State Department: Passport Crunch Over

State Department: Passport Crunch Over

Updated: 21 minutes ago

WASHINGTON - The State Department said Friday it has worked through a massive backlog in passport applications and that processing times are back to normal after months of major delays that disrupted summer travel plans for thousands of Americans.

The department said steps taken to deal with the crisis _ the hiring of hundreds of new adjudicators, temporary transfers of employees to passport centers and the opening of a new facility to handle the deluge _ had brought the waiting period for a standard application back to six to eight weeks and three weeks for expedited service.

"We're very pleased that we've been able to get back to the customer service standard that has long been our desire, and pleased that we've been able to do so in accordance with the commitments that we made to the American people and Congress," deputy spokesman Tom Casey said.

"So, good news, and we hope that this will ensure that Americans will be able to receive their passports, now and in the future, in a timely and secure fashion," he told reporters.

At one point during the summer, the processing time had stretched to more than three months for a standard application, infuriating many would-be overseas travelers and sparking a rash of harsh criticism from lawmakers.

The surge was largely the result of new post-Sept. 11, 2001 immigration rules that took effect in January requiring U.S. citizens to have passports for air travel to Canada, Mexico, the Caribbean and Bermuda. Those rules were suspended temporarily until the end of September due to the inability of the State Department to handle the crush of applications.

Casey said the State Department has issued more than 16 million passports since the beginning of budget year 2007 last October and is now poised to get up to 17 million by Sept. 30. The department issued just over 12 million passports the previous year.

By the end of September, Casey said the department will be able to process 500,000 applications per week due to the increase in personnel and capacity at passport production centers.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(http://www.cnbc.com)

Drive Your Car to Death, Save $31,000

By keeping your car for 15 years, or 225,000 miles of driving, you could save nearly $31,000, according to Consumer Reports magazine. That's compared to the cost of buying an identical model every five years, which is roughly the rate at which most car owners trade in their vehicles.

In its annual national auto survey, the magazine found 6,769 readers who had logged more than 200,000 miles on their cars. Their cars included a 1990 Lexus LS400 with 332,000 miles and a 1994 Ford Ranger pick-up that had gone 488,000 miles.

Calculating the costs involved in buying a new Honda Civic EX every five years for 15 years - including depreciation, taxes, fees and insurance - the magazine estimated it would cost $20,500 more than it would have cost to simply maintain one car for the same period.

Added to that, the magazine factored in $10,300 in interest that could have been earned on that money, assuming a five percent interest rate and a three percent inflation rate, over that time.

The magazine found similar savings with other models.

To have much hope of making it to 200,000 miles, a car has to be well maintained, of course. The magazine recommends several steps to help your car see it through.

• Follow the maintenance guide in your owner's manual and make needed repairs promptly.
• Use only the recommended types of fluids, including oil and transmission fluids.
• Check under the hood regularly. Listen for strange sounds, sniff for odd smells and look for fraying or bulges in pipes or belts. Also, get a vehicle service manual. They're available at most auto parts stores or your dealership.
• Clean the car carefully inside and out. This not only helps the car's appearance but can prevent premature rust. Vacuuming the inside also prevents premature carpet wear from sand and grit.
• Buy a safe, reliable car. Buying a car with the latest safety equipment makes it more likely you'll feel as safe in your aging car as a newer model.

The magazine recommends several cars that have the best shot at reaching the 200,000 mile mark and a few that, according to its data, aren't likely to make it.

All the cars in the magazine's "Good bets" list are manufactured by Honda and Toyota. (One extreme example was not enough to get the Ford Ranger onto the list.) The "Bad bets" are a mixture of European models and two Nissans.

Consumer Reports' "Good bets" for making 200,000 miles: Honda Civic, Honda CR-V, Honda Element, Lexus ES, Lexus LS, Toyota 4Runner, Toyota Highlander, Toyota Land Cruiser, Toyota Prius, Toyota RAV4

Consumer Reports' "Bad bets" for making 200,000 miles: BMW 7-series, Infiniti QX56, Jaguar X-type, V8-powered Mercedes-Benz M-class, Mercedes-Benz SL, Nissan Armada, Nissan Titan, Volkswagen Touareg, V6-powered Volvo XC90.

Copyrighted, CNNMoney. All Rights Reserved.

(http://finance.yahoo.com/)

The euro’s rise and rise is unsustainable

From The Times

July 16, 2007 Anatole Kaletsky: Economic view

Most commentators seemed to have no doubt about the explanation for last week’s most important economic event – the 26-year highs hit by the pound and the euro against the dollar, which now threaten to open the floodgates on a tide of currency speculation, transforming economic conditions for British and European export industries in the months ahead. The Financial Times explained this momentous event very clearly in Saturday’s leader, saying: “The dollar slide came amid another week of negative market movements, principally driven by more bad news from the US sub-prime housing market. The gap between growth in and outside the US explains some of the fall in the dollar. The large US trade deficit also puts inevitable downward pressure on the currency.”

I beg to differ. Market chatter last week may well have been dominated by the US housing panic, but a less emotional analysis suggests that something very different was probably going on. For a start, it seems odd to use the phrase “another week of negative market movements” to describe a succession of record highs on almost every stock market from New York to Hong Kong to Frankfurt – and the biggest weekly gain on Wall Street since 2003. Secondly, it is far from clear that the dollar’s decline has anything much to do with either the trade deficit or the gap between US and international growth. It is obviously true that the US economy has been relatively weak recently, growing by an annualised average of just 1.6 per cent in the past two quarters, and that America has by far the biggest trade deficit in the world. But before drawing any strong conclusions, it is worth recalling which major economy has had the strongest growth rate in the past two quarters.

To judge by the breathless enthusiasm for the euro and the pound in the financial markets, you might imagine that the answer is Germany, France or Britain or maybe Europe as a whole. In fact, however, the answer is Japan. Japan’s growth rate in the past two quarters has averaged 4.2 per cent, much higher than growth rate in any other large advanced economy – and although much of this growth has come from a boom in exports and inventory-building that is probably unsustainable, the contribution from consumption and business investment has been far greater than in Germany or France. In addition, Japan has the world’s largest trade surplus and is the greatest creditor country the world has ever seen. So, if growth rates and trade positions are the key determinants of foreign exchange movements, it is paradoxical, to put it mildly, that the yen has actually been the world’s weakest currency, falling 2.5 per cent even against the friendless dollar since the beginning of this year.

There are, of course, some perfectly plausible explanations for the yen’s relative weakness, but to discuss them here would be beside the point, since I want to concentrate on the issue that ought to be at the mental forefront of every businessman and policymaker in Britain and Europe – what is likely to happen next to the relationships between the dollar, the euro and the pound?

In my view, the key driver of currency movements today has not been pessimism about America, but euphoria about Europe. As I have pointed out before on this page, the dollar trade-weighted index (TWI) and the euro always move in the same direction even though the euro makes up only 34 per cent of the US TWI. This makes intuitive sense, since the euro (and before it the D-Mark) is the main alternative to the dollar as a reserve currency; so a generalised flight from dollars can happen only if investors are willing to buy the euro – and conversely the dollar starts generally rising the moment that confidence in the euro evaporates. Sterling’s exchange rate against the dollar is even more dependent on what happens to the euro against the dollar. History suggests it is almost impossible for the pound to start to fall against the dollar unless the euro-dollar rate turns at the same time. The weakening of the yen against the supposedly “collapsing” dollar also suggests that the real story in currency markets at present is not the weakness of the dollar, but the strength of the euro and the pound.

The key question for currency markets, therefore, is not whether the US property crisis is likely to worsen, but whether anything is likely to happen to puncture the present euphoria about European growth. The answer is almost certainly “yes” in the long term, but possibly not in the next few months.

Europe this year has already been hit by a potentially lethal combination of fiscal and monetary deflation, as the German and Italian tax increases reinforced the pressure from a doubling of European interest rates since December 2005. So far, this has not caused the major slowdown that I have been persistently predicting – although recent statistics on consumption and domestic demand in Europe have actually been much weaker than the headline GDP figures, flattered by unsustainable booms in exports and inventories in Germany and by preelection government spending in France. But, rather than trying to make excuses for my wrong predictions on Europe, let us suppose that my analysis was simply wrong. Suppose that the European economy really is completely immune to rising interest rates and taxes, which is certainly what most German businessmen and politicians assume. In that case, it is almost inevitable that the euro will continue to look like a very attractive alternative to the dollar for reserve managers around the world. It will keep rising – and rising strongly – not just against the dollar, but also against the yen, the renmimbi and other Asian currencies.

Assuming that the previous peak of $1.3670 can be broken by a technically decisive margin in the next few days, the trend-following technical analysis that dominates behaviour in the currency markets will imply that the euro can keep rising to $1.50 or beyond – and the pound will keep moving in its wake, rising to $2.20 and maybe even the peak of $2.40 that destroyed most of Britain’s manufacturing industries in 1981. If the euro keeps rising without limit, Europe’s export industries will be decimated, as they were not only in Britain, but also in America in the mid-1980s and also in Japan after 1995. Eventually the euro will fall back to a more competitive exchange rate, but in the meantime a huge shakeout of the European economy will occur. In short, the strength of the euro will guarantee a serious downturn in the European economy, even if one is not already in the cards. The faster the euro now rises, the sooner the euro-pessimists will be proved right.

(http://business.timesonline.co.uk/tol/business)

Feds OK Fee for Priority Web Traffic

WASHINGTON

The Justice Department on Thursday said Internet service providers should be allowed to charge a fee for priority Web traffic.

The agency told the Federal Communications Commission, which is reviewing high-speed Internet practices, that it is opposed to "Net neutrality," the principle that all Internet sites should be equally accessible to any Web user.

Several phone and cable companies, such as AT&T Inc., Verizon Communications Inc. and Comcast Corp., have previously said they want the option to charge some users more money for loading certain content or Web sites faster than others.

The Justice Department said imposing a Net neutrality regulation could hamper development of the Internet and prevent service providers from upgrading or expanding their networks. It could also shift the "entire burden of implementing costly network expansions and improvements onto consumers," the agency said in its filing.

Such a result could diminish or delay network expansion and improvement, it added.

The agency said providing different levels of service is common, efficient and could satisfy consumers. As an example, it cited that the U.S. Postal Service charges customers different guarantees and speeds for package delivery, ranging from bulk mail to overnight delivery.

"Whether or not the same type of differentiated products and services will develop on the Internet should be determined by market forces, not regulatory intervention," the agency said in its filing.

The agency's stance comes more than two months after Federal Trade Commission Chairwoman Deborah Platt Majoras cautioned policy makers to enact Net neutrality regulation.

Such a regulation could prevent rather than promote Internet investment and innovation and have "significant negative effects for the economy and consumers," the Justice Department said in the filing.

Supporters of Internet regulation have said that phone and cable companies could discriminate against certain Web site and services.

However, the agency said it will continue to monitor and enforce any anticompetitive conduct to ensure a competitive broadband marketplace.

Copyright 2007 The Associated Press.

On The Road: Bajaj pays employees to stay home

John Elliot

I’ve been traveling in Maharashtra this week, talking to engineering companies about how they have become internationally competitive, modernizing their manufacturing processes and turning out products that people want to buy – things that they didn’t need to worry about before the economic reforms of the 1990s, and that have begun to come good in the past few years.

Yesterday I went to Pune, which is re-emerging as a major engineering center, and met Rajiv Bajaj, the 40-year old managing director of Bajaj Auto, once a fantastically profitable scooter company and now being rebuilt as a leading and profitable motor bike business.

Rebuilding is precisely the right word to use because Bajaj has built two new factories in recent years and this week produced the surprising news that he is stopping manufacture of two-wheelers at a massive old plant adjacent to the group’s headquarters in Akurdi, outside Pune. Akurdi has been the home of the group since it started producing two-wheelers in 1960, so this is an emotional event. It will continue to house the headquarters and produce components, but it will no longer be the manufacturing and assembly base.

To achieve this with as little pain as possible, Bajaj has come up with an unusual solution. From this weekend, 2,200 employees are being told to stay at home and not report for work – on full pay, which will continue till their normal retirement. Many of them are in their 40s, so that is quite a long time to go on paying: but Rajiv Bajaj says it is no more expensive for the company, and may indeed be cheaper than a redundancy scheme that would involve lengthy and probably bitter trade union negotiations.

“This is the first time in India that someone has tried to do this - what is right for the company with no loss to the workers,” he says. Legally, if the employees find a new job, they should resign from Bajaj, but in India’s uncontrolled labor market, with many people holding more than one job, that seems unlikely to happen.

For the company, it makes sense because producing the two-wheelers at another factory saves it $25 per vehicle, which roughly covers the cost of paying the home-bound employees at the current production rate of 300,000 vehicles a year. Profits will be made when production increases – the two-year target is 500,000.

Bajaj says the plan is also better for the employees than a humiliating solution that is favored by some companies: making employees clock in each day but giving them no work to do. Bajaj’s trade unions are however threatening legal action.

The closure is tough on those involved because Bajaj admits that it is “not being done because of any failure on the part of the workmen or the management”. It is largely due to “the impact of government policies on capacity rationalization, chiefly the regional distortions created by inconsistent tax benefits and the continuing evil of octroi in the state of Maharashtra”.

Bajaj estimates that a third of his 1,000-rupee saving per vehicle will come from tax concessions elsewhere, a third from not paying octroi (an ancient form of state-level taxation collected on the borders of individual municipalities) and a third from rationalized production. The tax benefits refer to breaks available in under-developed areas, and both Bajaj’s new factories are in such locations.

Octroi has now been abolished in most Indian states and is not applied in special development areas, but it does operate for most of Maharashtra. It is levied at a rate of 4% on all goods brought into the area, and is not refundable when products leave. It causes massive traffic jams on highways, where trucks queue up at boundary collection points, delaying deliveries and leading to massive corruption.

“Octroi is nothing but an excuse to sustain corruption – lorry drivers pay bribes every day to the collectors,” says Bajaj. The problem is widespread. Jamshyd Godrej, chairman of Godrej & Boyce Manufacturing, a leading engineering products company, says his refrigerator and other appliance factories have been moved away from the headquarters site on the outskirts of Mumbai. The empty buildings have been leased to software companies such as Tata Consultancy Services, which escape octroi payments because they do not bring in hardware.

It is a pity to finish this post, which was supposed to be about modernizing engineering companies, with the perennial subject of corruption - but this is India.

(http://ridingtheelephant.blogs.fortune.com)

Can You "Steal" Someone's Wi-Fi Signal?

Christopher Null (Thu Aug 23, 2007 7:54PM EDT)

I guess I'm guilty. Faced with an open Wi-Fi signal and no other way to get online, I've done it: I've borrowed that wireless connection, sent a few emails, browsed a few web pages, and didn't feel any remorse. But technically, in both the U.S. and the U.K., I've broken the law.

Today the BBC joins a chorus asking the question whether these laws make sense, or whether it's unethical or immoral to "steal" an open Wi-Fi signal from someone who's paying good money for it.

In this thoughtful story, the author posits a hypothetical example of a man walking down the street, spilling gold coins behind him that evaporate if they aren't retrieved. Is it immoral to take some? The analogy is a strange one, but it applies to wireless: Say you're sitting at a restaurant for lunch, and your iPhone says there's an open wireless connection nearby. Presumably it's from the apartment upstairs, and the resident is off at work. Do you connect to it? Should you feel bad — or face prosecution — if you do? There's no one "damaged" by your hopping on the network. The owner of that wireless router pays nothing extra whether you use it solidly for the next hour or leave it untouched. Where's the crime?

Of course, this philosophical debate has lately spilled into the real world: A variety of arrests have been made in recent months for people using wireless connections without permission. Laws in several countries have made it very clear: Hitchhiking on a Wi-Fi connection is the same as breaking into their house and stealing a TV.

A more modest position finds a difference between "borrowing" (as in my example above) and outright stealing, as is the case with someone who uses a neighbor's Wi-Fi connection without permission, round the clock. I agree as well: The latter is probably a bit much... though there's an (admittedly sketchy) argument to be made that if someone else's Wi-Fi signal is spilling into your house, it's yours to do with as you please.

Ultimately, though, I can even muster some sympathy for the outright "stealer." My philosophy towards Wi-Fi is that any unsecured hotspot is unsecured for a reason: Nine times out of ten it's because the owner wants to share it. (This is often the case when you visit public areas, cafes, or rental homes, for example.) The remainder of users — those who've simply failed to configure their routers for security — probably don't care one way or the other.

(http://tech.yahoo.com)

Danger: Steep drop ahead

Even if the credit crunch passes without a major catastrophe, the prices of stocks, bonds and real estate have a long way to fall.

(Fortune Magazine) -- Credit crises have always been painful and unpredictable. The current one is particularly hair-raising because it's occurring amid the first truly global bubble in asset pricing. It is also accompanied by a plethora of new and ingenious financial instruments. These are designed overtly to spread risk around and to sell fee-bearing products that are in great demand. Inadvertently (to be generous), they have been constructed to hide risk and confuse buyers.

How this credit crisis works out and what price we end up paying has to be largely unknowable, depending as it does on hundreds of interlocking and often novel factors and how they in turn affect animal spirits. In the end it is, of course, the management of animal spirits that makes and breaks credit crises.

But even if this crisis is contained, we are facing some near certainties that should be understood.

First, house prices may move on euphoria in the short term, but long term they depend on family income - the ability to pay mortgages and rent. At levels well above the normal four times family income, the market gradually loses first-time buyers until prices break and fall back to affordable levels.

House prices are in genuine bubble territory in the U.S., Britain and many other markets. In Britain and in some critical large cities in the U.S., for example, the multiple of family income has risen to over six times from below four times, and in London last year the percentage of first-time buyers was the lowest since records began.
From these high levels, prices are guaranteed to fall. In doing so, they will reduce consumer borrowing and spending power. They will also increase mortgage defaults, most of which lie ahead, and lower financial profits and confidence.

Second, profit margins are at record levels around the world. They have lifted stock prices directly alongside the rising earnings. They have served to raise P/E multiples as well, for surprisingly, investors on average reward higher margins with higher P/Es. This is fine for an individual stock, but for the entire market, multiplying boom-time profits by high P/Es is horrific double counting and sends markets far too high in good times (and far too low in bad times).

Higher margins also indirectly raise prices by providing more cash flow for buybacks and takeovers. So high profit margins offer multiple supports for the market, but they will certainly decline. They are the most dependably mean-reverting series in finance: If high margins do not attract greater competition, then a wheel has fallen off the capitalist machine. For U.S. and developed foreign markets, fair value (defined as normal P/E times normal profit margins) is about one-third below today's level, and for emerging markets it is about 25 percent lower.

Third, and most important, risk will be repriced. Last year a broad base of risk measures - including volatility (VIX), junk and emerging debt spreads, CD rates, high-quality vs. low-quality stock values - reflected the lowest risk premiums in history. On some data, indeed, investors actually appeared to be paying for the privilege of taking risk.

For fixed income, some spreads widened slowly at first this year and then unexpectedly widened rapidly in recent weeks. For equities, though, the process has hardly started. Junkier stocks continued to outperform into June, even as the subprime woes spread. At the end of the cycle, high-quality blue chips will once again sell at normal premiums or better.

Investment bubbles and high animal spirits do not materialize out of thin air. They need extremely favorable economic fundamentals together with free and easy, cheap credit, and they need it for at least two or three years. Importantly, they also need serial pleasant surprises in such critical variables as global GNP growth. All of this has been provided.

These conditions always produce excess and are always extrapolated. Unfortunately, like almost all other investment factors, they eventually move back to normal.
As wonderfully favorable factors cool off, asset prices will be under broad pressure, and risky assets will be under extreme pressure. If the credit crisis gets out of control, this will happen quickly and painfully. The important point to make here is that even if all works out well on the credit front, it will still happen slowly.
Jeremy Grantham is chairman of investment firm GMO, where he oversees quantitative products and investment strategies.

(http://www.fortune.com)

UK tested poison gas on Indian soldiers

The Associated Press
Article Last Updated: 09/01/2007 10:37:27 AM PDT

LONDON—British military scientists tested mustard gas on hundreds of Indian soldiers during more than a decade of experiments that began before World War II, a British newspaper reported Saturday.

The experiments to determine whether mustard gas damaged Indians' skin more than British soldiers' began in the early 1930s and lasted more than 10 years at a military site in Rawalpindi, now in Pakistan, The Guardian reported, citing newly discovered National Archive documents.

The tests caused large numbers of burns, some of which were so damaging the subjects had to be hospitalized, a 1942 report cited by the newspaper said.

"Severely burned patients are often very miserable and depressed and in considerable discomfort, which must be experienced to be properly realized," the report said.

The Ministry of Defense said it could not comment until Monday.

During World War II, nearly 2,000 American military personnel participated in experiments conducted by the U.S. Naval Research Laboratory. They were often promised weekend passes and were not told the nature of the experiments, which included prolonged exposure to mustard gas and Lewisite, a chemical that contains arsenic and can damage the skin, eyes, respiratory and digestive tract.

The experiments in Rawalpindi were part of a much larger program intended to test the effects of chemical weapons on humans, The Guardian reported. It said more than 20,000 British servicemen and women were subjected to chemical warfare trials between 1916 and 1989 at the Defense Ministry's Porton Down research center in southwest England.

Some of those involved in the experiments later said they had been tricked into participating, and claimed they had been exposed to mustard gas and hallucinogens such as LSD.

An inquiry into the deaths of some of those involved in the testing concluded in 2003 that there was not enough evidence for a criminal prosecution.

(http://www.montereyherald.com/)

Thousands of Americans Choose Army for $20,000 Signing Bonus

Saturday , September 01, 2007

LEXINGTON, S.C. — Bored with life on his family's South Carolina horse farm, Willard McCormick decided that military service was the right plan for his future. And when the Army dangled its new, $20,000 recruiting bonus in front of him, the decision got a lot easier.

"I wasn't going to go right away, but I heard about the bonus and decided to jump on it," McCormick, 19, said a couple of days after signing up.

The new bonus comes with a "Quick Ship" provision that cuts the average 40-day wait time between sign-up and departure for basic training.

McCormick, who leaves for basic and infantry training at Fort Benning, Ga., on Sept. 6., said the accelerated departure doesn't bother him or his family.

"My three brothers are ready for me to go," he said with a smile.

Since the bonus was unveiled in July, more than 6,200 recruits have signed up to begin basic training before Oct. 1, a move that boosts end-of-fiscal year recruiting numbers, Army officials said.

"People are calling here saying $20,000 is more than they've made in the past two years," said Staff Sgt. Brent Feltner, 27, commander of a strip-mall recruiting station in this central South Carolina town.

Feltner said most recruits are happy to leave early. "Maybe they want to get out of South Carolina, get away from Mom and Dad," he said.

The Army's offer stands out to many in a state where the unemployment level is fourth highest in the country, at 5.9 percent in July, up from 5.5 percent in June. It was 6.2 percent in July a year ago.

Plus, the bonus comes on top of other benefits, such college tuition assistance, and medical and dental care.
"There's not a job out there that they can enter with zero experience, that will help them pay for college," Feltner said.

Half the bonus is paid out on completion of basic training and training in individual specialties, some of which can take at least a year, Feltner said. The remainder is to be doled out over the course of active-duty enlistment, which must be for at least two years, although some specialties require longer enlistments.

The accelerated sign-up program does not shorten training time or send soldiers into the field before they've had their specialized training, said Douglas Smith, spokesman for the Army Recruiting Command at Fort Knox, Ky.,

The Army has offered bonuses before -- some ranging from about $10,000 to $15,000 -- but $20,000 is the largest amount Smith said he's seen in his 26 years with the military.

"We've had a good August. It's been a good tool to use," said Smith, who added the bonus will help the Army reach a goal of recruiting 80,000 soldiers in fiscal year 2007.

After missing its monthly recruiting goals for two consecutive months, the Army announced in August that it had slightly exceeded its target for July. It signed up 9,972 people, up from the 9,750 it was hoping for.

Despite the possibility of being sent to fight in Iraq and Afghanistan, those opting for the Army bonus seem to have already made up their minds to join the military -- they just haven't settled on which branch to join, Feltner said.

"It helps to solidify their decision," he said.

Sgt. John Tate, another recruiter in the Lexington office, said the Army's job options, not just the bonuses, play a big role in recruiting. One female recruit who signed up recently opted to become a paralegal with a subspecialty in airborne parachutist training.

"She wanted to jump out of planes, but she also wanted inside, office work," Tate said.

(http://www.foxnews.com/)