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Thursday, January 08, 2009

Free Internet Press Newsletter - Thursday January 8 2009 - (813)

Thursday January 8 2009 edition
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Pelicans Fall Out Of The Sky Along The Pacific Coast
2009-01-07 23:41:33
Pelicans suffering from a mysterious malady are crashing into cars and boats, wandering along roadways and turning up dead by the hundreds across the West Coast, from southern Oregon to Baja California, Mexico, bird-rescue workers say.

Weak, disoriented birds are huddling in people's yards or being struck by cars. More than 100 have been rescued along the California coast, according to the International Bird Rescue Research Center in San Pedro.

Hundreds of birds, disoriented or dead, have been observed across the West Coast.

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Profit Warnings, Poor Job Outlook Weigh On Stocks
2009-01-07 16:41:30
Bleak outlooks from Time Warner, Intel and Alcoa combined with more evidence of rising unemployment sent stocks sharply lower today, sending major indexes down more than 2 percent including the Dow Jones industrials, which lost more than 225 points.

Unlike the panicked swings seen last fall, however, the declines were far more orderly, and some retrenchment had been expected following sharp rises in the final days of 2008 and into 2009.

Wall Street has been absorbing poor economic and corporate news far better since last November as some have dared to hope for a recovery in the second half of this year or early 2010, but the latest round of unnerving news proved to be too much to set aside.

Media industry bellwether Time Warner Inc. said Wednesday it would take a $25 billion impairment charge in the fourth quarter for its cable, publishing and AOL units, while Intel Corp. said it now expects fourth-quarter revenue to drop 23 percent, below prior estimates, on a further weakening in demand from computer makers.

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European Union Pushes For Russia To Resume Gas Deliveries
2009-01-07 16:40:57
The European Union is seeking a deal with Russian and Ukraine that would see the stationing of independent observers so that natural gas deliveries can resume to Europe. Countries all across Europe on Wednesday reported dramatic reductions in natural gas supplied from Russia.

It feels like 2006 all over again in Europe this week. Arctic cold has arrived bringing record low temperatures to wide swaths of Europe - and Russian natural gas giant Gazprom is again cutting gas supplies to Ukraine, resulting in inevitable disruptions to large parts of Europe.

On Wednesday afternoon, the European Union ratcheted up its efforts to ensure gas deliveries to Europe are restored promptly. European Commission President Jose Manuel Barroso said Russia and Ukraine had expressed their willingness to accept the deployment of international monitors to inspect the flow of Russian gas that travels to the European Union through Ukraine to ensure the flow is not interrupted. The E.U. receives one-quarter of its gas from Russia, though that dependency is greater in some member states.

"We have received assurances from both … they are ready to accept international monitors," said Barroso, after a meeting in Prague with Czech Prime Minister Mirek Topolanek, whose country just assumed the six-month presidency of the European Union. Topolanek called on Kiev and Moscow to return to the negotiating table. "If this is agreed," he said, "nothing will stand in the way for transit supplies to be restored."

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Californians May Get IOUs From State Instead Of Tax Returns
2009-01-07 16:40:02
California state officials on Tuesday braced for the possibility of delaying tax refunds to millions of Californians, along with student grants and payments to vendors, as the latest round of budget negotiations between Gov. Arnold Schwarzenegger and Democratic legislators collapsed.

With little more than a month's worth of cash left in the state treasury, the governor and lawmakers have been unable to agree on how to erase a budget gap projected to reach $41.6 billion by the middle of next year. Democrats announced Tuesday that two weeks of discussions had ended in an impasse and sent Schwarzenegger the $18-billion fiscal package they passed last month. The governor vetoed it, as he had promised to do.

State Controller John Chiang has said that as early as Feb. 1, his office may begin issuing promissory notes if lawmakers have not resolved the budget crisis. The state has done this only once before since the Great Depression - in 1992.

"We have not made any decision about deferring payments or using IOUs, but they are possibilities if the governor and Legislature don't come to some agreement soon," Chiang spokeswoman Hallye Jordan said Tuesday.

Under the state Constitution, schools and bondholders get first rights to any cash in the state's coffers.

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German Industrial Giant BASF Runs Into Trouble
2009-01-07 16:39:32
BASF has been one of Germmany's best performing companies for decades, withstanding the Great Depression, World War II and the 1970s oil crisis. Now, though, the company is having to radically reduce output as it is hit hard by the global economic downturn.

Driving through Ludwigshafen on the way to the main administration building at BASF, Carl-Bosch-Strasse, gate no. 2, you pass by a small park: a reassuring patch of lawn among all the gray concrete buildings, steel pipes and chimneys. The park belongs to BASF, but it is open to the public, and when plant manager Bernhard Nick, 50, tells visitors about the internal elements that hold together the largest chemical company in the world, he talks about the park and the memorial that can be seen there.

The park features a kind of furnace - five meters (16 ft.) high, one and a half meters in diameter - that stands on the lawn next to a commemorative plaque. This pioneering device was the main component of the first facility to manufacture ammonia (NH3), and it's easy to understand why BASF is proud of it. German scientists Fritz Haber and Carl Bosch, its inventors, were awarded the Nobel Prize in chemistry. The Badische Anilin- und Sodafabrik (BASF) in Ludwigshafen on the Rhine, founded in 1865, rapidly became a major global company.

A few weeks ago, there was a visitor from China who, like Nick, is a chemist by profession and someone who normally doesn't let his feelings show but, when the man stood in front of the old ammonia unit in the park, he became choked up with emotion. The text on the plaque reads: "Without this process, the struggle against hunger would be hopeless." Nick says that they have calculated that in a world without ammonia roughly half of mankind would die of hunger because there would be no chemical fertilizer. That is certainly somber food for thought.

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400 Earthquakes 'Swarm' Yellowstone Since Christmas
2009-01-07 16:39:07

When you have 400 earthquakes on top of one of the largest supervolcanoes on Earth, people pay attention.

And. since the day after Christmas, that's what has happened at Yellowstone National Park. Scientists are seeing what they call a "swarm" of low intensity earthquakes - the largest since the 1980s. The biggest quake had a magnitude of 3.9, below the level that can cause damage.

But the earthquakes have made worldwide news because the park lies on a giant caldera, the crater of a volcano that scientists say could one day explode and destroy most of North America and freeze the rest of the world under a shroud of ash for up to two years.

Still, the latest earthquakes are nothing to fear, said park geologist Hank Heasler.

Heasler and his colleagues at the University of Utah and the U.S. Geological Survey spent several hours Friday on a conference call comparing notes and sharing their views on the latest geological event atop the largest known volcano in the world.

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CBO Projects $1.2 Trillion U.S. Budget Deficit For 2009
2009-01-07 16:41:41

Slowing tax revenues and a historic bailout of the U.S. financial system will drive the annual budget deficit to nearly $1.2 trillion this year, even without the massive economic stimulus package now under review by Congress, the Congressional Budget Office reported Wednesday morning.

The CBO also projected that the deficit would hit $703 billion in the fiscal year that starts in October.

In a news conference in Washington, D.C., President-elect Barack Obama warned that "the deficit we are inheriting" this year is bound to grow beyond $1.2 trillion.

"We know that our recovery and reinvestment plan will necessarily add more," he said. "My own economic and budget team projects that unless we take decisive action, even after our economy pulls out of its slide, trillion-dollar deficits will be a reality for years to come."

Obama said his team is still consulting with members of Congress about the size of the stimulus package.

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Stock Losses Leave Corporate Pensions Underfunded By $400 Billion
2009-01-07 16:41:18

The collapse of the stock market last year left corporate pension plans at the largest companies underfunded by $409 billion, reversing a $60 billion pension surplus at the end of 2007, according to a study released Wednesday.

Shoring up the plans could cause further pain for workers, businesses and the struggling economy at a time when they can least afford it, said pension specialists.

"The chaos that has been observed in the world's financial markets over the last 12 months has had a major adverse impact on pension plan funding and will negatively impact corporate earnings," the Mercer consulting firm reported Wednesday. "Moreover, the trend in recent months has been one of alarming deterioration," said Mercer.

As Mercer and other pension specialists described it, the pension problem illustrates how the recession and the meltdown in the financial markets can become self-reinforcing.

Ballooning pension deficits will leave some companies with diminished profits, weaker credit ratings and higher borrowing costs, which can translate into lower stock prices, said Mercer principal Adrian Hartshorn. The need to cover pension shortfalls could prompt businesses to reduce spending on items as varied as equipment that boosts productivity and dividends that deliver income for shareholders.

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U.S. Service Sector, Factory Orders Decline
2009-01-07 16:40:35

The service sector contracted in December for the third consecutive month, while orders at factories fell the previous month on weakening consumer demand, according to data released Tuesday that highlighted the persistent weakness in the U.S. economy.

The Institute for Supply Management said Tuesday that the service sector continued to shrink last month, although at a slower pace than it had in November. Every industry in the sector contracted, with the exception of retail.

The group's index of the service sector registered 40.6 percent, not as weak as analysts had expected. Any reading under 50 percent indicates contraction; any reading above signals growth.

Wachovia economist Jay Bryson said holiday discounts may have given a tiny boost to the service industry, but he and other analysts cautioned that it should not be taken as a sign of a recovery.

"Maybe the holiday season wasn't quite as big a disaster ... but it's not like happy days are here again," said Bryson.

"To me, it says the economy is in bad shape," said Joel Naroff, president of Naroff Economic Advisors, a consulting firm in Holland, Pennsylvania. "Maybe it's not crashing and burning, just crashing."

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Time Warner Expects $25 Billion Charge, Loss For The Year
2009-01-07 16:39:44
Media company Time Warner Inc. said Wednesday that it expects a fourth-quarter charge of $25 billion to write down the value of its cable, publishing and AOL assets, leading to a loss for the year. New York-based Time Warner said its results, particularly for its AOL and publishing unit's advertising operations, have been pressured by economic conditions that are more difficult than it initially anticipated.

Time Warner's cable television arm Time Warner Cable Inc. will account for $15 billion of the charge, with the remaining $10 billion related to its publishing and AOL divisions, said spokesman Edward Adler, declining to give further specifics.

The steep charge will lead to an operating loss for the fourth quarter. Time Warner also anticipates a full-year loss, down from a prior outlook for a profit between $1.04 and $1.07 per share.

Analysts polled by Thomson Reuters predict 2008 earnings of $1.08 per share. Analysts' estimates typically exclude one-time items.

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Germany's Job-Creation Machine Sputters
2009-01-07 16:39:19
It was a good run. For over three years, the number of unemployed in Germany had been dropping. Statistics for December show that the trend has come to an end as the economic crisis hits Germany's labor market.

For years, Germany had seen its unemployment rate drop steadily, all the way down to a November total of less than 3 million. That downward trend, though, has now officially come to an end. According to a report released on Wednesday by the Federal Labor Agency, which tracks German unemployment statistics, the number of jobless rose by 114,000 in December, bringing the total to 3.102 million or 7.4 percent.

Despite the late up-tick, 2008 will be remembered as one of the German labor market's best ever. On average, the total number of unemployed last year was 508,000 lower than in 2007. Analysts, though, anticipate that 2009 will see increased job losses in Germany.

"The December data shows that the economic crisis has reached the labor market," said Frank-Jurgen Weise, head of the Federal Labor Agency, in a statement accompanying the report. "As such, our optimism for the year 2009 is muted."

The new report marks an end to the slide in German unemployment that has continued largely unabated since early 2005. After rising through much of the early part of the decade, the number of jobless spiked to over 5 million in January 2005.

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