Merrill Lynch is expected to report Wednesday that it will add about $2.5 billion more to the $5 billion worth of write-downs it has already announced, according to a person briefed on the situation.
Merrill reports its third-quarter earnings this morning. The bank announced earlier this month that it expected to write down $5 billion because of losses in its fixed-income unit. Most of the losses, the bank said, were tied to the decline in value of complex debt instruments called collateralized debt obligations, whose value has diminished in recent months as credit markets have been hit by a collapse in the subprime mortgage market.
A Merrill spokesman declined to comment. The additional write-down, coming so soon after the company's $5 billion charge, may raise more questions about the leadership of E. Stanley O'Neal, Merrill's chief executive, and the ability of his top executives to assess the firm's risk exposure.
Since he took over in December 2002, O'Neal has pushed Merrill into riskier businesses - which, if managed well, tend to produce higher returns. That strategy has taken Merrill Lynch deeper into fixed-income markets like commodities and mortgages, areas outside of its traditional strengths of wealth management and equities.
Tuesday, Brad Hintz, an analyst with Sanford C. Bernstein & Company, said he expected Merrill to pull back in fixed income, even though some of the markets were improving. "After this publicly embarrassing write-down, we would expect senior management to sharply tighten its risk management limits to reduce trading volatility," Hintz wrote, referring to Merrill.
He predicted that a "'back to basics' retrenchment of the business will cost approximately $1.0 billion in net income," or about $1.10 in earnings per share for 2008.
Please will someone say that this is a joke? Children as young as ten are being given the authority to mete out justice to other children who are guilty of crimes such as vandalism, anti-social behaviour or under-age drinking.
Panels of four children, under only minimal adult supervision, are to have the power to require delinquents to repair the damage they've caused and compensate their victims. Others will mimic roles played in the courts with child 'prosecutors', child 'defence lawyers', child 'administrators' and even child 'ushers'.
Alas, this is not a script from Playschool, but an official scheme involving real offenders, which began this week in Preston, Lancashire, and which could be extended to the whole country. Giving youths power to mete out justice is a sign our criminal justice system has failed.
A concept which might seem to many to be beyond satire is being backed in all seriousness by the police and the Ministry of Justice and funded by the taxpayer to the tune of £500,000. Apparently, the idea is that young delinquents will take more notice of their peer group than they do of adults. What an admission of total defeat by those in charge of our failing criminal justice system.
One reason for this catastrophic failure to protect the public is the refusal by many probation officers and others involved in the criminal justice world to accept that punishment is an appropriate and effective response to crime. They believe it is no more than a primitive lust for revenge which serves no useful purpose. And they also tend to see criminals as the victims of society.
But without punishment there can be no justice. The connection between behaving badly and suffering a painful experience as a consequence is a vital part of training children to be socialised and civilised. And treating criminals as victims means, of course, that true victims fail to receive either justice or protection.
This travesty of morality embedded in our criminal justice system has caused its progressive breakdown. And the latest response to this debacle is to tell children to be their own judge and jury. This is clearly farcical since children are by definition immature. As the Magistrates Association has said, the proper place to consider wrongdoing is the courts; children do not have the competence to take judicial decisions.
Indeed, the irony is that the same kind of people who are behind this daft scheme are the first to complain when children of 11 or 12 are tried in the courts, because they say they are not yet mature enough to be considered responsible for their actions. Too immature to be held to account for their crimes, it seems - and yet mature enough to sit in judgment upon others. This is simply an extraordinary abdication of responsibility, and not just towards the victims of crime.
This abandonment of our children is by no means confined to the criminal justice system. Everywhere one looks, the adult world has abandoned its assumption of authority over children and instead is expecting them to adopt wholly inappropriate adult roles. Instead of being taught that under-age sex or drug-taking are wrong, children are presented with information and invited to make adult 'choices'. And they are expected to respond 'maturely' when their parents abandon them in broken families. What we are seeing is simply the adultification of children and the infantilising of adults.
After child judges, whatever next? Child police officers? Prisons run by teenagers? A 15-year-old Justice Secretary? Come to think of it, maybe that would be an improvement.
Vaccinating millions of pensioners against flu each winter does nothing to cut hospital admissions, a report says today.
There is no evidence that the annual campaign, which costs the NHS £115million, saves people from developing more serious illnesses. The study, following others which have cast doubt on the campaign's effectiveness, led to calls for it to be scrapped. The researchers said flu was an 'important-contributor' to acute infections including bronchitis and emphysema. But these were no less frequent in people who had been vaccinated than in those who had not.
More than 15million people - including three-quarters of over-65s - will receive flu jabs this winter. Last month a review in the Lancet medical journal said there were no figures to back claims that the jab saves lives. It said few vaccine trials had actually included elderly people and there is evidence that the clinical benefits of vaccination decline with advancing years, especially after 70.
Researchers from George Washington University, Washington DC, said recently that no study had found a decline in flu deaths since 1980, even though vaccination coverage had increased from 15 to 65 per cent. Last year experts at the independent Cochrane Library, which examines the effectiveness of treatments, found jabs had little or no effect on deaths, the length of hospital stays or time off work.
Padre Pio, Italy's most-loved saint, faked his stigmata by pouring carbolic acid on his hands, according to a new book.
The Other Christ: Padre Pio and 19th Century Italy, by the historian Sergio Luzzatto, draws on a document found in the Vatican's archive.
The document reveals the testimony of a pharmacist who said that the young Padre Pio bought four grams of carbolic acid in 1919. "I was an admirer of Padre Pio and I met him for the first time on 31 July 1919," wrote Maria De Vito. She claimed to have spent a month with the priest in the southern town of San Giovanni Rotondo, seeing him often.
"Padre Pio called me to him in complete secrecy and telling me not to tell his fellow brothers, he gave me personally an empty bottle, and asked if I would act as a chauffeur to transport it back from Foggia to San Giovanni Rotondo with four grams of pure carbolic acid. "He explained that the acid was for disinfecting syringes for injections. He also asked for other things, such as Valda pastilles."
The testimony was originally presented to the Vatican by the Archbishop of Manfredonia, Pasquale Gagliardi, as proof that Padre Pio caused his own stigmata with acid. It was examined by the Holy See during the beatification process of Padre Pio and apparently dismissed.
Padre Pio, whose real name was Francesco Forgione, died in 1968. He was made a saint in 2002. A recent survey in Italy showed that more people prayed to him than to Jesus or the Virgin Mary. He exhibited stigmata throughout his life, starting in 1911. The new allegations were greeted with an instant dismissal from his supporters. The Catholic Anti-Defamation League said Mr Luzzatto was a liar and was "spreading anti-Catholic libels".
Pietro Siffi, the president of the League, said: "WE WOULD LIKE TO REMIND MR LUZZATTO THAT ACCORDING TO CATHOLIC DOCTRINE, CANONISATION CARRIES WITH IT PAPAL INFALLIBILITY. We would like to suggest to Mr Luzzatto that he dedicates his energies to studying religion properly."
The California Independent System Operator Corp., also known as California ISO, has declared an energy transmission emergency for Southern California due to the fires that are currently ravaging the region.
California ISO said Tuesday the most dramatic impact from the fires is currently in San Diego, where multiple lines in the 500,000-, 230,000- and 138,000-volt rating are no longer in service. So far, 24 different lines in the county have been affected by the fire, according to California ISO spokesman Greg Fishman. Some of the affected lines have been repaired, Fishman said.
"The transmission grid that we operate in San Diego has suffered losses and it has the opportunity to impact our ability to deliver power to the region," said Fishman. California ISO is "getting the word out that the situation is getting pretty serious and it gives us the authority to act quickly to take steps that we would need to take to keep the grid up if we lose more lines."
San Diego Gas & Electric spokesman Art Larson and California ISO's Fishman said one of the region's two main energy transmission corridors has been severed. The Southwest Power Link, a 500,000-volt line that conveys power from Arizona to San Diego, has not been in operation since Sunday due to damage caused by the Harris fire, one of the county's two major fires currently burning near Otay Mesa and Eastern Chula Vista. It was unclear when the line would be mended.
Larson said SDG&E has asked for assistance for repairs and damage assessments from crews and utilities throughout the southwest region. Monday night a fire burned around the Miguel Mountain substation, which the Southwest Power Link runs into, knocking out several of the 230,000-volt lines that run out of the station, according to California ISO's Fishman.
Electrical power outages are affecting 24,992 customers in 44 communities, according to SDG&E. The utility reported that the power grid is operating near maximum capacity and is urging customers to conserve energy if at all possible.
The dollar hit a record low against the euro on Monday as Rodrigo Rato, managing director of the International Monetary Fund warned that the US currency could suffer a dramatic fall that would shake confidence in American assets.
The outgoing IMF managing director said the depreciation of the dollar had been orderly, but cautioned there was a risk of a runaway sell-off that would hit growth in major economies. The risks of a disorderly fall in the US currency appeared to increase over the weekend after the IMF failed to agree internal reforms that would have set the stage for it to take on a greater role managing global economic imbalances.
"Up to now, movements in exchange rates have been orderly and in line with fundamentals. But there are risks that an abrupt fall in the dollar could either be triggered by, or itself trigger, a loss of confidence in dollar assets," Mr Rato said.
The dollar hit a record low of $1.4348 against the euro, before climbing slightly, while sterling also rose as high as $2.0537 against the US currency. Japan's yen hit a six-week high of Y113.27 against the dollar.
A Chinese submarine will send test signals that could change the course of a satellite when China launches its first moon orbiter, as part of the country's effort to develop space war technology, a human rights watchdog said Tuesday.
The Information Center for Human Rights and Democracy said two survey ships are deployed in the South Pacific Ocean and South Atlantic Ocean to send signals to maneuver the lunar exploration satellite, expected to be launched Wednesday. At the same time, a nuclear-powered submarine will send simulated signals to the satellite as a test, it said in a statement.
Once the satellite-maneuvering technology matures, the group said, China would have the know-how to destroy other satellites in space in wartime. China could launch cheaply-made weapon-carrying objects into space and change their courses to destroy or damage satellites of other countries by sending signals from submarines, the center said.
China shocked the world in January by firing a missile at an old weather satellite without notifying anyone in advance, showing off its anti-satellite weaponry and its ability to shoot down satellites without being immediately noticed.
Hong Kong's media reported that a rocket that will carry the satellite was being fuelled up, banners of greetings on the successful launch were prepared and farmers living near the Xichang Satellite Launch Center, in mid-western China's Sichuan Province, will be evicted one hour ahead of the launch.
China plans to launch the satellite around 6 p.m. Wednesday, the official Xinhua News Agency reported Monday, quoting a spokesman of the China National Space Administration. The satellite is named Chang'e I after the legendary Chinese goddess who, according to legend, flew to the moon.
China's space industry enjoyed its first major success after astronaut Yang Liwei reentered Earth after 21 hours in space in 2003 in the spacecraft Shenzhou 5, marking China's first successful manned space mission. A second manned space mission was successfully concluded in 2005 after astronauts Fei Junlong and Nie Haisheng finished orbiting the Earth for five days in the spacecraft Shenzhou 6.
The average family has to spend an extra £750 on their annual food bill, compared with a year ago, according to figures.
In recent weeks, some of the most dramatic signs of food inflation have hit supermarket shelves. According to price comparison website mySupermarket.com, the three biggest supermarkets - Tesco, Asda and Sainsbury's - are charging their shoppers 12 per cent more on average for a basket of 25 different goods compared with last year.
Tesco has increased its prices by 16 per cent in the past year. A kilo of peas has gone up from £1.19 to £1.79 at Tesco, a dozen eggs at Sainsbury's has leapt from £1.62 to £2.35, while Asda has increased the price of its orange juice from 73 pence a litre to 88 pence.
The figures suggest that, despite promises from the supermarkets that they are continually cutting their prices, households are being hit hard by food inflation. Considering that many families spend £90 a week on food, a 16 per cent increase equates to an annual rise of £749.
The research came on the same day that Government statistics showed that staples, such as butter, flour, pork and milk, soared in price last month. The Office of National Statistics published detailed figures yesterday which showed that butter had increased by 18 per cent in the past month, while milk had leapt by 12 per cent.
The price of milk powder has been climbing all year on the global markets as Chinese consumers start to eat dairy products in far greater quantities. The situation has been exacerbated by the terrible summer in the UK, when dairy farmers had to move many of their cattle indoors and give them expensive winter feed. This has led to far higher costs for farmers, which have been passed on to supermarkets. The poor summer also hit vegetable harvests, causing prices to rise.
Economists have been warning for some time that the crisis in some key commodity markets - especially the dairy market - would eventually hit shoppers in the UK. David Lang, a food analyst at Investec, said: "It's only starting to filter through to consumers now. But it will go on for some months to come. Prices will have to be raised again."
Sean Carter, at the Rural Shops Alliance, said: "Supermarkets keep their prices very sharp on certain items, and claim there is a continual price war going on. But, in actual fact, their profit margins never seem to fall. You can be sure that if they cut the prices on some items, they are increasing prices on other items."
A Tesco spokesman said: "It's no secret that all supermarkets have experienced upwards pressure on food prices in the wake of the poor summer weather and rising international commodity prices. However, the figures in this small and arbitrary basket are not at all representative of Tesco's overall price position."
Britain has been branded "the sick man of Europe" after a Government report revealed a nation blighted by record levels of obesity, alcohol abuse, diabetes and smoking related deaths.
The rate of obesity in British adults is the worst in Europe and, in some areas, are now above the national average of the United States. In Boston, Lincolnshire, almost a third of men and women are now dangerously overweight.
The "snapshot" of the nation's health showed that almost 900,000 children aged under 11 are obese - a 50 per cent increase in the past decade. The report from the Department of Health also revealed England as the only European country with rising alcohol consumption and an increase in alcohol-related deaths, particularly amongst women.
Other findings included:
* Britons drink 11.37 litres of pure alcohol per person compared with an EU average of 10.95 litres.
* The number of women aged 35 to 54 dying of alcohol abuse has almost doubled in the last 15 years.
* There are 288 deaths per 100,000 people from smoking-related causes in the UK, compared with an EU average of 263.
* People in Britain eat an average of 25kg less fruit and vegetables each per year compared with EU countries.
* Diabetes sufferers have risen to 4.8 per cent of men and 3.6 per cent of women in 2003.
* Despite declining teenage pregnancy rates, the UK still has the highest proportion of births to under-20s compared to other western European countries. There are also new highs in separate figures for self harm, and the sexually transmitted disease Chlamydia.
* A stark north-south divide remains, with boys born in Manchester likely to die on average 10 years younger than those born in the borough of Kensington and Chelsea in London.
Tory Shadow Health Secretary Andrew Lansley said: "These figures show a shocking rise in alcohol abuse and obesity levels in this country and how the Government is losing the battle to tackle public health challenges. This is a dreadful toll upon those affected and a great burden on our NHS. We have to reverse this. We can't continue being the sick man of Europe on health issues."
Wind-whipped firestorms destroyed more than 700 homes and businesses in SOUTHERN CALIFORNIA on Monday, the second day of its onslaught, and MORE THAN HALF A MILLION PEOPLE IN SAN DIEGO COUNTY were told to evacuate their homes.
The number of blazes and their wind-whipped ferocity strain the area's firefighting resources to the limit. The gale-force winds turned hillside canyons into giant blowtorches from Santa Barbara to the Mexican border. Although the worst damage was around San Diego and Lake Arrowhead, dangerous fires also threatened Malibu, parts of Orange and Ventura counties, and the Agua Dulce area near Santa Clarita.
Gov. Arnold Schwarzenegger, calling it "A TRAGIC TIME FOR CALIFORNIA," declared a state of emergency in seven counties and redeployed California National Guard members from the border to support fire fighters. Schwarzenegger stressed how much California officials have learned since the devastating wildfires of October 2003, which raged over much of the same terrain.
But as the day wore on, it became clear that any hard-earned knowledge was no match for natural forces overrunning the ability of fire fighters to control them.
"THE ISSUE THIS TIME IS NOT PREPAREDNESS," said San Diego City Council President Scott Peters. "IT'S THAT THE EVENT IS SO OVERWHELMING."
Gov. Mike Easley wants NORTH CAROLINA residents to cut their water use by 50 percent between now and Halloween to see how they can cope with critically low water levels.
Easley has already asked communities across the state to conserve water as drought worsens statewide. As of last week, 71 of North Carolina's 100 counties were in exceptional drought, the federal government's highest classification.
The governor said residents should experiment with drastic cuts in water use over the coming week so officials can see whether the state will be able to manage as the supply of water continues to drop. The governor's office will monitor public water systems across the state, then release a list of those that saw significant reductions in water consumption between Monday and Oct. 31.
The state will keep gathering information about water use until the drought ends.
NEW ORLEANS - The Army Corps of Engineers closed a gate on a suburban canal as heavy rains lashed the flood-prone city, raising fears that climbing waters threatened to top the walls holding them back.
After more than 8 inches of rain fell on parts of New Orleans by late afternoon, Mayor Ray Nagin shut City Hall early, and schools also closed. People were asked to stay indoors until the flood potential subsided. More rain was expected overnight.
The Harvey Canal in Jefferson Parish was one of several in the area placed under new safety guidelines after Hurricane Katrina's flood waters breached two New Orleans canals in August 2005, causing catastrophic flooding. The corps has worked to strengthen the canal, about five miles from downtown, but engineers worried that water being driven into it might lead to flooding. The area around the canal includes homes and businesses.
Robert Ricks, a lead forecaster with the National Weather Service in Slidell, said that a flood watch was extended to midnight Monday and that some areas could expect 10 inches or more of rain. Despite the flooding potential, the rain also offered relief to parts of Louisiana that have been abnormally dry. Until Monday's drenching, rainfall for New Orleans was about 11 inches below normal for the year.
The scattered showers and thunderstorms also came as a blessing to other drought-stricken areas of the Southeast on Monday. Still, climatologists say it will take more than a few scattered storms to pull the region out of a record drought. Rainfall in Atlanta is almost 17 inches below normal for the year, and state officials have warned that a north Georgia reservoir that supplies more than 3 million people with water could be depleted within three months.
Almost one-third of the Southeast is covered by an "exceptional" drought - the worst drought category.
Italy's retailers have denounced the growth of Mafia extortion rackets which they say now affect big companies as well as smaller ones.
The Mafia has turned into one of Italy's biggest business enterprises with a turnover of more than $120bn (£60bn) a year, a new report says. The report, prepared by Italy's leading retailer's association, warns of growing Mafia influence in the south. It estimates that 7% of Italy's output is filtered off by organised crime.
The retailer's association says it is seriously concerned by the spread of Mafia extortion rackets from small to big businesses. Some of Italy's best known and largest construction companies are denounced by name in the report for allegedly turning a blind eye to organised crime.
Organised crime is present in all areas of the economy, from food manufacture to tourism, from real estate to finance and in the service industries, the report says. Big business also finds it easier to negotiate agreements with the Mafia rather than to denounce extortion rackets to the police, it adds.
The study alleges that 20% of Italian shops pay regular hush money to criminals to carry on business undisturbed. The proportion is much higher in southern Italy. In Sicily, eight out of 10 shops pay a regular monthly sum to the Mafia, the report says.
Deputy Minister of the Interior Marco Minniti said the growth of Mafia business crime was alarming.
Turkey has said it will exhaust all diplomatic solutions before sending troops into Iraq to stop cross-border attacks by Kurdish PKK fighters.
Foreign Minister Ali Babacan made the announcement as he prepared to travel to Baghdad for talks with senior Iraqis, including PM Nouri Maliki. The US has again urged Iraq to take swift action against the insurgents to forestall the threatened Turkish raids. Turkey's UN envoy has warned that his country's patience has its limits.
Sunday's deadly PKK ambush near the Iraqi border has inflamed public opinion in Turkey, with the media and opposition leaders calling for immediate strikes against the rebels. Last week, the Turkish parliament approved raids into Iraq and up to 100,000 soldiers, backed by tanks, fighter jets and helicopters, have been deployed along the border.
Speaking via a secure video link between the White House and Baghdad on Monday, the Iraqi prime minister, Mr Maliki, agreed with Mr Bush to "work together, in co-operation with the Turkish government, to prevent the PKK from using any part of Iraqi territory to plan or carry out terrorist attacks", a White House statement said.
"We want the Iraqi government to take swift action to stop the activity of the PKK," White House spokesman Tony Fratto said afterwards. "We do not want to see wider military action on the northern border." Mr Bush also spoke to Turkish President Abdullah Gul, telling him of his "deep concern" at recent PKK attacks.
PKK sources reported heavy Turkish shelling of rebel positions after Sunday's ambush but there were no reports of an incursion.
The Kurdistan Workers' Party (PKK) has been a thorn in Turkey's side for decades.
The group, which has Marxist-Leninist roots, was formed in the late 1970s and launched an armed struggle against the Turkish government in 1984, calling for an independent Kurdish state within Turkey. Since then, more than 37,000 people have died. During the conflict, which reached a peak in the mid-1990s, thousands of villages were destroyed in the largely Kurdish south-east and east of Turkey, and hundreds of thousands of Kurds fled to cities in other parts of the country.
In the 1990s, the organisation rolled back on its demands for an independent Kurdish state, calling instead for more autonomy for the Kurds. In 1999, it suffered a major blow when its leader, Abdullah Ocalan, was arrested. Shortly afterwards, it introduced a five-year unilateral ceasefire and took a number of steps to try to change its image and widen its appeal, changing its name several times before deciding it again wanted to be known as the PKK. It also further watered down its demands, calling on Ankara to involve it in the country's political process, allow more cultural rights for the country's estimated 15 million Kurds and release imprisoned PKK members.
But Turkey, which, like a number of Western countries, regards the PKK as a terrorist organisation, refused to negotiate with it and has offered only a limited amnesty to its members. In 2004, the PKK resumed its violent campaign, which has escalated steadily over the past two years despite several other short-lived, unilateral ceasefires. Two recent attacks - the killing of 13 Turkish soldiers in a single clash and the killing of 12 civilians in a bus ambush - were regarded as being among the worst over recent years.
Although Turkey's ruling AK Party has recently made political gains in the south-east, MANY KURDS, AND THE EUROPEAN UNION, say the government needs to do a lot more to improve the rights of the country's Kurdish minority. And the PKK remains popular with many people there. At the annual Kurdish spring festival, Nowruz, Kurds regularly take to the streets proclaiming their support for the group's imprisoned leader Ocalan.
A group said to be an offshoot of the PKK, calling itself the Kurdistan Freedom Falcons, has claimed responsibility for a number of bomb blasts in Istanbul and Turkish Mediterranean resorts. The group also swears allegiance to Ocalan. And the last few years have also seen the rise of a sister organisation - Pejak - which has carried out attacks against Iran.
Turkey believes that the PKK currently has several thousand fighters based in the Candil mountains of northern Iraq; an area which is also said to be a base for Pejak. With violence in south-eastern Turkey rising and the US and the Iraqi Kurds apparently unwilling, or unable, to take action against PKK bases in Iraqi territory, the Turkish government is now threatening to take matters into its own hands.
Today we find the Church of God in a “wilderness of religious confusion!”
The confusion is not merely around the Church – within the religions of the world outside – but WITHIN the very heart of The True Church itself!
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