21 Things You Should Never Buy New
by Lynn Truong
Copyright by Wise Bread,
Monday June 28, 2010, 10:24 am EDT
http://finance.yahoo.com/news/21-Things-You-Should-Never-usnews-2356162080.html?x=0
If you're looking to get the most value for your dollar, it would do your wallet good to check out secondhand options. Many used goods still have plenty of life left in them even years after the original purchase, and they're usually resold at a fraction of the retail price, to boot. Here's a list of 21 things that make for a better deal when you buy them used.
[Slideshow: 10 Things to Splurge on This Summer.]
1. DVDs and CDs: Used DVDs and CDs will play like new if they were well taken care of. Even if you wind up with a scratched disc and you don't want to bother with a return, there are ways to remove the scratches and make the DVD or CD playable again.
2. Books: You can buy used books at significant discounts from online sellers and brick-and-mortar used book stores. The condition of the books may vary, but they usually range from good to like-new. And of course, check out your local library for free reading material.
3. Video Games: Kids get tired of video games rather quickly. You can easily find used video games from online sellers at sites like Amazon and eBay a few months after the release date. Most video game store outlets will feature a used game shelf, as well. And if you're not the patient type, you can rent or borrow from a friend first to see if it's worth the purchase.
4. Special Occasion and Holiday Clothing: Sometimes you'll need to buy formal clothing for special occasions, such as weddings or prom. Most people will take good care of formal clothing but will only wear it once or twice. Their closet castouts are your savings: Thrift stores, yard sales, online sellers and even some dress shops offer fantastic buys on used formalwear.
5. Jewelry: Depreciation hits hard when you try to sell used jewelry, but as a buyer you can take advantage of the markdown to save a bundle. This is especially true for diamonds, which has ridiculously low resale value. Check out estate sales and reputable pawn shops to find great deals on unique pieces. Even if you decide to resell the jewelry later, the depreciation won't hurt as much.
6. Ikea Furniture: Why bother assembling your own when you can pick it up for free (or nearly free) on Craigslist and Freecycle? Summer is the best time to hunt for Ikea furniture--that's when college students are changing apartments and tossing out their goodies.
7. Games and Toys: How long do games and toys remain your child's favorite before they're left forgotten under the bed or in the closet? You can find used children's toys in great condition at moving sales or on Craigslist, or you can ask your neighbors, friends, and family to trade used toys. Just make sure to give them a good wash before letting junior play.
8. Maternity and Baby Clothes: Compared to everyday outfits that you can wear any time, maternity clothes don't get much wear outside the few months of pregnancy when they fit. The same goes for baby clothes that are quickly outgrown. You'll save a small fortune by purchasing gently used maternity clothes and baby clothes at yard sales and thrift stores. Like children's games and toys, friends and family may have baby or maternity clothing that they'll be happy to let you take off their hands.
[See 20 Things You Should Never Buy Used.]
9. Musical Instruments: Purchasing new musical instruments for a beginner musician is rarely a good idea. (Are you ready to pay $60 an hour for piano lessons?) For your little dear who wants to learn to play an instrument, you should see how long his or her interest lasts by acquiring a rented or used instrument to practice with first. Unless you're a professional musician or your junior prodigy is seriously committed to music, a brand new instrument may not be the best investment.
10. Pets: If you buy a puppy (or kitty) from a professional breeder or a pet store outlet, it can set you back anywhere from a few hundred dollars to several thousand dollars. On top of this, you'll need to anticipate additional fees and vet bills, too. Instead, adopt a pre-owned pet from your local animal shelter and get a new family member, fees, and vaccines at a substantially lower cost.
11. Home Accent: Pieces Home decorating pieces and artwork are rarely handled on a day-to-day basis, so they're generally still in good condition even after being resold multiple times. If you like the worn-out look of some decor pieces, you can be sure you didn't pay extra for something that comes naturally with time. And don't forget, for most of us, discovering a true gem at a garage sale is 90% of the fun!
12. Craft Supplies: If you're into crafting, you probably have a variety of different supplies left over from prior projects. If you require some additional supplies for your upcoming project, then you can join a craft swap where you'll find other crafty people to trade supplies with. If you have leftovers, be sure to donate them to your local schools.
13. Houses: You're typically able to get better and more features for your dollar when you purchase an older home rather than building new. Older houses were often constructed on bigger corner lots, and you also get architectural variety in your neighborhood if the houses were built or remodeled in different eras.
14. Office Furniture: Good office furniture is built to withstand heavy use and handling. Really solid pieces will last a lifetime, long after they're resold the first or second time. A great used desk or file cabinet will work as well as (or better than) a new one, but for a fraction of the cost. With the recession shutting down so many businesses, you can easily find lots of great office furniture deals.
15. Cars: You've probably heard this before: Cars depreciate the second you drive them off of the dealership's lot. In buying a used car, you save money on both the initial cost and the insurance. It also helps to know a trusty mechanic who can check it over first. This way, you'll be aware of any potential problems before you make the purchase.
[See 20 Tips for Cleaning on the Cheap.]
16. Hand Tools: Simple tools with few moving parts, like hammers, hoes and wrenches, will keep for decades so long as they are well-made to begin with and are well-maintained. These are fairly easy to find at neighborhood yard or garage sales. If you don't need to use hand tools very often, an even better deal is to rent a set of tools or borrow them from a friend.
17. Sports Equipment: Most people buy sports equipment planning to use it until it drops, but this rarely happens. So when sports equipment ends up on the resale market, they tend to still be in excellent condition. Look into buying used sporting gear through Craigslist and at yard sales or sports equipment stores.
18. Consumer Electronics: I know most folks like shiny new toys, but refurbished electronic goods are a much sweeter deal. Consumer electronics are returned to the manufacturer for different reasons, but generally, they'll be inspected for damaged parts, fixed, tested, then resold at a lower price. Just make sure you get a good warranty along with your purchase.
19. Gardening Supplies: This is an easy way for you to save money, and all you need to do is be observant. Take a look outdoors and you'll likely find such gardening supplies as mulch, wood, and even stones for free or vastly reduced prices. Used garden equipment and tools are also common goods at yard sales.
20. Timeshares: Buying timeshares isn't for everyone, but if you decide that it suits your lifestyle, purchasing the property as a resale would be a better deal than buying it brand new: on average, you'll save 67 percent on the price for a comparable new timeshare. If you're new to timeshare ownership, give it a test run first by renting short term.
21. Recreational Items: It's fairly easy to find high ticket recreational items like campers, boats, and jet skis being resold. Oftentimes, they're barely used at all. As long as they're in safe, working condition, they'll make for a better value when purchased used than new.
Lynn Truong is the co-founder and Deals Editor of Wise Bread, a blog dedicated to helping readers live large on a small budget. Wise Bread's book, 10,001 Ways to Live Large on a Small Budget, debuted as the #1 Money Management book on Amazon.com.
Tuesday, June 29, 2010
Kirk didn't tell the whole story - Navy tipped him to questions about his record
Kirk didn't tell the whole story - Navy tipped him to questions about his record
BY LYNN SWEET
Copyright by The chicago Sun-Times
June 2, 2010
http://www.suntimes.com/news/sweet/2343516,CST-NWS-sweet02.article
WASHINGTON -- Republican U.S. Senate candidate Rep. Mark Kirk did not tell the whole story about how he found out his bio had misidentified him as having won a Navy "Intelligence Officer of the Year" award. It turns out the Navy tipped off Kirk's House staff that news outlets were asking questions about his military record.
Last week, Kirk, a commander in the Naval Reserves, said his staff called the false claim to his attention as if they discovered it themselves. What actually happened was that after his staff got the heads-up from the Navy, Kirk's team scrambled a damage-control operation, putting a statement on his website correcting the record before a story came out.
Navy Cmdr. Danny Hernandez told the Chicago Sun-Times on Tuesday that after his office received calls from news outlets "inquiring about [Kirk's] service" -- and who won the Intelligence Officer of the Year Award in 1999 -- the Navy's Office of Legislative Affairs on Capitol Hill was notified so it could pass the information to Kirk's office, and it did. That is a Navy courtesy, Hernandez said, for all congressmen who are the subject of media questions. He said Kirk's office was told that the 1999 winner of the reserve officer's award was Allan Dunlop, a lieutenant commander.
"Upon a recent review of my records, I found that an award listed in my official biography was misidentified as 'Intelligence Officer of the Year.' In fact . . . I was the recipient of the Rufus Taylor Intelligence Unit of the Year award for outstanding support provided during Operation Allied Force," Kirk said in that Web posting. Asked by the Sun-Times on Saturday night what prompted Kirk to make the change, a Kirk spokesman said "we noticed that it was misidentified and we corrected it."
The news about the false claim has put Kirk on the defensive for the first time in his campaign against Democratic nominee Alexi Giannoulias, the state treasurer. Kirk, a Navy reservist since 1989, has made his military record a centerpiece of his Senate campaign.
Kirk's Pentagon arrangement
Kirk has an unusual arrangement with the Pentagon when it comes to serving his reserve duty. "Our regular practice is to not call up for deployment sitting members of Congress who are in the reserves, but we have faced this question a number of times and have made case-by-case exceptions in a few instances, Rep. Kirk being one of them," Pentagon Press Secretary Geoff Morrell told the Sun-Times.
Kirk's duty
On the campaign trail and through his career in Congress, Kirk often boasts about his duty in conflict zones, which raises the question of where he served and for how long. The Kirk campaign gave the Sun-Times some details on Tuesday.
Iraq: Kirk, in an electronic intelligence squadron, "flew missions patrolling Iraqi airspace during March and April 2000," when the U.S. was enforcing a no-fly zone.
Afghanistan: Kirk served reserve duty in Kandahar from Dec. 15, 2008, through Jan. 2, 2009. He returned a second time between Dec. 19, 2009, and Jan. 4, 2010.
BY LYNN SWEET
Copyright by The chicago Sun-Times
June 2, 2010
http://www.suntimes.com/news/sweet/2343516,CST-NWS-sweet02.article
WASHINGTON -- Republican U.S. Senate candidate Rep. Mark Kirk did not tell the whole story about how he found out his bio had misidentified him as having won a Navy "Intelligence Officer of the Year" award. It turns out the Navy tipped off Kirk's House staff that news outlets were asking questions about his military record.
Last week, Kirk, a commander in the Naval Reserves, said his staff called the false claim to his attention as if they discovered it themselves. What actually happened was that after his staff got the heads-up from the Navy, Kirk's team scrambled a damage-control operation, putting a statement on his website correcting the record before a story came out.
Navy Cmdr. Danny Hernandez told the Chicago Sun-Times on Tuesday that after his office received calls from news outlets "inquiring about [Kirk's] service" -- and who won the Intelligence Officer of the Year Award in 1999 -- the Navy's Office of Legislative Affairs on Capitol Hill was notified so it could pass the information to Kirk's office, and it did. That is a Navy courtesy, Hernandez said, for all congressmen who are the subject of media questions. He said Kirk's office was told that the 1999 winner of the reserve officer's award was Allan Dunlop, a lieutenant commander.
"Upon a recent review of my records, I found that an award listed in my official biography was misidentified as 'Intelligence Officer of the Year.' In fact . . . I was the recipient of the Rufus Taylor Intelligence Unit of the Year award for outstanding support provided during Operation Allied Force," Kirk said in that Web posting. Asked by the Sun-Times on Saturday night what prompted Kirk to make the change, a Kirk spokesman said "we noticed that it was misidentified and we corrected it."
The news about the false claim has put Kirk on the defensive for the first time in his campaign against Democratic nominee Alexi Giannoulias, the state treasurer. Kirk, a Navy reservist since 1989, has made his military record a centerpiece of his Senate campaign.
Kirk's Pentagon arrangement
Kirk has an unusual arrangement with the Pentagon when it comes to serving his reserve duty. "Our regular practice is to not call up for deployment sitting members of Congress who are in the reserves, but we have faced this question a number of times and have made case-by-case exceptions in a few instances, Rep. Kirk being one of them," Pentagon Press Secretary Geoff Morrell told the Sun-Times.
Kirk's duty
On the campaign trail and through his career in Congress, Kirk often boasts about his duty in conflict zones, which raises the question of where he served and for how long. The Kirk campaign gave the Sun-Times some details on Tuesday.
Iraq: Kirk, in an electronic intelligence squadron, "flew missions patrolling Iraqi airspace during March and April 2000," when the U.S. was enforcing a no-fly zone.
Afghanistan: Kirk served reserve duty in Kandahar from Dec. 15, 2008, through Jan. 2, 2009. He returned a second time between Dec. 19, 2009, and Jan. 4, 2010.
U.S. metro home prices climb, Chicago at 2002 level
U.S. metro home prices climb, Chicago at 2002 level
Copyright by Reuters
June 29, 2010
http://chicagobreakingbusiness.com/2010/06/home-prices-in-major-cities-climb-from-april-to-may.html
Single-family home prices unexpectedly climbed in April from March, driven by a final sales push before tax credits expired, but signs of a sustained recovery have yet to emerge, Standard & Poor’s/Case Shiller home price indexes showed on Tuesday.
In the Chicago area, April home prices were relatively flat, rising 0.6 percent since April but still down 1.6 percent form April 2009. Area home prices are at levels similar to what the market saw in May 2002.
“Inventory data and foreclosure activity have not shown any signs of improvement,” David Blitzer, chairman of S&P’s index committee, said in a statement. “Consistent and sustained boosts to economic growth from housing may have to wait to next year.”
The S&P composite index of home prices in 20 metropolitan areas for April rose 0.4 percent on a seasonally adjusted basis after a downwardly revised 0.2 percent drop in March, compared with a 0.1 percent decline forecast in a Reuters survey. March prices were previously reported as unchanged.
On an unadjusted basis, prices gained 0.8 percent in April following March’s 0.5 percent drop. A 0.2 percent rise was forecast in a Reuters poll.
The 20-city index rose 3.8 percent in April from a year earlier, topping the expected 3.4 percent increase.
Home sales have fallen precipitously in the the weeks since the April 30 end of tax credits of up to $8,000, which pushed sales forward as buyers raced to lock in the incentive.
Other reports have shown sales of new homes sank by a record 32.7 percent in May to the lowest level since record keeping began in the early 1960s, and existing home sales unexpectedly fell 2.2 percent in May.
Applications to buy homes hover at 13-year lows.
Still, affordability is high, with prices down around 30 percent on average from 2006 peaks and mortgage rates touching record lows near 4.75 percent.
Copyright by Reuters
June 29, 2010
http://chicagobreakingbusiness.com/2010/06/home-prices-in-major-cities-climb-from-april-to-may.html
Single-family home prices unexpectedly climbed in April from March, driven by a final sales push before tax credits expired, but signs of a sustained recovery have yet to emerge, Standard & Poor’s/Case Shiller home price indexes showed on Tuesday.
In the Chicago area, April home prices were relatively flat, rising 0.6 percent since April but still down 1.6 percent form April 2009. Area home prices are at levels similar to what the market saw in May 2002.
“Inventory data and foreclosure activity have not shown any signs of improvement,” David Blitzer, chairman of S&P’s index committee, said in a statement. “Consistent and sustained boosts to economic growth from housing may have to wait to next year.”
The S&P composite index of home prices in 20 metropolitan areas for April rose 0.4 percent on a seasonally adjusted basis after a downwardly revised 0.2 percent drop in March, compared with a 0.1 percent decline forecast in a Reuters survey. March prices were previously reported as unchanged.
On an unadjusted basis, prices gained 0.8 percent in April following March’s 0.5 percent drop. A 0.2 percent rise was forecast in a Reuters poll.
The 20-city index rose 3.8 percent in April from a year earlier, topping the expected 3.4 percent increase.
Home sales have fallen precipitously in the the weeks since the April 30 end of tax credits of up to $8,000, which pushed sales forward as buyers raced to lock in the incentive.
Other reports have shown sales of new homes sank by a record 32.7 percent in May to the lowest level since record keeping began in the early 1960s, and existing home sales unexpectedly fell 2.2 percent in May.
Applications to buy homes hover at 13-year lows.
Still, affordability is high, with prices down around 30 percent on average from 2006 peaks and mortgage rates touching record lows near 4.75 percent.
Burge found guilty - Jury finds former police commander lied when he denied torture allegations
Burge found guilty - Jury finds former police commander lied when he denied torture allegations
By Matthew Walberg and William Lee
Copyright © 2010, Chicago Tribune
10:17 p.m. CDT, June 28, 2010
http://www.chicagotribune.com/news/local/ct-met-burge-trial-0629-20100628,0,7883778.story
Decades after torture allegations were first leveled against former Chicago police Cmdr. Jon Burge's "Midnight Crew," a federal jury convicted him Monday on all three counts of obstruction of justice and perjury for lying about the torture in a civil lawsuit.
Burge showed no reaction as the verdict was read, but moments after jurors strode from the courtroom for the last time, he talked and laughed with his lawyers.
Under federal criminal statutes, Burge faces up to 45 years in prison, but in reality his punishment will be far less severe. His attorneys said, in fact, that they will seek probation for Burge, who is 62 and said to have prostate cancer.
For years it looked as if Burge would escape criminal charges altogether. He was fired from the Police Department in 1993 for torturing a cop killer, but a four-year investigation by special Cook County prosecutors concluded in 2006 that the statute of limitations on the claims of abuse had long passed. It wasn't until 2008 that federal prosecutors figured out a clever way to indict him — not for the tortures themselves, but lying about them.
After Monday's verdict, jurors said five ex-cons who alleged torture by Burge or detectives under him — the so-called Midnight Crew — were taken with a grain of salt because of their lengthy criminal records, but that a cop who worked for Burge was a key witness for the prosecution even though he backtracked from his grand-jury testimony. And some jurors took note of the fact that Burge had named his boat "Vigilante," a point driven home by the prosecution during its cross-examination of Burge on the witness stand. Burge claimed he picked the name off a computer-generated list because it was unique.
But jurors acknowledged the deliberations were complicated by the fact that a cop was on trial in this upside-down case. Though Burge wasn't directly charged with torture, prosecutors had to prove those allegations to substantiate the charges of obstruction of justice and perjury.
The torture scandal sent innocent men to prison, tarnished the reputations of the Police Department and the Cook County state's attorney's office and led to blanket commutations that emptied the state's death row as well as repeated lawsuits that drained millions in taxpayer dollars from the city.
"This is a really significant moment in this ongoing drama," said attorney Locke Bowman, who has represented a number of Burge's alleged victims in their efforts to gain new trials over allegations that their confessions were coerced. "We now have confirmation of what has been well-known for decades," he said.
"I hope the U.S. government will take swift action to charge the other detectives … who were implicated in so many of these cases," he said
Prosecutors have signaled that they are investigating a number of detectives who worked for Burge. U.S. Attorney Patrick Fitzgerald has previously warned that police detectives relying on a code of silence to protect them may be "hanging on air," and he reaffirmed Monday that prosecutors are continuing their probe.
"I'm not going to comment on any other persons in this case at this time," he said. "The investigation is moving forward."
Fitzgerald, who was in the courtroom for the verdict, said the outcome provided at least a measure of justice for Burge's victims. "It's sad that it took so long, but it would be horrible if it was never addressed," he told reporters.
In closing arguments to jurors last week, Burge's lawyers questioned how the testimony of convicted murderers, gang members and armed robbers could be believed over the word of a Chicago cop.
But the accounts of victims Anthony Holmes, Melvin Jones, Gregory Banks, Shadeed Mu'min and Andrew Wilson were bolstered by testimony from doctors, nurses, attorneys and former Area 2 detective Michael McDermott, who was forced to testify against his old boss in exchange for immunity.
Still, the testimony of the victims was shocking. One said Burge smothered him with a bag and shocked him with an electrical device in 1973. Another said that nine years later Burge shocked him in the genitals. Another said Burge played Russian roulette with a .44-caliber gun and smothered him with a plastic bag. All said they feared for their lives and confessed to murders and other crimes.
Testifying in his own defense, Burge offered denial after denial of torture. The defense alleged that the accusers had cooked up the abuse stories after meeting in jail as a way to exact revenge, help them beat their criminal cases and make money through lawsuits.
Outside the courthouse, a small crowd of activists marched in a loose circle, partly in celebration, partly to demand that Mayor Richard M. Daley — who was the state's attorney when much of the abuse occurred — be held accountable for doing nothing to stop Burge.
"Mayor Daley, you can't hide," they chanted. "We've got justice on our side."
A moment later, Mark Clements, an alleged Burge victim who was released from prison last year after serving nearly three decades, screamed into a megaphone.
"When I say 'Jail,' you say 'Burge,' " he thundered.
In a quieter moment, he reflected on witnessing Burge's conviction.
"Finally, the poor people won," Clements said. "Hopefully Jon Burge will receive an appropriate sentence and he will have time to think about the consequences of his actions."
But the verdict disappointed the family of one of two Chicago police officers killed in 1982 by Andrew Wilson, one of Burge's victims.
"I just talked to my dad," said Mike Fahey, 51, whose brother, Chicago police Officer William Fahey was fatally shot with his partner Richard O'Brien. "We're upset. I just can't believe the jurors took the testimony of convicted criminals — people that just do crime all their life."
Wilson died in 2007 while serving a life sentence for the murders, but transcripts of his prior testimony were read to the jury and were central to the government's case.
"It seems like Andrew Wilson won again," Fahey said. "He murdered two cops and we're still paying for it. … I was at work when I heard it on the radio. I was just really disappointed. I thought, 'Leave the sick man (Burge) alone.' He already got his job taken away from him, and all he knew how to do was be a cop. He put a lot of bad guys away. I think the Police Department made a big mistake when they fired him, but that's just me."
mwalberg@tribune.com
wlee@tribune.com
By Matthew Walberg and William Lee
Copyright © 2010, Chicago Tribune
10:17 p.m. CDT, June 28, 2010
http://www.chicagotribune.com/news/local/ct-met-burge-trial-0629-20100628,0,7883778.story
Decades after torture allegations were first leveled against former Chicago police Cmdr. Jon Burge's "Midnight Crew," a federal jury convicted him Monday on all three counts of obstruction of justice and perjury for lying about the torture in a civil lawsuit.
Burge showed no reaction as the verdict was read, but moments after jurors strode from the courtroom for the last time, he talked and laughed with his lawyers.
Under federal criminal statutes, Burge faces up to 45 years in prison, but in reality his punishment will be far less severe. His attorneys said, in fact, that they will seek probation for Burge, who is 62 and said to have prostate cancer.
For years it looked as if Burge would escape criminal charges altogether. He was fired from the Police Department in 1993 for torturing a cop killer, but a four-year investigation by special Cook County prosecutors concluded in 2006 that the statute of limitations on the claims of abuse had long passed. It wasn't until 2008 that federal prosecutors figured out a clever way to indict him — not for the tortures themselves, but lying about them.
After Monday's verdict, jurors said five ex-cons who alleged torture by Burge or detectives under him — the so-called Midnight Crew — were taken with a grain of salt because of their lengthy criminal records, but that a cop who worked for Burge was a key witness for the prosecution even though he backtracked from his grand-jury testimony. And some jurors took note of the fact that Burge had named his boat "Vigilante," a point driven home by the prosecution during its cross-examination of Burge on the witness stand. Burge claimed he picked the name off a computer-generated list because it was unique.
But jurors acknowledged the deliberations were complicated by the fact that a cop was on trial in this upside-down case. Though Burge wasn't directly charged with torture, prosecutors had to prove those allegations to substantiate the charges of obstruction of justice and perjury.
The torture scandal sent innocent men to prison, tarnished the reputations of the Police Department and the Cook County state's attorney's office and led to blanket commutations that emptied the state's death row as well as repeated lawsuits that drained millions in taxpayer dollars from the city.
"This is a really significant moment in this ongoing drama," said attorney Locke Bowman, who has represented a number of Burge's alleged victims in their efforts to gain new trials over allegations that their confessions were coerced. "We now have confirmation of what has been well-known for decades," he said.
"I hope the U.S. government will take swift action to charge the other detectives … who were implicated in so many of these cases," he said
Prosecutors have signaled that they are investigating a number of detectives who worked for Burge. U.S. Attorney Patrick Fitzgerald has previously warned that police detectives relying on a code of silence to protect them may be "hanging on air," and he reaffirmed Monday that prosecutors are continuing their probe.
"I'm not going to comment on any other persons in this case at this time," he said. "The investigation is moving forward."
Fitzgerald, who was in the courtroom for the verdict, said the outcome provided at least a measure of justice for Burge's victims. "It's sad that it took so long, but it would be horrible if it was never addressed," he told reporters.
In closing arguments to jurors last week, Burge's lawyers questioned how the testimony of convicted murderers, gang members and armed robbers could be believed over the word of a Chicago cop.
But the accounts of victims Anthony Holmes, Melvin Jones, Gregory Banks, Shadeed Mu'min and Andrew Wilson were bolstered by testimony from doctors, nurses, attorneys and former Area 2 detective Michael McDermott, who was forced to testify against his old boss in exchange for immunity.
Still, the testimony of the victims was shocking. One said Burge smothered him with a bag and shocked him with an electrical device in 1973. Another said that nine years later Burge shocked him in the genitals. Another said Burge played Russian roulette with a .44-caliber gun and smothered him with a plastic bag. All said they feared for their lives and confessed to murders and other crimes.
Testifying in his own defense, Burge offered denial after denial of torture. The defense alleged that the accusers had cooked up the abuse stories after meeting in jail as a way to exact revenge, help them beat their criminal cases and make money through lawsuits.
Outside the courthouse, a small crowd of activists marched in a loose circle, partly in celebration, partly to demand that Mayor Richard M. Daley — who was the state's attorney when much of the abuse occurred — be held accountable for doing nothing to stop Burge.
"Mayor Daley, you can't hide," they chanted. "We've got justice on our side."
A moment later, Mark Clements, an alleged Burge victim who was released from prison last year after serving nearly three decades, screamed into a megaphone.
"When I say 'Jail,' you say 'Burge,' " he thundered.
In a quieter moment, he reflected on witnessing Burge's conviction.
"Finally, the poor people won," Clements said. "Hopefully Jon Burge will receive an appropriate sentence and he will have time to think about the consequences of his actions."
But the verdict disappointed the family of one of two Chicago police officers killed in 1982 by Andrew Wilson, one of Burge's victims.
"I just talked to my dad," said Mike Fahey, 51, whose brother, Chicago police Officer William Fahey was fatally shot with his partner Richard O'Brien. "We're upset. I just can't believe the jurors took the testimony of convicted criminals — people that just do crime all their life."
Wilson died in 2007 while serving a life sentence for the murders, but transcripts of his prior testimony were read to the jury and were central to the government's case.
"It seems like Andrew Wilson won again," Fahey said. "He murdered two cops and we're still paying for it. … I was at work when I heard it on the radio. I was just really disappointed. I thought, 'Leave the sick man (Burge) alone.' He already got his job taken away from him, and all he knew how to do was be a cop. He put a lot of bad guys away. I think the Police Department made a big mistake when they fired him, but that's just me."
mwalberg@tribune.com
wlee@tribune.com
Editorial: Donald Berwick, a nominee well-suited to trim the fat on health care
Editorial: Donald Berwick, a nominee well-suited to trim the fat on health care
Copyright by The Washington Post
Tuesday, June 29, 2010
http://www.washingtonpost.com/wp-dyn/content/article/2010/06/28/AR2010062804675.html
THE HOPE FOR health-care reform -- specifically, the hope that it will manage to bend the dreaded cost curve --depends on its execution. In that regard, no job will be more important than that of overseeing the giant government health-care programs: Medicare for seniors and the disabled, Medicaid for the poor. The administrator of the Centers for Medicare and Medicaid Services oversees more than $800 billion in annual spending, about one-third of all health-care spending. Getting these costs under control is crucial for the federal budget, but it is also significant in shaping overall health-care spending: In terms of health-care practices and reimbursement policies, as Medicare goes, so goes the private sector.
As influential as this position is, CMS has not had a confirmed leader since 2006. The Obama administration dawdled on naming anyone while it concentrated on the legislative fight. In April, President Obama nominated Donald Berwick, a professor at Harvard Medical School and one of the nation's leading experts on improving health-care quality while saving money -- in short, just what the doctor ordered for CMS. Dr. Berwick's bona fides for the job are exemplified by the broad range of individuals and institutions supporting him. President George W. Bush's two CMS administrators, Mark McClellan and Thomas Scully, back the nomination, as does Gail Wilensky, who served in the role under President George H.W. Bush. So do the American Hospital Association, the AARP, the National Committee to Preserve Social Security and Medicare, and a pages-long list of local medical groups. The American Medical Association called the nomination "welcome," and, in an official statement by the immediate past president, praised "his visionary leadership efforts that focus on optimizing the quality and safety of patient care in hospitals and across health-care settings."
So what's the holdup? Partisan politics. Republicans are seizing on the Berwick nomination as an opportunity to relitigate the health-care debate, latching on to a few of Dr. Berwick's statements to wage their campaign. Dr. Berwick has praised Britain's National Health Service: "not just a national treasure; it is a global treasure." In an assessment both accurate and inflammatory, he said just last year, "The decision is not whether or not we will ration care -- the decision is whether we will ration with our eyes open." He has said that "any health care funding plan that is just, equitable, civilized, and humane must -- must -- redistribute wealth from the richer among us to the poorest and less fortunate.'' Not surprisingly, Republican critics, including Sens. John Barrasso (R-Wyo.) and Pat Roberts (R-Kan.), have seized on these statements. "Dr. Berwick is the perfect nominee for a President whose aim has always been to save money by rationing health care," Mr. Roberts said on the Senate floor last month.
Actually, Dr. Berwick is the perfect nominee to help reshape a health-care system that is wasteful and bloated. He has a track record of understanding how to wring inefficiencies out of health-care systems and improve care in the process. Whatever his vision of the perfect health-care system, as administrator he would be constrained by legal and political realities; he would administer existing programs and help implement the new law.
The Senate Finance Committee has not scheduled a hearing on the Berwick nomination; that may not even happen before the August recess. Meanwhile, the prospect of rounding up 60 votes is uncertain. That's unfortunate. CMS -- and the country -- deserve a confirmed administrator, stat.
Copyright by The Washington Post
Tuesday, June 29, 2010
http://www.washingtonpost.com/wp-dyn/content/article/2010/06/28/AR2010062804675.html
THE HOPE FOR health-care reform -- specifically, the hope that it will manage to bend the dreaded cost curve --depends on its execution. In that regard, no job will be more important than that of overseeing the giant government health-care programs: Medicare for seniors and the disabled, Medicaid for the poor. The administrator of the Centers for Medicare and Medicaid Services oversees more than $800 billion in annual spending, about one-third of all health-care spending. Getting these costs under control is crucial for the federal budget, but it is also significant in shaping overall health-care spending: In terms of health-care practices and reimbursement policies, as Medicare goes, so goes the private sector.
As influential as this position is, CMS has not had a confirmed leader since 2006. The Obama administration dawdled on naming anyone while it concentrated on the legislative fight. In April, President Obama nominated Donald Berwick, a professor at Harvard Medical School and one of the nation's leading experts on improving health-care quality while saving money -- in short, just what the doctor ordered for CMS. Dr. Berwick's bona fides for the job are exemplified by the broad range of individuals and institutions supporting him. President George W. Bush's two CMS administrators, Mark McClellan and Thomas Scully, back the nomination, as does Gail Wilensky, who served in the role under President George H.W. Bush. So do the American Hospital Association, the AARP, the National Committee to Preserve Social Security and Medicare, and a pages-long list of local medical groups. The American Medical Association called the nomination "welcome," and, in an official statement by the immediate past president, praised "his visionary leadership efforts that focus on optimizing the quality and safety of patient care in hospitals and across health-care settings."
So what's the holdup? Partisan politics. Republicans are seizing on the Berwick nomination as an opportunity to relitigate the health-care debate, latching on to a few of Dr. Berwick's statements to wage their campaign. Dr. Berwick has praised Britain's National Health Service: "not just a national treasure; it is a global treasure." In an assessment both accurate and inflammatory, he said just last year, "The decision is not whether or not we will ration care -- the decision is whether we will ration with our eyes open." He has said that "any health care funding plan that is just, equitable, civilized, and humane must -- must -- redistribute wealth from the richer among us to the poorest and less fortunate.'' Not surprisingly, Republican critics, including Sens. John Barrasso (R-Wyo.) and Pat Roberts (R-Kan.), have seized on these statements. "Dr. Berwick is the perfect nominee for a President whose aim has always been to save money by rationing health care," Mr. Roberts said on the Senate floor last month.
Actually, Dr. Berwick is the perfect nominee to help reshape a health-care system that is wasteful and bloated. He has a track record of understanding how to wring inefficiencies out of health-care systems and improve care in the process. Whatever his vision of the perfect health-care system, as administrator he would be constrained by legal and political realities; he would administer existing programs and help implement the new law.
The Senate Finance Committee has not scheduled a hearing on the Berwick nomination; that may not even happen before the August recess. Meanwhile, the prospect of rounding up 60 votes is uncertain. That's unfortunate. CMS -- and the country -- deserve a confirmed administrator, stat.
Financial News Courtesy of the Financial Times
Financial News Courtesy of the Financial Times
US consumer confidence plunges in June
By Alan Rappeport in New York
Copyright The Financial Times Limited 2010
Published: June 29 2010 14:31 | Last updated: June 29 2010 15:39
http://www.ft.com/cms/s/0/24f68242-837a-11df-8451-00144feabdc0.html
Consumer confidence in the US plunged in June, as fears about sluggish job creation made Americans feel gloomier.
The Conference Board’s confidence index tumbled by nearly 10 points, dropping from a revised 62.7 in May to 52.9 in June. The decline was far steeper than Wall Street analysts had projected and broke a three month stretch of rising optimism.
“Increasing uncertainty and apprehension about the future state of the economy and labour market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence,” said Lynn Franco, director of the Conference Board’s research centre. “Until the pace of job growth picks up, consumer confidence is not likely to pick up.”
Consumers expressed growing pessimism about business conditions and job prospects. On Friday, the labour department’s non-farm payrolls report is expected to show that 111,000 jobs were created in June, with the unemployment rate ticking up to 9.8 per cent.
“Consumer confidence gets crushed,” said Steven Ricchiuto, chief economist at Mizuho Securities, noting that the figures fit into a “double dip” scenario for the economy.
Analysts keep a close watch on consumer confidence as an indicator of consumer spending, but such surveys can be volatile. Tuesday’s confidence figures clash with a separate survey released last Friday by Thomson Reuters/University of Michigan, which showed sentiment rising in June to the highest level since January 2008.
Meanwhile, US home prices recorded a modest rise in April, as a rush of buyers taking advantage of an expiring government tax credit gave the market a lift, figures showed on Tuesday.
House prices in the 20 biggest US cities rose by 0.8 per cent from March to April, according to the closely watched S&P/Case-Shiller index. That beat economists’ forecasts of a monthly dip and prices are up by 3.8 per cent compared with a year ago.
Although the rise was welcome, S&P noted that the increase was heavily induced, with 18 of 20 cities experiencing monthly price increases in April compared with just 6 in March. The first-time homebuyer tax credit expired at the end of April, and home prices, purchases and construction have been under pressure since then.
“Other housing data confirm the large impact, and likely near-future pull-back, of the federal programme,” said David Blitzer, chairman of the S&P index committee. “Consistent and sustained boosts to economic growth from housing may have to wait to next year.”
In April, Washington, San Francisco, and Dallas recorded the strongest monthly increases, while house prices declined in Miami and in New York, which fell to a new low for the cycle. Much of the improvement in the past year has been concentrated in California, which was among the states hardest hit by the housing market downturn.
Since peaking in June 2006, home prices remain off by 30 per cent, leaving them at their 2003 levels.
Analysts have expressed concern that the US housing market could be facing a double dip as the withdrawal of government support has revealed how reliant the market was on stimulus. Although housing remains highly affordable, headwinds such as high rates of foreclosure and persistent unemployment continue to strain the market.
“Housing transactions volumes have plunged since the credit expired and this drop will in due course be reflected in the home price numbers,” said Ian Shepherdson, chief US economist at High Frequency Economics. “The decline could be quite sharp though we are hopeful it will not last too long.”
Fed official warns of asset risk
By Robin Harding in Washington
Copyright The Financial Times Limited 2010
Published: June 29 2010 01:08 | Last updated: June 29 2010 01:08
http://www.ft.com/cms/s/0/6b6b6318-830d-11df-8b15-00144feabdc0.html
The Federal Reserve would risk its credibility if it bought more assets to stimulate the economy, board member Kevin Warsh said in a speech on Monday.
Buying more assets – to add to the $1,600bn of Treasury and mortgage-backed bonds it has bought since 2008 – is one measure the Fed could take if it thought the economic recovery had stalled. Mr Warsh’s comments suggest he would oppose such a move.
“I would want to be convinced that the incremental macroeconomic benefits [of buying more assets] outweighed any costs owing to erosion of market functioning, perceptions of monetising indebtedness, crowding-out of private buyers or loss of central bank credibility,” said Mr Warsh.
Until recently the Fed’s focus was on how and when to sell its bond portfolio, but Europe’s fiscal crisis, soft data on the housing and labour markets, and political opposition to further fiscal stimulus have prompted questions about what it could do if the economic situation declined.
In a statement last week, the federal open market committee said “financial conditions have become less supportive of economic growth on balance” and that “underlying inflation has trended lower”.
By in effect creating money to buy bonds, the Fed can flood banks with cash and try to push down long-term interest rates. But some economists doubt that buying more bonds would make much difference. They also fear that long-term rates could actually rise if the Fed lost its credibility as an inflation fighter.
Mr Warsh said asset sales by the Fed “will not take place in the near term”. But he said the Fed should consider gradual asset sales and that they could be kept separate from any decision to raise the Fed funds rate from its current range of 0-0.25 per cent.
That puts Mr Warsh at odds with the Fed’s chairman, Ben Bernanke, and the majority of the FOMC who think that asset sales should only begin after the Fed has raised interest rates for the first time.
Opponents of early asset sales worry about how the markets would react if the Fed started to sell its mortgage-backed bonds. They fear that markets might see it as a signal that higher interest rates are on the way or that it could prompt a premature jump in mortgage rates.
Mr Warsh said that “any sale of assets need not signal that policy rates are soon moving higher”. He said that in recent months the Fed had been able to close many of the special lending facilities it had created during the financial crisis even as rates had been kept low.
Fresh fears over European bank sector
By David Oakley, Capital Markets Correspondent
Copyright The Financial Times Limited 2010.
Published: June 29 2010 13:34 | Last updated: June 29 2010 13:34
http://www.ft.com/cms/s/0/1a3a7758-8368-11df-8451-00144feabdc0.html
Fears rose over the health of the European banking system on Tuesday as interbank rates jumped to nine-month highs amid worries that the European Central Bank may be reducing emergency financial support to financial institutions too soon.
Key three-month euribor rates, which measure the cost at which banks are prepared to lend to each other, jumped to the highest level since September and the biggest one-day rise since April 28. Euribor rates rose to 0.761 per cent from 0.754 per cent.
Bankers warn that the ECB’s decision to offer banks loans for only three months instead of a year is raising concerns that many institutions will come under further pressure in the strained interbank markets.
Don Smith, economist at Icap, said: “There are major worries over the systemic risks for banks, with many struggling to access the private markets. The ECB is in effect weaning the banks off the artificial support system – and this is a concern.”
The ECB will on Wednesday offer unlimited loans to European banks for three months as it seeks to smooth funding for those banks that have to return one-year loans to the central bank on Thursday.
However, in spite of the vast amount of support the ECB is offering to the market, with more than €800bn in outstanding loans to eurozone banks, analysts say the fact the ECB is no longer offering loans for a year has worried some investors.
This is because the shorter-term loans create more dangers of so-called rollover risk. In other words, weaker banks relying on the ECB for lending as they struggle to access the private markets have less certainty over their financing than if they had the loans for a year.
Google faces loss of China licence
By Kathrin Hille in Beijing
Copyright The Financial Times Limited 2010
Published: June 29 2010 09:23 | Last updated: June 29 2010 14:34
http://www.ft.com/cms/s/2/3ea0fa9c-8352-11df-8451-00144feabdc0.html
Google said on Tuesday that it had started a final attempt to rescue its presence in China after the Chinese government threatened to close its Chinese website down at the end of this month.
In a blog post published late Tuesday, David Drummond, the company’s chief legal officer, said the Chinese government had rejected Google’s practice of automatically redirecting users in mainland China to its Hong Kong site.
“It’s clear from conversations we have had with Chinese government officials that they find the redirect unacceptable – and that if we continue redirecting users our Internet Content Provider license will not be renewed (it’s up for renewal on June 30),” he said. “Without an ICP licence, we can’t operate a commercial website like Google.cn – so Google would effectively go dark in China.”
If Beijing does block Google, the internet company faces the threat of losing the Chinese market, one of the world’s fastest-growing internet market which has the world’s largest internet population at more than 400m.
In March, Google started automatically redirecting visitors of its mainland Chinese site, google.cn, to its Hong Kong site, in an attempt at preserving a bridgehead in China while ending controversial censorship of search results.
Since then, access to Google.com.hk has been patchy, with Chinese-language searches containing certain characters triggering browser errors which experts believe are caused by Beijing’s filtering of foreign websites.
But overall, the impact on the US company’s presence in China had been smaller than feared, as its share of Chinese online search revenues dropped just five percentage points to about 30 per cent in the first quarter, according to Analysys, a Beijing-based research house.
Google’s latest announcement, however, indicates that the March solution was not based on a compromise negotiated with Beijing but rather a one-sided attempt at finding a loophole in China’s internet censorship regime.
The company has launched a last attempt at compromise. Instead of automatically redirecting users in China to its Hong Kong site, it has now created a “landing page” on Google.cn which offers visitors an optional link to the Hong Kong site.
“This approach ensures we stay true to out commitment not to censor our results on Google.cn and gives users access to all of our services from one page,” Mr Drummond said.
He added that Google had resubmitted its ICP license renewal application based on this approach.
Google said it was “hopeful” that its licence would be renewed on this basis, but it is understood that the latest attempt at creating a solution has not been discussed with the Chinese government.
If Beijing refuses this latest proposal as well, it could close Google.cn down, effectively cutting the bulk of Chinese users off from the US search engine. Many Chinese internet users are not familiar with Google’s sites outside the mainland and could quickly switch to familiar alternatives such as Baidu, the country’s home-grown market leader.
The Chinese government could even block foreign Google sites.
Spokesmen at the Ministry of Industry and Information Technology, in charge of the ICP license renewal, were not available for comment.
Qin Gang, foreign ministry spokesman, repeated Beijing’s earlier stance and said: “The Chinese government encourages foreign enterprises to operate in China according to the law and we also administer the internet according to the law.”
US consumer confidence plunges in June
By Alan Rappeport in New York
Copyright The Financial Times Limited 2010
Published: June 29 2010 14:31 | Last updated: June 29 2010 15:39
http://www.ft.com/cms/s/0/24f68242-837a-11df-8451-00144feabdc0.html
Consumer confidence in the US plunged in June, as fears about sluggish job creation made Americans feel gloomier.
The Conference Board’s confidence index tumbled by nearly 10 points, dropping from a revised 62.7 in May to 52.9 in June. The decline was far steeper than Wall Street analysts had projected and broke a three month stretch of rising optimism.
“Increasing uncertainty and apprehension about the future state of the economy and labour market, no doubt a result of the recent slowdown in job growth, are the primary reasons for the sharp reversal in confidence,” said Lynn Franco, director of the Conference Board’s research centre. “Until the pace of job growth picks up, consumer confidence is not likely to pick up.”
Consumers expressed growing pessimism about business conditions and job prospects. On Friday, the labour department’s non-farm payrolls report is expected to show that 111,000 jobs were created in June, with the unemployment rate ticking up to 9.8 per cent.
“Consumer confidence gets crushed,” said Steven Ricchiuto, chief economist at Mizuho Securities, noting that the figures fit into a “double dip” scenario for the economy.
Analysts keep a close watch on consumer confidence as an indicator of consumer spending, but such surveys can be volatile. Tuesday’s confidence figures clash with a separate survey released last Friday by Thomson Reuters/University of Michigan, which showed sentiment rising in June to the highest level since January 2008.
Meanwhile, US home prices recorded a modest rise in April, as a rush of buyers taking advantage of an expiring government tax credit gave the market a lift, figures showed on Tuesday.
House prices in the 20 biggest US cities rose by 0.8 per cent from March to April, according to the closely watched S&P/Case-Shiller index. That beat economists’ forecasts of a monthly dip and prices are up by 3.8 per cent compared with a year ago.
Although the rise was welcome, S&P noted that the increase was heavily induced, with 18 of 20 cities experiencing monthly price increases in April compared with just 6 in March. The first-time homebuyer tax credit expired at the end of April, and home prices, purchases and construction have been under pressure since then.
“Other housing data confirm the large impact, and likely near-future pull-back, of the federal programme,” said David Blitzer, chairman of the S&P index committee. “Consistent and sustained boosts to economic growth from housing may have to wait to next year.”
In April, Washington, San Francisco, and Dallas recorded the strongest monthly increases, while house prices declined in Miami and in New York, which fell to a new low for the cycle. Much of the improvement in the past year has been concentrated in California, which was among the states hardest hit by the housing market downturn.
Since peaking in June 2006, home prices remain off by 30 per cent, leaving them at their 2003 levels.
Analysts have expressed concern that the US housing market could be facing a double dip as the withdrawal of government support has revealed how reliant the market was on stimulus. Although housing remains highly affordable, headwinds such as high rates of foreclosure and persistent unemployment continue to strain the market.
“Housing transactions volumes have plunged since the credit expired and this drop will in due course be reflected in the home price numbers,” said Ian Shepherdson, chief US economist at High Frequency Economics. “The decline could be quite sharp though we are hopeful it will not last too long.”
Fed official warns of asset risk
By Robin Harding in Washington
Copyright The Financial Times Limited 2010
Published: June 29 2010 01:08 | Last updated: June 29 2010 01:08
http://www.ft.com/cms/s/0/6b6b6318-830d-11df-8b15-00144feabdc0.html
The Federal Reserve would risk its credibility if it bought more assets to stimulate the economy, board member Kevin Warsh said in a speech on Monday.
Buying more assets – to add to the $1,600bn of Treasury and mortgage-backed bonds it has bought since 2008 – is one measure the Fed could take if it thought the economic recovery had stalled. Mr Warsh’s comments suggest he would oppose such a move.
“I would want to be convinced that the incremental macroeconomic benefits [of buying more assets] outweighed any costs owing to erosion of market functioning, perceptions of monetising indebtedness, crowding-out of private buyers or loss of central bank credibility,” said Mr Warsh.
Until recently the Fed’s focus was on how and when to sell its bond portfolio, but Europe’s fiscal crisis, soft data on the housing and labour markets, and political opposition to further fiscal stimulus have prompted questions about what it could do if the economic situation declined.
In a statement last week, the federal open market committee said “financial conditions have become less supportive of economic growth on balance” and that “underlying inflation has trended lower”.
By in effect creating money to buy bonds, the Fed can flood banks with cash and try to push down long-term interest rates. But some economists doubt that buying more bonds would make much difference. They also fear that long-term rates could actually rise if the Fed lost its credibility as an inflation fighter.
Mr Warsh said asset sales by the Fed “will not take place in the near term”. But he said the Fed should consider gradual asset sales and that they could be kept separate from any decision to raise the Fed funds rate from its current range of 0-0.25 per cent.
That puts Mr Warsh at odds with the Fed’s chairman, Ben Bernanke, and the majority of the FOMC who think that asset sales should only begin after the Fed has raised interest rates for the first time.
Opponents of early asset sales worry about how the markets would react if the Fed started to sell its mortgage-backed bonds. They fear that markets might see it as a signal that higher interest rates are on the way or that it could prompt a premature jump in mortgage rates.
Mr Warsh said that “any sale of assets need not signal that policy rates are soon moving higher”. He said that in recent months the Fed had been able to close many of the special lending facilities it had created during the financial crisis even as rates had been kept low.
Fresh fears over European bank sector
By David Oakley, Capital Markets Correspondent
Copyright The Financial Times Limited 2010.
Published: June 29 2010 13:34 | Last updated: June 29 2010 13:34
http://www.ft.com/cms/s/0/1a3a7758-8368-11df-8451-00144feabdc0.html
Fears rose over the health of the European banking system on Tuesday as interbank rates jumped to nine-month highs amid worries that the European Central Bank may be reducing emergency financial support to financial institutions too soon.
Key three-month euribor rates, which measure the cost at which banks are prepared to lend to each other, jumped to the highest level since September and the biggest one-day rise since April 28. Euribor rates rose to 0.761 per cent from 0.754 per cent.
Bankers warn that the ECB’s decision to offer banks loans for only three months instead of a year is raising concerns that many institutions will come under further pressure in the strained interbank markets.
Don Smith, economist at Icap, said: “There are major worries over the systemic risks for banks, with many struggling to access the private markets. The ECB is in effect weaning the banks off the artificial support system – and this is a concern.”
The ECB will on Wednesday offer unlimited loans to European banks for three months as it seeks to smooth funding for those banks that have to return one-year loans to the central bank on Thursday.
However, in spite of the vast amount of support the ECB is offering to the market, with more than €800bn in outstanding loans to eurozone banks, analysts say the fact the ECB is no longer offering loans for a year has worried some investors.
This is because the shorter-term loans create more dangers of so-called rollover risk. In other words, weaker banks relying on the ECB for lending as they struggle to access the private markets have less certainty over their financing than if they had the loans for a year.
Google faces loss of China licence
By Kathrin Hille in Beijing
Copyright The Financial Times Limited 2010
Published: June 29 2010 09:23 | Last updated: June 29 2010 14:34
http://www.ft.com/cms/s/2/3ea0fa9c-8352-11df-8451-00144feabdc0.html
Google said on Tuesday that it had started a final attempt to rescue its presence in China after the Chinese government threatened to close its Chinese website down at the end of this month.
In a blog post published late Tuesday, David Drummond, the company’s chief legal officer, said the Chinese government had rejected Google’s practice of automatically redirecting users in mainland China to its Hong Kong site.
“It’s clear from conversations we have had with Chinese government officials that they find the redirect unacceptable – and that if we continue redirecting users our Internet Content Provider license will not be renewed (it’s up for renewal on June 30),” he said. “Without an ICP licence, we can’t operate a commercial website like Google.cn – so Google would effectively go dark in China.”
If Beijing does block Google, the internet company faces the threat of losing the Chinese market, one of the world’s fastest-growing internet market which has the world’s largest internet population at more than 400m.
In March, Google started automatically redirecting visitors of its mainland Chinese site, google.cn, to its Hong Kong site, in an attempt at preserving a bridgehead in China while ending controversial censorship of search results.
Since then, access to Google.com.hk has been patchy, with Chinese-language searches containing certain characters triggering browser errors which experts believe are caused by Beijing’s filtering of foreign websites.
But overall, the impact on the US company’s presence in China had been smaller than feared, as its share of Chinese online search revenues dropped just five percentage points to about 30 per cent in the first quarter, according to Analysys, a Beijing-based research house.
Google’s latest announcement, however, indicates that the March solution was not based on a compromise negotiated with Beijing but rather a one-sided attempt at finding a loophole in China’s internet censorship regime.
The company has launched a last attempt at compromise. Instead of automatically redirecting users in China to its Hong Kong site, it has now created a “landing page” on Google.cn which offers visitors an optional link to the Hong Kong site.
“This approach ensures we stay true to out commitment not to censor our results on Google.cn and gives users access to all of our services from one page,” Mr Drummond said.
He added that Google had resubmitted its ICP license renewal application based on this approach.
Google said it was “hopeful” that its licence would be renewed on this basis, but it is understood that the latest attempt at creating a solution has not been discussed with the Chinese government.
If Beijing refuses this latest proposal as well, it could close Google.cn down, effectively cutting the bulk of Chinese users off from the US search engine. Many Chinese internet users are not familiar with Google’s sites outside the mainland and could quickly switch to familiar alternatives such as Baidu, the country’s home-grown market leader.
The Chinese government could even block foreign Google sites.
Spokesmen at the Ministry of Industry and Information Technology, in charge of the ICP license renewal, were not available for comment.
Qin Gang, foreign ministry spokesman, repeated Beijing’s earlier stance and said: “The Chinese government encourages foreign enterprises to operate in China according to the law and we also administer the internet according to the law.”
In Faulty-Computer Suit, Window to Dell Decline
In Faulty-Computer Suit, Window to Dell Decline
By ASHLEE VANCE
Copyright by The Associated Press
Published: June 28, 2010
http://www.nytimes.com/2010/06/29/technology/29dell.html?th&emc=th
After the math department at the University of Texas noticed some of its Dell computers failing, Dell examined the machines. The company came up with an unusual reason for the computers’ demise: the school had overtaxed the machines by making them perform difficult math calculations.
Dell, however, had actually sent the university, in Austin, desktop PCs riddled with faulty electrical components that were leaking chemicals and causing the malfunctions. Dell sold millions of these computers from 2003 to 2005 to major companies like Wal-Mart and Wells Fargo, institutions like the Mayo Clinic and small businesses.
“The funny thing was that every one of them went bad at the same time,” said Greg Barry, the president of PointSolve, a technology services company near Philadelphia that had bought dozens. “It’s unheard-of, but Dell didn’t seem to recognize this as a problem at the time.”
Documents recently unsealed in a three-year-old lawsuit against Dell show that the company’s employees were actually aware that the computers were likely to break. Still, the employees tried to play down the problem to customers and allowed customers to rely on trouble-prone machines, putting their businesses at risk. Even the firm defending Dell in the lawsuit was affected when Dell balked at fixing 1,000 suspect computers, according to e-mail messages revealed in the dispute.
The documents chronicling the failure of the PCs also help explain the decline of one of America’s most celebrated and admired companies. Perhaps more than any other company, Dell fought to lower the price of computers.
Its “Dell model” became synonymous with efficiency, outsourcing and tight inventories, and was taught at the Harvard Business School and other top-notch management schools as a paragon of business smarts and outthinking the competition.
“Dell, as a company, was the model everyone focused on 10 years ago,” said David B. Yoffie, a professor of international business administration at Harvard. “But when you combine missing a variety of shifts in the industry with management turmoil, it’s hard not to have the shine come off your reputation.”
For the last seven years, the company has been plagued by serious problems, including misreading the desires of its customers, poor customer service, suspect product quality and improper accounting.
Dell has tried to put those problems behind it. In 2005, it announced it was taking a $300 million charge related, in part, to fixing and replacing the troubled computers. Dell set aside $100 million this month to handle a potential settlement with the Securities and Exchange Commission over a five-year-old investigation into its books, which will most likely result in federal accusations of fraud and misconduct against the company’s founder, Michael S. Dell.
The problems affecting the Dell computers stemmed from an industrywide encounter with bad capacitors produced by Asian PC component suppliers. Capacitors are found on computer motherboards, playing a crucial role in the flow of current across the hardware. They are not meant to pop and leak fluid, but that is exactly what was happening earlier this decade, causing computers made by Dell, Hewlett-Packard, Apple and others to break.
According to company memorandums and other documents recently unsealed in a civil case against Dell in Federal District Court in North Carolina, Dell appears to have suffered from the bad capacitors, made by a company called Nichicon, far more than its rivals. Internal documents show that Dell shipped at least 11.8 million computers from May 2003 to July 2005 that were at risk of failing because of the faulty components. These were Dell’s OptiPlex desktop computers — the company’s mainstream products sold to business and government customers.
A study by Dell found that OptiPlex computers affected by the bad capacitors were expected to cause problems up to 97 percent of the time over a three-year period, according to the lawsuit.
As complaints mounted, Dell hired a contractor to investigate the situation. According to a Dell filing in the lawsuit, which has not yet gone to trial, the contractor found that 10 times more computers were at risk of failing than Dell had estimated. Making problems worse, Dell replaced faulty motherboards with other faulty motherboards, according to the contractor’s findings.
But Dell employees went out of their way to conceal these problems. In one e-mail exchange between Dell customer support employees concerning computers at the Simpson Thacher & Bartlett law firm, a Dell worker states, “We need to avoid all language indicating the boards were bad or had ‘issues’ per our discussion this morning.”
In other documents about how to handle questions around the faulty OptiPlex systems, Dell salespeople were told, “Don’t bring this to customer’s attention proactively” and “Emphasize uncertainty.”
“They were fixing bad computers with bad computers and were misleading customers at the same time,” said Ira Winkler, a former computer analyst for the National Security Agency and a technology consultant. “They knew millions of computers would be out there causing inevitable damage and were not giving people an opportunity to fix that damage.”
Mr. Winkler served as the expert witness for Advanced Internet Technologies, which filed the lawsuit in 2007, saying that Dell had refused to take responsibility for 2,000 computers it sold A.I.T., an Internet services company. A.I.T. said that it had lost millions of dollars in business as a result. Clarence E. Briggs, the chief executive of A.I.T., declined to comment on the lawsuit.
Some of the documents in the case that were sealed under a protective order became public this month. Those documents show that after A.I.T. complained, Dell representatives looked at the failed computers and contended that A.I.T. had driven many of the computers too hard in a hot, confined space. Dell’s sales representatives discussed trying to sell A.I.T. more expensive computers as a resolution.
Jess Blackburn, a Dell spokesman, said the company would not comment on pending litigation. Lawyers for Dell deny A.I.T.’s claims, and contend that A.I.T. has cherrypicked and misinterpreted documents in the case. Dell’s lawyers wrote in a response to A.I.T.: “There was a Nichicon problem, and it affected different customers in different ways.”
In addition to the charge, Dell extended its warranty on the systems and often replaced computers when customers complained. (In 2007, Dell restated its earnings for 2003 to 2006, as well as the first quarter of 2007, and lowered its sales and net income totals for that period. An audit revealed that Dell employees had manipulated financial results to meet growth targets.)
But, as Dell did not recall the computers, many of Dell’s OptiPlex customers may be unaware that they had problematic computers or realize why their computers broke. A.I.T. says in court documents that the faulty capacitors touched off a variety of other problems that were often misdiagnosed. Dell could potentially face a raft of new complaints from some of its biggest customers.
Crucially, in their complaints to Dell in the lawsuit, customers describe losing valuable information when their computers malfunctioned. Dell, by contrast, denied that that the capacitor issue had caused data loss.
Dell’s supply chain had always stood out as one of its important assets. The company kept costs low by limiting its inventory and squeezing suppliers. If prices for components changed, Dell could react more quickly than its competitors, offering customers the latest parts at the lowest cost.
But the hundreds of Dell internal documents produced in the lawsuit show a company whose supply chain had collapsed as it failed to find working motherboards for its customers, including the firm representing Dell in the lawsuit, Alston & Bird.
According to a person who saw Dell’s 2005 internal communications, company executives carefully devised a public relations policy around the OptiPlex situation. Mr. Dell and Kevin B. Rollins, then Dell’s chief executive, were told that the news media would be informed of Dell’s commitment to fix any systems that failed, that Dell was working with customers to resolve problems in the most effective manner possible and that the problems posed no safety or data loss risk.
Carey Holzman, a computer expert who investigated the capacitor problems and collected photos from people with broken motherboards, had a different take on the safety situation.
“Of course it’s dangerous,” Mr. Holzman said. “Having leaking capacitors is a huge problem.” He found that the capacitor problems could cause computers to catch fire.
As late as 2008, after Mr. Dell had replaced Mr. Rollins and returned as chief executive, Dell continued to circulate internal memorandums trying to deal with the fallout from the capacitor situation. Dell salespeople, according to the lawsuit, fretted that technology directors at companies who used to buy from Dell could “justify their job” by advising their companies of Dell’s PC failures and recommending the purchase of H.P. and Lenovo computers.
To counter such lingering bad impressions, Dell salespeople were told to emphasize that the company’s direct model allowed it to identify and fix problems faster than competitors.
By ASHLEE VANCE
Copyright by The Associated Press
Published: June 28, 2010
http://www.nytimes.com/2010/06/29/technology/29dell.html?th&emc=th
After the math department at the University of Texas noticed some of its Dell computers failing, Dell examined the machines. The company came up with an unusual reason for the computers’ demise: the school had overtaxed the machines by making them perform difficult math calculations.
Dell, however, had actually sent the university, in Austin, desktop PCs riddled with faulty electrical components that were leaking chemicals and causing the malfunctions. Dell sold millions of these computers from 2003 to 2005 to major companies like Wal-Mart and Wells Fargo, institutions like the Mayo Clinic and small businesses.
“The funny thing was that every one of them went bad at the same time,” said Greg Barry, the president of PointSolve, a technology services company near Philadelphia that had bought dozens. “It’s unheard-of, but Dell didn’t seem to recognize this as a problem at the time.”
Documents recently unsealed in a three-year-old lawsuit against Dell show that the company’s employees were actually aware that the computers were likely to break. Still, the employees tried to play down the problem to customers and allowed customers to rely on trouble-prone machines, putting their businesses at risk. Even the firm defending Dell in the lawsuit was affected when Dell balked at fixing 1,000 suspect computers, according to e-mail messages revealed in the dispute.
The documents chronicling the failure of the PCs also help explain the decline of one of America’s most celebrated and admired companies. Perhaps more than any other company, Dell fought to lower the price of computers.
Its “Dell model” became synonymous with efficiency, outsourcing and tight inventories, and was taught at the Harvard Business School and other top-notch management schools as a paragon of business smarts and outthinking the competition.
“Dell, as a company, was the model everyone focused on 10 years ago,” said David B. Yoffie, a professor of international business administration at Harvard. “But when you combine missing a variety of shifts in the industry with management turmoil, it’s hard not to have the shine come off your reputation.”
For the last seven years, the company has been plagued by serious problems, including misreading the desires of its customers, poor customer service, suspect product quality and improper accounting.
Dell has tried to put those problems behind it. In 2005, it announced it was taking a $300 million charge related, in part, to fixing and replacing the troubled computers. Dell set aside $100 million this month to handle a potential settlement with the Securities and Exchange Commission over a five-year-old investigation into its books, which will most likely result in federal accusations of fraud and misconduct against the company’s founder, Michael S. Dell.
The problems affecting the Dell computers stemmed from an industrywide encounter with bad capacitors produced by Asian PC component suppliers. Capacitors are found on computer motherboards, playing a crucial role in the flow of current across the hardware. They are not meant to pop and leak fluid, but that is exactly what was happening earlier this decade, causing computers made by Dell, Hewlett-Packard, Apple and others to break.
According to company memorandums and other documents recently unsealed in a civil case against Dell in Federal District Court in North Carolina, Dell appears to have suffered from the bad capacitors, made by a company called Nichicon, far more than its rivals. Internal documents show that Dell shipped at least 11.8 million computers from May 2003 to July 2005 that were at risk of failing because of the faulty components. These were Dell’s OptiPlex desktop computers — the company’s mainstream products sold to business and government customers.
A study by Dell found that OptiPlex computers affected by the bad capacitors were expected to cause problems up to 97 percent of the time over a three-year period, according to the lawsuit.
As complaints mounted, Dell hired a contractor to investigate the situation. According to a Dell filing in the lawsuit, which has not yet gone to trial, the contractor found that 10 times more computers were at risk of failing than Dell had estimated. Making problems worse, Dell replaced faulty motherboards with other faulty motherboards, according to the contractor’s findings.
But Dell employees went out of their way to conceal these problems. In one e-mail exchange between Dell customer support employees concerning computers at the Simpson Thacher & Bartlett law firm, a Dell worker states, “We need to avoid all language indicating the boards were bad or had ‘issues’ per our discussion this morning.”
In other documents about how to handle questions around the faulty OptiPlex systems, Dell salespeople were told, “Don’t bring this to customer’s attention proactively” and “Emphasize uncertainty.”
“They were fixing bad computers with bad computers and were misleading customers at the same time,” said Ira Winkler, a former computer analyst for the National Security Agency and a technology consultant. “They knew millions of computers would be out there causing inevitable damage and were not giving people an opportunity to fix that damage.”
Mr. Winkler served as the expert witness for Advanced Internet Technologies, which filed the lawsuit in 2007, saying that Dell had refused to take responsibility for 2,000 computers it sold A.I.T., an Internet services company. A.I.T. said that it had lost millions of dollars in business as a result. Clarence E. Briggs, the chief executive of A.I.T., declined to comment on the lawsuit.
Some of the documents in the case that were sealed under a protective order became public this month. Those documents show that after A.I.T. complained, Dell representatives looked at the failed computers and contended that A.I.T. had driven many of the computers too hard in a hot, confined space. Dell’s sales representatives discussed trying to sell A.I.T. more expensive computers as a resolution.
Jess Blackburn, a Dell spokesman, said the company would not comment on pending litigation. Lawyers for Dell deny A.I.T.’s claims, and contend that A.I.T. has cherrypicked and misinterpreted documents in the case. Dell’s lawyers wrote in a response to A.I.T.: “There was a Nichicon problem, and it affected different customers in different ways.”
In addition to the charge, Dell extended its warranty on the systems and often replaced computers when customers complained. (In 2007, Dell restated its earnings for 2003 to 2006, as well as the first quarter of 2007, and lowered its sales and net income totals for that period. An audit revealed that Dell employees had manipulated financial results to meet growth targets.)
But, as Dell did not recall the computers, many of Dell’s OptiPlex customers may be unaware that they had problematic computers or realize why their computers broke. A.I.T. says in court documents that the faulty capacitors touched off a variety of other problems that were often misdiagnosed. Dell could potentially face a raft of new complaints from some of its biggest customers.
Crucially, in their complaints to Dell in the lawsuit, customers describe losing valuable information when their computers malfunctioned. Dell, by contrast, denied that that the capacitor issue had caused data loss.
Dell’s supply chain had always stood out as one of its important assets. The company kept costs low by limiting its inventory and squeezing suppliers. If prices for components changed, Dell could react more quickly than its competitors, offering customers the latest parts at the lowest cost.
But the hundreds of Dell internal documents produced in the lawsuit show a company whose supply chain had collapsed as it failed to find working motherboards for its customers, including the firm representing Dell in the lawsuit, Alston & Bird.
According to a person who saw Dell’s 2005 internal communications, company executives carefully devised a public relations policy around the OptiPlex situation. Mr. Dell and Kevin B. Rollins, then Dell’s chief executive, were told that the news media would be informed of Dell’s commitment to fix any systems that failed, that Dell was working with customers to resolve problems in the most effective manner possible and that the problems posed no safety or data loss risk.
Carey Holzman, a computer expert who investigated the capacitor problems and collected photos from people with broken motherboards, had a different take on the safety situation.
“Of course it’s dangerous,” Mr. Holzman said. “Having leaking capacitors is a huge problem.” He found that the capacitor problems could cause computers to catch fire.
As late as 2008, after Mr. Dell had replaced Mr. Rollins and returned as chief executive, Dell continued to circulate internal memorandums trying to deal with the fallout from the capacitor situation. Dell salespeople, according to the lawsuit, fretted that technology directors at companies who used to buy from Dell could “justify their job” by advising their companies of Dell’s PC failures and recommending the purchase of H.P. and Lenovo computers.
To counter such lingering bad impressions, Dell salespeople were told to emphasize that the company’s direct model allowed it to identify and fix problems faster than competitors.
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