In an annual revision of the figures, the Treasury Department said Monday that China's holdings totaled $1.16 trillion at the end of December. That was an increase of 30 percent from an estimate the government made two weeks ago.
The government made the change to its monthly report based on more accurate information it obtains in an annual survey. That survey more does a better job of determining the actual owners of Treasury securities.
China was firmly in the top spot as the largest foreign holder of U.S. Treasury debt even before the revisions. But the big increase in Chinese holdings could ease fears that Chinese investors might begin dumping their U.S. holdings. Such a development could send U.S. interest rates rising. That would slow America's economic recovery and increase Washington's costs for financing the $14.3 trillion national debt.Continue »
If you're in the market for a Chevy Volt, part of the plug-in hybrid's appeal is probably the gas money that its electric engine will save you. But if you're planning to plug one into the outlet in your garage anytime soon, you may be in for a shock -- sticker shock, that is -- at what's being charged for this rechargeable car.
The manufacturer's suggested retail price for the Volt starts at $40,280, but with the revolutionary vehicle in short supply and high demand, some Chevrolet dealers are marking the Volt's price up, way up, from its MSRP.
According to the Arizona Daily Star, Moises Paiewonsky, a 29-year-old assistant music professor from Tucson, flew cross-country to New York -- one of only a half-dozen states plus the District of Columbia where the car is currently available -- to plunk down $50,000 for his Volt, about $6,000 more than his particular model's sticker price.Continue »
The FAA calls those extra lanes "NextGen", short for Next Generation Air Transportation System, a state-of-the-art satellite-based air traffic control system that would replace the current decades-old radar-based one and allow the rising number of planes to fly closer together on more direct and precise routes, effectively opening up those extra lanes and averting an otherwise unavoidable aviation traffic jam.
"Only a modernized air transportation system will be able to keep up with our forecasted demand," FAA Administrator Randy Babbitt said in a statement this morning.
The radio program "This American Life" aired a segment Friday claiming to have unraveled the secret formula for Coca-Cola. The show's producers discovered a photograph in a 1979 article in the Atlanta Journal-Constitution showing a copy of the secret recipe from a notebook belonging to an (alleged) friend of Coke's creator.
The photographed notebook page also allegedly showed the ingredients and proportions for a secret ingredient - known as Merchandise 7X - necessary for the recipe.
The show contacted flavor and beverage makers, including the Jones Soda Company, for help reproducing the recipe. The replica was good enough to fool many tasters in blind tests - including flavor experts at Jones.
On the other hand, many testers who identified themselves as frequent Coke drinkers were not fooled. And although there is a single recipe considered the "original formula," it was developed in a series of attempts by 19th century chemist John Pemberton. Even if the recipe identified by "This American Life" is authentic, it was likely an intermediary step in Pemberton's process.
Furthermore, "It's not what they have now," noted Mark Pendergrast, the author of For God, Country & Coca-Cola: The Definitive History of the Great American Soft Drink and the Company that Makes It."
Since the drink was invented in 1886, the roughly 8 milligram dose of cocaine has been removed, the amount of caffeine has been reduced, and the types of sweeteners and acids used have been replaced, to name a few changes.
"The irony of everybody paying attention to the formula again, is they always miss the historical context," said Pendergrast, who detailed the drink's history as a cocaine-laden "combination patent medicine and beverage" largely ripped off from a coca-infused wine and marketed to relieve the mythical disease of neurasthenia.
"This whole story is a whole hoo-ra over old news," Pendergrast said, noting that he published a similar recipe in the 1993 first edition of his book and that an updated recipe would appear in a forthcoming edition.
An official company historian said people were welcome to try the recipe presented on the show. He said he was confident they'd find it just wasn't the same.
(The This American life radio piece can be found at www.thisamericanlife.org. But - apparently due to surging interest in the story - the website was down Tuesday morning.)
A late-year downturn was Japan's first quarterly contraction in more than a year, and is partly the reason for the change in international economic hierarchy.
Japan's real GDP expanded 3.9 percent in the calendar year in the first annual growth in three years, but it wasn't enough to hold off a surging China. Japan's nominal GDP last year came to $5.4742 trillion, less than China's total of $5.8786 trillion, the Japanese Cabinet Office said.
"It's realistic to say that within 10 years China will be roughly the same size as the US economy," Tom Miller of GK Dragonomics, a Beijing-based economic consultancy, told the BBC.
Gross domestic product in Japan shrunk at an annualized rate of 1.1 percent in the October-December quarter, a sharp reversal from a revised 3.3 percent expansion in the third quarter, the government said.Continue »
What's in a name?
For cars, quite a lot -- even for two cars as different as a full-size Ford pickup and a Formula One Ferrari. The Ford F-150, a quintessential American truck, and the Ferrari F150, a 785-horsepower Italian race car, couldn't be more different, but save for a hyphen, their names are identical.
The two vehicles will never be confused with each other on the road, but the American automaker doesn't much care for the European sports car company appropriating the name of the top-selling pickup for its single-seat supercar, even if Ferrari says it chose the name in honor of the 150th anniversary of Italian unification.
Today, Ford filed a lawsuit against Ferrari in federal court for trademark infringement. And the F-150, which could never hope of besting the F150 on the raceway, now has a darn good chance of doing it in court.Continue »
According to the Times, "A merger would potentially let customers trade stocks in New York, options tied to those shares in Paris and derivatives linked to them in Frankfurt."Continue »
In a lawsuit filed last week, lawyers demanded $6.4 billion for Bernard Madoff's victims, accusing executives at JPMorgan Chase of being complicit in the disgraced financier's massive fraud.
Now the second-largest bank in the United States is firing back.
According to Reuters, JPMorgan says court-appointed trustee Irving Picard is circumventing the law by suing in bankruptcy court. Such a trial would be decided by a judge, not a jury.
"In substance," Retuers quotes the bank as saying, "the trustee is trying to pursue an enormous back-door class action."
JPMorgan, which served as the now-imprisoned financier's primary bank for two decades, asked the bankruptcy judge overseeing the Madoff proceedings to move the lawsuit to federal district court, where the bank has the right to a jury trial. A spokesman for Picard did not respond to Reuter's request for a comment.
Last week, the lawyers working on Picard's behalf cited numerous emails implicating JPMorgan, including an unidentified bank employee recounting being told "there is a well-known cloud over the head of Madoff and that his returns are speculated."
The bank has denied having any suspicions about Madoff, saying it followed all commercial banking regulations in its dealings with him.
However, the trading platform wasn't compromised, people familiar with the matter told WSJ.
Investigators think unlawful financial gain, theft of trade secrets or a national-security threat designed to damage the exchange could be reasons for the penetrations.
"So far, [the perpetrators] appear to have just been looking around," one person involved in the Nasdaq matter told WSJ.
Sources familiar with the matter told WSJ that the Secret Service started investigating the attempts about a year ago.
Authorities have yet to identify any trail, specific individual or country associated with the incidents.
A federal commission established to investigate the crisis has concluded that the size of the meltdown's impact is similar to the breadth of parties there are to blame for it, reports the New York Times.
A short list of people and things that the recently concluded Financial Crisis Inquiry Commission will blame in its official report (to be released Thursday) include: Government regulators and policy makers; corporate mismanagement; two presidential administrations; two Fed chairmen; greed in several financial institutions; and unnecessary Wall Street risk taking.
Most importantly, the commission concludes that the financial meltdown was "avoidable," reports the Times, which got an early look at the commission's findings.
"The greatest tragedy would be to accept the refrain that no one could have seen this coming and thus nothing could have been done. If we accept this notion, it will happen again," the report states.
The 10-member commission was far from unanimous in its findings, as only the 6 members appointed by Democrats approved of the report's conclusions, the Times reports.
Republican dissenters on the commission will publish their own findings shortly, and are expected to place most of the blame for the crisis on government policies promoting homeownership, the Times reports.
The commission's official 576-page report places some of the blame with former Fed chairmen Alan Greenspan and his successor, Ben S. Bernanke. Greenspan is singled out for advocating financial deregulation and failing to "stem the flow of toxic mortgages."
Both the Clinton and Bush administrations are cited in the report for missteps and inconsistencies that contributed to the financial turmoil.
Lobbying is also blamed in the report, which highlights the $2.7 billion spent between 1999 and 2008 by the financial sector on convincing politicians and federal officials to let them have their way.
Overall, the report paints a grim picture of mismanagement, miscalculation and a general lack of will to tackle obvious flaws in the financial system by government officials, industry leaders and regulators.
The report states: "The crisis was the result of human action and inaction, not of Mother Nature or computer models gone haywire. The captains of finance and the public stewards of our financial system ignored warnings and failed to question, understand and manage evolving risks within a system essential to the well-being of the American public. Theirs was a big miss, not a stumble."
Personal finance expert Carmen Wong Ulrich told "The Early Show" that the important part of the announcement was the word "hope," as in, Jobs hopes to return.
"It didn't say when he's coming back," Ulirch says, adding that this is his third medical leave since 2004. "This could be an opportunity for other tech companies."
Traders on Wall Street seemed to reflect that concern, as massive trading of the company's stock saw share prices tumble 11 percent on the NYSE as of noon Tuesday.
"While Steve Jobs's health has been a constant concern for investors, given previous issues and his importance to the company, we believe this announcement will still come as a negative surprise given it is the second leave in just two years, and this time there doesn't appear to be a date set that he expects to be back," wrote Barclays Capital analyst Ben Reitzes in a note, reports MarketWatch.
Regardless, the overall price of Apple shares is nearly double what it was this time last year, and with a planned rollout of new iPads and Mac operating systems as well as the new deal with Verizon bound to result in the sales of millions of new iPhones, many analysts expect the company to stay healthy regardless of Jobs' short term medical issues.
"Apple is in the best position of any technology company," said Apple Wall Street analyst Gene Munster on Business Insider. "The products they're going after are fundamentally targeting a shift in consumer buying."
Munster and other analysts tempered their optimism, however, because they consider Steve Jobs to be as important to Apple as Henry Ford was to Ford motors; his vision drives the company's growth. However, many appeared to have confidence in his apparent successor, Apple COO Tim Cook, as well's as Jobs' preparation for his inevitable departure.
"We have the utmost respect and awe for Steve's contributions to technology and society and put him on the same level as the greats including Thomas Edison, Benjamin Franklin, and Walt Disney (just to name a few)," Kaufman Bros. analyst Shaw Wu wrote. "But we believe like his predecessors, he has successfully embedded his way of thinking and philosophy into the culture of (Apple)."
Wu credited Jonathan Ive, Apple's top design executive, for being the real driving force behind Apple's financial stability, because of the unique and compelling products he helps create.
"(Ive is) responsible for the look and feel of the stores, the products, the software. And no slight to Tim (Cook), but we think he's the most important person in the company," Wu said.
They were a revolutionary handgun when their Austrian manufacturer, Glock GMBH, first put them on the market 20 years ago, because they were made with a high-tech polymer instead of steel, making them lightweight and reliable.
Now, however, a more grisly event has led to a new rise in Glock's popularity: a shooting in Arizona by a mentally disturbed 22-year-old suspect who used his Glock handgun to quickly kill six people and wound 14 more.
One-day sales of handguns in Arizona jumped 60 percent, two days after the shooting, according to Federal Bureau of Investigation data, reports Bloomberg News. Ohio saw the biggest jump in handgun sales, while Illinois, New York and California also saw siginificant increases. Nationally, one-day handgun sales rose 5 percent.
Of all the pistols sold, Arizona gun dealers told Bloomberg that the Glock model used in the Tucson shooting was among the most popular.
Major news events involving a shooting usually spur gun sales, Bloomberg reports, like after the Virginia Tech massacre in 2007 that saw 32 people killed by a mentally disturbed gunman also wielding a Glock.
"Whenever there is a huge event, especially when it's close to home, people do tend to run out and buy something to protect their family," Don Gallardo, a manager at Arizona Shooter's World in Phoenix, told Bloomberg. Gallardo said he expects handgun sales to climb steadily throughout the week.
Bank of America reportedly set up a crisis team to deal with the dump, and stocks fell on the rumors.
The financial system can take a breather, however, for now.
In an interview with two Swiss newspapers, Assange said WikiLeaks has been losing "600,000 francs," the equivalent of roughly $618,000, every week since they first began publishing diplomatic cables.
While external political pressures on WikiLeaks have not deterred their work, their financial troubles have certainly caused problems, Assange said.
"We will not divulge (the banking documents we have) right away," Assange said. "We are too busy with the diplomatic cables and with our financial troubles."
Despite reports of a book deal worth more than $1 million, Assange said the money has not been realized yet, and that he will only truly see a financial windfall from his memoir if it sells well.
Assange does not divulge in the interview with Swiss papers exactly what is costing his website so much money.
WikiLeaks has, however, been the target of frequent cyberattacks, and it has also had several avenues for receiving funds, from PayPal to Mastercard, cut off.
Additionally, Assange himself has been dealing with a lengthy legal process in England involving sexual assault charges in Sweden.
The rate at which WikiLeaks has released U.S. diplomatic cables to the public has slowed dramatically in the last few weeks. Assange assured his Swiss interviewers, however, that things more or less function normally with his website, despite the financial difficulties.
After revealing thousands of leaked U.S. diplomatic cables, WikiLeaks founder Julian Assange said in November that he was set to expose as "ecosystem of corruption" at a major U.S. bank. In an interview more than a year earlier, Assange said he had five gigabytes of information from a Bank of America executive's hard drive and was deciding how to release it.
Given Assange's comments, Bank of America has set up a special team to pore over thousands of documents and investigating whether any computers have gone missing in an effort to pin down what information might possibly be exposed.
The Charlotte, N.C.-based bank has also employed the consultancy Booz Allen Hamilton to assist with the review.
According to the report, the investigation has turned up no evidence to suggest that Assange has acquired a hard drive directly from the bank. But the bank provided documents to the Securities and Exchange Commission, congressional investigators and the New York attorney general's office in the last two years that could account for Assange's claims.
Officials from all three bodies deny WikiLeaks could have obtained the information through them.
In a move last month that could have inflamed any WikiLeaks aggression, Bank of America joined Mastercard and Paypal in ceasing to process payments to WikiLeaks, on the basis that its leaks may be illegal.
The U.S. Justice Department has indicated it is investigating possible charges against WikiLeaks and Assange. And in Sweden, Assange remains the focus of a sex crimes investigation. Swedish authorities have requested his extradition from Britain, where he remains free on bail.
A New York Times report details the occasional terrible mistakes banks have made with their customers in the mortgage crisis mess, breaking into the homes and changing the locks of people who were far from deserving of such punishment.
While banks claim the break-in mistakes are an anomaly involving a few dozen examples among millions of mortgage holders, the effects on those who endure the humiliation have resulted in both emotional turmoil and the occasional big lawsuit settlement.
In Truckee, Calif., Mimi Ash was behind on her mortgage payments on her vacation home, but in the process of working out a loan modification. Regardless, Bank of America sent contractors to her house to change the locks and clear out her house, and they removed clothes, kids' medals, and her dead husband's ashes, according to the Times. Ash has since filed a federal lawsuit.
The report details several other cases as well:
Alan Schroit had stored 75 pounds of frozen fish caught on an Alaskan vacation in his Galveston, Tex., second home, only to have the bank change the locks and shut off the electricity, even though he was caught up in his mortgage payments. The resulting disaster to the house itself from the melting fish ended in a settlement for Schroit.
In Florida, contractors working for Chase Bank used a screwdriver to enter Debra Fischer's house in Punta Gorda and helped themselves to a laptop, an iPod, a cordless drill, six bottles of wine and a frosty beer, left half-empty on the counter, according to assertions in a lawsuit filed in August. Ms. Fisher was facing foreclosure, but Chase had not yet obtained a court order, her lawyer says.
A clause in most mortgages allows banks that service the loan to enter a home and secure it if it is in default, meaning if the mortgage payment is 45 to 60 days late, and if the house has been abandoned, authorities said.
Banks do so to protect the property from vandalism or damage for which the bank could be liable.
But determining when a house is abandoned is not always easy and is often left to inexperienced contractors, said Carlin Phillips, a Massachusetts lawyer who represents Ms. Ash, who is 45.