

Funded by sky-high oil prices, government-backed companies in both areas have gone on a worldwide investing sprees, taking stakes in everything from casinos and cruise ships to electronics makers, banks and ports.

Studios and their UAE financiers are taking a risk with the theme parks, said Ibrahim Warde, adjunct professor of international business at The Fletcher School at Tufts University.

"There are two separate issues," he said. "One is whether, financially, all those projects will come to completion. The other question is if they do, will the customers show up?"

N & B El Segundo Properties LLC acquired a 12,000-square-foot masonry building in El Segundo for $2.7 million. The price per square foot was $225.

The property is at 1509 E. El Segundo Blvd. The sellers are Morton and Jerry Kahn.

Read more and see the property.

Let's all buy bikes.

Gas prices push closer to $3.50 a gallon, oil hits $117

NEW YORK (AP) -- Retail gas prices set new records Friday on their seemingly relentless march toward $3.50 a gallon, and diesel prices pushed further above $4 a gallon. Crude futures, meanwhile, surged to a new record of $117 a barrel.
The price of crude oil was pushed higher after a militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture and promised further attacks on the country's petroleum industry.

A spokeswoman for Shell confirmed that the pipeline was leaking, and said the damage appeared to have been caused by explosives. Nigeria is a major supplier of oil to the U.S.

The escalation in crude prices threatened to further boost gasoline costs.

At the pump, the national average price of regular gas rose 2.7 cents overnight to a record $3.445 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Diesel fuel added 2.2 cents to a record national average of $4.168 a gallon.

The spike in the cost of fuel is hurting consumers already feeling the effects of a slowing economy, a sluggish job market and falling home values. Soaring prices of diesel, which runs most of the world's trucks, trains, ships and heavy equipment, is a major factor pushing food prices higher.

Some analysts expect gas prices to peak near $3.80 a gallon; the Energy Department, in a recent forecast, said prices could average $4 a gallon nationally at times.

"I would say that energy prices are having the most profound effect on the economy in recent memory," said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago, in a research note.

Oil, meanwhile, pushed to new records.

Light, sweet crude for May delivery rose to a new trading record of $117 in after-hours electronic trading Friday after settling up $1.83 at a record $116.69 a barrel on the New York Mercantile Exchange. It was the fifth day in a row crude prices set new records.

Attacks since early 2006 on Nigerian oil infrastructure by the Movement for the Emancipation of the Niger Delta have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices.

Oil's gains on Friday were limited by the dollar, which strengthened against the euro, sending oil prices lower earlier in the day. A stronger dollar makes commodities such as oil less attractive to investors as a hedge against inflation, and it makes oil more expensive to investors overseas. Analysts believe the weaker dollar is the primary reason oil has soared well past $100 a barrel this year.

Analysts expect the Federal Reserve to cut interest rates several more times this year -- moves that tend to further weaken the dollar -- and reason that those cuts will help propel oil to new records.

Oil is not the only factor driving gas prices, which are also rising because refiners are switching from producing winter grade gasoline to the more expensive, but less polluting, version of the fuel they're required to sell during summer. When they do that each spring, they tend to draw supplies down to low levels as they try to sell off all their winter fuel.

Short supplies of alkylate, a blending component key to the creation of summer-grade gas, also have pushed prices higher. Contributing to the price spike, refiners have been cutting back on their production of gasoline, which has a low profit margin. Refiners have to buy the crude they process into gasoline, and soft demand for gas has prevented them from boosting pump prices fast enough to keep up with soaring crude futures.

"The refining margins were poor last month and, as a result, we've seen these voluntary ... or discretionary refining run cuts," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.

Ritterbusch estimates that the average difference between what refiners pay for oil and receive for the gasoline they make from it stands somewhere between $13 and $15 a barrel. But in some areas, this difference has actually gone negative at times in recent weeks, meaning that refiners "were losing money on each barrel of gasoline produced," Ritterbusch said.

In other Nymex trading Friday, May heating oil futures rose 2.49 cents to settle at $3.2923 a gallon while May gasoline futures rose 3.15 cents to settle at a record $2.9893 a gallon after earlier rising to a new trading record of $2.9934 a gallon.

May natural gas futures rose 20.4 cents to settle at $10.587 per 1,000 cubic feet.

In London, Brent crude futures rose $1.49 to settle at $113.92 a barrel on the ICE Futures exchange.

Let's all buy bikes.

Gas prices push closer to $3.50 a gallon, oil hits $117

NEW YORK (AP) -- Retail gas prices set new records Friday on their seemingly relentless march toward $3.50 a gallon, and diesel prices pushed further above $4 a gallon. Crude futures, meanwhile, surged to a new record of $117 a barrel.
The price of crude oil was pushed higher after a militant group in Nigeria said it had sabotaged a major oil pipeline operated by a Royal Dutch Shell PLC joint venture and promised further attacks on the country's petroleum industry.

A spokeswoman for Shell confirmed that the pipeline was leaking, and said the damage appeared to have been caused by explosives. Nigeria is a major supplier of oil to the U.S.

The escalation in crude prices threatened to further boost gasoline costs.

At the pump, the national average price of regular gas rose 2.7 cents overnight to a record $3.445 a gallon, according to a survey of stations by AAA and the Oil Price Information Service. Diesel fuel added 2.2 cents to a record national average of $4.168 a gallon.

The spike in the cost of fuel is hurting consumers already feeling the effects of a slowing economy, a sluggish job market and falling home values. Soaring prices of diesel, which runs most of the world's trucks, trains, ships and heavy equipment, is a major factor pushing food prices higher.

Some analysts expect gas prices to peak near $3.80 a gallon; the Energy Department, in a recent forecast, said prices could average $4 a gallon nationally at times.

"I would say that energy prices are having the most profound effect on the economy in recent memory," said Phil Flynn, an analyst at Alaron Trading Corp., in Chicago, in a research note.

Oil, meanwhile, pushed to new records.

Light, sweet crude for May delivery rose to a new trading record of $117 in after-hours electronic trading Friday after settling up $1.83 at a record $116.69 a barrel on the New York Mercantile Exchange. It was the fifth day in a row crude prices set new records.

Attacks since early 2006 on Nigerian oil infrastructure by the Movement for the Emancipation of the Niger Delta have cut nearly one-quarter of the country's normal petroleum output, boosting oil prices.

Oil's gains on Friday were limited by the dollar, which strengthened against the euro, sending oil prices lower earlier in the day. A stronger dollar makes commodities such as oil less attractive to investors as a hedge against inflation, and it makes oil more expensive to investors overseas. Analysts believe the weaker dollar is the primary reason oil has soared well past $100 a barrel this year.

Analysts expect the Federal Reserve to cut interest rates several more times this year -- moves that tend to further weaken the dollar -- and reason that those cuts will help propel oil to new records.

Oil is not the only factor driving gas prices, which are also rising because refiners are switching from producing winter grade gasoline to the more expensive, but less polluting, version of the fuel they're required to sell during summer. When they do that each spring, they tend to draw supplies down to low levels as they try to sell off all their winter fuel.

Short supplies of alkylate, a blending component key to the creation of summer-grade gas, also have pushed prices higher. Contributing to the price spike, refiners have been cutting back on their production of gasoline, which has a low profit margin. Refiners have to buy the crude they process into gasoline, and soft demand for gas has prevented them from boosting pump prices fast enough to keep up with soaring crude futures.

"The refining margins were poor last month and, as a result, we've seen these voluntary ... or discretionary refining run cuts," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Ill.

Ritterbusch estimates that the average difference between what refiners pay for oil and receive for the gasoline they make from it stands somewhere between $13 and $15 a barrel. But in some areas, this difference has actually gone negative at times in recent weeks, meaning that refiners "were losing money on each barrel of gasoline produced," Ritterbusch said.

In other Nymex trading Friday, May heating oil futures rose 2.49 cents to settle at $3.2923 a gallon while May gasoline futures rose 3.15 cents to settle at a record $2.9893 a gallon after earlier rising to a new trading record of $2.9934 a gallon.

May natural gas futures rose 20.4 cents to settle at $10.587 per 1,000 cubic feet.

In London, Brent crude futures rose $1.49 to settle at $113.92 a barrel on the ICE Futures exchange.

Will this mean better service?

DirecTV, the El Segundo-based satellite television provider, agreed to buy 180 Connect Inc., one of North America’s largest providers of installation, integration and fulfillment services to the home
entertainment, communication, and home integration service industries.

The transaction, which is expected to close in the third quarter, will allow DirecTV to gain control of installations in 45 US markets, including in California, where DirecTV had previously contracted out this service.

DirecTV will pay $1.80 for each outstanding share of 180 Connect Inc., which is based in Toronto, Canada, and Englewood, Colo.

Now if they could only clean their rooms.

OMG, this recession is so lame: As jobs dry up and prices rise, teens cut back on spending

NEW YORK (AP) -- The souring job market and rising costs of the usual teenage indulgences -- a slice of pizza, a drive to the mall, the hottest new jeans -- are causing teens to do something they rarely do: be thrifty.

It's a far cry from the freewheeling spending of recent years, when teens splurged on $100 Coach wristlet handbags, $60 Juicy Couture T-shirts and $80 skinny jeans from Abercrombie & Fitch.

Now jobs for teens are less plentiful, and parents who supply the allowances are feeling the economic pinch themselves.

The stalwart retailers of teen apparel, such as Abercrombie and American Eagle Outfitters Inc., are reporting sluggish sales, defying the myth that teen spending is recession-proof: It holds up longer, but can eventually fold.

It's even becoming cool to be frugal.

Last week, Ellegirl.com, the teen offshoot of Elle magazine, launched a new video fixture called Self-Made Girl, which shows teens how to make clothes and accessories. The first video offers tips on how to create a prom clutch.

"It's a little tacky in the economic unrest to tote a big logo bag," said Holly Siegel, the site's senior editor. She said it's no longer about teens "one-upping each other," but rather where they can get it cheap.

Victoria Bradley, a 16-year-old from Springfield, Mo., says the $80 she earns each month from baby-sitting is being eaten up by more expensive school lunches, late-night snacks with friends and stylish clothes.

Now, she says, she and her friends head for the thrift store or just browse at the mall.

"I used to be able to buy a T-shirt and jeans every couple of months," Victoria said, adding some of her friends are even "making their own clothes or altering their old ones to fit or look better."

Victoria's mother, Michelle Bradley, said she and her husband cut back spending on themselves last year, and early this year also started paring back "frivolous" buying for their three girls.

"We have made a conscious effort to not use credit cards," said Bradley, who stopped paying for Victoria's text messages last month. The top priority is school supplies and choir fees.

The job market for teens isn't what it used to be, either: Nathan Reeser, a Cincinnati 15-year-old, lost his job making pizza four months ago and has had to cut back on spending. He's shopping more at Target and less at Abercrombie & Fitch's Hollister stores.

"Now, I just get money from my parents, but they don't have as much because of taxes and everything else," he said.

Teen hiring has slumped by 5 percent since March 2007, with many mom-and-pop stores, which typically hire younger workers, laying off employees. Hiring in the overall job market fell by just 0.1 percent during the same period.

That's still not as bad as the 13 percent drop in teen hiring in the early 1990s. That means that if the larger job market mirrors the last teen hiring slump, "we're not out of the woods," said Michael P. Niemira, chief economist at the International Council of Shopping Centers.

Economists say this teen spending slump could be the worst in 17 years, when teen frugality led to the demise of once-hot Merry-Go-Round Enterprises Inc. and ushered in an era of flannel shirts and torn jeans.

Last month, teen retailers suffered an 8 percent drop in sales at established stores. The good news is that the under-20 crew is still spending on tech gadgets like iPods, cell phones and headsets, analysts say.

What makes this slump different, says Deloitte Research chief economist Carl Steidtmann, is the soaring cost of basics such food and gas, which have a direct impact on younger consumers.

Gas could reach $4 a gallon this summer, and prices for teen favorites like pizza and potato chips have all climbed, squeezing the amount of cash teens can spend elsewhere.

Sales at teen retailers open at least a year averaged a 0.5 percent decline last year, compared to a 3.3 percent increase in 2006 and a 12.1 percent gain in 2005, according to a UBS-International Council of Shopping Centers tally.

Retailers like American Eagle and Tween Brands Inc., which operates Limited Too, have cut their earnings outlooks amid deeper-than-expected sales declines. Abercrombie & Fitch reported a disappointing 10 percent sales drop in March, while Pacific Sunwear of California Inc. announced earlier this year it was shuttering its urban-inspired Demo stores.

Among the few bright spots is Aeropostale Inc., whose jeans are about 30 percent cheaper than Abercrombie & Fitch. Candace Corlett, principal at consulting firm WSL Strategic Retail, said low-price chains like H&M and Steve & Barry's should do well.

And Urban Outfitters Inc., which operates its namesake stores and the Anthropologie brand, has held up well. Trend experts believe that's because it has a thrift-store feel.

Secondhand clothing chains have seen business surge this year as teens and their parents buy popular brands like Gap, Banana Republic and Juicy Couture at a fraction of the regular price.

Kerstin Block, president and co-founder of Buffalo Exchange, a Tucson, Ariz.-based chain that sells second-hand clothing, said Gap jeans there run $9 to $20. A new pair runs $50 to $60. Block noted that buying second-hand is also appealing to a growing eco-friendly sentiment among teenagers.

"It is way cooler to get a super deal on that shirt rather than being able to spend the most money on something," said Anna D'Agrosa, director of Consumer Insights at The Zandl Group, a market research company focusing on teens. "Kids are becoming really aware of what is happening to their economy and to their families."

The Los Angeles County Sheriff’s Department will hold a recruitment event for women from 10 am to noon on Friday April 24, in San Pedro.

The Sheriff’s Department has 150 openings for Sheriff custody assistant and deputy sheriff trainees. Salaries range from $3,3337 to $4,136 a month, depending on experience. Candidates must have a U.S. high school diploma or GED.

The event, called Women in Law Enforcement Recruitment, will be at the Pacific Gateway Workforce Investment Network’s Harbor WorkSource Center, at 1851 N. Gaffey St. in Suite. F in San Pedro.

To participate in the recruitment, individuals should visit or call the Harbor WorkSource Center, 310-732-5700 / TTY 562-570-4629, and ask for an EDD Rep to schedule an appointment in ACES 1550.

However, walk-ins are welcome.

For more information on the recruitment or job requirements, please contact Eileen Arthur at 562-570-3771.

What's next? Billboards on the moon?

Sky-High Ads Float Like Clouds

(LiveScience) As kids, most of us spent time laying in the grass, watching clouds roll by and imagining the shapes we could see in the fluffy white masses.

Now, one company aims to indulge those flights of fancy by actually making "clouds" in the shapes of, well, anything, from the Atlanta Braves' tomahawk to Mickey Mouse's iconic head.

These clouds are actually a mixture of soap-based foams and lighter-than-air gases such as helium, something like what you'd get if you married helium balloons with the solutions that kids use to blow bubbles from plastic wands.

Read the full story.

Toyota's US marketing headquarters in Torrance has handed out more than $1 million in grants and scholarships throughout a seven-month environmental education program and contest called the Lexus Environmental Challenge.

Two teams won the top prize for coming up with pro-environment campaigns. Those two teams, from Jersey City and Honolulu, each won $75,000. Other student teams won $50,000 each.

From the Toyota release:

Both winning entries demonstrate how a small group can make a big impact. “The Climate Academy” team, made of five 6th graders from Academy I Middle School in Jersey City, created a campaign called: “Clean Cities Make Clean Oceans.” Their program included educating all students in Jersey City public schools about the impact of litter and pollution on the ocean. They also raised awareness by stenciling the words “Dump No Waste: Drains to Ocean” on storm drains near schools throughout the city. “The Dream Team” from W.R. Farrington High School in Honolulu focused on educating people around the world about the benefits of renewable energy sources such as wind turbines, solar panels, fuel cells, and hydropower. The team, comprised of eight high school students, created videos, blogs and a Web site in multiple languages and used social media web sites to help spread the word.

We're witnessing the transformation of an industry before our eyes.

New music video Web site features major label artists

(AP) -- A Santa Monica-based company backed by investors including Will Smith and major record labels has launched a new Web site offering 10,000 free, high-definition music videos.

Universal Music Group announced Wednesday that it has joined EMI and Sony BMG in backing PluggedIn.

The Web site features music videos from artists such as Gwen Stefani, Green Day, Coldplay and Norah Jones and is powered by a new media player that supports full-screen high-definition video.

PluggedIn also announced a partnership with Smith's production and management company Overbrook Entertainment.

Will this form a trend like housing?

Weekly jobless claims rise more than expected

(AP) The number of newly laid off workers filing claims for unemployment benefits last week increased by more than had been expected, reflecting pressure from the weak economy.

The Labor Department said Thursday that applications for unemployment benefits rose to 372,000, an increase of 17,000 from the previous week. That was higher than the gain of 12,000 that many economists had expected.

The four-week average for claims was 376,000, down only slightly from 376,750, the previous week.

Aside from the period in the fall of 2005 after Hurricane Katrina hit, the four-week average for claims has risen to levels last seen in 2003 when the country was mired in a long jobless recovery after the 2001 recession.

The unemployment rate jumped to 5.1 percent in March as businesses cut 80,000 jobs, the biggest drop in payrolls in five years. Many economists believe that was the most dramatic indication to date that the country has fallen into a recession.

Economists believe that the downturn should be short and mild, ending this summer with the help of the economic stimulus package that will send rebate checks to 130 million households. Still, they are looking for the unemployment rate to rise to 6 percent before stronger economic growth starts generating renewed hiring.

Ian Shepherdson, chief economist at High Frequency Economics, said the claims average for the past two months has now risen to a level similar to where it was at the start of the 2001 recession. He said he expected claims to keep rising in the months ahead and be above 400,000 on a weekly basis by this summer.

"We can think of no good reason why claims should now level off and plenty of reasons why they should be expected to rise further," Shepherdson said.

For the past month, the jobless claims have been difficult to read because an early Easter and layoffs attributed to a strike at a key parts supplier for General Motors have made the figures more volatile than usual.

Claims fell by 51,000 two weeks ago after having risen by 35,000 the previous week.

In another sign of labor market weakness, the total number of people receiving unemployment benefits rose to 2.98 million for the week ending April 5, up 26,000 from the previous week and the largest amount in nearly four years.

For the week of April 5, 31 states and territories reported increases in claims while 22 states had declines.

The state with the biggest increase was Georgia, where claims rose by 4,306, reflecting higher layoffs in textile plants, carpet and rug factories and in service industries. Michigan was next with an increase of 3,483 claims applications, reflecting higher layoffs in the auto industry, followed by Texas with an increase of 2,377.

The states with the biggest declines in claims applications were New Jersey, down 2,737; New York, down 2,465; and Wisconsin, down 2,075.

There's always a silver lining.

(TheStreet.com)
Seven Reasons to Welcome a Recession:

- Affordable Homes
- Low Mortgage Rates
- Great Consumer Deals
- Inexpensive Stocks
- Great Travel Deals
- Streamline Your Finances
- Lower Credit-Card Rates

Read the full story.

Skechers USA Inc., the Manhattan Beach-based maker of trendy footwear, held its first national sales conference in China, an event that "heralded the official entry of Skechers into the China market," the company said Wednesday.

The three-day conference was held in the last week of March in Guangzhou, the nerve center of
commercial and trade activities in the country’s booming Southern region of Guangdong.

Skechers' China headquarters are located in Guangzhou. Company-owned flagship stores
are already being opened in "major fashion cities" including Beijing, Shanghai and Shenzhen.

Skechers' Chinese joint venture partner is Luen Thai Enterprises, a Hong Kong-based conglomerate with investments in various industries in Asia, North America and the Pacific Region.

What's that saying about everyone being a critic?

In response to one of the Biz Waves blog items about "bad news" in the housing industry, here's a comment from reader C. Norris.

Too many reporters chasing too little bad news that just isn't there. A poll may be newsworthy but a poll, in itself, is not news. Neither are the mortgage default rates. The actual numbers are puny compared to the 1990's, when the defense/aerospace industry collapsed around a "peace dividend" and put a lot of aerospace workers out of a job and home. Half of the real story is that there is no story out there other than that of lending money to people who could not have gotten a home loan without the benefit of sub-prime lending subsidies. In other times, they would not have been on the media's radar screen at all, because they would not have existed. The other half of the real estate story is the excessive amount of mortgage brokers and their real estate agents. As with all economic bubbles, excessive employment in that segment of the economy occurs. The wise and the pro's will survive, those just "passing through", will pass through. When the press can find another issue to over promote then this "crisis du jour" will simply disappear down the memory hole. As well it should.

Here's the blog item C. Norris disagreed with.

RIP...

Last of Walt Disney's "Nine Old Men" dies

(Reuters) The last of Walt Disney's original team of animators, known as the Nine Old Men, has died at the age of 95, a Walt Disney Co spokesman said on Tuesday.

Ollie Johnston worked for Disney for 43 years, drawing characters for animated Mickey Mouse short films before contributing to such classics such as "Snow White and the Seven Dwarfs," "Pinocchio," "Peter Pan" and "The Jungle Book."

Johnston died of natural causes in a long-term care facility in Sequim, Washington on Monday.

Born in Palo Alto, California in 1912, Johnston showed early artistic promise and attended Chouinart Art Institute in Los Angeles. During his final year of college in 1935, Disney approached Johnston to join his fledgling animation studio.

Starting with "Song of the South" in 1946, Johnston became directing animator and served in that capacity in nearly every subsequent film. He retired in 1978 after completing some work on his final film, "The Fox and the Hound."

Johnston devoted his retirement to writing, lecturing and consulting and to model trains, of which he was considered one of the world's foremost experts.

Read the full story.

This from a Canadian paper.

Boeing bleeds red, white and blue over lost contract

(Globe and Mail) After a big government contract award, the loser quietly retreats while the winner pops the champagne.

That's the way it's supposed to happen, anyway.

Not so with the $40-billion (U.S.) deal to replace the U.S. Air Force's fleet of 180 refuelling tanker jets – essentially airborne gas stations.

The Feb. 29 decision to hand the largest Pentagon purchase in years to Northrop Grumman Corp. and European Aeronautic Defence and Space, the Franco-German maker of the Airbus, over hometown favourite Boeing Co. has unleashed a surprisingly ferocious lobbying war.

Boeing simply refuses to go away. It has filed a rare protest with the Government Accountability Office, alleging a flawed procurement process. It has also unleashed an army of lobbyists and launched a public relations blitz, including spending $3-million on full-page newspaper ads, to convince people the Pentagon is buying the wrong plane.

Read the full story.

That's on top of higher prices for everything else these days.

Airline combos could mean higher prices, fewer choices

PHOENIX (AP) -- Getting hitched may be the right move for Delta and Northwest. But for beleaguered air travelers, it could usher in an era of higher fares, fewer flights, more confusion at the airport and even more crowded planes.

The merger could kick off a wave of airline consolidation. And while the effects would not be immediate because the combinations could take months to get regulatory approval, industry observers say get ready anyway for fewer carriers in the sky.

"It's not an industry that works," said Mark Cooper, director of research for the Consumer Federation of America, who lobbied Congress against a bid by US Airways for Delta last year.

"We're now getting to the point where there are so few carriers left, and they still can't make money," he said.

Mergers, combined with a recent spate of airline bankruptcies, mean passengers in many cities can expect fewer flights to choose from, and they'll be packed even fuller than they are now.

Greater demand for remaining seats translates into higher ticket prices.

"There's no doubt in my mind fares are going to go up," said Rick Seaney, chief executive of FareCompare.com, which tracks changes in airline ticket prices. "Consumers are deluding themselves if they think that's not the case."

Peter Schiff, president of brokerage firm Euro Pacific Capital, said the changes could put air travel out of reach for Americans of modest means.

"Although many Americans have come to regard affordable air travel as a birthright, from a global perspective it remains the province of the wealthy," Schiff said.

That could mean more headaches for travelers already reeling from a string of cancellations due to stepped-up scrutiny of safety regulations by the Federal Aviation Administration.

The merger announcement by Northwest Airlines Corp. and Delta Air Lines Inc., which would create the world's largest airline, has already ignited talks among other airlines as they seek to bulk up to combat rising fuel prices in a slowing economy.

Continental Airlines Inc. executives told employees Tuesday that the airline wants to remain independent -- but warned "the landscape is changing" and said it would consider its "strategic alternatives."

The executives did not say what they might consider, but Continental has held talks with United Airlines in the past.

United CEO Glenn Tilton issued his own statement to employees Tuesday in which he called industry consolidation "one of the changes necessary" for the industry to get to sustained profits.

"We will participate in consolidation when and if it is the right choice and provides the right benefits for employees, customers and shareholders," Tilton said.

A Continental-United pairing would create an airline even bigger than the Delta-Northwest offspring, which will keep the Delta name if regulators and shareholders give their blessing.

An industry dominated by a few massive carriers would give Wall Street what it's wanted for a long time -- fewer planes in the sky. That could allow airlines to cast off redundant or unprofitable routes, use less fuel and keep fares high.

But the Northwest-Delta deal could also be a rare nugget of good news for some passengers.

The combined carrier could give consumers in small cities access to larger airline networks, which means more travel choices, said Michael Boyd, an airline consultant.

"Most mergers are all about less," Boyd said. "This one could be something very innovative that could end up with consumers not losing service, not having higher fares, but having much better access to the rest of the world."

Joining Northwest's strong Pacific network with Delta's strong Atlantic routes would mean travelers could cover more of the globe on a single carrier rather than switching to an airline's partners, airline consultant Robert Mann said.

"That combination really opens up the east-west travel," Mann said. "It would be a big plus."

Both airlines also use versions of a reservation system developed by defunct carrier TWA, Mann said. That could ease integration issues and reduce headaches for fliers.

Mann notes that both Northwest and Delta have close relationships with European carrier Air France-KLM -- Northwest through a joint venture on Atlantic routes, and Delta through the SkyTeam marketing alliance. Both also have agreements with Continental.

Delta and Northwest said they don't plan to cut more U.S. flights beyond what they've done separately. That decision tempered reaction to their long-awaited combination announcement. Both companies' shares closed lower.

The airline industry's problems have come into sharp focus: Frontier Airlines, ATA Airlines, Skybus Airlines and Aloha Airlines have all filed for bankruptcy in recent weeks. Champion Air plans to shut down and MAXjet Airways went bankrupt in December. All have cited high fuel costs and falling demand.

Passengers flying out of smaller airports should expect to be stung the most by industry consolidation. Airlines that combine will reshuffle their schedules and likely favor hub cities that are more of a destination than a stopover.

Ray Neidl, an airline analyst at Calyon Securities in New York, said Northwest's hub in Memphis could be most at risk because it's relatively close to Delta's home base in Atlanta. Delta's hub in Cincinnati might also lose out because it is relatively near Northwest's hub in Detroit.

Bob McAdoo, a former airline chief financial officer and analyst with Avondale Partners, said he expects consolidation to end fire sales advertising discount tickets.

"With less capacity, there's going to be fewer deep discounted seats where airlines are trying to attract customers to fill their surplus seats," McAdoo said.

Still, airports that are also served by low-cost carriers like Southwest Airlines probably will continue to keep prices low, McAdoo said.

"The low-cost carrier is the guy who sets the prices," he said.

It may get worse before it gets better.

Foreclosure Filings Against US Homeowners Soar 57 Percent in March; Bank Repossessions Surge

(AP) The onslaught of homes facing foreclosures has yet to ebb, a research report showed Tuesday, with bank repossessions skyrocketing last month as more troubled homeowners mailed in their keys and walked away.
And the worst isn't over: the wave of adjustable-rate loans resetting to higher rates will crest in May and June. And that's expected to push more homeowners into default and foreclosure in the third and fourth quarters of this year, according to RealtyTrac Inc. of Irvine, Calif.

"Once we're through that batch of loans, the worst will have been worked through the system," said Rick Sharga, RealtyTrac's vice president of marketing.

The number of U.S. homes receiving at least one foreclosure filing jumped 57 percent in March to 234,685, compared with 149,150 properties a year earlier. Filings include default notices, auction sale notices and bank repossessions.

The overall foreclosure rate is 5 percent higher than in February, which saw an unexpected month-to-month decline over January. March marked the 27th consecutive month of year-over-year increases in national foreclosure filings.

That meant one in every 538 households received a filing during the month. Forty-four percent were households that slipped into default for the first time and more than a fifth were homes banks took back.

Lenders took possession of homes at a sharply higher rate, up 129 percent over last year, as more homeowners relinquished their homes, said Sharga. Banks repossessed 51,393 properties nationwide, many of them without a public foreclosure auction.

"In a lot of cases, banks worked something out with the owner in advance and took back the keys and deed. For a homeowner, it's not as embarrassing and it's a little less of a blemish on their credit record compared to a foreclosure," Sharga said.

He estimates between 750,000 and 1 million bank-owned properties will hit the market this year, or about a quarter of the homes up for sale. In some areas, these properties will continue to slow sales and depress prices further.

Declining home prices and stricter lending requirements have exacerbated the foreclosure environment. Homeowners stuck in unmanageable mortgages aren't able to sell their homes or refinance into cheaper loans before their mortgage payments reset higher.

Nevada clocked in the worst foreclosure rate for the 15th straight month. Last month, one in every 139 households received a foreclosure-related notice, nearly four times the national rate. The number of properties with a filing increased 24 percent over February and 62 percent over the previous March.

California had the second-highest foreclosure rate in the country. One in every 204 California households received a foreclosure-related notice. The state had 64,711 properties facing foreclosure, the most of any state and more than double last year's total.

In Florida, 30,254 homes reported at least one filing, down nearly 7 percent from February, but up 112 percent from the year before.

Rounding out the states with the highest foreclosure rates were Arizona, Colorado, Georgia, Ohio, Michigan, Massachusetts and Maryland.

El Segundo-based Vegetarian Times just published a study called "Vegetarianism in America."

According to the study, 3.2 percent of U.S. adults, or 7.3 million people, follow a vegetarian-based diet. About 0.5 percent, or 1 million, of those are vegans, who consume no animal products at all.

In addition, 10 percent of U.S. adults, or 22.8 million people, say they largely follow a vegetarian-inclined diet.

The 2008 study also said that of the non-vegetarians surveyed, 5.2 percent, or 11.9 million people, are "definitely interested" in following a vegetarian-based diet in the future.

Vegetarian Times is owned by Active Interest Media of El Segundo.

I'm not sure if I've ever actually had Malt-O-Meal. But I remember watching the commercials on TV.

Recalled Malt-O-Meal Cereals Linked to Salmonella Outbreak

(MedHeadlines) The FDA has joined forces with Malt-O-Meal to identify the cause of contamination while state health officials and the Centers for Disease Control and Prevention (CDC) are working to identify other cases of the disease and to prevent further illness.

Anyone who purchased Malt-O-Meal’s unsweetened Puffed Rice and unsweetened Puffed Wheat Cereals with “Best If Used By” dates ranging from April 8, 2008, through March 18, 2009 (coded “APR0808″ and “MAR1809,” respectively), is urged to throw them away immediately. Retailers have been asked to remove any such products from their shelves.

Malt-O-Meal distributes cereal products nationwide under their own brand name but they also sell under private labels, too. Look for the same dates and codes on puffed wheat and puffed rice cereals bearing these private labels: Acme, America’s Choice, Food Club, Giant, Hannaford, Jewel, Laura Lynn, Pathmark, Shaw’s, ShopRite, Tops, and Weis Quality.

Read the full story.

Is the rise in oil prices a permanent reality?

Oil rises to trading record above $112

By GILLIAN WONG, Associated Press Writer 55 minutes ago

Oil prices rose to an intraday trading record above $112 a barrel Tuesday after the U.S. dollar fell further and crude supplies to the U.S. and elsewhere were disrupted.

The main driver of crude's rally was a decline in the greenback relative to the euro on Monday, analysts said. Crude oil's recent run above $100 a barrel has been largely attributed to a steadily depreciating U.S. currency because a weakening dollar prompts investors to seek a safe haven in hard commodities such as oil and gold.

"We've seen another swing down in the U.S. dollar so I think we saw short-term traders go back into oil as a hedge against the falling dollar," said Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia.

Light, sweet crude for May delivery rose to $112.48 a barrel on the New York Mercantile Exchange midmorning Tuesday in Singapore, surpassing the previous trading record of $112.21 set last week.

The May contract later retreated to $112.36 a barrel, up 60 cents from Monday's record close of $111.76 a barrel.

News Monday from U.S. bank Wachovia Corp. supported oil prices by making the dollar less attractive, said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Wachovia, the fourth largest bank in the U.S., reported a hefty first-quarter loss and cut its dividend, and said it was forced to seek a $7 billion cash injection to make up for a poorly timed expansion of its mortgage business.

"This news highlights the strains in the banking sector and credit markets and that has led to more dollar selling, and so that tends to drive investors into oil and other commodities," Shum said.

He said the news from Wachovia as well as disappointing first-quarter results from General Electric Co. on Friday overshadowed concerns raised by the Group of Seven industrialized nations about the dollar's fall. The G-7 remarks were seen as a warning by some analysts that the group may be contemplating an intervention that could lessen crude's attraction as an inflation hedge and send it lower.

Crude was also supported by news of disruptions to oil supplies, though analysts said the disruptions were minor.

"They only look like temporary shutdowns but ... the combination of that and the fact that the dollar was off again was the key," Pervan said.

The Capline pipeline — the Royal Dutch Shell PLC conduit that carries 1.2 million barrels of crude each day from the U.S. Gulf Coast to the Midwest — was closed on the weekend but has since resumed operations at a slightly reduced capacity.

In Nigeria, Italian energy giant ENI reported a 5,000 barrel per day reduction in production at one of its facilities.

In other Nymex trading, heating oil futures added 1.41 cents to $3.217 a gallon while gasoline prices rose 0.82 cents to $2.83 a gallon. Natural gas futures gained 6.7 cents to $10.12 per 1,000 cubic feet.

In London, Brent crude futures rose 61 cents to $110.45 a barrel on the ICE Futures exchange.

Is the rise in oil prices a permanent reality?

Oil rises to trading record above $112

By GILLIAN WONG, Associated Press Writer 55 minutes ago

Oil prices rose to an intraday trading record above $112 a barrel Tuesday after the U.S. dollar fell further and crude supplies to the U.S. and elsewhere were disrupted.

The main driver of crude's rally was a decline in the greenback relative to the euro on Monday, analysts said. Crude oil's recent run above $100 a barrel has been largely attributed to a steadily depreciating U.S. currency because a weakening dollar prompts investors to seek a safe haven in hard commodities such as oil and gold.

"We've seen another swing down in the U.S. dollar so I think we saw short-term traders go back into oil as a hedge against the falling dollar," said Mark Pervan, senior commodity strategist at the ANZ Bank in Melbourne, Australia.

Light, sweet crude for May delivery rose to $112.48 a barrel on the New York Mercantile Exchange midmorning Tuesday in Singapore, surpassing the previous trading record of $112.21 set last week.

The May contract later retreated to $112.36 a barrel, up 60 cents from Monday's record close of $111.76 a barrel.

News Monday from U.S. bank Wachovia Corp. supported oil prices by making the dollar less attractive, said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

Wachovia, the fourth largest bank in the U.S., reported a hefty first-quarter loss and cut its dividend, and said it was forced to seek a $7 billion cash injection to make up for a poorly timed expansion of its mortgage business.

"This news highlights the strains in the banking sector and credit markets and that has led to more dollar selling, and so that tends to drive investors into oil and other commodities," Shum said.

He said the news from Wachovia as well as disappointing first-quarter results from General Electric Co. on Friday overshadowed concerns raised by the Group of Seven industrialized nations about the dollar's fall. The G-7 remarks were seen as a warning by some analysts that the group may be contemplating an intervention that could lessen crude's attraction as an inflation hedge and send it lower.

Crude was also supported by news of disruptions to oil supplies, though analysts said the disruptions were minor.

"They only look like temporary shutdowns but ... the combination of that and the fact that the dollar was off again was the key," Pervan said.

The Capline pipeline — the Royal Dutch Shell PLC conduit that carries 1.2 million barrels of crude each day from the U.S. Gulf Coast to the Midwest — was closed on the weekend but has since resumed operations at a slightly reduced capacity.

In Nigeria, Italian energy giant ENI reported a 5,000 barrel per day reduction in production at one of its facilities.

In other Nymex trading, heating oil futures added 1.41 cents to $3.217 a gallon while gasoline prices rose 0.82 cents to $2.83 a gallon. Natural gas futures gained 6.7 cents to $10.12 per 1,000 cubic feet.

In London, Brent crude futures rose 61 cents to $110.45 a barrel on the ICE Futures exchange.

Yeah, but will service improve?

Delta OKs deal to take over Northwest

Delta Air Lines has reached an agreement with Northwest Airlines to take over Northwest and create the world's biggest carrier. The boards of both companies gave the deal the go-ahead Monday. Delta said the combined airline will have an enterprise value of $17.7 billion. It will be based in Atlanta, and Delta CEO Richard Anderson will head the combined company.

Under the terms of the transaction, Northwest shareholders will receive 1.25 Delta shares for each Northwest share they own. The exchange ratio represents a premium to Northwest shareholders of 16.8 percent based on Monday's closing stock prices.

The announcement comes a year after the two carriers emerged from Chapter 11 bankruptcy protection. Both carriers are losing money again but are in much better shape than the four much-smaller airlines that have filed for bankruptcy or gone out of business in recent weeks.

The deal will need antitrust approval, and integrating the work forces of fully unionized Northwest and Delta, where pilots are currently the only major unionized work group, will be tricky.

The joining of Atlanta-based Delta and Eagan, Minn.-based Northwest, if approved by regulators, will result in combined annual revenue of $31.7 billion, vaulting it ahead of Fort Worth, Texas-based AMR Corp.'s American Airlines for the top spot in the U.S.

It would be the biggest carrier in the world in terms of traffic, before any further domestic capacity cuts and any divestitures that might be required by antitrust regulators.

The agreement comes after several months of merger discussions between Delta and Northwest and at one time between Delta and Chicago-based UAL Corp.'s United Airlines. Analysts believe a Delta-Northwest combination will stand up better to regulatory scrutiny because the two carriers have less overlap, even though a Delta-United combination could create more scale and have greater synergies.

Years of mounting losses forced Delta and Northwest to file for bankruptcy protection in New York on Sept. 14, 2005. Both emerged from bankruptcy as leaner carriers last spring, after shedding billions in costs during their reorganizations.

While in bankruptcy, Delta fended off a hostile takeover bid by Tempe, Ariz.-based US Airways Group Inc.

Delta said its plan to remain on its own would create more value than US Airways' $9.8 billion bid, which Delta argued would not pass regulatory hurdles. The value argument never materialized, as Delta's post-emergence market capitalization started out $1 billion less than US Airways' bid and less than the $9.4 billion to $12 billion Delta projected. Its market value has fallen precipitously in the months since amid airline industry woes, including high fuel prices and a general inability to gain traction raising ticket prices.

Many analysts predicted an eventual Delta-Northwest merger after Anderson, a former Northwest CEO, was named last August to be the chief executive officer of Delta.

Anderson, who was Northwest's CEO from 2001 to 2004, immediately sought to quiet those suggestions, telling Delta's pilots union chairman the morning his appointment was announced that he believed in Delta's standalone plan and that "he was not coming in as CEO to facilitate a merger with Northwest."

But eight months later, that's what Anderson is doing, and many analysts believe he didn't have a choice amid plummeting airline market values and soaring fuel prices.

Wall Street and some airline executives have pushed for consolidation for years, arguing that too many seats are chasing too few passengers. The resulting discounting has made it hard for airlines to cover their expenses.

However, Northwest and Delta overlap relatively little in the U.S. — which could actually help them gain antitrust approval. Delta's routes are strongest in the eastern U.S. and to Latin America and Europe. Northwest would complement that with its near-lock in the Midwest along with flights to its Tokyo hub and other points in Asia.

Northwest's Asian routes have been one of its main appeals to other carriers. It and United are the only two U.S. carriers with the rights to pick up new passengers in Japan and fly them farther into Asia. Delta and Northwest also complement each other internationally because they are both part of a marketing alliance that includes Air France-KLM.

U.S. airlines get the majority of their revenue from domestic service, though that trend has shifted in recent years as more carriers, particularly Delta and Northwest, have sought to increase international service.

I wonder if the parody will publish regularly.

A Funnier-Than-Usual Journal Gets Snapped Up Early

(NYT) It seems someone at The Wall Street Journal really likes a biting new parody of the paper — likes it enough, in fact, to leave at least one newsstand with no copies remaining for anyone else to buy.

The tabloid-format satire, “My Wall Street Journal,” mostly sets out to skewer The Journal’s new owner, the News Corporation, and its chairman, Rupert Murdoch, with swipes at News properties like Fox News, The New York Post and The Journal itself. It takes aim at other targets, too, including Wall Street firms and traders, and assorted politicians and pundits.

It was not supposed to go on sale until this week, but some newsstands began selling it early. Last Thursday, Alexander Laurence was working at one such stand in Los Angeles, chatting with a customer, David Metz, when, both of them say, a man in a shirt with a Journal logo asked if anyone had seen a paper that looked sort of like The Journal.

“This guy comes by all the time to bring promotional stuff for The Wall Street Journal — bags, coin trays, stickers,” Mr. Laurence said.

Sure enough, they found what he was looking for. “He grabbed them all, said, ‘I need to buy all of these,’ ” Mr. Laurence said. “He had been going around to different stands, buying them.”

Not everyone will be affected.

Credit Card Issuers Tighten Standards

(TheStreet.com) Credit card companies may be getting a bit stingier about the amount of credit they're willing to offer.

Experts say some companies are deciding to require that new potential customers have Fair Isaac(FIC - Cramer's Take - Stockpickr), or FICO, credit scores of around 20 to 40 points higher, for example.

Others are scaling back on the amount of credit they're offering -- say, to $4,000 in cases whereas a line of $5,000 had always been the routine. Some have cut down on mailed advertisements.

Not everyone is feeling such changes. Companies are more likely to tweak their standards when dealing with new customers than they are with existing ones, particularly those who have always paid bills on time. Lenders that have been more conservative all along might have decided to stay the course.

Read the full story.

I figure it'll get worse before it gets better.

AP poll: More avoid buying homes

(AP) A growing majority say they won't buy a home anytime soon, the latest sign of increasing pessimism about the nation's housing crisis, a poll showed Monday.

In a vivid sketch of how the sputtering real estate market is causing distress throughout the country, the Associated Press-AOL Money & Finance poll found that more than a quarter of homeowners worry their home will lose value over the next two years. Fully one in seven mortgage holders fear they won't be able to make their monthly payments on time over the next six months.

"This is a great time to buy, but not necessarily to sell," said Robert Jackson, who lives in a two-bedroom house in Ferguson, Mo., with his wife and four young children. He said he would love to purchase a larger home, but can't because even if he found a buyer, he would probably lose thousands on his house, which he bought less than two years ago.

"We're just going to have to slap a Band-Aid on it and stay here until the market gets a little bit better," Jackson, 30, said in a follow-up interview.

Jackson is not alone. Sixty percent said they definitely won't buy a home in the next two years, up from 53 percent who said so in an AP-AOL poll in September 2006. At the same time, just 11 percent are certain or very likely to buy soon, down from 15 percent two years ago.

The growing reluctance to dip into the housing market seems to stem partly from worry that housing prices will continue falling — good if you're buying a house but bad if you have to sell one.

The number envisioning falling prices in their area has grown to one in four, while four in 10 think prices will rise, a decrease from two years ago. Expectations for rising prices are highest in the South, with Westerners likeliest to predict they will drop.

Underscoring the public's unsettled feelings, the number saying local housing prices are about right has fallen to 35 percent. Half say homes are overpriced — especially in the Northeast — while those saying housing is underpriced have doubled to one in 10, particularly Midwesterners.

Some pockets buck regional trends. Laurie Jensen, a single mother of three, struggles to make payments on her home in Whitehall, Mont., by working as a seasonal road construction flagger and at times collecting unemployment. She said she'd like to move outside of town, but the area is popular and prices have surged.

"Things are pretty crazy," she said. "Places I don't consider that great are really expensive."

One in 10 have adjustable rate mortgages, half of the number who said so two years ago. These mortgages generally start at a low interest rate and are later adjusted to market conditions — which has often meant steep, unaffordable boosts that have forced many to refinance or even lose their homes.

Daniel Gallego, a warehouse worker in Stockton, Calif., said he may have to sell his home at a big loss. He said rising gasoline and other costs have made his adjustable rate mortgage unaffordable. Because he doesn't expect his home's value to recover soon, he said he may be better off moving now, before his rates rise.

"We may have to move in with my wife's parents or my parents," said Gallego, 30, who has two young children. "I could pay off some debt, then we could rent, and maybe buy another house in a few years."

The public anxiety is in reaction to an economy that is veering toward recession and losing jobs even as the housing market sputters badly. Foreclosures have soared to record highs, mortgage rates have increased, sales of existing and new homes have fallen and home values have dropped.

Gus Faucher, director of macroeconomics for Moody's Economy.com, a consulting firm, estimated that 9 million homeowners owe more on their home than it's worth. He said his company believes home sales are at or near bottom and home values will continue to fall until early next year.

Even so, he said, many people bought their homes before the run-up in values that started around 2001 and remain in good shape.

"So the value of your house goes down temporarily," he said. Unless the homeowner must sell now or can't afford the payments, "that doesn't have that much of an impact."

The poll also found:

_The biggest worriers are those expecting to buy soon. Of that group 43 percent frets that their home's value will drop in the next two years, compared with 25 percent of those not expecting to buy shortly.

_Fifty-nine percent think now is a good time to buy.

_Half think this is a very tough time for first-time buyers, an increase from two years ago. Nearly two-thirds think it's harder for first-home buyers than it was five years ago.

The AP-AOL Money & Finance poll was conducted from March 24-April 3 by Abt SRBI Inc. It involved telephone interviews with 1,002 adults nationwide, for whom the margin of sampling error is plus or minus 3.1 percentage points.

Included were interviews with 769 homeowners, for whom the sampling margin of error is plus or minus 3.5 points. The margin of sampling error for other subgroups was larger.

I've flown Delta. The plane arrived late and we got lost in their confusing Atlanta airport. I wonder if this proposed merger will improve service.

(NYT) Merger talks between Delta Air Lines and Northwest Airlines picked up pace again on Sunday, and people briefed on the negotiations said an announcement of a deal could come as soon as Tuesday.

The two companies have seemed on the verge of announcing a deal several times in recent months — raising hopes among some investors and worrying those concerned about loss of competition among airlines — only to back away from a merger.

During that period, the airline business has deteriorated sharply. Record-high fuel prices have sent a handful of smaller carriers into bankruptcy in recent weeks. The latest was Frontier Airlines on Friday.

Some analysts now expect the industry to lose money this year after two years that were mostly profitable. And the slowing economy is making it hard for airlines to raise fares to cover fuel costs.

A representative at Delta could not be reached and a Northwest spokesman declined to comment.

Read the full story (registration required).

Is this fair?

WASHINGTON (AP) -- The tax audit rates of the largest companies are less than half what they were 20 years ago while more small and mid-size businesses are coming under scrutiny, according to an organization that monitors the Internal Revenue Service.

The Syracuse University-based Transactional Records Access Clearinghouse described what it said was a "historic collapse" in audits for corporations holding assets of $250 million or more. About 26 percent of them were audited in the 2007 budget year compared with 34 percent in 2006 and 43 percent in 2005.

The IRS did not dispute the numbers, based on agency data. But it strongly disagreed with suggestions it was easing oversight of the biggest corporations.

Enforcement revenues from large companies rose by one-third in 2007 from the previous year, from $10.6 billion to $14.2 billion, said IRS Deputy Commissioner Barry Shott, who heads the Large and Mid-Size Business Division.

While the number of examinations has declined, "what we are doing is focusing our resources better on where the noncompliance is," Shott said in an interview with The Associated Press.

Shott said the focus in recent years has been on tax shelters and `extraordinarily complicated" partnerships and S corporations where shareholders, rather than the company, must report income or losses. Last year the IRS examined 17,700 S corporations, compared with 14,000 the previous year, and 12,200 partnerships, compared with 9,800.

But the TRAC report concluded that the IRS also was concentrating on regular small and mid-sized companies to boost audit numbers.

"Moving the focus of the corporate auditors away from the large corporations and toward the smaller ones has been quite effective when it came to increasing the overall number of these kinds of audits but actually was counterproductive in financial terms," the researchers said.

The new IRS commissioner, Douglas Shulman, said in a response that he intends to make "targeting noncompliance with our tax laws ... a high priority."

According to IRS statistics, 15 percent, or 4,473, of companies with $10 million to $50 million in assets were examined in 2007. That compares with 12.3 percent, or 3,535 companies, that were audited in 2005.

In the same two years, the percentage of audits of corporations in the $50 million to $100 million range fell from 16.4 percent to 11.4 percent. For corporations in the $100 million to $250 million range, the percentage dropped from 17.5 percent to 12.1 percent .

Among the largest corporations above $250 million in assets, 3,424 were audited in 2007, down from a peak of 4,859 in 2005.

TRAC also questioned the financial benefits of the shift. The group said that last year the government uncovered $682 in additional recommended taxes for every revenue agent hour spent auditing the smallest corporations, compared with $7,498 in additional taxes for audits of the largest corporations.

Dean Zerbe, national managing director for Houston-based alliantgroup, which provides tax services for medium-sized companies, said his fear was that "in the IRS' zeal to show Congress improved numbers in corporate audit, it is America's small and medium businesses that are taking it on the chin."

Shulman told the Senate Finance Committee last week that audits of businesses in general rose from 52,000 in 2006 to 59,500 in 2007.

He acknowledged that audits of the largest corporations were down. But he said that "in times of flat budgets, the agency cannot increase activity across the board, but must address the areas where there is growth and potential risk."

Shott also cited a new program where larger companies work with the IRS during the year so there will not be disputes at tax-filing season. Participants in this program rose from 17 in 2005 to 73 this budget year, he said.

The returns of these companies do not show up in enforcement statistics, he said, but the collaboration can avoid controversies that can go on for years.

Having more money was not necessarily an advantage for individual taxpayers. The IRS said that last year it audited 9.25 percent of those with incomes of more than $1 million, compared with 6.3 percent in 2006. For those earning less than $100,000, the chances of getting audited were less than 1 percent.

The tax agency said total enforcement revenues in the 2007 budget year, from collections and appeals activities, were $59.2 billion, up from $48.7 billion the previous year.

Here they are according to an article in PARADE Magazine.

Energy: Jobs related to oil, gas and nuclear power remain essential and in demand. Positions range from scientists to engineers to rig and well workers.

Security: The Defense and Homeland Security departments are attempting to fill 83,000 civilian jobs, from auditors to program analysts.

Accounting: Managing corporate finances is especially important during lean times. "Job-board sites list more than 325,000 accounting and finance openings right now," says Rick Moore of Volte Services Group.

Wireless Support: With a mobile workforce, companies need professionals who can maintain wireless networks and protect information security.

Database Administration: As companies become more reliant on data for research, sales, and marketing, there is an increased need for database administrators.

Read the full story.

That's essentially what a Democratic congressman said.

WASHINGTON (AP) -- The growing cost to the United States of fighting the war in Iraq "is not only linked to our economic skid, but is a leading cause of it," a Democratic congressman said Saturday.

Rep. John Yarmuth of Kentucky linked the costly, unpopular war with the growing economic troubles -- some say recession -- in this country.

Yarmuth said in the Democrats' weekly radio address that the testimony this week of Gen. David Petraeus and Ambassador Ryan Crocker about the Iraq war served as reminder of the billions of dollars being poured into Iraq as the U.S. economy struggles.

"General Petraeus and Ambassador Crocker failed to offer a plan to change direction in Iraq and redeploy our troops," Yarmuth said. "Instead, they offered more of the same, with U.S. troops and taxpayers paying the price."

The U.S. government has spent "more than half-a-trillion dollars" in support of the war effort, while that money could be spent on pressing needs in this country, he said.

In February, an Associated Press-Ipsos poll found that pulling out of Iraq was the most named remedy for fixing U.S. economic problems.

Forty-eight percent of those surveyed said a withdrawal would help the country's economic problems "a great deal" and 20 percent more said it would help somewhat. Some 43 percent said increasing government spending on health care, education and housing programs would help a great deal; 36 percent named cutting taxes.

"Across America, our roads and bridges are crumbling and are in desperate need of repair, yet taxpayer dollars are being squandered on an Iraqi government that is riddled with waste, fraud and corruption," Yarmuth said.

He said "the cost of one month in Iraq could extend the Children's Health Insurance Program, which the president vetoed, to 10 million children of working families for a full year."

He noted that Congress has passed an economic stimulus package to send millions of Americans up to $1,200 that could provide a boost to the economy.

But Yarmuth isn't satisfied.

"We know we must do more," he said, adding that Democrats are pushing for a second economic stimulus package to aid workers, their families and businesses.

The White House said the first economic stimulus package should be given a chance to work before a second is passed.

When I want to understand what's going on with retailers like Wickes Furniture, I occasionally call George Whalin, a prominent retail analyst and president of Retail Management Consultants in San Marcos. Here's what he said Thursday about the economy:

"I don’t think there’s any doubt that there’s a recession. . . . The recession is a result of slowing home sales, (loss of) jobs. All of the factors that go into where we got ourselves today."

Find out the store's last day.

By Muhammed El-Hasan Staff Writer

The “going out of business” sign in front of the Wickes Furniture in Torrance resembles a similar sign on the In Your Place Furniture store in Hermosa Beach as well as placards that graced the Levitz Furniture sites in Torrance and Hawthorne a few months ago.
The furniture retail industry is suffering a nationwide slump, the result of a slowing housing market and general downturn in the nation’s economy. Fewer people buying homes means lower sales of couches, dining tables and recliners. The credit crunch and weakening job market represent further blows to furniture sellers.
“Real estate problems are causing problems for furniture retailers, and will continue to do so for at least another year,” retail analyst George Whalin said. “It’s a slump. I don’t know if I’d quantify it as huge.”
Employees at the Wickes in Torrance said the store’s last day is Sunday. A worker on Thursday vacuumed the mostly empty furniture showroom as would-be customers browsed the shrinking selection at 18850 Hawthorne Blvd.

Read the full story.

Find out the store's last day. The full story runs this weekend in the Daily Breeze.

By Muhammed El-Hasan Staff Writer

The “going out of business” sign in front of the Wickes Furniture in Torrance resembles a similar sign on the In Your Place Furniture store in Hermosa Beach as well as placards that graced the Levitz Furniture sites in Torrance and Hawthorne a few months ago.
The furniture retail industry is suffering a nationwide slump, the result of a slowing housing market and general downturn in the nation’s economy. Fewer people buying homes means lower sales of couches, dining tables and recliners. The credit crunch and weakening job market represent further blows to furniture sellers.
“Real estate problems are causing problems for furniture retailers, and will continue to do so for at least another year,” retail analyst George Whalin said. “It’s a slump. I don’t know if I’d quantify it as huge.”
Employees at the Wickes in Torrance said the store’s last day is Sunday. A worker on Thursday vacuumed the mostly empty furniture showroom as would-be customers browsed the shrinking selection at 18850 Hawthorne Blvd.

I hate to use this over-used phrase, but it's a perfect storm of bad economic news hitting us. Here's the latest hit.

Gas Prices Set Record, Oil Moves Higher

NEW YORK (AP) -- Gas and diesel pump prices jumped to yet another record Friday, piling on the costs for motorists as well as consumers reliant on trucks, trains and ships that deliver goods to market.

Retail gasoline rose 0.8 cents to a national average of $3.365 a gallon, although drivers in California could expect to pay nearly 30 cents more for regular and over $4 a gallon for higher grades, according to AAA and the Oil Price Information Service.

The increase marks the latest in a series of retail gasoline records in recent weeks, and leaves drivers paying 56 cents more a gallon now than they did a year ago. And there may be more to come.

"We do think prices, particularly for self-serve regular, are going to continue to go up," AAA fuel price analyst Geoff Sundstrom said.

Oil prices also edged higher in a late-day push, but remained more than $2 below an all-time high set earlier in the week. Light, sweet crude for May delivery rose 3 cents to settle at $110.14 on the New York Mercantile Exchange.

Analysts expect gasoline prices will continue to set records as more drivers take to the roads as summer approaches and refineries complete their conversion to more expensive summer-grade fuel. It is unclear how high prices will go, however, because a bigger fuel bill could convince some drivers to cut back.

"I still do not believe there's enough strength in demand that it's going to justify that move to $4 a gallon" nationwide, said Tom Kloza of the Oil Price Information Service in Wall, N.J.

Retail diesel prices rose 2.1 cents to $4.066, topping the previous high set a day earlier. The spike in the key transportation fuel is significant because it affects the cost of a wide range of goods -- meaning that even Americans who don't drive will feel the pinch.

"Its obviously a very distressing situation for the commercial transportation sector," Sundstrom said.

An unexpected decline in U.S. crude and gasoline inventories drove oil prices to a trading record of $112.21 a barrel on Wednesday amid concerns about inadequate supplies. Prices fell Thursday.

Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Ill., said the tepid performance later in the week was the result of traders looking to lock in their gains before the weekend.

"The main thing I see is just profit-taking after we ran things up to a record high," he said. "There's a strong possibility we'll see new record highs again next week."

Crude prices were under pressure for most of Friday after the International Energy Agency lowered its global oil demand forecast for the year by 310,000 barrels a day to 87.2 million barrels a day, citing lower economic output expectations in the U.S. and elsewhere.

"The suspicion is it's not just the U.S. that's going to see a slowdown," Kloza said. "I think it's significant, but I also think the would-be sellers ... are probably not yet convinced."

The U.S. dollar strengthened against the euro and the pound, which also helped keep crude prices from overheating further.

Crude oil's recent run has been largely attributed to the steadily depreciating U.S. currency. A weakening dollar attracts investors to commodities as a hedge against inflation, but when the dollar rises, the effect tends to reverse as oil also becomes more expensive to investors overseas.

In other Nymex trading Friday, heating oil futures rose 0.35 cent to settle at $3.1975 a gallon, while gasoline futures rose by 1.52 cents to settle at $2.8073 a gallon. Natural gas futures slipped by 19.7 cents to settle at $9.901 per 1,000 cubic feet.

In London, Brent crude futures rose 55 cents to settle at $108.75 a barrel on the ICE Futures exchange.

We keep hitting new lows every few weeks. I sense a trend.

Consumer Confidence Falls to New Low

WASHINGTON (AP) -- Americans' confidence in the economy fell to a new low, dragged down by worries about mounting job losses, record-high home foreclosures and zooming energy prices.

According to the RBC Cash Index, confidence dropped to a mark of 29.5 in April, down from 33.1 in March. The new reading was the worst since the index began in 2002. It marked the fourth month in a row where confidence has fallen to an all-time low.

"Consumers are very pessimistic," said Mark Vitner, economist at Wachovia. "There are not a lot of happy campers out there."

Over the past year, consumer confidence has deteriorated significantly. Worsening problems in housing, harder-to-get credit, financial turmoil on Wall Street and lofty energy prices have put people in a much more gloomy mind-set. Last April, confidence stood at 85.4. The index is based on results from the international polling firm Ipsos.

All the economy's problems are taking a toll on President Bush's approval ratings, too. The public's approval rating on his economic stewardship fell to a low of 27 percent, according to a separate Associated Press-Ipsos poll. Bush's overall job-approval rating dipped to 28 percent, also an all-time low, the poll said.

Many economists believe the country has tipped into its first recession since 2001. Federal Reserve Chairman Ben Bernanke for the first time acknowledged last week that a recession was possible. It was a rare public utterance of the "r" word by a Fed chief.

"Consumer sentiment is tracking at levels we think are consistent with a mild recession at this point," said Brian Bethune, economist at Global Insight.

A measure looking at consumer's feelings about current economic conditions slipped to a 54.6 in April, from 54.7 in March. The new reading was the lowest in six years of records.

Rising unemployment and job losses are making people more uneasy.

The government reported last week, that employers slashed 80,000 jobs in March, the most in five years and the third straight month where the nation's payrolls were cut. The unemployment rate jumped from 4.8 percent to 5.1 percent, the highest since the aftermath of the devastating Gulf Coast hurricanes.

Another factor blamed for eroding consumer confidence is high gasoline prices, which are socking people's wallets and pocketbooks. That's squeezing already strained budgets and leaving people with less money to spend on other things.

"Much of the angst we're seeing from consumers is `Gosh, I'm working harder and harder, and all I'm doing is paying for my basic necessities. I don't have anything left to have any fun,'" Vitner said.

Gasoline prices, which have set a string of records in recent weeks, climbed to a new record of $3.357 a gallon on Thursday, according to AAA and the Oil Price Information Service.

Anxiety also has grown as people wonder if there is any relief in sight for the troubled housing market. With the housing collapse, many people have watched their single-biggest asset -- their home -- drop in value. That has made them feel less wealthy and less inclined to spend.

Against the backdrop of all these concerns, another measure tracking individuals' sentiments about the economy and their own financial standing over the next six months fell deeper into negative territory. This gauge dropped to a negative 48.3 in April, down from a negative 41.6 in March. The new reading was the worst on record.

A measure on consumers feelings about employment conditions fell to 97 in April, from 99.2 in March. The new reading was the lowest since early October 2003. Another gauge of attitudes about investing, including comfort in making major purchases, declined to 56.4 in April, from 56.7 in March. The new figure was the lowest on records going back to 2002.

Economists keep close tabs on confidence barometers for clues about consumer spending, a major shaper of overall economic activity.

Cautious shoppers gave most retailers their most dismal March in 13 years, according to sales figures reported by major retailers on Thursday. J.C. Penney Co., Gap Inc., and Limited Brands Inc. were among the merchants hit by a sharp drop in sales.

The RBC consumer confidence index was based on the responses from 1,005 adults surveyed Monday through Wednesday about their attitudes on personal finance and the economy. Results of the survey had a margin of sampling error of plus or minus 3 percentage points. The overall confidence index is benchmarked to a reading of 100 in January 2002, when Ipsos started the survey.

Pointing to the overall confidence reading of 29.5 in April, T.J. Marta, a fixed-income strategist at RBC Capital Markets, said: "What confidence? There is no confidence. It's like 1929."

First Boeing loses the Air Force tanker deal. Now this.

(BBC) A growing number of airlines have said they will be seeking compensation from Boeing for the latest delay to the new 787 Dreamliner plane.

The move follows Boeing's announcement on Wednesday that the first 787 jets will not now be delivered until the third quarter of next year.

Boeing had initially promised the planes by May 2008, before the first delay pushed this back to early 2009.

Virgin Atlantic and British Airways are among those seeking compensation.

Other airlines also wanting financial redress are Air New Zealand, Air India, All Nippon Airways and Japan Airlines.

Read the full story.

When will this bubble burst?

(Reuters) U.N. says markets are to blame for world food crisis

Global investment funds and the weak dollar are largely to blame for high world food prices, a senior official of the United Nation's Food and Agriculture Organization said on Thursday.

"The crisis is a speculative attack and it will last," said Jose Graziano, the UN food and farm organization's regional representative for Latin America and the Caribbean.

"This is not a conspiracy theory," he said.

Across the globe foods from bread to milk have become more expensive and in some countries helped fuel inflation. High prices for rice, beans and other food staples provoked food riots in Haiti this week.

"The lack of confidence in the (U.S.) dollar has led investment funds to look for higher returns in commodities ... first metals and then foods," Graziano told a news conference in the capital.

Read the full story.

I wonder if the airlines will add to the economy's troubles.

Delays May Surpass American's 2,400

WASHINGTON (AP) -- This week's flight cancellations by American Airlines are likely to spread to other U.S. airlines in the weeks ahead as federal regulators step up a by-the-book review of carriers' compliance with maintenance and safety orders issued in recent years.

"If we do uncover any safety issues from these audits, the carriers will have to make a business decision as to how to deal with the issue," Federal Aviation Administration spokesman Les Dorr said.

Midwest Airlines on Thursday became the latest airline to ground planes and cancel flights to re-inspect a wiring harness, the same issue that has forced American to cancel more than 2,400 flights and Alaska Airlines to cancel about 40 more in recent days.

Nicholas Sabatini, the FAA official who ordered the audits last month after Southwest Airlines was found to have flown planes that missed inspections, faced tough questions from Congress Thursday about his responsibility for the lapses. Some of Sabatini's congressional testimony from last week, which came during a hearing that featured whistleblowers, has been labeled as "misleading and inaccurate" by House lawmakers -- charges the FAA has denied.

Sabatini told the Senate subcommittee on aviation operations, safety and security that he was accountable for the recent breakdowns, and blamed the Southwest incident on the failure of both FAA and airline employees.

Depending on how you look at it, this could be viewed as a classic bureaucratic overreaction after the agency was embarrassed by the disclosure last month that FAA inspectors were letting Southwest ignore airworthiness directives -- or that the top brass, shocked at how lax the safety review system had gotten, has finally awakened and ordered a high-impact new way of doing business.

"There's always going to be extremes, just as there are in politics, and to some extent this is a political issue," said Bob Harrell of New York-based travel and aviation consulting firm Harrell Associates. "Auditors get paid to audit, get paid to find things."

Another sign of the political stakes: the Senate confirmation process for acting FAA Administrator Robert Sturgell, who was nominated by President Bush in October, has been put on hold. Sturgell announced last week that four U.S. airlines are being investigated for failing to comply with federal regulations, that the probe would take months to complete and could result in fines.

The first round of audits, conducted over a two-week span last month, checked 10 airworthiness directives that apply to each carrier's fleet. Under the second phase, which runs through June 30, individual inspectors will check a random sampling of 10 percent of the orders that apply to each airline's fleet. For a large carrier like American that operates many different aircraft, that could be several hundred directives, Dorr said.

Flight delays and cancellations could soon get worse, "particularly for the carriers that have older fleets," Harrell said. About 35 percent of the U.S. fleet is more than 25 years old, according to the International Air Transport Association.

FAA spokeswoman Lynn Tierney said the agency is simply doing its job.

"We are aware and sympathetic ... 100,000 people being stranded is extraordinary," Tierney said. "But the role is clear, it's a regulator's role and you have to enforce the regulations. We understand the disruption this causes, but (the airlines) had 18 months to complete the work."

Tierney is referring to the safety order issued on the Boeing Co. MD-80 aircraft that have been grounded by American, Midwest and other airlines in recent days. The FAA issued an airworthiness directive on those planes after reports of shorted wires, evidence of worn-down power cables, and fuel system reviews conducted by the manufacturer. It was effective Sept. 5, 2006, and the airlines had 18 months to comply.

"The FAA is doing what it's chartered to do: enforce safety regulations," said David Castelveter, a spokesman for the Air Transport Association, which represents the nation's largest airlines. "It is yet to be seen if they are going too far."

Transportation Department Inspector General Calvin L. Scovel III on Thursday repeated his findings about the FAA's inspection office responsible for Southwest Airlines having "developed an overly collaborative relationship" with the carrier.

"FAA's oversight in this case appears to allow, rather than mitigate, recurring safety violations," Scovel said.

Gregory Polek, a senior editor at Aviation International News, said American Airlines is now suffering because of that.

"American is paying for the transgressions of the (FAA) office because Congress made a public spectacle about the internal conflicts that led to the Southwest Airlines fiasco," Polek wrote in an e-mail.

Scovel's office found that the FAA fails to protect employees who report safety issues and doesn't adequately respond to problems when they are identified. He recommended immediate action be taken to fix the air carrier oversight programs.

The FAA last week announced a new reporting system designed to make it easier for inspectors to raise concerns and that it was strengthening ethics policies aimed at easing potential conflicts of interests.

The agency is also considering establishing a two-year "cooling off" period before former inspectors could work for an airline they were overseeing. That would match the time that new inspectors hired from industry must wait before they can oversee their former employer.

This comes as vehicle remain super weak.

Mid-Size Cars Make Strides in Safety

WASHINGTON (AP) -- Several mid-size cars have made strides in protecting motorists in side crashes through standard air bags and improved designs, the insurance industry reports.

Crash test results released Thursday by the Insurance Institute for Highway Safety gave top scores in front-end and side-impact crashes to the 2008 Chevrolet Malibu, Saturn Aura, Dodge Avenger, Nissan Altima, Infiniti G35 and Mitsubishi Galant. The 2008 Kia Optima received the highest score in front-end tests and the second-highest score in the side test.

David Zuby, the Institute's senior vice president, said 10 similar vehicles tested in 2004 without side air bags received the lowest rating of "poor" in the side tests. Only past generations of the Honda Accord, Toyota Camry and Chevrolet Malibu received the top score in 2004 when they were tested with side air bags.

"The side impact results represent a huge change from just four years ago," Zuby said.

In rear-end testing, the results were mixed. The Optima was the only vehicle tested to receive a top rating, followed by the Avenger, which received the second-highest score of "acceptable."

Four of the vehicles -- G35, Altima, Malibu and Aura -- received the second-lowest score of "marginal" and the Galant received the lowest rating of "poor." Rear crashes can lead to neck injuries, which rack up 2 million insurance claims a year costing at least $8.5 billion.

Dan Irvin, a Mitsubishi spokesman, said the Galant meets all federal safety standards and the automaker "continuously strives to improve the safety performance of our vehicles."

Carolyn Markey, a General Motors Corp. spokeswoman, said the rear tests were one measure of crash performance and their vehicles' head restraints were designed "to accommodate a variety of drivers."

Kia spokesman Alex Fedorak said the automaker had a "strong safety record" and noted the IIHS has said its side-impact test features severe crash conditions. Max Gates, a Chrysler spokesman, said the automaker's priority "continues to be designing vehicles that perform safely for our customers and their families in 'everyday' driving conditions."

Zuby said side air bags were largely optional equipment when the institute conducted the tests in 2004. But side air bags are standard in all seven of the 2008 vehicles the institute reviewed.

The institute's frontal crash test simulates a 40 mph crash and its effect on the driver, while the rear test simulates a 20 mph test. The side crash simulates what would happen if the vehicle was struck in the side by a sport utility vehicle at 31 mph. The side crash test uses dummies in both the front and rear seats.

Airbus must be cheering.

CHICAGO (AP) -- The Boeing Co. delayed its 787 jetliner program again Tuesday, pushing back its expected debut in commercial service to the third quarter of 2009 as it continues to grapple with problems involving its supply chain and the need to redo work done by contractors.

The newest delays push the 787's schedule back approximately another six months and mean the aircraft touted for its potential to be more fuel-efficient than other large jets is now more than a year behind its original schedule.

The first test flight now isn't expected to take place until the fourth quarter as Boeing builds more time into the schedule to reduce the risk of further delays. The company had initially planned to begin test flights last August or September and deliver the first plane to Japan's All Nippon Airways this May -- a delivery it had recently rescheduled to early 2009.

The fourth delay with the 787, coming less than three months after the last one, further undermines Boeing's credibility on the much-hyped program and also is a setback to the more than 50 airlines that have placed about 900 orders for the top-selling plane. Buyers are likely to seek compensation for the delays.

The twin-engine widebody will be the first jetliner made largely of carbon-fiber plastic, which Boeing says will save fuel and be cheaper to maintain. But schedule delays with new jets are not uncommon, and Boeing also has had difficulties with a program that leans unusually heavily on overseas suppliers.

The company said that while significant progress has been made assembling the first airplane, it is rescheduling the first flight "due to slower-than-expected completion of work that traveled from supplier facilities into Boeing's final assembly line, unanticipated rework and the addition of margin into the testing schedule."

Boeing now anticipates delivering a total of 25 of the new airplanes in 2009.

"Over the past few months, we have taken strong actions to confront and overcome start-up issues on the program, and we have made solid progress," said Scott Carson, president and CEO of Boeing's Seattle-based commercial airplanes unit. "Nevertheless, the traveled work situation and some unanticipated rework have prevented us from hitting the milestones we laid out in January."

The company said research and development costs will likely increase because of the latest delay but it expects no change to 2008 earnings guidance. It said it will disclose more financial details when it reports first-quarter earnings on April 23.

Citing evidence of what it said is substantial progress, Boeing said it will power up the first aircraft by the end of June and also begin final assembly of the third and fourth 787s. It also revised the scheduling of the different 787 models, saying the larger 787-9 now will follow the original 787, with first delivery planned for 2012, while the shorter-range 787-3 that originally was pegged for a 2010 delivery will be pushed back behind the 787-9.

Analysts and customers had been expecting the latest delays. European rival Airbus saw delays of 18 months for its A380.

How much longer until it sinks in with us?

IMF sees US falling into recession

(AP) The world economy will slow sharply this year, according to an International Monetary Fund forecast, with the United States sliding into a recession amid housing, credit and financial slumps.

The IMF, in a World Economic Outlook released Wednesday, slashed growth projections for the United States — the epicenter of the woes — and the global economy as a whole.

Economic growth in the United States is expected to slow to a crawl of just 0.5 percent this year, which would mark the worst pace in 17 years, when the country last suffered through a recession, the IMF said. The United States won't fare much better next year; the IMF projected the U.S. economy will grow by a feeble 0.6 percent in 2009.

"The U.S. economy will tip into a mild recession in 2008 as the result of mutually reinforcing cycles in the housing and financial markets," the IMF said.

Many private economists and members of the U.S. public believe the country has already fallen into its first recession since 2001. For the first time, Federal Reserve Chairman Ben Bernanke acknowledged last week that a recession was possible.

An increasing number of analysts think the U.S. economy, which grew by 2.2 percent in 2007, started shrinking in the first three months of this year and is still contracting. Under one rough rule, if the economy contracts for six straight months it is considered to be in a recession. A panel of experts at the National Bureau of Economic Research that determines when U.S. recessions begin and end, however, uses a broader definition, taking into account income, employment and other barometers.

To limit the damage, the Federal Reserve has been slashing interest rates since last September and has taken a number of extraordinary measures to avert a financial meltdown, which would have dire consequences for the U.S. economy.

"The financial market crisis that erupted in August 2007 has developed into the largest financial shock since the Great Depression," the IMF declared.

Problems started in the United States with risky "subprime" mortgages made to people with blemished credit and quickly spread into other areas, hitting more creditworthy borrowers. Foreclosures in the U.S. hit record highs and financial companies racked up multibillion-dollar losses as mortgage-backed investments soured with the collapse of the U.S. housing market.

The fallout gripped investors on Wall Street and in other countries, creating a panicky atmosphere that threatened to paralyze financial markets in the United States and beyond.

Against that backdrop, the IMF now expects the world economy, which grew by a hardy 4.9 percent last year, to lose considerable momentum. The fund is projecting the global economy to grow by 3.7 percent this year and 3.8 percent next year.

"The global expansion is losing speed in the face of a major financial crisis," the IMF said.

There's a risk that things could turn worse, it cautioned.

"The IMF now sees a 25 percent chance that global growth will drop to 3 percent or less in 2008 and 2009 — equivalent to a global recession," the fund said. "The greatest risk comes from the still-unfolding events in financial markets, particularly the potential for deep losses" on complex investments linked to the U.S. subprime mortgage market, the IMF said.

Looking at other countries, the IMF trimmed its projection for Germany, with economic growth slowing to 1.4 percent this year and weakening to 1 percent in 2009. In Britain, growth will slow to 1.6 percent this year and next. France also will see growth decelerate to 1.4 percent this year and 1.2 percent next year.

Japan's economy will expand by 1.4 percent this year and 1.5 percent next year, which would mark a loss of momentum from last year. Canada's growth would slow to 1.3 percent this year and pick up slightly to 1.9 percent next year.

Global powerhouse China, which barreled ahead at an 11.4 percent pace last year, would see growth moderate to 9.3 percent this year and then strengthen a bit to 9.5 percent next year. India, which grew by a blistering 9.2 percent last year, is expected to grow by 7.9 percent this year and 8 percent next year. Russia, which logged growth of 8.1 percent last year, will see growth moderate to 6.8 percent this year and then 6.3 percent next year.

While the IMF is worried about the dangers of weakening global economic growth, it also expressed concern about the potential for inflation to heat up around the world, given sharp increases in energy and other commodity prices. "Risks related to inflationary pressures have risen," the fund said.

Here it is. Who knows if it's enough to stop the housing meltdown.

(WSJ) WASHINGTON -- The Bush administration appears set to support a significant expansion of its assistance for struggling homeowners in a bid to forestall more-aggressive action being contemplated by Democrats in Congress.

In a draft of testimony for a congressional hearing, Brian Montgomery, the commissioner of the Federal Housing Administration, is expected to say an administration program created last summer as the real-estate crisis first appeared "can and should be extended in a responsible way."

Under the expanded program, lenders could get FHA insurance for problem loans in exchange for "voluntarily writing down the outstanding mortgage principal," according to the testimony. Mr. Montgomery emphasizes in the testimony that "while considering any changes to FHA, we must ensure that the financial solvency of the [FHA] must not be compromised."

Details about the expansion aren't clear, but it seems likely the program could become the administration's most aggressive response to the housing crisis, which has prompted Washington to reverse years of laissez-faire attitudes toward the economy.

3D glasses have advanced beyond the red and blue lenses I remember when I was a kid.

Disney Says its New Animated Cartoons will be 3D

NEW YORK (AP) - The Walt Disney Co. said Tuesday it will jump on the 3-D bandwagon, vowing to release every animated movie in the format beginning with "Up" next year.

Chief Creative Officer John Lasseter made the announcement in New York at a presentation of Disney's upcoming lineup of animated movies from its Pixar and Disney studios.

The lineup includes "Rapunzel," a retelling of a fairy tale set for release for Christmas 2010, and "King of the Elves," set for release around Christmas 2012.

Disney also showed a 30-minute clip of "Wall-E," set for release June 27. It tells a love story between the title character, a robot left alone on earth for 700 years, and another robot named Eve sent to look for life.

"Wall-E" is the first Pixar release since last summer's "Ratatouille," which grossed more than $620 million at the worldwide box office.

"Ratatouille" was the last independent Pixar picture in development prior to Disney's acquisition of Pixar Animation Studios in May 2006 for $7.5 billion in stock.

In a deal announced last month, four studios -- Disney, News Corp.'s 20th Century Fox, Viacom Inc.'s Paramount, and Universal Pictures, which is owned by General Electric Co.'s NBC Universal -- agreed to help finance and equip 10,000 screens in the U.S. and Canada to accommodate 3-D movies.

The conversion will cost as much as $700 million and take three years.

Box office figures have shown that the enveloping feel of 3-D can attract two to three times more moviegoers who are willing to pay as much as $3 more per ticket, analysts said.

Theaters owners and studios hope the offerings will help bring people back to multiplexes for an experience that cannot be matched by increasingly sophisticated home theater systems.

The Boeing-led team competing for an Air Force contract to build a next-generation satellite constellation, has demonstrated the readiness of the advanced electronics that would be used in it, Boeing said Tuesday.

The program is called the Transformational Satellite Communications System, or TSAT, and Boeing is competing against a team lead by Lockheed, with Northrop Grumman's Redondo Beach-based Space Technology sector as a major partner.

The Air Force is expected to award the TSAT program to one of the two teams later this year.

Most of Boeing's work on TSAT is done in El Segundo.

The Boeing team's tests were completed in late 2007 at Texas A&M University in College Station, Texas. The tests simulated "the most challenging radiation environment TSAT will experience during operation," Boeing said.

Here's the list of Boeing's TSAT team members:

- Cisco Systems
- Hughes
- IBM
- Harris Corp.
- Ball Aerospace & Technologies Corp.
- LGS Innovations
- Raytheon
- General Dynamics C4 Systems
- L-3 Communications
- BBN Technologies
- EMS Technologies
- SAIC
- Innovative Communications Engineering. The team submitted its TSAT Space Segment proposal to the Air Force on July 30, 2007. The Air Force is expected to announce the winner of the multibillion-dollar contract later this year.

El Segundo-based Wyle won a contract worth up to $56,454,125 to provide aircrew support and related services for the U.S. Navy’s Naval Air Systems Command Aircraft Division, the Naval Test Wing Atlantic and Naval Test Wing Pacific.

The contract has a current value of $10,068,870 and potential value of $56,454,125.

Under the five-year contract, including a base year and four option years, Wyle and its subcontractors will support aircrew, engineering, operations, scheduling and technical services, independent analysis and technical support related to air vehicles at Naval Air Warfare Center Aircraft Directorate, Patuxent River, Md.

How long will the slump last?

Pending home sales hit low in February

(AP) group said Tuesday that pending U.S. home sales fell in February to the lowest reading since the index began, signaling the housing market distress is not yet over.

The National Association of Realtors' seasonally adjusted index of pending sales for existing homes fell to 84.6 from January's upwardly revised reading of 86.2. The index stood at 107.6 in February 2007.

Wall Street economists surveyed by Thomson/IFR had predicted the index would inch up to a reading of 86.3.

A reading of 100 is equal to the average level of sales activity in 2001, when the index started. The previous low was August's reading of 85.8, recorded at the height of the credit crunch.

With house prices falling and credit continuing to tighten, many economists say the housing market is likely to worsen in the coming months, though some remain hopeful about a recovery in the second half of the year.

"The question was whether things were starting to stabilize," said Global Insight economist Patrick Newport. "Apparently they're not."

Newport predicts home sales will fall by another 5 to 10 percent before picking up at the end of the year, while the Realtors group forecasts sales will remain flat in the first half of the year before rebounding strongly in the second half.

The Realtors report gives an early indication of how existing home sales are likely to fare for March, because of the typical lag of a month or two between when a buyer signs a home sales contract and the closing of the deal.

Lawrence Yun, the Realtors' chief economist, said in a statement that the decline in pending home sales "implies we're not out of the woods yet, though an era of successive deep sales declines appears to be over."

The Realtors group maintained its prediction that the housing market would pick up in the second half of the year, forecasting improved availability of loans for more expensive houses.

Sales of existing homes posted an unexpected increase in February, rising by 2.9 percent after six months of declines.

Some say lower home prices are providing incentive for bottom-fishers to look for cheap deals, however it remains unclear how much of a boost that will provide.

"We'll have to see if these pending transactions can actually close," Mike Larson, a real estate analyst with Jupiter, Fla.-based Weiss Research said in an e-mail. "My concern is that stingier lending standards are leading to more deals falling apart."

Northrop Grumman Corp.'s Redondo Beach-based Space Technology sector has reached a "strategic, long-term supply agreement" with Centennial, Colo.-based SEAKR Engineering Inc., which becomes an exclusive supplier for data store and processing systems.

SEAKR Engineering is a small firm that makes spacecraft data storage and processing systems for aerospace, military and rugged applications.

Northrop said this outsourcing agreement will save the aerospace giant money.

Nokia will try to steal some of the iPhone's thunder.

(InfoWorld) Nokia remains at work on its answer to the Apple iPhone, codenamed "Tube," a company official said on Monday.

Shown in a slide at the Evans Data Developer Relations Conference in Redwood City, Calif., Tube looks similar to the popular iPhone. The Nokia device showed graphical displays, such as a promotion for the movie Shrek the Third. Other capabilities will be featured, such as the ability to upload photos.

Nokia will try to steal some of the iPhone's thunder.

(InfoWorld) Nokia remains at work on its answer to the Apple iPhone, codenamed "Tube," a company official said on Monday.

Shown in a slide at the Evans Data Developer Relations Conference in Redwood City, Calif., Tube looks similar to the popular iPhone. The Nokia device showed graphical displays, such as a promotion for the movie Shrek the Third. Other capabilities will be featured, such as the ability to upload photos.

Q&A is in today's paper. The final question sums it up for some people.

If you want to know what Peter Tourigny sells, you may want to sit down. The explanation will take awhile.

But that explanation may be worth it for seniors who want to tap into their home's value.

Tourigny, 41, sells reverse mortgages as a local loan officer. He is branch manager of a Manhattan Beach office affiliated with Colorado Federal Savings Bank.

Tourigny entered the mortgage industry in 1980 by joining his father's mortgage brokerage in Buzzards Bay, Mass.

In 1998, a love of beach volleyball led the younger Tourigny to Southern California, where he opened a loan office attached to his father's East Coast office.

Tourigny, who lives in Manhattan Beach, also sells conventional mortgages.

What does your job entail vis-a-vis reverse mortgages?

Educating the senior population about reverse mortgages. It's a loan for senior homeowners. You have to be at least 62 years old to qualify for this mortgage. And you have to live in your house as your primary residence.

Read the full story.

All signs point south.

(Reuters) Martin Feldstein, who leads the group that is considered the arbiter of U.S. recessions, said on Monday that he personally believes the economy has been sliding into a recession since December or January.

"I think that December/January was the peak and that we have been sliding into recession ever since then," Feldstein, the president of the National Bureau of Economic Research, said on CNBC television.

Read the full story.

... with nanotechnology.

Anthony Laviano credits an apple for sending his career in a new - more compact - direction.

It was the late 1990s, and Laviano was serving as project manager for a team developing radar power supplies at Raytheon Co. in El Segundo.

His team was charged with making a paper-thin power supply out of aluminum foil. But Laviano's engineers were running up against the limits of shrinking such a component.

One day while taking a break to eat the lunch his wife had packed for him, Laviano took out an apple and bit into it.

That's when he had an epiphany.

"My wife had wrapped it in Saran Wrap," Laviano said in a recent interview. "I realized it's not what you see, but what you can't."

Laviano approached his boss with news of the epiphany.

"He looked at me like I was crazy," Laviano recalled.

But his boss allowed him to pursue his hunch. That led Laviano to research a then-little known field of applied science known a nanotechnology.

Today, Laviano serves as executive director of the Nanotechnology Center at Loyola Marymount University.

Read the full story

Who's can fend off a 600-pound gorilla like Microsoft?

Microsoft Gives Yahoo Deadline on Offer

SEATTLE (AP) -- Microsoft set the clock ticking for Yahoo to accept its $41 billion buyout offer in a letter to the Internet pioneer's board Saturday, warning that if a deal wasn't reached by April 26 the software maker would launch a hostile takeover at a less attractive price.

"If we have not concluded an agreement within the next three weeks, we will be compelled to take our case directly to your shareholders, including the initiation of a proxy contest to elect an alternative slate of directors for the Yahoo board," wrote Microsoft Chief Executive Steve Ballmer.

"If we are forced to take an offer directly to your shareholders, that action will have an undesirable impact on the value of your company from our perspective which will be reflected in the terms of our proposal," he wrote.

A Yahoo spokeswoman declined to comment Saturday.

In the letter, Ballmer said Yahoo's search share and page views, two measures of the strength of the Web portal company's business, appear to have fallen since the offer was made at the end of January. At the time, Microsoft's cash-and-stock offer was valued at $44.6 billion, or 62 percent above Yahoo's market value. Judging by Friday's closing share prices, the deal is now worth just under $41 billion.

Yahoo's board formally rejected Microsoft Corp.'s bid in February, saying it undervalues the company.

Since then, the Silicon Valley company has explored alliances with Google Inc., News Corp.'s MySpace.com and Time Warner Inc.'s AOL, but no alternative to Microsoft's offer has surfaced.

Ballmer acknowledged the alternative negotiations and questioned why, in the absence of another offer, Yahoo was still dragging its heels.

"This is despite the fact that our proposal is the only alternative put forward that offers your shareholders full and fair value for their shares," Ballmer wrote in the letter. Ballmer said the Microsoft offer has grown stronger as the economic climate has weakened.

"We believe that the majority of your shareholders share this assessment," despite a forecast recently released by Yahoo that calls for the company's revenue to rise more than 70 percent during the next three years, he wrote.

Microsoft has said from the start that it would consider all possible ways of getting the deal done, including taking its offer directly to Yahoo's shareholders, as well as working to elect its own candidates to fill Yahoo's board at the company's annual annual shareholder meeting, and thus the deadline for Microsoft to nominate its slate.

Yahoo has not set a new date for the meeting. Before Saturday, it was known that Microsoft had hired a proxy solicitation firm to help with a hostile bid, but the software maker had made no pronouncements as to when that might happen.

The part about the father was moving, especially at the end.

By Muhammed El-Hasan, Staff Writer

After the Nimeh family purchased the Chicken Dijon restaurant in Redondo Beach in 1993, father Afram Nimeh occasionally would pull his two sons to his side and lock his arms into theirs.

"He said, `Stay together like this, march together like this and together you will stay strong,"' recalls Joe Nimeh, 35, the elder son.

Today, more than a decade after their father passed on, Joe Nimeh and his brother, Steve, 33, have their arms locked together, figuratively, as they expand their family's Mediterranean eatery business.

Read the full story.

Volkswagen Recalls 410,000 Passats

AUBURN HILLS, Mich. (AP) -- Volkswagen Group of America Inc. says it's voluntarily recalling about 410,000 gasoline powered Passats because of potential problems including damage to a heat shield.

Volkswagen announced the recall Friday, saying no accidents or injuries have been recorded related to the 1999 to 2005 model year Passats.

Some Passats with an automatic transmission may have an underbody heat shield that could be subject to damage. And some with 1.8T engines have a fuel line that requires potential replacement.

Also, some all-wheel-drive Passats will be inspected for potential fuel tank ventilation valve damage.

Volkswagen plans to notify owners of the recall, but says drivers who smell fuel should take the vehicle to a Volkswagen dealer or authorized repair shop.

Here's their tax returns for 2000-2007.

Here's the bad news.

(AP) If history is any guide, government efforts to combat recessions often come too late to do much good. Furthermore, such efforts can sow the seeds for the next downturn.

The news Friday that the U.S. economy shed 80,000 jobs in March, the worst loss in five years, triggered a wave of hand-wringing, fault-finding and proposed fixes on Capitol Hill and the presidential campaign trail. The jobs report added to a building consensus that the country has slipped into recession, one that may have begun earlier this year or late last year.

Yet past efforts to head off or alleviate recessions with crash spending programs and tax rebates - classic antirecessionary plays - often did not kick in until after the recession had ended.

Read the full story.

But are they richer than John McCain's wealthy wife?

Recently released tax documents show that Bill and Hillary Clinton earned $109 million from 2000-2007.

President Clinton earned $51.8 million for giving speeches over eight years and $29.6 million from his book.

Sen. Clinton made $10.5 million in book income.

The Clintons paid $33.8 million in taxes during that period, which amounted to 31% of adjusted gross income.

The political powerhouse coupple also gave $10.26 million to charity over those eight years.

Computer Sciences Corp., the IT giant, plans to sell its 175,000-square-foot headquarters office building and a 32,000-square-foot flex building in El Segundo, according to real estate services firm Jones Lang LaSalle.

CSC recently said it plans to move its headquarters from El Segund to Falls Church, Va.

CSC "may elect to lease back approximately 30,000 square feet in one of the towers" at 2100 E. Grand Avenue in El Segundo, said Jones Lang LaSalle, which is handling the sale.

The building is Class A space and consists of a three-story tower built in 1978 and an interconnected six-story tower built in 1980.

The flext building was built in 1981, with 14-16 feet height clearance and was formerly a data center and is currently used for warehousing/light assembly operations.

"The buildings sit on a 6.6-acre campus with a structured parking deck and significant investment in perimeter security upgrades," according to the real estate firm.

Northrop Grumman launched a website to help justify to the public its recent multibillion-dollar win of the US Air Force aerial refueling tanker contract with its European partner EADS against a Boeing-led team.

The website is called "America's New Tanker" and is filled with facts on the KC-45 tanker aircraft.

Northrop launched the website as Boeing continues to protest its loss in the contract bid.

Check out the new tanker website.

Northrop Grumman launched a website to help justify to the public its recent multibillion-dollar win of the US Air Force aerial refueling tanker contract with its European partner EADS against a Boeing-led team.

The website is called "America's New Tanker" and is filled with facts on the KC-45 tanker aircraft.

Northrop launched the website as Boeing continues to protest its loss in the contract bid.

Check out the new tanker website.

Here's a few facts that came in too late to be included in today's story on former Joint Chiefs of Staff Gen. Peter Pace becoming chairman of Pelican Products, a Torrance-based maker of heavy-duty flashlights and cases:

- More than a third of Pelican Products's business is from military customers.

- Gen. Pace was introduced to the Pelican team through the company's majority shareholders, Behrman Capital, a New York private equity firm.

- Pelican expects Pace to remain as chairman "for many years to come."

- Pelican has about 560 employees at its Torrance headquarters.

Here's a link to today's article.

And like Donald Trump, Cindy McCain has a prenup.

Watch the AP video.

Is anyone surprised?

NEW YORK (AP) -- Gasoline prices extended their record run at the pump Thursday, but took a breather in futures trading as investors collected profits from the previous session's huge advance. Crude oil futures, meanwhile, fluctuated as some investors bought on expectations that the dollar will continue its protracted decline while others sold as the greenback firmed slightly.

At the pump, the national average price of a gallon of gas rose 0.2 cent overnight to $3.289 a gallon, according to AAA and the Oil Price Information Service. That's the latest in a string of records set as gas prices have followed surging oil futures higher.

In futures trading Thursday, May gasoline fell 3.44 cents to $2.7392 a gallon on the New York Mercantile Exchange, dropping back after soaring 13.44 cents to a new record of $2.7736 on Wednesday.

Wednesday's surge in gas futures, accompanied by a big gain in oil prices, is expected to send prices even higher at the pump in the near future; retail prices follow the futures market, although with some time lag. Gas got a boost from an Energy Department report Wednesday that gasoline supplies fell last week while demand rose for the first time since January.

The report also showed that refiners are holding back on producing gasoline due to low refining profit margins. The combination of low production and higher demand during peak summer driving season -- and high crude prices -- could boost gas prices even further into record territory.

"There's always concern ahead of the driving season," said Tim Evans, an analyst at Citigroup Inc. in New York.

The Energy Department expects gas prices to peak near $3.50 a gallon later in the spring. Many analysts think prices could rise as high as $3.75 or $4.

In oil trading Thursday, May light, sweet crude rose 7 cents to $104.90 on the New York Mercantile Exchange, but alternated between gains and losses.

The continuing advance in energy prices has raised concerns about the impact of inflation on consumer spending. While gas prices are hurting consumers' budgets, so is the price of diesel, used to transport the vast majority of the world's food, consumer and industrial goods. Diesel slid 0.2 cent overnight to a national average of $4.023 a gallon, but remains within 2 cents of a record set in late March.

Oil has taken much of its price direction in recent months from the dollar. Commodities such as oil become attractive to investors seeking a hedge against inflation when the greenback is falling. The trend typically reverses when the dollar strengthens.

On Thursday, the dollar gained ground, prompting some selling. But other investors were more focused on dismal economic reports. The Labor Department said jobless claims jumped last week to their highest level in more than two years, and the Institute for Supply Management said the economy's service sector shrank in March for the third straight month.

In the sort of "bad news is good news" logic the market often employs, some investors took the reports as a sign the Fed will sharply cut interest rates later in the year to boost the economy. Rate cuts tend to weaken the dollar.

"It looks like we're running to the commodities again for cover," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago.

In other Nymex trading Thursday, May heating oil futures rose 1.09 cents to $2.9619 a gallon, while May natural gas futures fell 25.3 cents to $9.579 per 1,000 cubic feet. The Energy Department said natural gas inventories fell last week by 29 billion cubic feet, less than analysts had expected.

In London, May Brent crude fell 39 cents to $103.36 a barrel on the ICE Futures exchange.

At what point was Press fudging the facts? It's possible he was stretching the truth with Toyota and then with Chrysler.

(AUTOMOTIVE NEWS) Chrysler LLC co-President Jim Press has a PR problem--and so does his former employer, Toyota Motor Corp.

In an interview published Thursday, March 24, Press told BusinessWeek that the Japanese government “paid for 100 percent of the development of the battery and hybrid system that went into the Toyota Prius.”

On March 14, 2007--when he was still Toyota’s top U.S. executive--Press told something else to a subcommittee of the U.S. House Energy and Commerce committee. U.S. Rep. Michael Burgess, R-Texas, questioned Press about the seven years of r&d that went into Toyota’s hybrid technology:

Read the full story.

AT&T Inc. recently launched its AT&T Online Photos from Flickr for all subscribers of its U-verse TV service.

AT&T recently offered its TV service to parts of the South Bay.

Subscribers can now watch slideshows and browse their online photos from their U-verse TV screens.

All U-verse TV and high-speed Internet customers have this feature at no extra charge.

AT&T said it's the only video service provider to offer an integrated online photos channel.

AT&T also recently expanded its high-definition offerings by adding three HBO channels to its U-verse TV service.

Pelican Products Inc., the Torrance maker of heavy-duty cases and flashlights, appointed former Joint Chiefs of Staff Gen. Peter Pace as company chairman in a move designed to shore up military business, the firm said Wednesday.

Pace, who serves in a non-executive role, will provide "additional strategic oversight" for Pelican with military, defense and federal government customers, the company said.

Pace's appointment will complement Pelican's "aggressive global expansion plans," which include developing technologies and products to benefit U.S. and allied militaries, Lyndon Faulkner, Pelican's president and CEO, said in a statement.

Read the full story.

Consolidations are common during tough economic times. I'm not sure of the reason is for this consolidation:

Allstate Insurance Co. said Wednesday that its Maxamillion Insurance & Financial Services offices in Redondo Beach and San Pedro have combined.

The united office is in San Pedro at 823 W. 9th St. The office is owned and operated by Allstate Insurance
agent Michael Amira.

Amira has been an Allstate agent for 24 years,

Northrop begins assembly of 1st F-35

Northrop Grumman Corp. has begun assembling the first F-35 Lightning II jet, marking the transition from demonstration to production of the Joint Strike Fighter, the defense giant said Tuesday.

Assembly work on the aircraft's center fuselage began March 24 at Northrop's Palmdale Manufacturing Center, with the loading of an all-composite air inlet duct into a special tooling structure called a jig.

Read the full story.

By definitiion, the Fed chairman must appear optimistic. That's part of his job, to be a cheerleader for the economy. So when he's contemplating recession, how are the rest of us supposed to feel?

(AP) Federal Reserve Chairman Ben Bernanke warned Wednesday the economy may shrink over the first half of this year and that "a recession is possible." Yet, he didn't offer any assurances of further interest rate cuts.

Bernanke's testimony to the Joint Economic Committee was a much more pessimistic assessment of the economy's immediate prospects amid a trio of crises — housing, credit and financial.

"It now appears likely that gross domestic product (GDP) will not grow much, if at all, over the first half of 2008 and could even contract slightly," Bernanke told lawmakers. GDP measures the value of all goods and services produced within the United States and is the best barometer of the United States' economic health. Under one rule, six straight months of declining GDP, would constitute a recession.

Still, Bernanke said that he expects more economic growth in the second half of this year and into 2009, helped by the government's $168 billion stimulus package of tax rebates for people and tax breaks for businesses as well as the Fed's aggressive reductions to a key interest rate. Nevertheless, the chairman acknowledged uncertainty about the Fed's next steps, notwithstanding the mounting economic woes.

"Much necessary economic and financial adjustment has already taken place, and monetary and fiscal policies are in train that should support a return to growth in the second half of this year and next year," Bernanke said.

To try to limit the damage, the Federal Reserve has aggressively cut a key interest rate, now at 2.25 percent, to spur buying and investing by individuals and businesses. At the Fed's last meeting in March, however, two members dissented from the Fed's decision to sharply cut rates, showing a rare division in the often unified front the Fed shows the public. The dissenting officials, who had reputations for being extra concerned about inflation, favored a smaller reduction. Although Bernanke said he hopes inflation will moderate in coming quarters, he acknowledged that high energy prices have clouded the inflation outlook.

Many economists had predicted the Fed might drop it key that rate again when it next meets April 29-30, although Bernanke's remarks cast some doubt on that scenario.

On Wall Street, stocks initially dropped after the Fed chief's remarks but later turned slightly positive.

Housing, credit and financial woes are threatening to push the country into a deep recession. The situation has emerged as a top concern for presidential contenders and a hot-button issue for Congress. It has thrust the White House and the Fed in crisis-management mode.

Faced with mounting home foreclosures and job losses, Bernanke has been under immense political and public pressure to provide relief and help turn around a faltering economy.

Committee Chairman Sen. Charles Schumer, D-N.Y., peppered Bernanke with questions about the Fed's moves to aid once mighty Wall Street firm Bears Stearns and then juxtaposed that with — what he believed was a lack of help — to millions of people at risk of losing their homes.

"I hope that you will use your position to jawbone this administration to get behind the housing relief effort before Congress." Schumer said. "Addressing the housing crisis head-on will do as much to instill confidence in the markets as lowering interest rates or bolstering regulatory oversight of wayward mortgage lenders and financial institutions. We need to do all of it."

"Wall Street has been helped. Now it's time to help Main Street," added Rep. Carolyn Maloney, D-N.Y.

Many private analysts believe the economy contracted in the first three months of this year, signaling the start of a recession. The government releases first-quarter results later this month. The economy lost jobs in January and February, with many economists bracing for more losses when the report for March is released on Friday. Bernanke said he expected unemployment to move "somewhat higher in coming months."

"Clearly, the U.S. economy is going through a very difficult period," he told lawmakers, adding that all the problems have weighed heavily on consumers whose spending is indispensable to economic vitality.

The Fed also has taken a series of extraordinary steps in recent weeks and months to prop up the nation's financial system, which has been in state of high jeopardy.

In a controversial move, the Fed backed a $29 billion lifeline as part of JP Morgan's deal to take over the troubled Bear Stearns, the nation's fifth largest investment house, which was on the brink of bankruptcy. Bear Stearns had invested heavily in risky mortgage-backed securities that eventually soured with the collapse of the housing market.

Bernanke defended the move. "With financial conditions fragile, the sudden failure of Bear Stearns likely would have led to a chaotic unwinding of positions in those markets and could have severely shaken confidence," he said. "The damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain."

Although the taxpayers are on the hook for the $29 billion, Bernanke said he was "reasonably confident we'll be able to recover the full amount." He also said that Bear Stearns' investments that the Fed took control of "are entirely investment grade."

In addition, the Fed — in the broadest use of its credit authority since the 1930s — agreed to temporarily let big investment firms obtain emergency financing from the Fed, a privilege that previously had been granted only to commercial banks.

Those actions have prompted criticism from Democrats and others who contend that the Fed is bailing out Wall Street and putting billions of taxpayers' dollars at potential risk. Bernanke and the Bush administration argued that the actions were warranted to avert a potential meltdown in the entire financial system, something that would have devastating consequences for the overall economy.

Asked about the Bush administration's plan to revamp the country's creaking financial system, Bernanke said it was vital for the Fed to have sufficient enforcement powers. Under the plan, the Fed would become a top cop in charge of financial market stability but would lose its day-to-day supervision of U.S. banks.

I sense a trend...

DETROIT (AP) — Automakers reported Tuesday double-digit U.S. sales declines in March as demand for trucks and sport utility vehicles plummeted and consumers held back because of concerns about gas prices, the housing slump and tightening credit.

General Motors Corp. and Chrysler LLC both reported a 19 percent drop in U.S. sales Tuesday. Ford's sales dropped 14 percent and even industry stalwart Toyota was down 10 percent compared with last March. Nissan fell 4 percent, and Honda reported a 3 percent drop. Some automakers warned things could keep getting worse in the near term.

"I'd like to be able to tell you that the worst is behind us, but I really can't give you that assurance," Jim Farley, Ford Motor Co.'s sales and marketing chief, said in a conference call. Farley said Ford is concerned the shrinking availability of consumer credit will continue to hurt sales and that the second quarter could be more difficult than the first.

GM's truck and SUV sales were down 22 percent in March while its car sales fell 14 percent. New vehicles like the Chevrolet Malibu were a bright spot, with sales up 17 percent, but sales of Chevrolet pickups were down 25 percent while sales of GM's gas-guzzling Hummer brand fell 29 percent. GM's sales were down 11 percent for the first quarter.

"There's no question that the industry and the economy is in a weakened state," said Mike DiGiovanni, GM's executive director of global markets and industry analysis. "We expected the first three quarters to be weak, and this has exceeded what we thought."

DiGiovanni said GM remains hopeful the federal economic stimulus package will help sales in the second half of the year.

Mark LaNeve, GM's vice president for North American sales and marketing, said a monthlong strike by American Axle and Manufacturing Holdings Inc. that has idled or shut down 30 factories that make GM trucks, cars and SUVs has cut GM's production by 100,000 vehicles. But he said slow sales and a high inventory before the strike has minimized the impact. LaNeve said truck and SUV supplies were "more than adequate" for spring, but he wouldn't speculate on whether the strike will hurt hotter sellers like the Malibu.

"We don't believe that it's affected retail business one bit to date," LaNeve said.

A 24 percent jump in sales for Ford's popular Edge crossover couldn't make up for falling sales of pickups and large SUVs. Ford's truck and SUV sales dropped 16 percent versus March 2007. Sales of the Ford Expedition SUV fell 34 percent, while sales of the perennially popular F-Series pickup — which will be replaced with a new version this fall — were down 24 percent.

Ford's car sales fell 10 percent, dragged by declining demand for the Ford Mustang and Crown Victoria sedan. Ford's overall sales for the first quarter were down 9 percent.

Toyota Motor Corp., which beat Ford to become the No. 2 automaker by U.S. sales last year, held onto its lead in the first quarter, outselling Ford by more than 43,000 vehicles. But Toyota took a beating in March, reporting truck and SUV sales down 14 percent and car sales off 7 percent. The Tundra pickup saw a surprising 17 percent sales increase, but totals were hurt by SUV sales, which fell 20 percent. Toyota's sales dropped 6 percent for the quarter.

Chrysler's car sales fell 13 percent and its truck sales plunged 22 percent, in part because it cut low-profit sales to rental car agencies. Chrysler saw no boost from its much-hyped, newly redesigned Chrysler Town and Country and Dodge Caravan minivans, which saw sales drop 2 percent and 21 percent, respectively. Chrysler's sales fell 16 percent for the quarter.

Honda Motor Co., which had bucked the downward trend in February, saw its 3 percent increase in car sales eroded by a 12 percent decline in truck and SUV sales. That drop was led by the Honda Pilot SUV, which fell 24 percent. Honda's sales were flat for the first quarter.

Nissan Motor Co. reported a 10 percent increase in car sales, led by the subcompact Versa and the newly redesigned Altima. But Nissan's truck and SUV sales plummeted 20 percent, with the Nissan Titan pickup down 45 percent for the month and the Nissan Armada SUV off 43 percent. Nissan's overall sales were down 4 percent for the quarter.

Truck sales have been hurt by the slowdown in housing construction. Small cars fared best as consumers focused on fuel efficiency. Sales of the Ford Focus jumped 24 percent for the month, while Toyota's subcompact Yaris saw sales rise 83 percent and Honda's subcompact Fit surged 74 percent.

GM and Ford said consumers are also choosing more fuel-efficient four-cylinder engines over six-cylinder options. Ford's top U.S. sales analyst George Pipas said 70 percent of Ford Fusion buyers are now getting the four-cylinder engine for the midsize car, compared to 60 percent at this time last year.

GM shares rose $1.07, or nearly 6 percent, to $20.12. Ford shares gained 21 cents to $5.83, Toyota's U.S. shares added $2.43 to $103.32 and Honda's U.S. shares were up $1.06 to $29.87. Auto shares rallied along with the market amid optimism that the worst of the credit crisis has passed and that the economy is faring better than expected.

The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 26 sales days last month and 28 in March 2007.

I sense a trend...

DETROIT (AP) — Automakers reported Tuesday double-digit U.S. sales declines in March as demand for trucks and sport utility vehicles plummeted and consumers held back because of concerns about gas prices, the housing slump and tightening credit.

General Motors Corp. and Chrysler LLC both reported a 19 percent drop in U.S. sales Tuesday. Ford's sales dropped 14 percent and even industry stalwart Toyota was down 10 percent compared with last March. Nissan fell 4 percent, and Honda reported a 3 percent drop. Some automakers warned things could keep getting worse in the near term.

"I'd like to be able to tell you that the worst is behind us, but I really can't give you that assurance," Jim Farley, Ford Motor Co.'s sales and marketing chief, said in a conference call. Farley said Ford is concerned the shrinking availability of consumer credit will continue to hurt sales and that the second quarter could be more difficult than the first.

GM's truck and SUV sales were down 22 percent in March while its car sales fell 14 percent. New vehicles like the Chevrolet Malibu were a bright spot, with sales up 17 percent, but sales of Chevrolet pickups were down 25 percent while sales of GM's gas-guzzling Hummer brand fell 29 percent. GM's sales were down 11 percent for the first quarter.

"There's no question that the industry and the economy is in a weakened state," said Mike DiGiovanni, GM's executive director of global markets and industry analysis. "We expected the first three quarters to be weak, and this has exceeded what we thought."

DiGiovanni said GM remains hopeful the federal economic stimulus package will help sales in the second half of the year.

Mark LaNeve, GM's vice president for North American sales and marketing, said a monthlong strike by American Axle and Manufacturing Holdings Inc. that has idled or shut down 30 factories that make GM trucks, cars and SUVs has cut GM's production by 100,000 vehicles. But he said slow sales and a high inventory before the strike has minimized the impact. LaNeve said truck and SUV supplies were "more than adequate" for spring, but he wouldn't speculate on whether the strike will hurt hotter sellers like the Malibu.

"We don't believe that it's affected retail business one bit to date," LaNeve said.

A 24 percent jump in sales for Ford's popular Edge crossover couldn't make up for falling sales of pickups and large SUVs. Ford's truck and SUV sales dropped 16 percent versus March 2007. Sales of the Ford Expedition SUV fell 34 percent, while sales of the perennially popular F-Series pickup — which will be replaced with a new version this fall — were down 24 percent.

Ford's car sales fell 10 percent, dragged by declining demand for the Ford Mustang and Crown Victoria sedan. Ford's overall sales for the first quarter were down 9 percent.

Toyota Motor Corp., which beat Ford to become the No. 2 automaker by U.S. sales last year, held onto its lead in the first quarter, outselling Ford by more than 43,000 vehicles. But Toyota took a beating in March, reporting truck and SUV sales down 14 percent and car sales off 7 percent. The Tundra pickup saw a surprising 17 percent sales increase, but totals were hurt by SUV sales, which fell 20 percent. Toyota's sales dropped 6 percent for the quarter.

Chrysler's car sales fell 13 percent and its truck sales plunged 22 percent, in part because it cut low-profit sales to rental car agencies. Chrysler saw no boost from its much-hyped, newly redesigned Chrysler Town and Country and Dodge Caravan minivans, which saw sales drop 2 percent and 21 percent, respectively. Chrysler's sales fell 16 percent for the quarter.

Honda Motor Co., which had bucked the downward trend in February, saw its 3 percent increase in car sales eroded by a 12 percent decline in truck and SUV sales. That drop was led by the Honda Pilot SUV, which fell 24 percent. Honda's sales were flat for the first quarter.

Nissan Motor Co. reported a 10 percent increase in car sales, led by the subcompact Versa and the newly redesigned Altima. But Nissan's truck and SUV sales plummeted 20 percent, with the Nissan Titan pickup down 45 percent for the month and the Nissan Armada SUV off 43 percent. Nissan's overall sales were down 4 percent for the quarter.

Truck sales have been hurt by the slowdown in housing construction. Small cars fared best as consumers focused on fuel efficiency. Sales of the Ford Focus jumped 24 percent for the month, while Toyota's subcompact Yaris saw sales rise 83 percent and Honda's subcompact Fit surged 74 percent.

GM and Ford said consumers are also choosing more fuel-efficient four-cylinder engines over six-cylinder options. Ford's top U.S. sales analyst George Pipas said 70 percent of Ford Fusion buyers are now getting the four-cylinder engine for the midsize car, compared to 60 percent at this time last year.

GM shares rose $1.07, or nearly 6 percent, to $20.12. Ford shares gained 21 cents to $5.83, Toyota's U.S. shares added $2.43 to $103.32 and Honda's U.S. shares were up $1.06 to $29.87. Auto shares rallied along with the market amid optimism that the worst of the credit crisis has passed and that the economy is faring better than expected.

The Associated Press reports unadjusted figures, calculating the percentage change in the total number of vehicles sold in one month compared with the same month a year earlier. Some automakers report percentages adjusted for sales days. There were 26 sales days last month and 28 in March 2007.

Can you believe this?

(AP) Alex Rodriguez makes more this year than his hometown Florida Marlins. Boosted by his new deal with the New York Yankees, A-Rod tops the major league baseball salary list at $28 million, according to a study of contract terms by The Associated Press. The 33 players on the Marlins' opening-day roster and disabled list total $21.8 million.

"The Marlins? It's amazing," Rodriguez said. "And they still seem to find a way to be very competitive. They have a great pool of talent; they made some unbelievable trades, so they have great personnel people. To win two championships in 11 years, that's really admirable, and I'm very proud of that organization, being from Miami."

For the first time in baseball history, the average salary topped the $3 million mark. The 855 players on opening-day rosters and the DL averaged $3.15 million, up 7.1 percent from last year's starting average of $2.94 million.

Florida's highest earner doesn't even make the average. Pitcher Kevin Gregg tops the Marlins at $2.5 million.

"My best friend came into town, and he mentioned something about Johan Santana making $15 million more than our five starters combined," Marlins catcher Matt Treanor said. "It's something to laugh at, but at the same time, it is what it is. Those guys put on the uniform like us. When it comes time to start the game, it doesn't matter how much money the Yankees or whoever make."

Treanor's friend was exaggerating a bit — Santana makes $12 million more than Florida's rotation. Still, the Marlins' payroll was less than half that of the No. 29 team, Tampa Bay ($43.8 million).

"They've won a championship more recently than we have as an organization. So there's many different ways to skin a cat," said Yankees general manager Brian Cashman, whose team lost to Florida in the 2003 World Series. "Alex earned that contract in the negotiation. Right now, the Marlins are in a different place. But they've got a stadium coming on board and they're going in the right direction, and I think they've already proven they know how to build something."

The Yankees, not surprisingly, topped the payroll list at $209.1 million, and A-Rod was No. 1 in the majors for the eighth straight year. New York first baseman Jason Giambi was second at $23.4 million, followed by Yankees shortstop Derek Jeter ($21.6 million) and Boston left fielder Manny Ramirez ($18.9 million).

Boosted by the acquisition of Miguel Cabrera and Dontrelle Willis, Detroit shot up to second in the major leagues at $138.7 million. The Tigers' payroll at the end of last season was 12th at $98.5 million.

"This isn't one of those teams, 'I can't believe we didn't pick up this player, or this guy.' We've got no excuses," Tigers manager Jim Leyland said. "It's all about us, because the main man has done everything and more that you could ask."

The New York Mets were third at $138.3 million, up from $121 million at the end of 2007, and the World Series champion Boston Red Sox were fourth at $133.4 million.

Bunched together after that were the Chicago White Sox ($121.2 million), Los Angeles Angels ($119.2 million), Chicago Cubs ($118.6 million), Los Angeles Dodgers ($118.5 million) and Seattle Mariners ($118 million).

Although the average increased, the median salary — the point at which an equal amount of players fall above and below — remained at a record $1 million for the third straight opening day.

There were a record 434 making $1 million or more, breaking the record set in 2001 and matched last year. And there was a big boost at the top with 85 players reaching $10 million — up from 66 last year.

Payroll figures don't include cash transactions between clubs. Figures included salaries and prorated shares of signing bonuses and other guaranteed income, and for some players, deferred money was discounted to present-day value.

The average salary usually declines during the season as veterans get released and are replaced by young players. The final 2007 average, as calculated by the players' association, was $2.82 million.

Northrop Grumman Corp. has begun to assemble the first F-35 Lightning II jet for the aircraft’s production phase, the defense giant said Tuesday.
Assembly work on the F-35 center fuselage began March 24 at Northrop’s Palmdale Manufacturing Center, with the loading of an all-composite air inlet duct into a special tooling structure called a jig.
The assembly of the center fuselage “is significant because it shows the F-35 program is successfully transitioning from the system development and demonstration phase into the production phase,” Janis Pamiljans Northrop’s F-35 program manager, said in a statement.
Northrop’s El Segundo-based Integrated Systems sector is responsible for developing and building the center fuselage.
The company employs about 425 people working on F-35 assembly in Palmdale.
Northrop employs another roughly 1,300, mostly engineers, in El Segundo to design and development the aircraft’s center fuselage. Also in El Segundo, Northrop workers fabricate composite air inlet and aft ducts for the center fuselage.
Final assembly of all F-35 jets is performed in Fort Worth, Texas, by Lockheed Martin Corp., the program’s prime contractor.
In 2001, Lockheed beat a Boeing Co.-led team for the lucrative contract expected to be worth more than $200 billion. When all anticipated domestic and international sales are factored, more than 4,000 F-35 jets are expected to roll off Lockheed’s assembly line, according to Northrop spokesman Brooks McKinney.
That means years of continuous work for many Northrop employees in Southern California.
Also known as the Joint Strike Fighter, or JSF, the F-35 is a versatile single-seat, stealthy, supersonic strike fighter capable of tactical bombing and air-to-air combat.

Read the full story in Wedesday's business section.

When will the bad news end?

Record 24th Straight Drop in Housing Pushes Overall Construction Down in February

WASHINGTON (AP) -- Construction spending fell again in February as home building tumbled for a record 24th straight month.

The Commerce Department reported Tuesday that overall construction activity dropped 0.3 percent in February, reflecting weakness not only in home building but also in nonresidential activity. Only government building projects showed a gain in February.

Residential construction fell by 0.9 percent in February. Residential activity has fallen every month since March 2006, a record period of declines that underscored the severe downturn going on in housing.

Analysts believe that housing will keep falling until a record glut of unsold homes is reduced. That effort is being hindered by the fact that mortgage defaults have soared to record levels, reflecting the abuses that occurred in lending activity at the height of the housing boom.

The weakness in housing is combining with soaring energy prices and a severe credit crunch to push the economy close to a recession.

The Bush administration is hoping that an economic stimulus package will boost growth starting this summer, when 130 million households begin spending their rebate checks.

In other economic news, a closely watched gauge of manufacturing activity edged up slightly to a reading of 48.6 in March. That was slightly better than had been expected but still signaled that the manufacturing sector remained in contraction.

The Institute for Supply Management's manufacturing index had been at 48.3 in February. Any reading below 50 is seen as a sign of contraction.

The 0.3 percent drop in construction spending represented the fifth straight decline in overall activity. Spending had fallen by 1 percent in January and 1.7 percent in December.

In addition to the continued fall in housing construction, spending on nonresidential projects dropped by 0.1 percent in February after declines of 1 percent in January and 0.2 percent in December. Weakness in February reflected declines in office building, health care facilities and schools.

Government spending was the one area of strength, rising by 0.4 percent with federal spending surging by 1.4 percent and state and local projects rising by 0.4 percent.

Total construction spending dipped to $1.12 trillion at an annual rate in February while private activity falling to $826.6 billion at an annual rate and government spending edging up to $294.9 billion at an annual rate.