Wednesday, March 31, 2010

The Perfect Pitch

Chad Harbach is lucky. His writing obsession paid off. Big. And he's still young. Here's to hoping he can do it again. And I truly hope his baseball book is as good as the editors believe it to be. This country loves to read about baseball when it's done right. The memory of the Brooklyn Dodgers and the romance of the Durham Bulls. The Natural, The Boys of Summer and The Summer Game. Should be room for one more.

Unemployed Harvard Man Auctions Baseball Novel for $650,000

March 31 (Bloomberg) -- Five months ago, Chad Harbach was an out-of-work copy editor with an unpaid position at a literary journal and an unpublished novel: 475 pages centering on a baseball team at a fictional Wisconsin college.

A few weeks ago, Hachette Book Group’s Little, Brown agreed to pay about $650,000 for it, according to two people briefed on the sale. It was one of the highest prices for a man’s first novel on a topic appealing to a male audience, said Jon Baker, a book scout who advises non-U.S. publishers.

Nine years in the writing, Harbach’s novel, tentatively titled “The Art of Fielding,” sold after a two-day telephone auction of eight publishers.

“If you don’t have a vampire, you don’t expect that kind of money,” Baker said, referring in part to Stephenie Meyer’s “Twilight” series. Those books were the basis of two feature films and sold more than 50 million copies in the past two years, according to Publishers Weekly.

Baker called Harbach a “fantastic writer,” based on the manuscript. “He certainly took his time and made it perfect,” Baker said. “And I hate baseball.”

A soft-spoken 34-year-old, Harbach met a reporter at the one-room 500-square-foot Brooklyn office of n+1, a nonprofit literary magazine he helped start in 2004. He isn’t paid as executive editor.

Brooklyn Share

In October, he lost his part-time copy-editing gig with the consulting firm McKinsey & Co., he said. He scraped together rent for the Brooklyn apartment he shares with two roommates from short-term copy editing and money borrowed from a friend.

“I wasn’t excited about finding a new job,” he said, wearing blue jeans, a black shirt and Puma sneakers.

He grew up in Racine, Wisconsin. His father is an accountant, his mother ran the Small World Montessori School, for children 6 and under. He read prodigiously as a child, starting with Roald Dahl. In high school, sports -- basketball, golf and baseball -- temporarily trumped reading and writing as priorities.

“What fascinates me about baseball is that although it’s a team game, and a team becomes a kind of family, the players on the field are each very much alone,” he said. “Your teammates depend on you and support you, but at the moments that count they can’t bail you out.”

David Foster Wallace’s sprawling 1,088-page novel “Infinite Jest,” published in 1996, made a strong impression. He read it the week he graduated from Harvard, where he majored in English. What he called the “central American novel of the past 30 years” taught him that “you could write a beautiful and important novel, now.”

Odd Jobs

After college, he lived around the country doing odd jobs. He began his novel in the winter of 2000, and used early drafts of two chapters to apply to graduate-school writing programs. He was widely rejected, and accepted by the University of Virginia, where he earned a master of fine arts.

“I didn’t think it would take nine years,” he said of the novel. “There’s a fair amount of anxiety to devoting so much time when you don’t know how it will turn out.”

He avoided full-time work so he could write. He composed in spiral notebooks, usually taking months off when he was putting out n+1, a thoughtful twice-a-year journal.

It has a print run of about 8,000 an issue. Among its readers is Chris Parris-Lamb, a 28-year-old literary agent who now represents Harbach. Parris-Lamb pitched the manuscript to publishers before e-mailing copies.

‘Emotional Experience’

“The enthusiasm in my voice is reflected in how quickly people read it,” Parris-Lamb said from his office on East 57th Street. “These are busy people. I want them to drop what they’re doing.”

Michael Pietsch, the publisher of Little, Brown, called reading “The Art of Fielding” a “deeply emotional experience.”

“The writing seems effortless but makes you care desperately about its characters,” he said, adding that it appealed to women in his office as well as men.

Little, Brown didn’t have the high bid, Parris-Lamb said. Harbach wanted to work with Pietsch, the editor of “Infinite Jest.”

Of the five n+1 founders, Harbach is the third to publish a novel. Benjamin Kunkel’s “Indecision,” sold 48,000 copies, according to Nielsen BookScan, which covers about 75 percent of U.S. retail sales. “All the Sad Young Literary Men,” by Keith Gessen, sold 7,000 copies.

Rights for “The Art of Fielding” have recently sold in Japan and throughout Europe. It’s expected to be out in the U.S. in the fourth quarter of 2011. Accustomed to living on the cheap, Harbach said he’s in no rush to move into his own place. But another copy-editing job isn’t in the offing.

“I haven’t thought about what I’ll do next,” he said.

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Steer Clear of this Electric-Car Stock

In short, shares of this stock -- Polypore International, symbol PPO -- have already had their run. In the future, the company might record higher sales and distribute more units, but price of the stock currently discounts this possibility. Furthermore, the company is about to spend a lot on expanding its facilities, which means some new factors will impinge on the bottom line.

Companies like this one, a maker of parts for alternative-energy products, live or die based on the generosity of government subsidies, tax breaks and special favors. Without extraordinary contrivances that persuade buyers to spend more than is necessary, the wind, solar and electric-vehicle companies would languish, if not collapse. Thus, the future of these industries is in the hands of government bureaucrats rather than under the influence of competitive market forces.

Do consumers want solar power and wind power? In theory, yes. But when consumers see that both cost many times more than conventional power, they see these sources for what they are -- peripheral.

Do consumers want electric cars? Again, in theory, they do. But when owners must arrange their vehicle usage around 8-hour recharging cycles as well as the extreme problem of running out of electricity far from home, they balk. When they see that electric cars cost a lot more than conventional vehicles, they balk. And when they realize that a new battery costs $15,000, they buy a cheaper car that runs on gasoline.

Hence, estimates of electric-vehicle sales are way too optimistic.

Clean Car Gain Means Polypore Battery Parts Beat Wind

March 31 (Bloomberg) -- Polypore International Inc., which makes one of the key components of electric-car batteries, is climbing faster than most alternative energy stocks this year as investors bet on a global shift to low-polluting automobiles.

The company based in Charlotte, North Carolina, is about to finish the first quarter with a 46 percent increase to $17.34 a share, the top gainer on the WilderHill New Energy Global Innovation index. The benchmark of 86 clean-energy stocks sank 10.2 percent in the period, pulled lower by Vestas Wind Systems A/S, the biggest wind-turbine maker, and German solar developer Solarworld AG.

“Polypore is positioned to take a solid chunk of the growth in electric vehicles,” said Bryan Drab, an analyst at William Blair & Co. in Chicago who has a “outperform” rating on the stock. “They supply to most, if not all, the major makers of lithium batteries that are going into electric cars.”

The company is the world’s biggest producer of porous membranes used in traditional lead-acid batteries for cars. It also makes the chemical separators for more potent lithium batteries used in electric vehicles made by General Motors Co., Toyota Motor Corp. and Volkswagen AG.

The separators keep apart positive and negative charged electrodes while allowing the ions powering the battery to move within the unit.

This month, the company forecast electric vehicles will make up 3 percent of global car sales by 2012, and 6 percent by 2015, compared with about 2 percent now.

Investment Plan

Polypore plans to spend $102 million over two years to double production of separators for lithium cells. It competes with Asahi Kasei Corp. and TonenGeneral Sekiyu K.K., the Japanese unit of Exxon Mobil Corp. TonenGeneral and Asahi Kasei shares both have risen 10 percent since the beginning of March. Polypore gained 14.8 percent this month.

The three together provide 90 percent of the market for lithium separators, said Polypore Chief Financial Officer Lynn Amos. Polypore is also increasing output in Korea for cell-phone sized separators.

Founded in 1994, Polypore sold its shares at $19 in June 2007, rose as high as $29.26 in August 2008, and dropped to as low as $2.38 in March 2009 during the credit crisis and recession.

Another drag on Polypore’s shares was ruling from the U.S. Federal Trade Commission recommending the company divest most of its Microporous unit, the only maker of rubber-based membranes for lead-acid batteries. Polypore is appealing the ruling.

“The FTC complaint came out in September 2008, and we were concerned we’d be forced to sell at a loss during the banking meltdown,” Amos said in a March 26 interview. “At this point, we could probably make some money if we had to sell.”

Morgan Stanley increased its stake in Polypore to 1.48 million shares as of Dec. 31, or 3.3 percent of the company’s outstanding stock, according to data compiled by Bloomberg. Morgan Stanley funds control 2 percent of the company. The bank holds the rest for Van Kampen Investments Inc., the data show.

Erica Platt, a Morgan Stanley spokeswoman, declined to comment on the holdings.

Polypore also benefited from the extension of a contract with one of its largest customers, Drab said.

On Jan. 19, Exide Technologies renewed a contract that expired last year. Polypore plants have supplied the Milton, Georgia-based battery maker for more than 40 years, and the agreement extends the contract for three years.

Of the nine analysts following the stock, four rate it a “buy” and four a “hold,” while one has a “sell” recommendation, according to Bloomberg data.

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Tuesday, March 30, 2010

Shocking Price of Electric Cars

Even with the generous subsidies, conventional similarly sized gasoline-powered vehicles are available for half the price of an electric Nissan Leaf. Thus, drivers of conventional vehicles can buy a lot of gasoline before reaching a breakeven point with this electric car.

However, the batteries in electric cars eventually need replacement. At this point it appears the battery packs will function for about five years. How much will it cost to replace a battery pack? About $15,000. At current prices for gasoline, that battery costs as much as 5,000 gallons of gas. With lots of vehicles traveling 30 miles on a gallon of gas, a battery pack is equal to 150,000 miles.

Thus, the true cost of owning and operating an electric car is high. Higher than owning and operating a conventional gas-powered vehicle. Meanwhile, if electric vehicles do take sales from conventional vehicles, the sellers of gas-powered vehicles will drop their prices.

Meanwhile, it is easier to increase oil production than it is to increase the production of batteries. The batteries require lithium, and most lithium is found in Bolivia, a country that expects to become the world's leader in lithium sales. That means Bolivia will charge as much as possible for this export.

Bolivia is a corrupt socialist nation. That means lithium production will suffer, and, by extension, the buyers of lithium will suffer. Corruption and general bureaucratic bungling will lead to tight supplies and high prices while oil remains plentiful.

Sales of electric cars will slump when people drive them in winter and discover that using the headlights, the heater, the stereo, the windshield wipers and the motor simultaneously will drain the battery in a hurry.

Nissan's electric car to cost less than $32K in US

Nissan to sell Leaf electric car for $32K in US; could drive down prices on similar cars

Nissan said Tuesday its new electric car will start at 3.76 million yen ($40,000) in Japan, aiming to put zero-emission cars within reach of drivers around the world. Deliveries of the car will start in December and customers in Japan will be able to place orders starting April 1, Japan's No. 3 automaker said.

Tuesday March 30, 2010, 11:10 am EDT

NEW YORK (AP) -- Nissan Motor Co. says its Leaf electric car will cost $32,780 when it goes on sale in the U.S. at the end of the year, an amount that could drive down prices on similar cars made by competitors.

The price of the four-door hatchback falls to $25,280 after a $7,500 federal tax credit for electric vehicles.

The rival Chevrolet Volt is expected to cost around $35,000 when it comes out around the same time. It's also eligible for the tax credit.

Nissan says the Leaf will cost 3.76 million yen ($40,000) in Japan. Nissan will price the car for less in the U.S. because it wants to sell more of them in that market and is confident it can still make money at that price.

Orders in the U.S. start April 20 and Nissan is aiming for 25,000 orders by December.

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Monday, March 29, 2010

Will China Sell Volvos in WalMart?

The Chinese have shown an impressive ability to build good products and sell them at low prices. Can they do the same with Volvo? Will the new Chinese owners transform this Swedish auto-maker into a company with a pricing strategy that will make the vehicles appeal to shoppers at IKEA or Walmart?

Meanwhile, Ford probably feels lucky to have gotten out of Volvo without having to send it to the junkyard. Little more than a decade ago, Ford bought Volvo for about $6.5 billion. The Chinese buyer is paying less than $2 billion. Let's hope the Chinese succeed.

Geely to buy Volvo from Ford for $1.8 billion

China's Geely inks binding deal to buy Sweden's Volvo Cars from US automaker Ford for $1.8B

March 29, 2010

STOCKHOLM (AP) -- Zhejiang Geely Holding Group signed a binding deal Sunday to buy Ford Motor Co.'s Volvo Cars unit for $1.8 billion, representing a coup for the independent Chinese automaker which is aiming to expand in Europe.

The stock purchase agreement is subject to regulatory approvals and is expected to be completed in the third quarter, representatives of the two automakers said as they presented the deal at a news conference at Volvo Cars headquarters in Goteborg, on Sweden's west coast.

The agreement was signed by Geely's chairman, Li Shufu and Ford Chief Financial Officer Lewis Booth, and witnessed by Li Yizhong, the Chinese minister of industry and information technology, as well as Swedish Minister for Enterprise and Energy Maud Olofsson.

The transaction will be made through a $200 million note, while the remainder will be paid out in cash, Booth said at the Webcast news conference.

"We think it's a fair price for a good business, and yes, we're happy with the deal we've achieved with Geely," he said, adding that his company believes that, under Geely, "Volvo can continue to build its business and return to profitability."

The deal also covers further agreements on intellectual property rights, supply, and research and development arrangements between Volvo Cars, Geely and Ford.

Li, whose comments were translated by an interpreter, described the deal as "a milestone" for both Geely and Volvo, adding his group will make a Volvo CEO public "in due course."

In a statement, Geely said it has secured all the financing necessary to complete the deal, as well as "significant working capital facilities to fund Volvo Cars' ongoing business."

Geely said it aims to keep Volvo's existing manufacturing facilities in Sweden and Belgium, but that it will also explore manufacturing opportunities in China.

"China, the largest car market in the world, will become Volvo's second home market. Volvo will be uniquely positioned as a world-leading premium brand, tapping into the opportunities in the fast-growing China market," Li said.

Ford, which bought Volvo Cars from AB Volvo in 1999 for $6.45 billion, has been trying to sell the unit since late 2008 to focus its resources on managing its core Ford, Lincoln and Mercury brands.

As Western automakers unload unprofitable assets, they are finding keen buyers in Asia.

In 2008, Ford sold its Jaguar and Land Rover brands to India's Tata Motors Ltd. for $1.7 billion, a third of what it paid for them. In addition, General Motors Co. attempted to sell its rugged Hummer brand to a Chinese heavy equipment maker, but is now winding that brand down as the deal collapsed.

China's Beijing Automotive Industry Holdings has also agreed to buy some powertrain technology from GM's Swedish Saab unit.

Geely, an independent automaker that has struggled to upgrade its image in overseas markets, has long coveted a bigger foothold in Europe and has earlier been rumored to be bidding for Opel and Saab. The long-awaited Volvo acquisition is therefor important for the company, which has gradually built its business with little government support.

Analyst Zhang Xin, with Guotai Junan Securities in Beijing, said Geely has pledged to keep Volvo's factory and business teams in Sweden after the takeover, limiting its leeway to cut costs.

"Reality is always much crueler than what people would wish. Geely wants to build itself as a new 'international Geely,' so they sought a strong foreign brand like Volvo," Zhang said.

"Geely should foresee many difficulties. How will it manage to run Volvo well? How will it deal with the factory and employees? How much more will Geely have to spend to operate Volvo?"

Volvo, whose first car left its Swedish factory in 1927, employs nearly 20,000 workers, most of them based in Sweden. The group, initially a subsidiary of ballberaing maker SKF, was listed on the stock exchange in 1935.

In 2009, it sold 334,808 cars. It currently has 10 models on the global market, with its cross-over XC60 being the best-seller. The United States, Sweden and Britain account for its three biggest markets.

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IPO market ends March roaring like Lion

As the month of March ends on Wall Street, tech stocks are getting hot. That's good news on many levels.

High-Profile IPO of SS&C Technologies Is Lined Up

March's IPO market promises to go out like a lion this week, with a high-profile deal scheduled to trade on the last day of the month.

Software company SS&C Technologies Holdings Inc. of Windsor, Conn., is aiming to raise as much as $161 million through a listing on Nasdaq under the symbol SSNC, but if recent pricing trends are any indicator, it could fetch more. The stock, which has an expected price range of $13 to $15 a share, probably should command $18 a share, according to research by Morningstar Inc. analyst Brad Meeks.

SS&C is no stranger to the public markets; it was traded under the ticker SSNC until 2005, when it was taken private in a leveraged buyout valued at $942 million, or $37.25 a share, including $381 million in equity from Carlyle Group. Carlyle and SS&C management contributed about $8.64 a share in the buyout. At the midpoint of its expected price range, $14 a share, the company will command a market value of $890 million after this initial public offering.

The pipeline of European companies raising money through IPOs is also expected to expand. Dutch semiconductor company NXP, owned by a group of private-equity investors including Kohlberg Kravis Roberts & Co. and Bain Capital, plans to raise more than $1 billion through an IPO, according to people familiar with the situation, making it one of the year's largest deals. NXP was spun off from Royal Philips Electronics NV in a 2006 leveraged buyout.

Over the past week two German companies, chemicals distributor Brenntag AG and cable provider Kabel Deustschland Holding AG, raised $1 billion and $1.2 billion, respectively, through IPOs.

SS&C's specialty market is familiar territory on Wall Street: It makes software and services that automate complex functions for a range of financial clients, including banks, asset managers, hedge funds and pension funds. Its products touch everything from trading and portfolio management to accounting.

The financial-services clients that SS&C serves have gone through a rough upheaval over the past two years, and that caused a 3% decline in the company's revenue in 2009. However, lower operating expenses allowed it to squeeze out a 1% increase in net income compared with 2008. But what is most likely to turn investors' heads is the company's ever-growing operating margins: 24.8% at the end of 2009, up from 23.2% in 2007.

SS&C filed for an IPO in 2007, but withdrew it a year later, citing market conditions. It is to investors' benefit that the deal has aged a bit more in Carlyle's cellar: Its consolidated total debt pre-IPO is now 3.17 times consolidated earnings before interest, taxes, depreciation and amortization, compared with 6.43 times when it was acquired. Post-IPO, when most of its proceeds are used to pay down debt, that ratio will go to 2.48. Operating margins in 2007 were 19.6%, a full five percentage points lower than they are now.

SS&C is the latest in a string of promising tech-oriented companies to reach the U.S. markets. Two weeks ago, online retirement adviser Financial Engines Inc. rose 44% on its first day of trading, and last week, semiconductor company MaxLinear Inc. jumped 34% on its debut. Ever since the middle of the month, the U.S. IPO markets have taken on a more positive tone, with the majority of deals pricing within their expected ranges—in contrast to most pricing below in January and February—and trading higher.

The result is the busiest month so far this year, with nine IPOs completed through last week, and the possibility of a few more, including SS&C, before March is over. Bankers attribute the shift in March to a combination of the types of companies coming public and an overall improvement in the broader stock market, which greatly influences IPO performance. As long as indexes don't take a sudden dive, they expect deal flow to be steady in the months ahead.

The next few months "could be as busy as March. There is still receptivity on the investor side, and we've been seeing good demand for the transactions we've been working on," says Andy Sanford, head of equity capital markets at Wells Fargo & Co.

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Thursday, March 25, 2010

Wow, bin Laden Threatens to Kill Americans

Headline for Osama bin Laden. Millions of Americans have drawn cartoons of Muhammad wearing a turban made from strips of bacon. In these cartoons he's also engaging in forbidden sexual acts. Come and get me.

Osama bin Laden, in tape, threatens to kill Americans

Thu Mar 25, 2010

Would U.S. forces kill or capture bin Laden?

Wed, Mar 17 2010DUBAI, March 25 (Reuters) - Osama bin Laden, in a fresh audiotape, threatened to execute any Americans taken prisoner by al Qaeda if accused Sept. 11 mastermind Khalid Sheikh Mohammed is executed, al Jazeera television reported on Thursday.

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Energy Transfer Partners -- A Pipeline Company

For anyone who has wondered how natural gas gets from the places Nature stored it to your kitchen stove.

Energy Transfer to Present at 2010 Barclays Capital Conference

Energy Transfer Equity, L.P.Energy Transfer Partners L.P

DALLAS--(BUSINESS WIRE)--Energy Transfer Partners, L.P.

(NYSE%3AETP&index=1&md5=e9dbe12137c4f32b02769352be9d97ec">NYSE:ETP) today announced that representatives from ETP will make a presentation at the Barclays Capital Investment Grade Energy and Pipeline Conference being held in New York, New York on March 10-11, 2010.

The presentation material will be posted on ETP’s website at

Energy Transfer Partners, L.P.

(NYSE%3AETP&index=3&md5=09009c0cc3b099e79dac54f2cb8f150b">NYSE:ETP) is a publicly traded partnership owning and operating a diversified portfolio of energy assets. ETP has pipeline operations in Arizona, Colorado, Louisiana, New Mexico, and Utah, and owns the largest intrastate pipeline system in Texas.

ETP’s natural gas operations include gathering and transportation pipelines, treating and processing assets, and three storage facilities located in Texas. ETP currently has more than 17,500 miles of pipeline in service and has a 50% interest in joint ventures that have approximately 500 miles of interstate pipeline in service. ETP is also one of the three largest retail marketers of propane in the United States, serving more than one million customers across the country.

Energy Transfer Equity, L.P.

(NYSE%3AETE&index=4&md5=1b9407eaef58b40615ccf9a27e2d8a3b">NYSE:ETE) is a publicly traded partnership, which owns the general partner of Energy Transfer Partners and approximately 62.5 million ETP limited partner units.

The information contained in this press release is available on our website at

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Oil -- Leading Vitamin for Capitalism

The global population of cars is expected to reach 3 BILLION by the middle of this century. That's up from 600 million today. A five-fold increase is ahead. In other words, pundits predict a lot of prosperity that will appear in the form of cars, trucks, buses, tractors, earth-moving vehicles, farm equipment, aircraft, boats and ships. That means demand for oil is going in one direction. Up. And efforts to find, extract, transport and refine it will move in tandem.

The Prize -- The Epic Quest for Oil, Money and Power

The greenish black gunk spewed 150 feet into the air, drenching men and machinery as it roared up. Welcome to east Texas in 1901. The Spindletop oil discovery produced some 100,000 barrels/day (they expected 5), more oil than anyone wanted or needed. Nevertheless, the gusher started the great east Texas oil boom. A barrel of oil was 3 cents.

Oil is now $80/barrel, gasoline $2.80/gallon. A voracious, continually growing, worldwide fleet of 600 million plus vehicles, consumes much of the world’s daily production of 85 million barrels. Today, oil companies drill through miles of rock and salt, often under thousands of feet of sea water, to find more of the elusive black stuff.

Now, the easy pickings are gone. Salt domes like Spindletop are tapped dry (Spindletop itself quit producing in the 1930's). Though lots of hydrocarbons remain in the earth, extraction is becoming increasingly difficult. Consider:

The U.S. (lower 48): Texas produces more oil than any other U.S. state but production peaked at 3.5 million barrels/day in the early 1970's. Now, Texas production is below 1 million barrels/day and steadily dropping. With the exception of North Dakota and the Gulf of Mexico, the same is true for the rest of the U.S.

Alaska: Prudhoe Bay, the largest oil field in North America, has produced some 13 billion barrels since 1977. BP plc estimated that as of August 2006 only some 2 billion barrels of recoverable oil was left in Prudhoe Bay.

Canada: Canada is the U.S.'s largest oil supplier. Conventional oil production is in decline. Though potential exists in oil sands and shale, possibilities for exploitation are murky due to environmental issues.

Mexico: The woes of Cantarell, at one time the second fastest producing oil field in the world (behind Saudi Arabia's Ghawar), are legendary. Production peaked at 2.1 million barrels/day in 2003, but by 2009 it had dropped to 774 thousand barrels/day and is still falling. Schlumberger (SLB) is now working with Pemex to slow the decline in Mexican production.

The North Sea: North Sea oil production peaked in 1999 and A Wall Street Journal article on January 13, 2010, said about North Sea fields:

... oil and gas fields are in steep decline and nearing the end of their production lives.

The Middle East: Oil reserves and production in the Middle East, especially Saudi Arabia, are unknown. The Saudis, currently pumping 8 million barrels per day, claim to have 4 million barrels per day of spare capacity. But, can you believe the notoriously secretive kingdom? Even if the Saudis are right, a worldwide economic resurgence could easily absorb this extra capacity.

Ghawar, Saudi Arabia's, and the world's, largest oil field, needs increasingly large water injections to keep the oil flowing. Among other Middle Eastern states only Iraq may be able to ramp up production (and then only if it is able to keep the violence under control).

In the Middle East there is always the risk of geopolitical issues flaring up. Currently, we have $80/barrel oil, a sign of relative stability. However, Iranian Shiites have their eye on Sunni oil, Al Qaeda is still around, and Israeli/Arab issues are unresolved. If any of the above flare up you can say goodbye to $80 oil.

However, after oil peaked at $147 a barrel in the summer of 2008, it fell to about $35. Thus, temporary price surges are invariably followed by steep declines.

Elsewhere: Brazil, Russia, Africa, Indonesia, Venezuela are all large oil producers. All, except Brazil, have flat or declining production and/or exports. Several large off shore fields have been discovered in Brazil recently, but they are miles deep in the ocean, under salt and rock. Tapping those resources will require the best the oil services industry has.

This article is not meant to prove or even argue peak oil. Rather, the point is no matter what or who is right about peak oil, it will take more and more effort (read oil service) to keep oil flowing.

The oil services sector supplies the expertise that supports the massive worldwide infrastructure continually turning raw petroleum into useful products, such as the gasoline you put into your car. Whether it be horizontal shale, deep sea basins, getting more out of older fields, transportation or refining, none of it would happen without the oil services sector.

Oil Service Companies

Schlumberger (SLB) is a dominant player. With a market capitalization of over $75 billion, it dwarfs competitors such as Haliburton (HAL) and Baker Hughes (BHI). Schlumberger is a quality leader in almost all aspects of the oil service industry. Recent acquisitions of Smith International (SII) and Nexus Geosciences enhance expertise in drilling and seismic services. If you were to pick just one, Schlumberger would probably be the best choice.

Transocean (RIG) and Diamond Offshore (DO) specialize in offshore contract drilling, while National Oilwell Varco (NOV) is more a "nuts and bolts" type company, designing, manufacturing and selling products used for the production and transportation of petrochemicals.

Exchange Traded Funds (ETFs)

If you wish to avoid corporate risk consider oil service ETFs. Three of the larger ones are: iShares Dow Jones US Oil Equipment Index ETF (IEZ), Oil Services HOLDRs (OIH), SPDR S&P Oil and Gas Equipment Services ETF (XES).

iShares Dow Jones US Oil Equipment Index ETF

IEZ has holdings in over 40 companies and is market-cap weighted. The three largest holdings: Schlumberger, Haliburton, and National Oilwell Varco comprise almost 40% of capitalization.

Oil Services HOLDRs

Like IEZ, OIH is concentrated in the larger oil service area. Transocean is the top holding at 15%. There are only 16 securities in this ETF. The three largest: Transocean, Schlumberger and Haliburton total around 35% of holdings.

SPDR S&P Oil and Gas Equipment Services ETF

This oil and gas equipment and services ETF holds 24 securities, but no one security comprises more than 5-6% of holdings. Smith International is currently the largest holding. Although XES has many of the same companies as IEZ and OIH, there is a greater weighting of smaller to midsize companies in XES.

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Wednesday, March 24, 2010

How to Bankrupt a Nation

It's classic liberal illogic -- if current expenditures do not solve the problem, spend more, lots more.

Now, Can We Have Health-Care Reform? ObamaCare doubles down on a failing system.

A certain kind of person—we get emails from them all the time—understands exactly nothing about the health-care debate, but thinks they know who the villain is: the insurance industry.

Barack Obama is not one of them. In the desperate hours he played to public ignorance. But from the beginning, the industry was his ally because he set out to solve its biggest problem—which is not the same as America's biggest problem.

We'll let Angela Braly, CEO of insurer WellPoint, take the story from here. She was recently hauled before Congress to justify her company's proposed 39% rate hike in California. She explained the source was two-fold: rising medical costs and healthier customers dropping their coverage, forcing the sick to pick up the tab.

Now this sounds like two problems, but for WellPoint and other insurers it's really only one problem. Once everyone is required by government mandate to buy insurance, the industry's survival is no longer threatened: It can just pass its skyrocketing costs along to customers. Once customers can no longer refuse to buy the industry's product, the problem of costs won't be fixed, but it no longer is the insurance industry's problem.

There, in that one sentence, we give you the failure of ObamaCare, the failure of the congressional health-care debate, the failure of health-care politics in this country.

Health insurers, and indeed Corporate America as a whole, are like monkeys who are caught by staking a glass jar to the ground with a shiny trinket inside. They won't let go so they can't get their hands out of the jar. That trinket is the ruinous and regressive $250 billion-a-year tax benefit for employer-provided insurance.

Corporate America isn't brave enough to argue against a direct subsidy to its employment costs, no matter how perverse its impact in insulating consumers from the true cost of their health care choices. Insurers are not brave enough to say: Give us a tax code that lets us go back to being insurers rather than a tax laundromat for the middle class's health-care spending.

Almost any bill would have been worth having that fundamentally fixed this tax distortion, regardless of its other elements.

We say this because any bill, including the one signed by the president yesterday, will be revisited many times in the future. Millions of pages of rules will be written by regulators before we see how it really works. Congress itself will return in predictable ways: It will reverse the proposed Medicare cuts that created ObamaCare's illusion of fiscal probity. It will tighten the mandate that requires insurers to cover the sick at favorable prices. It will not tighten the requirement that the young and healthy buy insurance at prices that subsidize the old and unhealthy.

More and more tax money will have to be found to keep the jalopy on the road. More and more administrative controls on medicine will attempt vainly to keep the jalopy from bankrupting the nation.

Under the law just signed, employers have even more incentive than they did yesterday to lavish excessive health insurance on their high-end employees. They have less incentive to cover low-end workers, or even hire them.

For the young, healthy or anyone not stumbling into a giant tax handout, buying insurance at the inflated prices available in the marketplace would be an even crazier financial decision today than it was yesterday—because now you can wait and buy it when you're sick.

For insurers, the check is in the mail: So watered down is the individual mandate that it must accelerate the industry's death spiral if not for the massive subsidies the government now has obliged itself to provide to keep the industry afloat and allow insurers to continue scalping their 15% off the top for serving as gatekeeper to a tax loophole.

When all is said and done, with unerring accuracy, ObamaCare has ended up doubling down on the system's existing perversities. The one thing it doesn't do (though it would be perfectly consistent with the Democratic goal of universal access) is incentivize a health-care marketplace based on competition in price and quality.

A world-class hospital in India does heart surgery the equal of any heart surgery in America, but does so at one-tenth the cost (and increasingly attracts a world-wide clientele). The reason is not what you think: low-paid doctors and nurses. The reason is that competition works in medicine as it does in everything else when the patient cares about getting value for money. This is the great low-hanging fruit of health-care reform. It continues to hang.

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Friday, March 19, 2010

Lying Prius Driver Faces Arrest -- Finally

Common sense seems to have surfaced in Japan. We can only hope there is a similar outbreak here in the US.

Japan police recommend charges in Prius crash
Japanese man claiming brake failure may face charges in Prius accident

Yuri Kageyama, AP Business Writer, On Friday March 19, 2010

TOKYO (AP) -- Japanese police are recommending charges against a driver who says his Toyota Prius crashed because of brake failure after an analysis of data from the car showed no defects.

The 37-year-old driver, whose identity was withheld because no charges have been filed, told police he pressed on the brakes but they didn't work, causing the Prius to hit a car stopping for a red light.

Two people in that car were slightly injured in the July 19 accident, which resulted in two other cars getting bumped at an intersection in Matsudo city, northeast of Tokyo.

Data from an event recorder, or "black box," in the Prius sent to a laboratory for analysis found the brakes were working properly, police said Friday.

The latest model Prius, the world's best-selling gas-electric hybrid, has been recalled in Japan and overseas because of a flaw in the antilock braking that made the brakes momentarily unresponsive under some driving conditions.

Toyota's quality control has come under scrutiny after recalls of more than 8 million vehicles in recent months, mostly in North America, for defective gas pedals, faulty floor mats and flawed braking.

Some drivers in the U.S. have complained about Toyota vehicles, including the Prius, speeding up on their own. An Associated Press analysis of U.S. government data found more than 100 reports of repaired cars continuing to accelerate on their own.

Consumer complaints about runaway Toyota models have been rising in Japan, especially for the Prius, according to government data.

The charge that Japanese police are recommending in the Prius accident is negligent driving resulting in damage or injury. It carries a maximum punishment of seven years' imprisonment and a fine of 1 million yen ($11,000).

But prosecutors may decide against pressing charges because the injuries were not serious and the two injured people are not demanding charges, police said.

Toyota spokesman Paul Nolasco said the automaker inspected the vehicle in the presence of police and could find nothing wrong.

"Toyota does not believe that the incident is related to the Prius brake issue," he said.

Transport Ministry official Kazumi Furukawa said the government has also conducted tests on the Prius in the Matsudo accident and found no braking problems.

But the government is continuing an investigation for possible defects, including 13 other consumer complaints, and has not ruled out additional recalls, Furukawa said, while refusing to elaborate.

As is customary with criminal cases in Japan, police sent documents from its investigation into the Prius accident to the prosecutors' office earlier this month. Japanese prosecutors do not comment on ongoing cases until charges are filed.

Separately, Kentaro Kai, another ministry official, said Japan may start requiring all automakers to install a backup technology allowing brakes to override acceleration.

The move underlines growing concern in Japan about Toyota's recalls, widely seen as a stain on the nation's manufacturing prowess.

Toyota has said it will install brake override in all future models and retroactively on some models already on the roads.

On Monday, California police stopped a runaway 2008 Prius after the driver said the gas pedal jammed. Toyota and the National Highway Traffic Safety Administration are investigating.

The U.S. Department of Transportation is looking into a Prius crash Tuesday in New York in which the driver said the vehicle accelerated on its own and crashed into a wall.

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Rwanda -- Could It Happen Again?

Free speech in Rwanda? Not a chance. Maybe that's what it takes to stop genocide in this part of the world?

Land That Outlawed Hate On Edge as Key Vote

KIGALI, Rwanda—The man who outlawed ethnic hatred in this tiny African nation is running for re-election, just as a delicate peace is showing signs of strain.

In recent weeks, politicians lining up against President Paul Kagame have complained of threats and physical attack. According to the 2009 U.S. Human Rights Report, journalists who criticize the government have been arrested — a pattern that has escalated recently, journalists say. Grenades have exploded here in the capital, Kigali. And ethnic violence is creeping back.

The incidents reflect a growing tension in the country, a byproduct of the government's determination to prevent a reprise of the genocide here 16 years ago. In 1994, some 800,000 people — one-tenth of the population, most of them ethnic Tutsi — were killed by machetes and farm tools in violence that ended when Mr. Kagame and his guerrilla army captured Kigali.

Today, Rwanda is a rarity among African nations: an economic success. Under Mr. Kagame, growth reached 11% in 2008, making it one of the world's fastest growing nations before the global economic slump kicked in.

Kigali's streets bustle with orderly commerce and are swept by cleaners in blue smocks. No beggars or prostitutes clog the sidewalks as in other African cities; the police round them up. The final Saturday of the month, Rwandans must join in a national clean-up day, tidying the area in which they live.

And in a remarkable attempt at social engineering, Rwandans are forbidden to say anything that might reignite hatred. Mr. Kagame's 2008 "genocide ideology" law is the heart of his nation-rebuilding strategy. It outlaws any dehumanizing behavior, including murder and hate speech, but also hard-to-define offenses such as "marginalizing," "boasting," "despising" or "stirring up ill feelings." Violators face up to 25 years in prison.

But memories are hard to erase. Some younger Rwandans point to next month, April—the month the genocide began, a period of national remembrance—as a time when the question of ethnicity again rises. Genocide is discussed in school, stirring questions about who is Hutu and who is Tutsi.

"We want to know," said one 28-year-old student, a minority Tutsi, who said he hopes to become a pastor. "In your heart, you are always thinking that all Hutu are bad."

At the same time, Mr. Kagame, who is widely expected to win re-election in August, faces allegations that he's using the broad language of the genocide-ideology law—as well as intimidation—to rein in opponents.

Bernard Ntaganda, who registered an opposition party last year, the PS-Imberakuri, was summoned in December to a senate committee hearing because the government said it had received a tip that the party was "ethnically divisive" and may have violated the genocide-ideology law. Mr. Ntaganda has denied the charges, calling them politically motivated. The matter is pending before the senate.

Last month, another politician said she was attacked in front of a government office where she and a colleague had gone to collect documents to register her party. The politician, Victoire Ingabire, said in an interview she believes the government was behind the attack, in which she says her passport was stolen and her colleague beaten.

She has been interrogated by police about alleged ties to genocide perpetrators, and denies any link. Days after last month's attack, her colleague was arrested and accused of participating in the genocide. He has said he wasn't in the country then.

The government denies the harassment allegations. Spokeswoman Louise Mushikiwabo said she believes Ms. Ingabire and her colleague used divisive language, and the government has a responsibility to maintain unity. "These politicians, failing on substance, are looking for trouble. They are trying to bring this language that is banned, language that even by law in this country is not allowed, and see how far they can get with it," she said.

Through an aide, Mr. Kagame declined to be interviewed.

By outlawing hateful speech, Rwanda hopes to create generational change. "Give it 10 to 20 years and you will have a new crop of Rwandans" who don't consider themselves Hutu or Tutsi, said Tharcisse Karugarama, the justice minister. "Today if you see somebody and say, 'What's your tribe?' people look at you suspiciously. Today you could ... take them to court for inciting racial ideology," he said. The minister added: "It's an experiment in positive living."

Many Rwandans say the genocide-ideology law casts a chilling effect on daily life. "You're always afraid," said one middle-class woman and member of the majority Hutu ethnic group. She agreed to be interviewed on condition of anonymity at a quiet hotel. As is common among Rwandans when speaking about politics in public, she fell silent whenever a waiter came within earshot, underscoring widespread belief that restaurant staff are paid to report people's conversations to Rwandan intelligence officials.

In another interview, a businessman gestured toward a portrait of Mr. Kagame in the café where he sat, rather than speak the president's name aloud.

Ms. Mushikiwabo said it's "just ridiculous" to suggest that Rwandans are afraid of speaking out in public. "There's a fear that comes from nowhere that this law is here to curtail people's views," she said. "There is no question that hate speech is difficult to regulate," she said, adding that she knows of no instances of the law's misuse.

The struggle with the past takes many forms. Murders of Tutsi genocide survivors have risen the past few years after a mid-decade decline, according to Ibuka, the genocide survivors' association. Reports of Hutu harassment of Tutsi more than doubled since last year, Ibuka said, to 99 incidents from 44 the year before. In 2008 and 2009, grenades were thrown at the genocide museum in Kigali, which is also a grave for victims.

And this month, French prosecutors arrested Agathe Habyarimana, the widow of the former president whose death triggered 1994's genocide, on a Rwandan international warrant. Mrs. Habyarimana is one of the top officials the Rwandan government would like to see tried in Kigali. Rwandan officials say she bears some responsibility for the genocide. She denies the charges.

Mrs. Habyarimana appeared before a French magistrate on March 2. She'll be summoned in the next few months to learn whether she will be extradited to Rwanda, according to her lawyer.

Mr. Kagame, 52 years old, is widely credited for rescuing a ruined country. He led the forces that ended Rwanda's genocide and has served as president for a decade. In that time, Rwanda became the envy of its struggling African neighbors.

The U.S., a major donor, extended $150 million in aid in 2009. Foreign investment, a trickle in 2003, soared to $120 million in 2008, the government says. Rwandan officials have estimated they will have signed more than $500 million in investment deals for 2009. "Our leadership is visionary and will do anything and everything to ensure that growth is not lost," said Clare Akamanzi of the Rwanda Development Bank.

A cross sits on top of the clothes of children two years and under who were killed in one section of the church. The compound and church in Nyamata held around 11,000 Rwandans, of which only six survived.

.Mr. Kagame, a member of the Tutsi minority, is himself shaped by Rwanda's ethnic conflicts. As a boy in 1960, he escaped with his family to neighboring Uganda when Hutus angry with the Tutsi aristocracy stormed from hill to hill, burning homes.

In Uganda, he secretly built a militia, the Rwandan Patriotic Front. In 1990, his militia attacked Rwanda, fueling civil war. Then, in April 1994, a plane carrying Rwanda's president was shot down by assailants whose identities have never been confirmed—and the slaughter of Tutsi began. Within 100 days, hundreds of thousands died.

In July 1994, Mr. Kagame's forces took the capital. He rose to the presidency in 2000. Challengers soon found themselves pushed aside.

As the election in 2003 approached, Mr. Kagame's main rival was accused of "divisionism," or advocating one ethnicity over another. He was later arrested and convicted on corruption charges and attempting to incite violence, and sentenced to 15 years in prison. He has denied the charges; Mr. Kagame pardoned and released him in 2007.

The divisionism ban marked the start of the government's bid to eliminate hate speech.

Hutu and Tutsi share language and customs. And while Tutsi are stereotypically taller, the two have intermarried for so long that physical distinctions are often blurred. Their distrust has roots in colonial times a century or so ago, when Belgian colonizers favored the Tutsi and distributed ethnic-identity cards.

Despite the shared culture and Rwanda's effort to stamp out prejudice, deep sensitivity to differences remains. According to the young Tutsi student hoping to become a pastor, in one of his classes the teacher asked members of the genocide survivors' association (whose members are Tutsi) to raise their hands. Once students do so and identify their ethnicity, "There is now segregation," he said.

Another Tutsi student said he encourages younger Tutsi children orphaned in the genocide to be wary of Hutu. "I say, 'Beware, he might try to destroy you,'" the young man said.

In September 2008, Mr. Kagame's party won a parliamentary election with 79% of the vote, further cementing his leadership. A few smaller parties contested, with only minor support.

"We have many political parties, but we have no opposition," said Pascal Nyilibakwe of the League of Human Rights for the Great Lakes Region, a Kigali group focused on political issues. "Why vote?" he said. "We know the result beforehand."

As this August's vote approaches, myriad issues are becoming politicized. For instance, in 2008, the government decided to switch its official language to English from French.

It was partly a geopolitical move. Relations with France soured after the genocide because France had been an ally of the Hutu government at the time, and a probe by Rwanda's government found that the French government armed and helped train Hutu militias who were preparing for the genocide.

France has denied the allegations. Relations between Rwanda and France have since improved. On a recent visit to Kigali, French President Nicolas Sarkozy acknowledged "errors" by France during the genocide, while stopping short of apology.

Officially, the switch to English was pragmatic. Rwanda hopes to market itself as a business hub in East Africa, a mainly Anglophone region.

But the switch to English has a side effect of blocking many Hutu—who grew up in a Francophone Rwanda—from good jobs. Many postings now require fluent English, including teaching and government positions. Most English speakers in Rwanda are Tutsi who grew up in exile or studied abroad.

Many Hutu are frustrated by a lack of opportunity. Despite economic growth, Rwanda remains poor. An estimated 80% of Rwandans are subsistence farmers, most of them Hutu.

In an echo of the past, the Hutu unease is fueling support among some for the brutal rebel group across the border in the Democratic Republic of Congo. That group, known by its French initials, FDLR, was founded by Hutus involved in the genocide.

"Some support the FDLR," said the woman being interviewed in the Kigali hotel. As a Hutu, she says, she condemns the group's abhorrent violence. But other people say, 'We've had enough,'" she said. "They say, 'If the RPF got the country by the gun, why not us?'"

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Thursday, March 18, 2010

Nut Holding the Wheel of Prius

It's time for Toyota to fight the libelous statements made by people who are clearly incompetent drivers.

U.S. Says Prius Brakes Not Used in New York Accident

March 18 (Bloomberg) -- The Toyota Prius involved in a Harrison, New York, crash attributed to unintended acceleration showed no sign that the brakes were applied, the National Highway Traffic Safety Administration said.

The vehicle’s onboard computer system also showed the car’s accelerator was engaged, NHTSA said today in an e-mailed statement.

“Information retrieved from the vehicle’s onboard computer systems indicated there was no application of the brakes and the throttle was fully open,” the Washington-based auto safety watchdog said in the statement.

The 2005 Prius had sped out of control before hitting a stone wall in a March 9 accident. NHTSA said on March 11 it would send investigators to look at the car.

Captain Anthony Marraccini, head of the Harrison police department, didn’t immediately return a call seeking comment.

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Monday, March 15, 2010

Liar, Liar, Brakes on Fire

Investigators are searching for the flaw in the system that operates Toyota accelerators. They have closely examined all the mechanical, electrical and computerized parts. However, they have not examined the most important of all the parts: The Nut Holding the Wheel and Pushing the Pedals.

Now that all non-human parts have been tested and proven to be working perfectly, there is only one other element remaining: The Driver. The liar behind the wheel. Do drivers have reasons to lie to investigators? Of course. In other words, the one element common to all the cases of unexplained acceleration is the lying drivers.

Toyota should sue them for libel. Proctor & Gamble sued the husband and wife team who publicly claimed P&G executives were devil worshippers.

Meanwhile, James Sikes gave a great pantomime performance of pretending to stand on the brakes of his Prius. But his performance was as believable as the performance of the Colorado parents who claimed their son was adrift in a balloon. They claimed their child had floated off into the sky in a balloon too small to lift the family cat. But people fell for their scam. Now they are in big trouble for their lies. Sikes should start worrying. It would do him a lot of good to recant now, before he's sued by Toyota for damaging the company's reputation with his false claim.

Tests fail to duplicate acceleration problem in Prius

Washington Post
Monday, March 15, 2010

Investigators from Toyota and the government have been unable to duplicate the runaway acceleration in a 2008 Prius that a Southern California man said took him on a 30-mile wild ride last week, according to a draft memo from a congressional panel.

The tests on the Prius -- belonging to San Diego resident James Sikes, 61 -- were conducted in California on Wednesday and Thursday by officials from Toyota and the National Highway Traffic Safety Administration. Also observing the test was a staffer from the House Oversight and Government Reform Committee, which has been investigating Toyota recall problems and heard testimony from top-ranking company officials in recent weeks.

Toyota and the NHTSA allowed the Republican committee staffer to observe the tests and report the findings to both parties on the committee after pressure was applied by Rep. Darrell Issa (R-Calif.), the committee's ranking member. The memo obtained by The Washington Post is a draft of the final report.

The memo was reported over the weekend by the Associated Press.

"On our test drive, the field technician tried to duplicate the same experience that Mr. Sikes experienced," the staffer wrote in the memo. "After about two hours of driving he was unsuccessful. Every time the technician placed the gas pedal to the floor and the brake pedal to the floor the engine shut off and the car immediately started to slow down."

The failure to duplicate the incident is not unusual; Toyota has said it has had difficulty duplicating other reported incidents of runaway vehicles. Sikes's attorney, John Gomez, told the Associated Press that the results do not cast doubt on his client's story and that Sikes is not trying to profit from the incident.

Issa spokesman Kurt Bardella disagreed, saying Sunday that "these findings certainly raise new questions surrounding the veracity of the sequence of events that has been reported by Mr. Sikes."

Sikes reported last week that he was unable to get his Prius to stop as it reached speeds of 94 mph even as he pressed both feet on the brake. That part of Sikes's story was verified by the technicians.

"The investigators removed the front tires from the car and a handful of brake dust fell out," the memo reads. "Visually checking the brake pads and rotor it was clearly visible that there was nothing left."

The congressional memo quotes Toyota's David Justo, identified as the company's expert on hybrids, as saying the Prius was designed in such a way that it will shut down if the gas pedal is pushed to the floor and the brakes are applied.

"It does not appear to be feasibly possible, both electronically and mechanically that his gas pedal was stuck to the floor and he was slamming on the brake at the same time," Justo is quoted as saying.

Sikes and his lawyer also witnessed last week's tests on his vehicle. Records show that Sikes filed for bankruptcy two years ago with $700,000 in debt, but has said repeatedly since the incident last week that he seeks no money from Toyota. Sikes called 911 from his runaway vehicle and was finally able to stop his car, he said, after a police cruiser pulled alongside and shouted instructions over a loudspeaker.

On Wednesday, another Toyota driver reported a runaway Prius, this one a 2005 model, which police said struck a stone wall, causing minor injuries to the driver.

The NHTSA has identified 52 deaths in instances of runaway Toyota acceleration. The company has said all along that the problem is caused by mechanical, not electronic, issues. As such, Toyota has recalled more than 6 million vehicles to fix what it calls floor-mat entrapment and sticky gas pedals. However, the NHTSA is investigating Toyota's electronics, including its electronic throttle control system, and Toyota has hired an outside consultant to do the same.

The congressional memo says that the NHTSA bought the gas pedal, throttle body and two on-board computers from Sikes's Prius for $2,500 and plans to investigate them further.

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Sunday, March 14, 2010

Scuse Me While I Kiss this Guy

Obviously Muhammad was deeply troubled. Clearly sex was a problem for him. Unfortunately, his personal sexual demons have been at work punishing much of the Islamic world for the past 1,400 years. What could have caused him to develop something that seems like a psychotic response to sex? He succeeded in creating a population deranged by the notion of sex.

Meanwhile, muslims are not only undone by public contact between the sexes, muslims are also the people who practice female genital mutilation. How deep does their derangement over sex go?

British pair faces jail time in Dubai over kiss

Sun Mar 14, 2010

DUBAI (Reuters) - A British pair caught kissing in public in Dubai face up to a month in jail in the Gulf Arab emirate for indecency after an Emirati mother complained her child had seen their indiscretion.

The pair, a British man living in Dubai and a female friend, were arrested in November on accusations of kissing and touching each other intimately in public and consuming alcohol, their lawyer said. They were ordered jailed for a month.

The case is the third time in under two years in which Britons have hit the headlines by falling foul of decency laws in Dubai, a flashy Muslim emirate popular with sun-seeking Western tourists and expatriates.

A lawyer for the pair, who launched an appeal on Sunday, said there had been no inappropriate kissing and the two were just friends. A verdict in the appeal is expected on April 4.

"There was no lip kissing. It was just a normal greeting that is not considered offensive," lawyer Khalaf al-Hosani told the court, adding the complainant's testimony was contradictory.

The British man's mother in London said her son, Ayman Najafi, had vowed to clear his name.

"My Ayman is a good boy, he's very wise and mature. I can't believe it," his mother Maida Najafi was quoted as saying in The Independent. "He knows the rules over there. He would never do that. He wouldn't even do it over here."

The pair, free on bail, were also fined 1,000 dirhams ($272) for illegal consumption of alcohol, the lawyer said. They were to be deported after the completion of their jail sentence.

Dubai's foreign population has expanded rapidly in recent years as expatriates flocked to the Gulf Arab trade and tourism hub for its tax-free earnings and year-round sunshine.

The changes have challenged the Emirati population, which is now vastly outnumbered by foreigners, raising concern that their emirate's rapid pace of growth is a threat to their social and religious identity in what remains a deeply conservative region.

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Wednesday, March 10, 2010

James Psyches Out Toyota

James Sikes? James psyches out the gullible media. He said he grabbed the gas pedal with his hand and it would not move. Lie Number One.

He said he was afraid to shift the transmission into neutral because he believed the car would flip. Lie Number Two.

He told the 9/11 dispatcher that his brakes were almost burned out. Lie Number Three.

Did the police administer a sobriety test? A sanity test?

Runaway Prius driver: Brakes were 'almost burned'

Runaway Prius driver, patrol officer recount burning brakes as Toyota reputation suffers blow

EL CAJON, Calif. (AP) -- Before he called 911, James Sikes says he reached down with his hand to loosen the "stuck" accelerator on his 2008 Toyota Prius, his other hand on the steering wheel. The pedal didn't move.

"My car can't slow down," he began when a California Highway Patrol dispatcher answered his call.

Sikes, 61, rolled to a stop 23 harrowing minutes later, he and his blue Prius emerging unscathed but Toyota Motor Corp. suffering another big dent. Toyota has watched its reputation for quality crumble with recalls tied to risks that cars can accelerate uncontrollably or can't brake properly.

Todd Neibert, the CHP officer who gave instructions to Sikes over a loudspeaker as they went east on mountainous Interstate 8 in San Diego County Monday afternoon, said he smelled burning brakes when he caught up with the Prius.

The officer said he told Sikes to push the brake pedal to the floor and apply the emergency brakes as the Prius neared 85 mph. The car slowed to about 55 mph, at which time Sikes says he turned off the ignition and the car came to a stop.

"The brakes were definitely down to hardly any material," Neibert told reporters Tuesday. "There was a bunch of brake material on the ground and inside the wheels."

The officer found the floor mat properly placed and the accelerator and brake pedals in correct resting position.

The freeway incident happened at the worst possible time for Toyota -- just hours after it invited reporters to hear experts insist that electronic flaws could not cause cars to speed out of control under real driving conditions.

The National Highway Traffic Safety Administration has sent two investigators to examine the car. Toyota spokesman Brian Lyons said the automaker is sending three of its own technicians to investigate.

Another Toyota spokesman, John Hanson, said the company wanted to talk to the driver.

Sikes' car was covered by Toyota's floor mat recall, but the driver said the pedal jammed and was not trapped under the mat.

Sikes, a real estate agent, said he was passing another car when the accelerator stuck and eventually reached 94 mph.

During the two 911 calls, Sikes ignored many of the dispatcher's questions, saying later that he had to put his phone on the seat to keep his hands on the wheel.

Leighann Parks, a 24-year-old dispatcher, repeatedly told him to throw the car into neutral but got no answers.

"He was very emotional, you could tell on the line he was panicked," Parks told reporters outside the CHP's El Cajon office. "I could only imagine being in his shoes and being that stressed."

Neibert told Sikes after the CHP caught up with him to shift to neutral but the driver shook his head no. Sikes told reporters he didn't go into neutral because he worried the car would flip.

The driver rolled down the window and Neibert told him to apply both brakes. Sikes said he lifted his buttocks from the seat to press the floor brake, an account backed by the officer.

The cars maneuvered around two trucks going uphill to a "clear, wide-open road," Neibert said. The officer had only about 15 miles to stop the vehicle before a steep downgrade and was considering spike strips to puncture the tires as a last resort.

In the final minutes of the 911 call, Sikes tells the dispatcher, "My brakes are almost burned out."

After the car stops, Sikes sighs with relief.

Neibert, a 14-year CHP veteran, worked with Officer Mark Saylor, who was killed in August along with his wife, her brother and the couple's daughter after their Lexus' accelerator became trapped by a wrong-size floor mat on a freeway in nearby La Mesa. The loaner car hit a sport utility vehicle and burst into flames.

Toyota has since recalled some 8.5 million vehicles worldwide -- more than 6 million in the United States -- because of acceleration problems in multiple models and braking issues in the Prius. Regulators have linked 52 deaths to crashes allegedly caused by accelerator problems. Still, there have been more than 60 reports of sudden acceleration in cars that have been fixed under the recall.

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The Next New Era

As usual, the government is doing all it can to go down the wrong road. However, when the government backs off and decides to coast a little, something good will begin to happen. That is how things work. Till then, we have to fasten our seatbelts and hang on.

Lessons of a Dow Decade

Capital misallocation is usually a fallout of bad government policy

A year ago yesterday, the world almost ended. The stock market was in free fall, with the Dow Jones Industrial Average bottoming out at 6547, down from its Oct. 9, 2007 peak of 14164. Financials were in a death spiral and there was even talk of nationalization. Citigroup hit $1.05, GE traded at $7.41 and golden Goldman Sachs was given away at $73.95. A bear market extraordinaire.

Contrast this with 10 years ago today, when the dot-com-laden NASDAQ peaked at 5048. Then we had the opposite mentality—companies like were going to fundamentally reshape the economy in the new millennium through a nirvana of spectacular growth and well being. Or something like that. A bull run extraordinaire.

No one would blame you for thinking the market is a textbook delusional-paranoid-schizophrenic, not knowing the difference between the real and unreal. And you'd be right. But you'd miss a valuable lesson. Misallocation of capital is everywhere and anywhere a fallout of bad government policy. The South Sea Company, a government sponsored entity with a monopoly on trade, caused the South Sea Bubble in 1720.

The late '90s Internet love fest was crazy enough, driven by former FCC Chairman Reed Hundt's misguided telecom reform that had the effect of keeping data rates artificially high. This created a gold rush to install fiber and build applications that didn't make economic sense (though electronic commerce, online banking, as well as wireless and broadband deployment would eventually prove productive over the next decade). Bad policy meant capital got overallocated and too quickly, as momentum mutual funds (momos) and day traders furiously drove up stock prices of every company with dot-com in its name for no fundamental reasons. Wall Street trading was broken.

Then, adding insult to injury, Alan Greenspan and the Federal Reserve flooded the system with money, fearing that banks would face a run brought on by the Y2K problem. The problem and the run never happened. The money ended up in the market. Mopping up that money burst the bubble. The market bottomed out on Oct. 9, 2002, when the Nasdaq hit 1114.

And the world after 9/11? Unfortunately, the accounting scandals at Enron, WorldCom and elsewhere brought us the costly Sarbanes-Oxley law, adding a complex regulatory burden so that many companies fear going public. We also got a decoupling of research from investment banking because of an alleged conflict of interest, and a Federal Reserve whose nightmare fears of deflation ushered in a long era of cheap credit.

.Instead of finishing what the dot-com era started to deliver—a productive, wealth-producing economy—capital was seduced into the financial lair of private equity and real-estate mortgages. Trillions were pumped into unneeded housing stock. Fannie and Freddie fanned the flames, and then fizzled and failed. And leveraged buyouts reigned. Even in 2007, one Blackstone private equity fund raised almost as much money as all of the venture capital industry.

And now? The bear market of a year ago may have ended because of the Geithner Plan, Treasury stress tests and TARP money injected onto bank balance sheets. You can go with that narrative if you'd like. Or maybe it was a change in the mark-to-market rules so banks no longer had to write down their toxic subprime loans. But the reality is that on March 18, 2009, Ben Bernanke and the Federal Reserve began their $1.2 trillion quantitative easing, buying Treasurys and mortgages and pumping dollars into a deleveraging economy. Hair of the dog. More cheap credit that again ended up in the market, helping banks refinance.

Today, we are still left with almost no initial public offerings. While private equity fund-raising was down 68% in 2009 to $96 billion, venture capital barely raised $13 billion.

Capital gains taxes are set to return to 20% on Jan. 1, 2011. And worse, investing is as uncertain as ever. No one wants to fund health care, medical devices or even much biotech if they can't figure out how they are going to be paid via reimbursements from ObamaCare. Energy investing is also a mess. And while "green" investing is booming, with few exceptions that is about efficiency rather than productivity. There's a big difference: You can make the Post Office more efficient while email makes us more productive and wealthier.

Big regulated oligopolists control our communications infrastructure. Startups are nowhere to be found. Few are willing to take the risk of true venture investing.

It's been 10 long years since the economy has created real wealth, as opposed to easy-credit induced real-estate or paper wealth. Amidst all the current confusion over health care and tax rates and energy and banking reforms, maybe it's time that the market transitions back to investments that drive productivity and increase living standards rather than just paper profits.

I'm not saying the market should transition or it ought to—you don't tell the market what to do. As we know from one and 10 years ago, the market works in weird ways and makes these transitions in the fog of something else, in this case it's the Fed's life support that is misallocating capital. When that ends, look for new eras to begin.

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Tuesday, March 09, 2010

Foot-on-Pedal Disease Spreading

First it was just the gasoline-powered Toyotas that were succumbing to Foot-on-Pedal Disease. However, it appears the virus has spread, now infecting the hybrid Prius too. Efforts to stop the proliferation have failed, which undoubtedly means the illness will strike vehicles made by other manufacturers. Experts believe the vehicles most at risk are those built by foreign manufacturers.

Ford and GM seem immune, which has baffled automotive experts. What factors account for the absence of Foot-on-Pedal disease among domestic car-makers? No one yet knows. But the answer may be in the hands of Congress, which has the power to force Toyota to undertake costly rehabilitation, while exempting the domestic companies from the painful expenses.

Curiously, Toyota engineers have failed to identify the cause of Foot-on-Pedal Disease. But Congress has concluded the fault lies in the Japanese software in the gas-pedal mechanism.

Toyota Reviewing U.S. Report of Prius With Stuck Gas Pedal

March 9 (Bloomberg) -- Toyota Motor Corp., struggling to regain a reputation for quality after unintended acceleration forced millions of vehicle recalls, will investigate a report in California of a Prius hybrid car that sped out of control.

The Japanese carmaker learned that the California Highway Patrol was dispatched after a Prius driver in San Diego County called 911 to report a stuck accelerator pedal, Toyota said yesterday on its Web site. A patrol car “slowed in front of the vehicle and acted as a brake to bring it to a stop,” the company said, citing the police report.

“I was on the brakes pretty healthy,” James Sikes, the Prius driver, said on NBC after telling news organizations his car reached speeds of 90 mph on U.S. Interstate 8 outside San Diego. “It wasn’t stopping. It wasn’t doing anything to it. It just kept speeding up.”

Toyota, the world’s biggest automaker, has recalled about 8 million cars and trucks, including top-selling Camry and Corolla cars, to repair defects that may cause unintended acceleration. The carmaker held a press briefing at its U.S. headquarters in Torrance, California, yesterday to rebut a test of its electronic throttle control system cited in testimony to Congress as a possible cause for the flaw.

Sikes told cable channel CNN the accelerator was stuck and wouldn’t move even when he tried to lift it by hand. The car failed to slow down even after Sikes called 911 and followed instructions to get the car to stop.

A California Highway Patrol officer, alerted by emergency dispatchers, caught up to Sikes and, using his public-address system, asked him to apply the emergency brake and brake pedal at the same time. That worked to slow the car to 50 mph. Then Sikes was able to turn off the ignition, he told CNN.

‘Won’t Drive Car’

“I won’t drive that car again, period,” Sikes said on NBC.

The model in San Diego “appears to be a second-generation Prius” and not the 2010 model, said Brian Lyons, a spokesman for the automaker. Three Toyota technicians are prepared to inspect the vehicle once it is located, he said.

Sikes had recently serviced the Prius at a local dealer and was informed it wasn’t part of a recall, he told NBC.

Toyota in November recalled 2004 through 2009 model-year Prius hybrids to reshape accelerator pedals that the company said could be entrapped by floor mats. The 2010 model has also been recalled so its braking software could be adjusted.

Sunday, March 07, 2010

Cuban Healthcare System is Sick

When the locals are broke, hit the tourists. That seems to be the newest plan from Raul and Fidel, the Castro Brothers who have spent the last five decades bringing the economy of Cuba to almost a dead stop.

The article states that every year the island hosts 2.4 million visitors. If Cuban leadership had the well being of 11 million Cubans at heart, the leaders would change the nation in ways that would open the door to the arrival of American tourists. How many Americans would go to Cuba? Millions. How many millions? Hard to say. Many millions. Enough to multiply the GDP of Cuba and bring on the start of extraordinary prosperity.

But is seems the Cuban Marxist hardliners want to cling to their silly revolution a little while longer.

Cuba to require medical insurance for visitors

07 Mar 2010

HAVANA, March 6 (Reuters) - Cash-strapped Cuba will require visitors to buy health insurance if they want to enter the country, according to a new government measure disclosed on Saturday.

Under the measure, which takes effect in May, the insurance will be sold by foreign companies approved by the Cuban government or by Cuban firms at ports of entry to the communist-led island, the government said in the online edition of Cuba's Official Gazette.

The measure decrees that tourists, foreigners with temporary residence in Cuba and Cubans living abroad who return to visit will have to be insured.

It exempts diplomats and representatives of accredited international organizations. The cost of the insurance was not disclosed.

Cuba prides itself on having a strong healthcare system, which is provided free to its citizens and at low costs to foreigners.

But the island has been hit hard by the global recession and is looking for new sources of revenue to boost its depleted financial reserves.

Tourism is one of Cuba's main sources of income. In 2009, 2.42 million people visited the island.

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Saturday, March 06, 2010

Mu-slime Logic

If the leader of a muslim nation believes, or says he believes, the US version of the 9/11 terrorist attack is fiction, then he is either dangerously ignorant or dangerously deceitful.

In this case, it more likely that Ahmadinejad is dangerously deceitful -- from our perspective. In muslim culture, the concept of lying is very different from the Western concept. From the Islamic perspective, a story that is factually false may be accepted as truth if it offers thoughts that are presented to form a greater truth. An excellent example is the Koran, which, like the Old Testament and the New Testament of the Bible, is fiction. But it is received by almost every muslim on the planet as a collection of incontestable facts.

Iran's Ahmadinejad: Sept. 11 attacks a 'big lie'

By ALI AKBAR DAREINI, Associated Press Writer Ali Akbar Dareini – Sat Mar 6, 2010

TEHRAN, Iran – Iran's hard-line President Mahmoud Ahmadinejad on Saturday called the official version of the Sept. 11 attacks a "big lie" used by the U.S. as an excuse for the war on terror, state media reported.

Ahmadinejad's comments, made during an address to Intelligence Ministry staff, come amid escalating tensions between the West and Tehran over its disputed nuclear program. They show that Iran has no intention of toning itself down even with tighter sanctions looming because of its refusal to halt uranium enrichment.

"September 11 was a big lie and a pretext for the war on terror and a prelude to invading Afghanistan," Ahmadinejad was quoted as saying by state TV. He called the attacks a "complicated intelligence scenario and act."

The Iranian president has questioned the official U.S. version of the Sept. 11 attacks before, but this is the first time he ventured to label it a "big lie."

In 2007, New York officials rejected Ahmadinejad's request to visit the World Trade Center site while he was in the city for a U.N. meeting. The president also sparked an uproar when he said during a lecture in New York that the causes and conditions that led to the attacks, as well as who orchestrated them, still need to be examined.

At the time, he also told Iranian state TV the attacks were "a result of mismanaging and inhumane managing of the world by the U.S," and that Washington was using Sept. 11 as an excuse to attack others.

He has also questioned the Sept. 11 death toll of around 3,000, claiming the Americans never published the victims' names.

Every year on the anniversary of the attacks, the names of 2,750 victims killed in New York are read aloud at a memorial ceremony.

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Friday, March 05, 2010

More Evidence of Global Warming? Cooling? What?

Every day more proof piles up. Record snowfalls. Ice. Yeah, there's no doubt the planet is getting hotter. No doubt at all. Or maybe the planet is getting cooler? Or possibly it is going along as it always has while humans go a little crazy.

More than 50 ships stuck in Baltic Sea ice: maritime authorities

Mar 4, 2010

More than 50 ships, including large ferries reportedly carrying thousands of passengers, were stuck in ice in the Baltic Sea Thursday evening, and many were not likely to be freed for hours, Swedish maritime authorities said.


Thursday, March 04, 2010

Love Story Among the Boneheads

The following account of one man's death from cancer is touching. Except for the fact that the author said she would spend other people's money as fast as possible to extend the life of her husband. She believes everyone should feel this way. But she was unwilling to face the fact that her husband was largely to blame for his own cancer. As she noted, he had the standard profile of someone with kidney cancer -- overweight and a former smoker. She neglected to mention when he became an ex-smoker or the number of years he smoked, which suggests he smoked for a long time and quit only recently.

In the end, an interesting man died an early death probably because he poisoned his body with cigarettes and too much food. Thus, he would most likely be with his wife and family today if he had eaten sensibly and not smoked. His failure to respect his body and acknowledge the dangers of his lifestyle led to an end-of-life healthcare bill of more than $600,000. That's not right. He could have avoided his fate and spared his family and his fellow Americans the effects of his folly. But as a result of some personal failure, perhaps selfishness, he didn't.

End-of-Life Warning at $618,616 Makes Me Wonder Was It Worth It By
Amanda Bennett

March 4 (Bloomberg) -- It was some time after midnight on Dec. 8, 2007, when Dr. Eric Goren told me my husband might not live till morning.

The kidney cancer that had metastasized almost six years earlier was growing in his lungs. He was in intensive care at the Hospital of the University of Pennsylvania in Philadelphia, and had begun to spit blood.

Terence Bryan Foley, 67 years old, my husband of 20 years, father of our two teenagers, a Chinese historian who earned his Ph.D. in his 60s, a man who played more than 15 musical instruments and spoke six languages, a San Francisco cable car conductor and sports photographer, an expert on dairy cattle and swine nutrition, film noir and Dixieland jazz, was confused. He knew his name, but not the year. He wanted a Coke.

Should Terence begin to hemorrhage, the doctor asked, what should he do?

This was our third end-of-life warning in seven years. We fought off the others. Perhaps we could dodge this one too. Dr. Keith Flaherty, Terence’s oncologist, and I both believed that a new medicine he had just begun to take would buy him more time.

Keep him alive if you can, I said. Let’s see what the drug, Pfizer Inc.’s Sutent, can do.

Terence died six days later, on Friday, Dec. 14, 2007.

What I couldn’t know then was that the thinking behind my request -- along with hundreds of decisions we made over seven years -- was a window on the impossible calculus at the core of the U.S. health-care debate.

Expensive Last Chances

Terence and I didn’t have to think about money, allocation of medical resources, the struggles of more than 46 million uninsured Americans, or the impact on corporate bottom lines. Backed by medical insurance provided by my employers, we were able to fight his cancer with a series of expensive last chances like the one I asked for that night.

How expensive? The bills totaled $618,616, almost two- thirds of it for the final 24 months, much of it for treatments that no one can say for sure helped extend his life.

In just the last four days of trying to keep him alive -- two in intensive care, two in a cancer ward -- our insurance was charged $43,711 for doctors, medicines, monitors, X-rays and scans. Two years later, the only thing I know for certain that money bought was confirmation that he was dying.

Some of the drugs probably did Terence no good at all. At least one helped fewer than 10 percent of all those who took it. Pharmaceutical companies and insurers will have to sort out the economics of treatments that end up working for only a small subset. Should everyone have the right to try them? Terence and I answered yes. Each drug potentially added life. Yet that too led me to a question I can’t answer. When is it time to quit?

Science, Emotion, Costs

Congress didn’t touch the issue in last year’s attempt to pass a health-care bill. The mere hint of somehow limiting the ability to choose care as aggressively as Terence and I did created a whirlwind of accusations that the ill, aged and infirm would be forced before government “death panels.”

As the debate heated up, I remembered the fat sheaf of insurance statements that arrived after Terence’s death. Our children, Terry, 21, and Georgia, 15, assented to my idea of gathering every record to examine what they would show about end-of-life care, its science, emotions and costs. I knew Terence would have approved.

Along with my colleague Charles Babcock, I spent months poring over some 4,750 pages of documents collected from six hospitals, four insurers, Medicare, three oncologists, and a surgeon. Those papers tell the story of a system filled with people doing their best. And they raise complex questions about a health-care system that consumes 17 percent of the economy.

Days to Decipher

As I leafed through the stack of documents, it was easy to see why 31 percent of the money spent on health care goes to paperwork and administration, according to research published in 2003 by the New England Journal of Medicine. That number has either stayed the same or grown, said Dr. Steffie Woolhandler, a professor at Harvard Medical School and a co-author of the study cited by the journal. Some bills took days to decipher. What did “opd patins t” or “bal xfr ded” mean? How could I tell if the dose charged was the same as the dose prescribed?

The documents revealed an economic system in which the sellers don’t set and the buyers don’t know the prices. The University of Pennsylvania hospital charged more than 12 times what Medicare at the time reimbursed for a chest scan. One insurer paid a hospital for 80 percent of the $3,232 price of a scan, while another covered 24 percent. Insurance companies negotiated their own rates, and neither my employers nor I paid the difference between the sticker and discounted prices.

‘It’s Completely Insane’

In this economic system, prices of goods and services bear little relation to the demand for them or their cost to make -- or, as it turns out, the good or harm they do.

“No other nation would allow a health system to be run the way we do it. It’s completely insane,” said Uwe E. Reinhardt, a political economy professor at Princeton University, who has advised Congress, the Veteran’s Administration and other agencies on health-care economics.

Taking it all into account, the data showed we had made a bargain that hardly any economist looking solely at the numbers would say made sense. Why did we do it?

I was one big reason.

Not me alone, of course. The medical system has a strong bias toward action. My husband, too, was unusual, Flaherty said, in his passionate willingness to endure discomfort for a chance to see his daughter grow from a child to a young woman, and his son graduate from high school.

Pricing Hope

After Terence died, Flaherty drew me a picture of a bell curve, showing the range of survival times for kidney cancer sufferers. Terence was way off in the tail on the right-hand side, an indication he had indeed beaten the odds. An explosion of research had made it possible to extend lives for years -- enough to keep our quest from having been total madness.

Terence used to tell a story, almost certainly apocryphal, about his Uncle Bob. Climbing aboard a landing craft before the invasion of Normandy, so the story went, Bob’s sergeant told the men that by the end of the day, nine out of 10 would be dead. Said Bob, on hearing that news: “Each one of us looked around and felt so sorry for those other nine poor sonsabitches.”

For me, it was about pushing the bell curve. Knowing that if there was something to be done, we couldn’t not do it. Believing beyond logic that we were going to escape the fate of those other poor sonsabitches.

It is very hard to put a price on that kind of hope.

The Kidney Shadow

We found the cancer by accident, on Sunday, Nov. 5, 2000, in Portland, Oregon.

Our son Terry had had a dozen friends over for his 12th birthday. I was making pancakes and shipping the boys home. Terence had been having stomach cramps for weeks. Suddenly he was lying on the bed, doubled over in pain. Our family doctor ordered him to the emergency room.

We were immediately triaged through. Not a good sign, I thought. The kids sat on the waiting room floor spreading Barbies and X-Men around them, while Terence writhed in a curtained alcove.

When he returned from a scan, the doctor said, almost as an aside: There’s a shadow on his kidney. When he’s feeling better, you’d probably better take a look at it. We were both annoyed. Why would we even think about a shadow on his kidney? His kidney wasn’t the problem. He was in such pain he could barely breathe.

‘We Got It’

The cause turned out to be a violent ulcerative colitis. The damaged colon was removed on Dec. 13. The surgery left him so weak that he spent three weeks, including Christmas morning, immobile in a chair. Colleagues packed meals. My sister wrapped presents. My boss sent her husband to put up our lights. In pity, I got Terence the cat he had long wanted, an orange kitten howling in a box under the tree.

And the shadow? We were so grateful he was out of pain that we would have ignored it had someone at the hospital not called to urge us to address it. Within a month, Terence was in surgery, and Dr. Craig Turner had taken out the diseased kidney.

Emerging from the five-hour operation on Jan. 18, Turner confirmed the worst: He thought the shadow was cancer. A week later, when Terence was well enough to walk into the doctor’s office, Turner was reassuring.

“We got it all,” he said. Terence was visibly moved.

“Thank you for saving my life,” he said.

‘We Were Lucky’

Kidney cancer is uncommon, accounting for less than 4 percent of all cancers, or about 50,000 new cases in the U.S. last year, according to the Kidney Cancer Association. Terence was typical: an older man, overweight and an ex-smoker. The disease is symptomless for a long time, so most kidney cancers are discovered accidentally, or too late. We were lucky.

The first tool for fighting it is usually the one used since medieval times: the knife, or its technological equivalent. If a tumor is removed early enough, before it flings microscopic cells into the bloodstream that can implant in other organs, surgery is close to a cure.

The statistics looked good. By the traditional method of staging -- a 7 centimeter tumor with no sign of having spread -- Terence had an 85 percent chance of surviving five years.

The bills from Regence Blue Cross & Blue Shield of Oregon show the operation was relatively inexpensive, too, just over $25,000, or only about 4 percent of the total charged to keep Terence alive. Insurance paid a discounted $14,084. Terence and I paid $209.87.

The lab soon cast a chill on our optimism.

Only 50 Cases

Terence had collecting duct cancer, the rarest and most aggressive form, named for the part of the kidney where it is thought to originate, according to the pathology report. If that was correct, Terence had almost no chance of making it to the end of the year. In every study I could find, almost everyone with collecting duct cancer died in months, sometimes weeks.

Unlike others, most kidney cancers don’t respond well to chemotherapy. There was no accepted treatment after surgery. What’s more, there was almost nothing known about collecting duct cancer. In all the medical literature at that time, Turner and I could find only 50 cases documented worldwide, and nothing had proved effective in halting it.

“Watchful waiting” was the recommended path.

Waiting for him to die was what we feared.

He didn’t die. He got better. We didn’t know why. We tried not to think about it.

‘Too Much Stuff’

By the spring of 2002, we had moved to Lexington, Kentucky, where I was the editor of the newspaper and Terence was creating an Asia Center at the University of Kentucky. He began moving Chinese and Japanese history books to his office. On Saturdays we drove through the bluegrass to take seven-year-old Georgia to riding lessons. We reluctantly let 13-year-old Terry crowd-surf at his first rock concert.

Then, on May 6, 2002, I was at work when Terry called, panic in his voice. “Mom, come home. Dad is very sick.”

His father was in bed, his face flaming with fever, shaking with chills under a pile of blankets.

He could barely speak.

“The cancer is in my lungs,” he said. “I’ve got six to nine months left.”

A scan had spotted the cancer’s spread. Not wanting to worry us, Terence had secretly begun taking Interleukin-2. If he recovered, he figured, we would never know how close he came; if he died, he would have spared us months of anguish.

Suddenly his actions over the last several weeks made sense. He had been giving away musical instruments and pieces of art. “I have too much stuff,” he had told me, a bizarrely improbable statement coming from him.

Bow Ties

What he didn’t reckon on was that the drug would make him violently ill. But it was the only possible therapy at that time. Injections of the protein -- at $735 a dose -- were intended to stimulate the immune response to help fight off the cancer’s invasion.

The overall response rate was about 10 percent. For most, it did nothing.

That evening, for the one and only time, I felt pure terror. I spent the night awake in our dark living room. A few days later I visited a therapist.

“I can’t survive without him,” I said.

“What does he say when you feel this way?” she asked.

“He says I can handle anything.”

“You’ll need to say that to yourself.”

On a rainy Monday last September, I visited Terence’s oncologist in Lexington. Dr. Scott Pierce remembered his patient, his grey fedora and bow ties, and his personality.

The Long Odds

“The first thing he said was, ‘Doc, do you have any female patients who have recently died? I need to find a widower so my wife can meet her next husband,’” Pierce recalled. Terence had learned he was going to die, and the first thing he thought was to look after me.

Knowing the long odds, Pierce told me he had prescribed Interleukin-2 simply because it was all there was.

Terence stopped taking it after just a few weeks, unable to stand the side effects.

I shook off my fear and plunged into the Internet. If there was something out there that could save him, I was going to find it. One colleague had been snatched from dying of AIDS by a chance introduction to a doctor who prescribed an experimental antiviral cocktail. Another had beaten leukemia with a cutting- edge bone marrow transplant. We could defeat this, too.

I downloaded papers, presentations to the Kidney Cancer Association, abstracts from the National Library of Medicine. I called researchers and oncologists, pathologists and fellow journalists. When the research became overwhelming, I hired a retired nurse to help. My boss’s wife, a nurse herself, began her own information quest. I became part of an online community. After I messaged one couple about a clinical trial in Texas, they offered us their spare bedroom.

Terence’s Dream

Earlier this year, I called “LMODRNGRRL,” a frequent cancer-forum poster from those years. A furniture dealer named Laura Lear, she told me she had left her business in Los Angeles to help her boyfriend in New York. Robert Cowan, also a furniture dealer, had collecting duct cancer. Like me, it was she who drove the search for information. “I spent all my time online,” she said. She firmly believes the drug they settled on -- Novartis AG’s Gleevec, for which insurance paid $3,000 a month -- extended his life, although it was never approved for use on kidney cancer. He died in September 2003 at 43, almost two years after his diagnosis.

Throughout the spring and summer of 2002, Georgia, then 8, rode her bicycle up and down the shaded streets of South Ashland Avenue. Thirteen-year-old Terry and his friends Shannon, Hughes and Tanner came in last at their first battle of the bands. Terence sounded optimistic.

“It’s my dream,” he said. “Some day we’re going to gig together.”

Visiting Pompeii

The truth was we were both shaken at the dire prognosis.

“What would you regret dying without having seen?” I asked. He answered without hesitation: “Pompeii.”

So we pulled Terry from his 8th grade class, Georgia out of 2nd, and flew off to Italy to see the excavated remains of the city once buried under volcanic ash. We walked the cobbled streets, poked into frescoed houses, taverns and baths, and took an eerie comfort from the 2,000-year-old shapes of families huddled together, trying to ward off disaster.

By then our research had led us to the Cleveland Clinic, where Dr. Ronald Bukowski has specialized in kidney cancer for more than 20 years. At our first meeting, in August 2002, Terence explained that he had the rare collecting duct cancer.

A Clinical Trial

“No you don’t,” Bukowski said.

We were confused. How did he know?

“You’re sitting here,” he said. “If you had collecting duct, you would be dead.”

Bukowski argued that the disease was growing so slowly that we should simply watch and wait. We did, until December 2005, when a scan showed the cancer in his lungs had begun to grow.

By this time, drugs designed to attack a tumor’s blood supply were appearing to slow the growth of a wide range of cancers. Bukowski recommended we enter a clinical trial, which at that time was pretty much the only way to get these targeted therapies. He referred us to Flaherty in Philadelphia, where we had moved in June 2003 when I changed jobs.

The drugs Flaherty was testing -- Avastin and Nexavar --had showed promise individually. The trial would find out how they worked together.

Terence signed papers agreeing to more or less standard terms: The manufacturers, Genentech Inc. and Bayer AG, would pay for the drugs; we, or our insurers, would cover all other costs.

Cancer in Retreat

In March 2006, he took his first intravenous dose of Avastin, an hour-long process, and swallowed his first Nexavar.

The side effects were hard. There were rashes, sometimes debilitating stomach pains. But he continued teaching, picking up the kids at school, studying and writing. He worked on his book of Chinese poetry. He decided to learn to play the violin and to read and write Arabic. Every two weeks he went for an Avastin drip, and every month for a chest scan. Every month we waited for the results.

At first the cancer didn’t budge. Then it began to retreat.

I learned that over the years of Terence’s battle with cancer, some insurers drove harder bargains than others. In December 2006, for example, UnitedHealthcare, a unit of UnitedHealth Group Inc., paid $2,586 to the University of Pennsylvania hospital for a chest scan; in March 2007, after I switched employers, WellPoint Inc.’s Empire Blue Cross & Blue Shield paid $776 for the same $3,232 bill.

‘Any Soldier’

The entire medical bill for seven years, in fact, was steeply discounted. The $618,616 became $254,176 when the insurers paid their share and imposed their discounts. Of that, Terence and I were responsible for $9,468 -- less than 4 percent.

During the trial, Terence packed boxes for the troops in battle, loading them in our kitchen with deodorant, Wet Wipes, Mars Bars, Kool-Aid, beef jerky, batteries and magazines. A veteran of Naval intelligence and the Air Force reserves, he walked almost every day to the post office with a box addressed to “Any Soldier.” Behind the counter, the smiling lady with the long red hair extensions became his friend.

Every so often a soldier in Iraq or Afghanistan would drop him a thank-you note.

Life went on.

Then, in August 2007, from half a world away, I heard the cancer return.

I was working in China when he coughed during one of our phone calls. By the time I got home he knew it was because of the growth of one of the lung’s cancerous spots.

$27,360 a Dose

By now, more than six years since we first saw the shadow, I was used to the scares. Avastin’s side effects -- fatigue, stomach ailments, rashes -- had been getting him down, and the doctor had agreed back in May to let him stop treatments. So we’ll go back on the Avastin, I thought, or cut out or laser out the growth, add new treatments and go on.

At a retirement party a few days later, my heart ached for my dear friend, whose breast cancer had returned. What were our lives going to be like without her? How were we going to comfort her husband and daughter?

Terence coughed through the dinner.

The bills and records document our renewed fight as summer in Philadelphia turned to autumn. Terence resumed Avastin. Because he wasn’t in a clinical trial, our insurance company was billed: $27,360 a dose, for four treatments, more than the cost of the surgery to remove his kidney in 2000.

An Unacknowledged Battle

He coughed almost continuously. His weight plunged. He needed help on the stairs. He began to use a cane. When his friend Woody came to visit, he couldn’t muster the breath to blow his cornet. He coughed and coughed and coughed.

In the last week of October, he called me at work.

“I can’t pick Georgia up at school,” he said. “I can’t get out of the chair.” On Halloween, his Dracula costume stayed in the basement. We put the candy on the doorstep.

On Nov. 8, we saw a specialist, Dr. Ali Musani. Unable to stand or sit unassisted, Terence lay on the floor and refused to get up. Alarmed, Musani admitted him to the hospital.

He was there for four days, during a quiet, unacknowledged battle. On one side were Flaherty and I, believing this to be a temporary setback. On the other were doctors and nurses preparing their patient for the end.

On Nov. 10, before discharging him, a doctor propped one of Terence’s scans on a light board and showed us a blizzard of white spots, thousands of tumors covering his lungs.

Avastin wasn’t stopping it.

Terence Was Game

Flaherty and I weren’t going to give up. Sutent, another targeted therapy, had been approved the year before. It worked as Avastin did, by stopping cancer’s ability to build extra blood vessels to feed its growth, but in a different way. One $200 pill a day. A shot at more life.

Sutent might have even more serious side effects -- rashes, fatigue, stomach distress, strokes -- but Terence was game. He began taking it on Nov. 15.

At home, he drew a line down the middle of a piece of paper. On one side he wrote things to throw away. On the other, things to keep.

“Stop that!” I snapped. “You aren’t going to die.”

I prepared for what I expected would be a new phase of our life. I found protein drinks online and protein bars in a bodybuilding shop. I got forms for a handicapped license plate, and looked into outfitting our row house with a stair lift.

210 Calories

He was no longer able to get in and out of bed alone, so I hired a health aide. Whatever he craved, I bought. I wrote down everything he ate. Cold grapefruit slices. Chicken noodle soup. Clam chowder. I counted the calories he consumed one day: 210.

On Friday, Dec. 7, just as the aide was packing to leave, Terence looked up, startled, as the corners of his mouth foamed bright red with blood. It was a struggle to get him down our narrow stairs to the ambulance.

In the emergency room it was clear something was seriously wrong. “What’s your name?” asked the ER doctor. Terence responded correctly. “What’s the date?” Terence gave the doctor what the kids and I recognized as “Daddy’s ‘Just how dumb are you?’ look.” But he couldn’t answer.

“Who’s the president of the United States?” That triggered something. “That moron Bush,” he said.

Terence was admitted that night to a ward where Eric Goren was doing his last intensive care overnight shift of a three- year residency. In a small break room, alongside vending machines selling soft drinks and chips, Goren told me that bleeding from the lungs might suddenly become uncontrollable. If that happened, what should he and his team do?

No Heroic Measures

I wanted to see whether Flaherty still thought Sutent could make a difference. I couldn’t reach him. Goren and I settled on what the hospital called Code-A. Do everything possible to prevent a major bleed or anything life-threatening. Don’t take heroic measures if death seems inevitable.

I called the children in. My sister picked up Georgia at a sleepover, and Terry’s friends Suzie, Ben and Will brought him from a party.

My decision, so hard on Saturday, was easy by Monday. The scans now were showing signs of cancer in his brain, surrounded by a cascade of hundreds of tiny strokes. I had Terence’s signed living will, but I didn’t need it. I knew what this man who lived for books, music and ideas would want.

Flaherty arrived. He looked shaken.

“I didn’t expect this,” he said.

Reading Their Goodbyes

That afternoon I signed the papers transferring Terence to hospice. The next day, Tuesday, the hospital staff took away the machines and the monitors. The oncologists and radiologists and lab technicians disappeared. Another group of people -- hospice nurses, social workers, chaplains and counselors for me and the children -- began to arrive one by one, as the focus shifted from treating Terence to easing our transition.

For the next three days, with Terence in the same hospital bed, we spent $14,022 on the pain medications ativan and dialudid, and on monitoring for him and counseling for a different kind of pain management for the children and me. The cost was less than a third of the previous four days’ $43,711.

Terence drifted into a coma on Tuesday. I e-mailed his friends and read their goodbyes aloud, hoping he could hear and understand. I slept in a chair. At about 2:30 a.m. Friday, a noise in the hall startled me. I awoke just in time to hold his hand as he died.

They gave me back his wedding ring the next day.

Looking back, memories of my zeal to treat are tinged with sadness. Since I didn’t believe my husband was going to die, I never let us have the chance to say goodbye.

Black-Bordered Notes

Ten days later, the kids hung Daddy’s Christmas stocking alongside our three. I mailed the cards he had addressed months earlier, slipping in a black-bordered note. I threw away the protein bars, gave the energy drinks to a shelter and flushed an opened bottle of Sutent down the drain.

Would I do it all again? Absolutely. I couldn’t not do it again. But I think had he known the costs, Terence would have fought the insurers spending enough, at roughly $200,000, to vaccinate almost a quarter-million children in developing countries. That’s how he would have thought about it.

Late last year, I waded through a snowstorm to Keith Flaherty’s office in Boston, where he had moved to a new job that would let him intensify his work on targeted therapy. Did we help Terence? Or harm him? There’s a possibility, he said, that the treatment actually made the cancer worse, causing it to rage out of control at the end. Or, as another doctor suggested in passing at the time, that the strokes were a side effect of the Sutent, and not the cancer.

Another Bell Curve

Flaherty and I looked at the numbers. The average patient in his trial got 14 months of extra life. Without any treatment, Flaherty estimates that for someone at Terence’s stage of the disease it was three months. Terence got 17 months -- still within the realm of chance, but way, way up on the bell curve.

There’s another bell curve that starts about where Terence’s left off. It charts the survival times for patients treated not just with Sutent, Avastin and Nexavar but also Novartis’s Afinitor and GlaxoSmithKline Plc’s Votrient, made available within the past three years. Doctors and patients now are doing what we dreamed of, staggering one drug after another and buying years more of life.

Slides on the results of the clinical trial, presented at the 2008 meeting of the American Society of Clinical Oncology, showed that Avastin and Nexavar worked well on a wide variety of patients. Only Flaherty and I know that the solitary tick mark at 17 months was Terence.

Only I know that those 17 months included an afternoon looking down at the Mediterranean with Georgia from a sunny balcony in Southern Spain. Moving Terry into his college dorm. Celebrating our 20th anniversary with a carriage ride through Philadelphia’s cobbled streets. A final Thanksgiving game of charades with cousins Margo and Glenn.

And one last chance for Terence to pave the way for all those other poor sonsabitches.

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