Eeyore's News and View

US Inflation Could Hit 200%: Dr. Doom
The US risks being hit by Zimbabwe-style hyperinflation and there are signs that the world's biggest economy risks turning into a banana republic, Marc Faber, author of the Gloom, Doom & Boom report, told CNBC's "Asia Squawk Box."
Current DateTime: 02:45:58 10 Feb 2009
"In the US, we have a totally new school, and it’s called the Zimbabwe school," Faber said. "And it’s founded by one of the great leaders of this world, Mr Robert Mugabe, that has managed to totally impoverish his own country. And that is the monetary policy the US is pursuing."
The government's increased intervention in the economy is likely to slow down economic growth because history shows that every time the private sector shrinks to make way for the government sector, the economy suffers, he said.
Asked whether the US risked being faced with 200 percent inflation, Faber answered: "Well, not yet. Not yet. But I think eventually. If I look at government debt in the US, and debt in general, I think the only way they will not default physically on their debt is to inflate."
The Federal Reserve's policy of printing money and the government's intervention in the economy might undermine the US's economic and political clout, Faber warned.
"Well, I wrote two years ago a report entitled 'Is America becoming a banana republic?' And there are some features that characterize banana republics- totalitarian states, very strong government intervention into the economy, and the polarization of wealth," he said.
"And we have all these trends occurring in the US. We are not yet there. And in theory it could be reversed, but I doubt it will be," Faber added.
Because of these factors, US government and corporate bonds, including that of CNBC parent General Electric [GE 12.64 --- UNCH (0) ], should be downgraded, he said.
"Yeh, I think GE should be a junk bond. But I also think the US government should be junk," Faber said, adding: "I don’t pay much attention to rating agencies. The rating agencies have totally failed over the last 3-4 years to identify sick companies."
http://www.cnbc.com/id/29047443/

Health risks may reach far beyond reported victims
By Elizabeth Weise and Julie Schmit, USA TODAY
Like any mother facing a long day in the car and then on a plane with two young kids, ages 4 and 5, Jennifer Krieger of Alexandria, Va., was prepared.
"I bought peanut butter crackers," she says, "thinking it would be a great healthy snack to take on the trip, easy to throw in my bag, and it won't go bad."
But things went bad, in ways that Krieger couldn't have imagined. A long-awaited Christmas vacation ski trip turned into a five-day vigil at a Colorado hospital after David Krieger, 4, got salmonellosis, a life-threatening infection caused by exposure to the salmonella bacteria.
"The hardest part was seeing him in such pain," Krieger says. "He would cry out, 'My tummy hurts! My tummy hurts!' and he'd be in a fetal position on the floor."
Federal officials say David, who has recovered, was one of more than 538 people across the nation who became sick after they ate contaminated peanut butter or foods containing tainted peanut paste made in a Peanut Corp. of America (PCA) manufacturing plant in Georgia. The infection also may have contributed to eight deaths, they say. Recalled products now number more than 1,700, including peanut butter crackers and many other snacks, although officials say major brands of peanut butter are not affected.
PCA is under a criminal investigation by the Food and Drug Administration and the Justice Department. A second congressional hearing on the recall is scheduled for Wednesday. The impact of the salmonella contamination could reach well beyond the 538 people who got sick.
The conventional wisdom among epidemiologists, first outlined in a 2004 paper by Centers for Disease Control and Prevention researcher Andrew Voetsch, is that for each case of salmonellosis that is reported, more than 38 other people get sick but don't go to their doctor or get tested. So this outbreak could be responsible for more than 20,000 illnesses.
In Belle Plaine, Minn., pre-Christmas snacking was the likely path to infection for Sarah Kirchner's son Michael, 3. "We ease up around Christmastime," Kirchner says, so Michael got to eat more peanut butter crackers and candy than he'd normally be allowed.
He was in the hospital for four days, three with a temperature of 104. "He couldn't even move because he was in so much pain. He would scream and cry every time the nurses touched him," Kirchner says.
Michael's baby sister Lily, who was 4 months old, got the bug from him. The bacteria can be passed along via contaminated hands and surfaces. And it was present and growing in Michael days before his parents knew he was sick.
Lily got to stay at home but had such intense diarrhea every five to 10 minutes that her skin was raw and she had to have a baking-soda bath after each bout to counteract the acid in her stool.
Kirchner and husband David — who had not eaten the crackers or candy — took turns at home and in the hospital so that neither child was ever alone.
"I kept wishing it was us," she says. "Why didn't we get it?"
Most fight off infection
Once ingested, the salmonella bacteria start growing in the intestines. For the vast majority of people exposed, their bodies fight it off, and they never know they had it.
But depending on how many bacteria you have, or how old or sick you are, salmonella can overwhelm the body's defenses and infect the colon, says Tim Dellit, an infectious-disease specialist at Harborview hospital in Seattle.
"Normally you've got this nice, smooth intestine and colon, and then you get inflammation, and it's like eczema on your skin," Dellit says.
In some cases, blood vessels leak into the colon, he says.
"It can actually be bright red blood that comes out in the watery diarrhea. That's typically what people will notice, that there will be blood in the toilet bowl."
In most cases, salmonella infection lasts four to seven days. The body eventually fights it off. In fact, treating it with antibiotics often can make it worse. "In some situations, the antibiotics can prolong the carrier state, the time that the body takes to clear the bacteria," Dellit says.
How hard salmonella hits a given person depends on several factors: how much bacteria they consumed, how good their immune system is at fighting it off and how old or young they are.
But there's another interesting thing about salmonella: There are thousands of different strains of the bacteria, and each seems to attack the body in a slightly different way, says Robert Tauxe of the CDC's division of foodborne, bacterial and mycotic diseases.
There are salmonella strains that hit younger people harder, and there are salmonellas that hit older people harder. Some make boys sick more than girls; some, women more than men. In the ConAgra salmonella outbreak associated with peanut butter in 2007, more than 25% of the cases showed up as a urinary tract infection in older women, researchers at the CDC found.
Why the same basic bacteria cause such different illnesses is a mystery. "It's a real head-scratcher," Tauxe says. "I can't pretend we understand why."
The current outbreak's potential impact on children likely has been reduced by the rise in peanut allergies in the USA. Salmonella is most dangerous for very young children.
"Pediatricians have told everybody under 2 to stay away from peanut butter" for the past few years, Tauxe says.
"So we see very few kids under the age of 2 in this outbreak," he says. "And those are likely to be the kids who get into trouble."
What are the chances?
Leslie Kurland of Hoosick, N.Y., went to culinary school, so she knows all about food safety and sanitation.
But it never occurred to her that peanut butter crackers could be the cause of the horrific bout of salmonella that has son Gabriel, who is about to turn 2, on his second round of antibiotics.
In his case, doctors prescribed antibiotics because very young children are at the highest risk for developing a blood infection from salmonella.
Overall, however, salmonella has a very low attack rate, says Bill Keene of Oregon's acute and communicable disease program.
"Look at the total number of people ill, we're talking 500 reported cases," says Donald Schaffner, a food microbiologist speaking for the Institute of Food Technologists.
"But the amount of product that came out of that (PCA) plant fed more than 20,000 people. So we're looking at a level of contamination that's low and sporadic."
Peanut butter and peanut paste, which are low in water and high in fat, are an almost perfect medium to preserve salmonella bacteria even when they are exposed to heat.
That's a problem, because the "kill step" for peanut butter — the action that's supposed to ensure that it's free of harmful bacteria — is roasting, Schaffner says.
That means that either the roasting of the contaminated products wasn't done at a high enough temperature or the peanut products were infected later in the process.
A recent FDA inspection found unsanitary conditions at the PCA plant. An FDA inspection report says PCA shipped products in 2007 and 2008 that tested positive for salmonella.
In some situations, the products first tested positive and then negative — and then were shipped anyway. In others, the company shipped products before receiving positive test results, the FDA report says.
A wake-up call
Peanut paste goes through more heat exposure when it's baked in a cracker or some other kind of snack.
However, "Salmonella is a million times more heat-resistant when it's in peanut butter than when it's in chicken (a common carrier) or another high-moisture environment," Schaffner says.
This outbreak is a wake-up call to the nut industry and the food industry in general, Schaffner says.
"People (in the industry) ought to be asking themselves, 'What is my kill step? Am I really sure that my kill step is as effective as I think it is?'
"If there's anybody out there in the industry who's manufacturing nuts or nut butter of any kind, they really need to get on the stick and study the thermal processes they're using and document that it's effective against salmonella."
For now, the only thing that's going to end this outbreak is for people to go through their cupboards and toss out potentially infected food.
"The shelf life of these products is months, if not years, in somebody's cupboard," says the CDC's Tauxe.
"They're going to be little time bombs going off for months unless people get rid of them."
http://www.usatoday.com/money/industries/food/2009-02-09-peanut-butter-salmonella_N.htm

Grandma's moistening kettle may have held off flu
February 9, 2009 - 11:41pm
By RANDOLPH E. SCHMID AP Science Writer
WASHINGTON (AP) - Grandma may have been right about keeping a teakettle warming on the stove in winter to moisten the air. Studies of seasonal influenza have long found indications that flu spreads better in dry air. Now, new research being published Tuesday in Proceedings of the National Academy of Science, indicates that the key is the absolute humidity _ which measures the amount of water present in the air, regardless of temperature _ not the more commonly reported relative humidity.
Relative humidity varies depending on air temperature; absolute humidity doesn't.
"The correlations were surprisingly strong. When absolute humidity is low, influenza virus survival is prolonged and transmission rates go up," said Jeffrey Shaman, an Oregon State University atmospheric scientist who specializes in ties between climate and disease transmission
The finding "is very important for the scientific community and the medical community to know to develop better prediction models of influenza," Shaman said in a telephone interview. It will offer the chance to better understand and forecast the spread of the disease.
For the public, he added, it offers a "more elegant explanation for why we see these seasonal spikes" in flu. And, he added, it shows that in some cases it may be worthwhile to add humidity to the air. Beware of overdoing it, though _ too much humidity can lead to other problems, such as mold.
The correlation with flu and low humidity is important because in cold winter weather, when flu is most common, even a high relative humidity reading may indicate little actual moisture in the air, and the less moisture there is, the happier the flu virus seems to be.
Shaman and co-author Melvin Kohn, an epidemiologist with the Oregon Department of Health Services, reanalyzed data from a study published in 2007 in the journal PLoS Pathogens by researchers at Mount Sinai School of Medicine in New York. That report found there were more flu cases when it was colder and drier.
The Oregon researchers said relative humidity could only explain about 12 percent of the variability of influenza virus transmission and 36 percent of virus survival in the 2007 study.
In their new analysis, Shaman and Kohn said using absolute humidity explains 50 percent of influenza transmission and 90 percent of virus survival.
So why is relative humidity misleading?
The answer is that more moisture can be present in warm air than in cold. Some people like to say warm air can hold more moisture than cold air. While that's not scientifically correct, it is a convenient way to think about it.
What that means is warm air at 30 percent relative humidity and cold air at 60 percent relative humidity may actually have the same amount of water in the air.
So, while the cold air sounds moist, it might be pretty dry _ just what the flu likes.
Absolute humidity is expressed in weight of water, grams or pounds, in a volume of air, such as a cubic meter or yard. The higher the reading the wetter. The wetter, the worse for flu virus.
"In some areas of the country, a typical summer day can have four times as much water vapor as a typical winter day _ a difference that exists both indoors and outdoors," Shaman said. "Consequently, outbreaks of influenza typically occur in winter when low absolute humidity conditions strongly favor influenza survival and transmission."
Proceedings of the National Academy of Sciences: http://www.pnas.org

In recession, many fix old autos instead of trading in
More motorists are fixing their old cars instead of buying new ones, in hopes their jalopies will survive a long recession.
Auto dealers and garage owners say they are seeing drivers pay more attention to regular maintenance and be more willing to spring for costly major repairs now that they are reluctant to trade in their junkers. "People are hanging on to them right now, and they've got to keep them running," says Tim Smith of Bob Smith BMW/Mini in Calabasas, Calif.
Working to saving Old Bessie:
•Dealer servicing. Parts and service departments are expected to see a revenue gain of about 3% this year, forecasts Paul Taylor, chief economist for the National Automobile Dealers Association. That would be up from 1.8% for the first 11 months of 2008.
Dealers count on servicing to offset falling new car sales. Jason Brickl of Ballweg Chevrolet in Middleton, Wis., says his service department has seen a 17% sales gain the past 12 months.
•Repair shops. Some 60% of the independent mechanics responding to a survey by Automotive Service Association reported sales up last year over the previous year. Only 14% reported a decline. This year, 76% say they expect more work.
Shop owners say, "It's common these days to hear from motorists, 'I don't want to buy a new car right now so … should I spend the money and fix this one?' " says ASA spokeswoman Angie Wilson.
•Roadside assistance. Though AAA says roadside assistance calls have remained fairly steady at nearly 30 million a year, memberships, which usually include towing benefits, rose by about 500,000 last year to 51.3 million. "People are taking a little better care of their cars," says Michael Calkins, manager of AAA's approved auto repair shop program.
Motorists are hanging on to vehicles longer. The average age of the entire U.S. fleet of cars and trucks averaged a record 9.2 years in 2007 for the second year in a row, the most recent figure from research firm R.L. Polk. The 4.8% of vehicles scrapped was the lowest since 1996.
Business is up about 10% over last year at Parkway Auto Care in St. Paul, says owner Ron Alcorn. "A few years ago, if it was going to be $1,000 to fix it, they would trade it off. Now they say, 'I can't buy a new car for $1,000 or even a decent used car,' " and go ahead with repairs, Alcorn says. But the garage is still losing some business when customers who now can't afford a major repair choose to ride public transit instead, he adds.
http://www.usatoday.com/money/autos/2009-02-08-used-car-repairs_N.htm

Amazon's new Kindle e-book reader gets slimmer
February 9, 2009 - 6:34pm
NEW YORK (AP) - Amazon.com Inc. is releasing a slimmer version of its Kindle electronic reading device, but it still costs $359 _ making it unclear how mainstream even an improved Kindle can be during a brutal recession.
Rather than lowering the price, Amazon touted several upgrades to the e-book reader and a novella from Stephen King that will be available exclusively for the device. The new Kindle is expected to begin shipping Feb. 24, with owners of the first Kindle at the front of the line if they want to upgrade.
"This device is a significant improvement versus the first generation," Amazon CEO and founder Jeff Bezos said in an interview.
He said there was no way to lower the price given the upgraded components in the Kindle 2, which is a bit more than one-third of an inch thick _ about half the thickness of the first Kindle. Its 6-inch screen can display 16 shades of gray, compared with the previous Kindle's four shades. It will be able to read text aloud from two small speakers on the back, and it can store 1,500 books, instead of 200.
The new Kindle is slightly taller, but like the old version, it weighs about 10 ounces. It downloads books _ the catalog has 230,000 titles _ and newspaper stories and blog posts over Sprint Nextel Corp.'s wireless network.
E-books still don't exceed 1 percent of overall book sales, but publishers say they are a fast-growing niche, a rare area of improvement in an otherwise terrible market. Although some publishers have expressed nervousness about Amazon.com's market power, they have supported the Kindle and expanded the number of books available for it and competing devices such as Sony Corp.'s Reader. The Reader costs $300 or $400, depending on the model.
The Kindle has enjoyed a steady buzz, with an endorsement last fall from Oprah Winfrey and Amazon's claim over the holidays that it was out of stock.
Seattle-based Amazon has carefully guarded key details, including how many Kindles have sold since they debuted late in 2007. Amazon wouldn't comment on an analyst report last week that it had sold about 500,000 Kindles, which was based on a regulatory filing by Sprint Nextel that indicated 210,000 were bought in the third quarter of 2008.
Sony spokeswoman Valerie Motis said that since the original Reader's launch in October 2006, the company had shipped 300,000 of the devices as of the end of November.
Bezos said Monday that Kindle orders were strong around the holidays and that he expects that to continue. Even in the recession, he said, "people are buying Kindles."
The Kindle is available only in the U.S.; Bezos said an international release is "clearly something we're thinking about."
Ross Rubin, an analyst with The NPD Group, called the Kindle 2 "an improvement across the board." He said that there was enough room for improvement over the first Kindle that the second probably will still appeal to people who already have one.
But for e-book readers to reach broader audiences, the price needs to come down, he said. He expects this won't happen until must-haves like textbooks become available for the devices.
Colin Sebastian, an analyst with Lazard Capital Markets, said Amazon could cut the Kindle's price before the next holiday season if sales are healthy enough that Amazon can save on some component costs. He noted that driving down the price could lead to more sales of books for the Kindle _ and books are more profitable than the device itself, he said.
Amazon recently said it would make Kindle e-books available on other kinds of devices, including cell phones, as rival Google Inc. also is doing.
Amazon also hopes to make the Kindle enticing through exclusive content, beginning with King's novella, called "Ur," which incorporates the device into the story.
King has been known as a digital publishing innovator. In 2000 he released a novella, "Riding the Bullet," as a free download. Web sites such as Amazon and Barnes & Noble.com were swamped by high demand for the 66-page story.
Amazon shares rose 16 cents to close at $66.71.
http://wtop.com/?nid=108&sid=1596778