Monday, April 30, 2012

Reuters: Most Read Articles: Microsoft buys Nook stake, Barnes & Noble shares soar

Reuters: Most Read Articles
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Microsoft buys Nook stake, Barnes & Noble shares soar
May 1st 2012, 00:49

The new Nook Tablet is seen during a demonstration at the Union Square Barnes & Noble in New York, in this November 7, 2011, file photo. REUTERS/Shannon Stapleton/Files

1 of 2. The new Nook Tablet is seen during a demonstration at the Union Square Barnes & Noble in New York, in this November 7, 2011, file photo.

Credit: Reuters/Shannon Stapleton/Files

By Phil Wahba and Bill Rigby

NEW YORK/SEATTLE | Mon Apr 30, 2012 8:49pm EDT

NEW YORK/SEATTLE (Reuters) - Microsoft Corp is jumping into the fast-growing e-books market by investing $605 million over five years in Barnes & Noble Inc's Nook e-reader and college business, as it looks to unlock Amazon.com and Apple Inc's grip on the exploding tablet computer market.

The move comes just six months before the world's largest software maker is due to launch its new touch-enabled Windows 8 operating system, and the inclusion of a Nook app on Windows tablets should allow them to compete with Apple's iPad and Amazon's Kindle Fire.

It also gives Microsoft a direct interest in electronic publishing just as the market for downloadable college textbooks starts to take off and the publishing industry undergoes a radical shift toward electronic distribution.

"It's a good strategic deal," said Sid Parakh, an analyst at fund firm McAdams Wright Ragen. "It gets Microsoft in the game for e-readers, and gives them access to a market that has been growing nicely and they've basically sat out of. It also makes Windows 8 a more compelling platform from an e-readers perspective."

In turn, Barnes & Noble gets a much-needed capital injection and a way to enter the digital books market outside the United States. The new unit will be run and majority owned by Barnes & Noble and will maintain a relationship with the U.S. bookstore chain's nearly 700 stores.

Shares of Barnes & Noble soared as much as 90 percent in early trading, before sliding back and ending with a 52 percent gain at $20.75. Microsoft shares, which recently hit a four-year high, edged up 0.1 percent to close at $32.015.

Microsoft's initial investment of $300 million, which will give it a 17.6 percent stake in the newly created Barnes & Noble subsidiary, values the new unit at $1.7 billion. Over the next five years, Microsoft has committed to invest another $305 million.

The deal - initially worth only 0.5 percent of Microsoft's cash hoard - is financially small, but strategically important for both companies.

Microsoft's Windows software still runs on more than 90 percent of the world's personal computers, but the company has been left behind in the mobile revolution as millions of people do more computing on smartphones and tablets running Apple or Google's Android software. Microsoft has also struggled to make its mark on internet-based commerce, which is dominated by Amazon, or rival Apple and Google's online app stores.

"The deal brings Microsoft technology and engineers into the Nook business - that talent will be tapped to make the Nook even better," said Albert Greco, a book industry expert at the business school of Fordham University in New York. "It gives Microsoft a tablet already, and Barnes & Noble global reach for the Nook platform, through Windows 8."

Barnes & Noble Chief Executive William Lynch told Reuters that the investment would go primarily to fund the international rollout of the Nook's digital bookstores and new reading software for the Windows platform.

MICROSOFT BACKS ANDROID

Under the deal announced early on Monday, Microsoft will get a 17.6 percent stake in a new Barnes & Noble unit combining the bookseller's college bookstore and Nook businesses. Those areas made up just over $1 billion in sales last quarter, about 40 percent of Barnes & Noble's total.

Microsoft, which will get an unspecified share of the new unit's sales, will pay $25 million a year for the first five years to help with development costs and acquiring content, and will make an upfront payment of $60 million a year for the first three years after the launch of Windows 8, essentially guaranteeing minimum sales of that amount to Barnes & Noble.

That means Microsoft's total outlay will be at least $605 million.

As part of the deal, Microsoft has dropped a patent lawsuit against Barnes & Noble over the Nook, which runs on Google's Android system, and will get royalties on those patents. There is a possibility that future Nook models will be based on the Windows operating system, but executives would not comment on that in a call with analysts.

Barnes & Noble gets a much-needed capital injection and a way to enter the digital books market outside the United States. The new unit will be run by Barnes & Noble and will maintain a relationship with the U.S. bookstore chain's nearly 700 stores.

Barnes & Noble's Nook has found a strong following, allowing it to garner some 27 percent of the U.S. e-books market in the 2-1/2 years since the device was launched, compared with Amazon's 60 percent and Apple's 10 percent. But battling Amazon's market-leading Kindle has proved expensive.

"It gives them a much larger partner with deeper pockets, it gives them increased reach," said Morningstar analyst Peter Wahlstrom. "In the last two years they've had their backs against the wall."

Last year, Barnes & Noble suspended its dividend to direct more cash into developing Nook, which resulted in a well-reviewed glow in the dark Nook introduced last month.

In January, however, it lowered its sales and profit forecasts as it faces pressure from Amazon's aggressive pricing strategy which has prompted it repeatedly to lower the prices on its own devices.

NOOK TO GO GLOBAL

Barnes & Noble has poured tens of millions of dollars into developing the Nook. The first version hit the market in 2009, two years after the Kindle.

The company's e-readers, tablets and electronic book sales have helped it offset a broader decline in book sales. Same-store sales of books at its brick-and-mortar stores have edged up again largely thanks to the bankruptcy last year of Borders Group.

But the Nook has been available only in the United States and the company said last year it wanted to take its digital business to new markets. Lynch told Reuters that deals to sell Nook through retailers abroad were "coming soon."

Barnes & Noble said in January that it might spin off its digital business, which includes the Nook, arguing that investors were not giving the company enough credit for that growth.

The company did not say on Monday if it would take the new venture public.

Barnes & Noble put itself up for sale in 2010 but attracted only one firm offer - a bid for $17 per share, or $1 billion, last May, from Liberty Media, which was drawn by the Nook's growth.

Liberty ultimately decided to invest $204 million rather than buy the company outright. It now has preferred shares it can convert into a 16.6 percent stake in Barnes & Noble at a strike price of $17.

(Reporting by Phil Wahba, Martinne Geller and Sinead Carew in New York and Bill Rigby in Seattle; Additional reporting by Mihir Dalal in Bangalore and Alistair Barr in San Francisco.; Editing by Lisa Von Ahn, Maureen Bavdek, Dave Zimmerman and Matthew Lewis)

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Reuters: Most Read Articles: Exclusive: Bo's wife dressed as Chinese army general after Heywood death: source

Reuters: Most Read Articles
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Exclusive: Bo's wife dressed as Chinese army general after Heywood death: source
May 1st 2012, 04:08

File photo of China's former Chongqing Municipality Communist Party Secretary Bo Xilai (5th L) and his wife Gu Kailai (4th L) posing for group photos at a mourning held for his father Bo Yibo, former vice-chairman of the Central Advisory Commission of the Communist Party of China, in Beijing in this January 17, 2007. REUTERS/Stringer

1 of 2. File photo of China's former Chongqing Municipality Communist Party Secretary Bo Xilai (5th L) and his wife Gu Kailai (4th L) posing for group photos at a mourning held for his father Bo Yibo, former vice-chairman of the Central Advisory Commission of the Communist Party of China, in Beijing in this January 17, 2007.

Credit: Reuters/Stringer

By Chris Buckley

BEIJING | Tue May 1, 2012 12:08am EDT

BEIJING (Reuters) - A woman at the centre of China's biggest political scandal in two decades, wife of deposed political leader Bo Xilai, had once dressed as a military commander last year in a bizarre episode that shines new light on the collapse of Bo's inner circle.

Bo, ambitious former leader of China's biggest municipality Chongqing, was sacked in March after police began investigating his wife, Gu Kailai, on suspicion of murdering a former family friend, British businessman Neil Heywood, in a row over money.

News of Bo's removal and the murder allegation against his wife, who is a lawyer and businesswoman, emerged only a month ago, but new details uncovered by Reuters show the house of Bo was already in chaotic decline at the time of Heywood's death.

The new details, provided by sources with knowledge of the police case against Gu, include that she is alleged to have poisoned Heywood after the Briton demanded a 10 percent cut for his role in organizing a large, illicit money transfer for her.

A few days after Heywood was killed in Chongqing, southwest China in November, Gu strode into a meeting of police officials wearing a military uniform and gave a rambling speech in which she told the startled officials that she was on a mission to protect the city's police chief, Wang Lijun, the source said.

"First she said that she was under secret orders from the Ministry of Public Security to effectively protect Comrade Wang Lijun's personal safety in Chongqing," said the source, adding that she wore a green People's Liberation Army (PLA) uniform with a major-general's insignia and bristling with decorations.

"It was a mess," he said of Gu's speech, which circulated among some police and officials. "I reached the conclusion that she would be trouble."

It was not clear to those present why Gu, who had never served in the military, had put on a PLA uniform or what she was trying to convey with her vow to protect Wang, the source said. The incident, on or about November 20, left the officials even more bewildered about her mental state, he added.

At that time, Heywood's family had been told that there were no suspicious circumstances and that he had died of a heart attack brought on by excessive alcohol consumption.

Only later did Wang begin probing Heywood's death, treating it as a poisoning and identifying Gu as chief suspect. He revealed his suspicions to Bo at an explosive meeting in January, sources said. The police chief then fled to a U.S. consulate in February, hiding inside for more than 24 hours before leaving into the custody of central government officials.

Wang had been the spearhead of Bo's anti-corruption drive in Chongqing, a plank in the politician's barely concealed campaign to enter the topmost ranks of the ruling Communist Party.

HEYWOOD 'DEMANDED 10 PCT'

Gu's appearance in PLA uniform was part of a cascade of extraordinary events that have led to China's worst leadership crisis since the 1989 Tiananmen Square crackdown, months before the party anoints a new generation of top leaders.

There had been rumors circulating in elite circles that Gu had been assigned a military rank, but officials dismissed them as an attempt to brandish her authority and background.

Her uniform was of the same rank as her father's, a PLA leader who fought the Japanese occupation in the 1930s and 1940s, and might have been given to her out of "respect for her father", said a second source with knowledge of the incident.

Even if Gu was somehow entitled to the uniform, which the sources doubted, the civilian setting in which she showed her apparent military rank made her performance disturbing and politically troublesome, they said.

"That was clearly a violation of disciplinary rules, a serious one," said the first source with ties to Bo and his family, referring to talk among officials that Gu had assumed a military title. "Even her background gives her no right to do anything like that."

Gu and the family's 32-year-old aide, Zhang Xiaojun, have been named as the main suspects in the murder of Heywood, whose body was found in a Chongqing hotel room on November 15. Chinese authorities say he was poisoned.

Bo, who was suspended from the elite Politburo last month, could later face a police investigation as well.

Neither Bo nor Gu has been allowed to answer the accusations in public. Heywood's family has also declined to comment.

Chinese government ministries have not responded to written questions about the case against Gu.

A source citing details from Wang's testimony to investigators said Gu became angry and increasingly distrustful with Heywood after he demanded "at least 10 percent" to move a large sum abroad for her.

Sources had previously said Heywood demanded an unspecified proportion of the deal that Gu considered too large.

"It was a large amount, probably from a dirty deal, and Heywood was also nervous about handling it," said the source. He said he did not know the size of the offshore transaction.

It remains unclear how Heywood might have helped Gu shift money offshore. Chinese citizens are only allowed to transfer $50,000 out of the country each year.

BO'S MISGIVINGS

Long before Gu's alleged falling out with Heywood, Bo voiced misgivings about her involvement in business, according to another British businessman who had dealt with Gu and Heywood.

"He hated what she was doing," said Giles Hall who dined with Heywood and the Bo family on a visit to China a decade ago, recalling a heated conversation overheard between Bo and Gu.

"There was an agitated conversation going on. There were a few threats being made. We were a bit nervous. We were in this restaurant. We said (to the interpreter) 'What's the problem?' and the interpreter said 'Her husband does not like her business dealings'. So he wasn't happy with it."

Hall, who was trying to tempt Bo to set up a tourism venture involving a hotair balloon, said Gu showed a ruthless streak.

"You couldn't cut her up (cross her) that was for certain. She said to me 'You cross me - never come to China, you'll never get out of jail'. There was no mucking about."

(Additional reporting by William Maclean in LONDON; Editing by Bill Tarrant and Mark Bendeich)

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Reuters: Most Read Articles: Dissident Chen wants to stay in China

Reuters: Most Read Articles
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Dissident Chen wants to stay in China
May 1st 2012, 03:53

By Arshad Mohammed and Chris Buckley

WASHINGTON/BEIJING | Mon Apr 30, 2012 11:53pm EDT

WASHINGTON/BEIJING (Reuters) - Chinese dissident Chen Guangcheng, said to be under U.S. protection in Beijing, wants reform, not asylum, said one of his key helpers as the United States' top diplomat heads to Beijing for talks likely to be overshadowed by Chen's case.

The blind activist's escape from house arrest was a "miracle" of planning and endurance but Chen wants to stay in China and campaign for reform, said Guo Yushan, a Beijing-based researcher and rights advocate who has campaigned for Chen and helped bring him to Beijing after his escape.

"He was adamant that he would not apply for political asylum with any country. He certainly wants to stay in China, and demand redress for the years of illegal persecution in Shandong and continue his efforts for Chinese society," said Guo on Monday, speaking in his first long interview since he was released from days of police questioning.

Chen, a self-schooled legal advocate who campaigned against forced abortions used to implement family planning goals, was confined to his village home in Shandong since September 2010, after release from jail on charges he rejected as spurious.

He is under U.S. protection in Beijing, according to a U.S.-based rights group, creating a diplomatic dilemma as the U.S. secretaries of state and treasury prepare to travel to China for annual talks on Thursday and Friday with Chinese officials.

President Barack Obama nudged China on Monday to improve its human rights record and Secretary of State Hillary Clinton said she will raise the issue in Beijing this week, but both stayed mum about Chen's case.

At a news conference, Obama appeared to be walking a fine line between not saying anything that would make it harder to resolve Chen Guangcheng's case while conveying U.S. concern for human rights and appreciation for wider cooperation with China.

Analysts said the dissident appears to have two options: going into exile, which he has told associates he does not want to do, or getting the Chinese authorities to allow him to live in freedom within China, a challenge at best.

Bob Fu, whose religious and political rights advocacy group ChinaAid has been a source of information about Chen, suggested the most plausible solution would be for him to leave China for the United States with his family, ostensibly for medical care.

"Another option that is more realistic is for him and his family to come to the U.S., face-savingly for the Chinese government, to receive medical treatment," Fu told Reuters in an interview in Midland, Texas, where his group is based.

CLINTON TO RAISE 'EVERY' ISSUE IN BEIJING

Neither Obama nor Clinton have said a word in public about Chen, whose shadow will loom large at this week's U.S.-China Strategic and Economic Dialogue in Beijing.

Asked about Chen's case, Obama told a news conference: "Obviously I am aware of the press reports on the situation in China but I am not going to make a statement on the issue."

Obama said the issue of human rights comes up every time there are senior U.S.-Chinese talks, saying the United States does so both on principle and because "we actually believe China will be stronger as it opens up and liberalizes its own system."

Clinton also ducked a question about Chen, but hinted that she would not be shy about the matter in Beijing.

"A constructive relationship includes talking very frankly about those areas where we do not agree, including human rights," she told a news conference.

"That is the spirit that is guiding me as I take off for Beijing tonight and I can certainly guarantee that we will be discussing every matter including human rights that is pending between us."

CHEN ADAMANT ABOUT STAYING IN CHINA

A senior U.S. diplomat, Kurt Campbell, U.S. assistant secretary of state for East Asian and Pacific affairs, flew to Beijing to work on a solution to the Chen case ahead of this week's U.S.-China Strategic and Economic Dialogue in Beijing, a source briefed on the matter said.

The State Department said nothing about Campbell's whereabouts over the weekend but on Monday confirmed he was in Beijing. A State Department spokesman described his trip as part of the preparations for Clinton's talks this week.

Other associates of Chen also said he is firmly against leaving China.

Yang Jianli, who runs the U.S.-based pro-democracy group Initiatives for China, said he believed that both the United States and China would prefer that Chen go into exile but that he did not think the dissident would.

"He is not the (kind of) person who will give in," Yang said. "He is so determined to stay in China."

But Bob Fu of ChinaAid, who said he has spoken with senior U.S. diplomats in China about Chen's case, suggested the dissident ultimately may have little choice.

"At the end of the day that is the only option that is left, if he wants safety and freedom for himself and his family," he said.

The source briefed on the Chen case said Campbell, the senior U.S. diplomat who travelled to Beijing over the weekend, had an enormous challenge.

"I think Kurt is there to negotiate one of the two more favorable outcomes, either his asylum or his exoneration by senior Chinese officials so that he can return home to Shandong and live unmolested," said the source, saying this was an inference on his part.

"I don't think either of those outcomes is going to be easy to negotiate."

(Additional reporting by Chris Baltimore, Laura MacInnis, Paul Eckert and Andrew Quinn; Editing by Don Durfee and Jonathan Thatcher)

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Reuters: Most Read Articles: FL Motel Goes All-Nude to Boost Bottom Line

Reuters: Most Read Articles
Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com
FL Motel Goes All-Nude to Boost Bottom Line
Apr 30th 2012, 19:37

By Andrew Chow, JD at FindLaw.com

Mon Apr 30, 2012 3:37pm EDT

When times get tough, the tough get naked. At least that's what a Florida motel owner hopes, as he turns his 32-room property into a potential magnet for nudists.

The Fawlty Towers Motel in Cocoa Beach, Fla., is set to go clothing-optional May 1, after years of declining business and increasing competition from larger chain hotels, its owner told Florida Today.

Going nude wasn't a snap decision. Owner Paul Hodge first had to convince his skeptical wife. And he has yet to sway some of his concerned neighbors, who fear the soon-to-be nude motel will expose tourists, and local children, to some unwanted sightseeing.

"Young people surf on that beach," one local woman complained to WFTV. "What kind of a message is that sending them? It's inappropriate."

But Hodge says his nude motel plan is all about his bottom line. "It's sort of a make-or-break situation," he told Florida Today. "We can't pay ourselves in winter. We had to scrap health insurance. Every year it gets a little bit worse."

To prepare for his guests to bare all, Hodge hired a lawyer and consulted with the American Association of Nude Recreation. They apparently found no state or local laws that would stand in the way of Hodge's plan for unabashed indoor nudity.

While that may be the case for Hodge's nude motel, other business owners may want to think twice before adding a naked twist to their business plans. Nudity may reclassify your business as "sexually oriented" (as one nude maid service in Texas recently found out), and may require new permits.

Failure to follow local laws can lead to costly fines. That's why it's wise to follow Hodge's nude motel preparations, and consult a local business attorney.

Hodge's nude guests, however, may still face criminal charges of indecent exposure if they set foot -- or technically, their naked private body parts -- outdoors.

As for nude motel owner Paul Hodge, neither he nor his wife plan to remove any clothing when the Fawlty Towers Motel gets its first nude guests on Tuesday. He's hoping the motel's bartenders, however, will at least go topless.

Related Resources:

  • Nudist Hotel To Open In Cocoa Beach (Orlando, Fla.'s WESH-TV)
  • Browse Business & Commercial Lawyers by Location (FindLaw)
  • The 10 Strangest Naked Crimes of 2011 (FindLaw's Legally Weird)
  • Get Ready to Get Naked: SCOTUS Upholds Prison Strip Search (FindLaw's U.S. Supreme Court blog)
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Reuters: Most Read Articles: Israel begins building wall on Lebanese border

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Israel begins building wall on Lebanese border
Apr 30th 2012, 12:57

1 of 3. A U.N peacekeeper of the United Nations Interim Force in Lebanon (UNIFIL) stands on the Lebanese borders, as seen from the southern Lebanese border village of Kfar Kila April 30, 2012.

Credit: Reuters/Karamallah Daher

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Reuters: Most Read Articles: As America's waistline expands, costs soar

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As America's waistline expands, costs soar
Apr 30th 2012, 14:04

A regular sized wheelchair (L) is pictured alongside an oversized one in the children's and women's maternity ward at the University of Alabama Hospital in Birmingham, Alabama, April 26, 2012. OBESITY/ REUTERS/Marvin Gentry

1 of 5. A regular sized wheelchair (L) is pictured alongside an oversized one in the children's and women's maternity ward at the University of Alabama Hospital in Birmingham, Alabama, April 26, 2012. OBESITY/

Credit: Reuters/Marvin Gentry

By Sharon Begley

NEW YORK | Mon Apr 30, 2012 10:04am EDT

NEW YORK (Reuters) - U.S. hospitals are ripping out wall-mounted toilets and replacing them with floor models to better support obese patients. The Federal Transit Administration wants buses to be tested for the impact of heavier riders on steering and braking. Cars are burning nearly a billion gallons of gasoline more a year than if passengers weighed what they did in 1960.

The nation's rising rate of obesity has been well-chronicled. But businesses, governments and individuals are only now coming to grips with the costs of those extra pounds, many of which are even greater than believed only a few years ago: The additional medical spending due to obesity is double previous estimates and exceeds even those of smoking, a new study shows.

Many of those costs have dollar signs in front of them, such as the higher health insurance premiums everyone pays to cover those extra medical costs. Other changes, often cost-neutral, are coming to the built environment in the form of wider seats in public places from sports stadiums to bus stops.

The startling economic costs of obesity, often borne by the non-obese, could become the epidemic's second-hand smoke. Only when scientists discovered that nonsmokers were developing lung cancer and other diseases from breathing smoke-filled air did policymakers get serious about fighting the habit, in particular by establishing nonsmoking zones. The costs that smoking added to Medicaid also spurred action. Now, as economists put a price tag on sky-high body mass indexes (BMIs), policymakers as well as the private sector are mobilizing to find solutions to the obesity epidemic.

"As committee chairmen, Cabinet secretaries, the head of Medicare and health officials see these really high costs, they are more interested in knowing, 'what policy knob can I turn to stop this hemorrhage?'" said Michael O'Grady of the National Opinion Research Center, co-author of a new report for the Campaign to End Obesity, which brings together representatives from business, academia and the public health community to work with policymakers on the issue.

The U.S. health care reform law of 2010 allows employers to charge obese workers 30 percent to 50 percent more for health insurance if they decline to participate in a qualified wellness program. The law also includes carrots and celery sticks, so to speak, to persuade Medicare and Medicaid enrollees to see a primary care physician about losing weight, and funds community demonstration programs for weight loss.

Such measures do not sit well with all obese Americans. Advocacy groups formed to "end size discrimination" argue that it is possible to be healthy "at every size," taking issue with the findings that obesity necessarily comes with added medical costs.

The reason for denominating the costs of obesity in dollars is not to stigmatize plus-size Americans even further. Rather, the goal is to allow public health officials as well as employers to break out their calculators and see whether programs to prevent or reverse obesity are worth it.

LOST PRODUCTIVITY

The percentage of Americans who are obese (with a BMI of 30 or higher) has tripled since 1960, to 34 percent, while the incidence of extreme or "morbid" obesity (BMI above 40) has risen sixfold, to 6 percent. The percentage of overweight Americans (BMI of 25 to 29.9) has held steady: It was 34 percent in 2008 and 32 percent in 1961. What seems to have happened is that for every healthy-weight person who "graduated" into overweight, an overweight person graduated into obesity.

Because obesity raises the risk of a host of medical conditions, from heart disease to chronic pain, the obese are absent from work more often than people of healthy weight. The most obese men take 5.9 more sick days a year; the most obese women, 9.4 days more. Obesity-related absenteeism costs employers as much as $6.4 billion a year, health economists led by Eric Finkelstein of Duke University calculated.

Even when poor health doesn't keep obese workers home, it can cut into productivity, as they grapple with pain or shortness of breath or other obstacles to working all-out. Such obesity-related "presenteeism," said Finkelstein, is also expensive. The very obese lose one month of productive work per year, costing employers an average of $3,792 per very obese male worker and $3,037 per female. Total annual cost of presenteeism due to obesity: $30 billion.

Decreased productivity can reduce wages, as employers penalize less productive workers. Obesity hits workers' pocketbooks indirectly, too: Numerous studies have shown that the obese are less likely to be hired and promoted than their svelte peers are. Women in particular bear the brunt of that, earning about 11 percent less than women of healthy weight, health economist John Cawley of Cornell University found. At the average weekly U.S. wage of $669 in 2010, that's a $76 weekly obesity tax.

MORE DOCTORS, MORE PILLS

The medical costs of obesity have long been the focus of health economists. A just-published analysis finds that it raises those costs more than thought.

Obese men rack up an additional $1,152 a year in medical spending, especially for hospitalizations and prescription drugs, Cawley and Chad Meyerhoefer of Lehigh University reported in January in the Journal of Health Economics. Obese women account for an extra $3,613 a year. Using data from 9,852 men (average BMI: 28) and 13,837 women (average BMI: 27) ages 20 to 64, among whom 28 percent were obese, the researchers found even higher costs among the uninsured: annual medical spending for an obese person was $3,271 compared with $512 for the non-obese.

Nationally, that comes to $190 billion a year in additional medical spending as a result of obesity, calculated Cawley, or 20.6 percent of U.S. health care expenditures.

That is double recent estimates, reflecting more precise methodology. The new analysis corrected for people's tendency to low-ball their weight, for instance, and compared obesity with non-obesity (healthy weight and overweight) rather than just to healthy weight. Because the merely overweight do not incur many additional medical costs, grouping the overweight with the obese underestimates the costs of obesity.

Contrary to the media's idealization of slimness, medical spending for men is about the same for BMIs of 26 to 35. For women, the uptick starts at a BMI of 25. In men more than women, high BMIs can reflect extra muscle as well as fat, so it is possible to be healthy even with an overweight BMI. "A man with a BMI of 28 might be very fit," said Cawley. "Where healthcare costs really take off is in the morbidly obese."

Those extra medical costs are partly born by the non-obese, in the form of higher taxes to support Medicaid and higher health insurance premiums. Obese women raise such "third party" expenditures $3,220 a year each; obese men, $967 a year, Cawley and Meyerhoefer found.

One recent surprise is the discovery that the costs of obesity exceed those of smoking. In a paper published in March, scientists at the Mayo Clinic toted up the exact medical costs of 30,529 Mayo employees, adult dependents, and retirees over several years.

"Smoking added about 20 percent a year to medical costs," said Mayo's James Naessens. "Obesity was similar, but morbid obesity increased those costs by 50 percent a year. There really is an economic justification for employers to offer programs to help the very obese lose weight."

LIVING LARGE, BUT NOT DYING YOUNG

For years researchers suspected that the higher medical costs of obesity might be offset by the possibility that the obese would die young, and thus never rack up spending for nursing homes, Alzheimer's care, and other pricey items.

That's what happens to smokers. While they do incur higher medical costs than nonsmokers in any given year, their lifetime drain on public and private dollars is less because they die sooner. "Smokers die early enough that they save Social Security, private pensions, and Medicare" trillions of dollars, said Duke's Finkelstein. "But mortality isn't that much higher among the obese."

Beta blockers for heart disease, diabetes drugs, and other treatments are keeping the obese alive longer, with the result that they incur astronomically high medical expenses in old age just like their slimmer peers.

Some costs of obesity reflect basic physics. It requires twice as much energy to move 250 pounds than 125 pounds. As a result, a vehicle burns more gasoline carrying heavier passengers than lighter ones.

"Growing obesity rates increase fuel consumption," said engineer Sheldon Jacobson of the University of Illinois. How much? An additional 938 million gallons of gasoline each year due to overweight and obesity in the United States, or 0.8 percent, he calculated. That's $4 billion extra.

Not all the changes spurred by the prevalence of obesity come with a price tag. Train cars New Jersey Transit ordered from Bombardier have seats 2.2 inches wider than current cars, at 19.75 inches, said spokesman John Durso, giving everyone a more comfortable commute. (There will also be more seats per car because the new ones are double-deckers.)

The built environment generally is changing to accommodate larger Americans. New York's commuter trains are considering new cars with seats able to hold 400 pounds. Blue Bird is widening the front doors on its school buses so wider kids can fit. And at both the new Yankee Stadium and Citi Field, home of the New York Mets, seats are wider than their predecessors by 1 to 2 inches.

The new performance testing proposed by transit officials for buses, assuming an average passenger weight of 175 instead of 150 pounds, arise from concerns that heavier passengers might pose a safety threat. If too much weight is behind the rear axle, a bus can lose steering. And every additional pound increases a moving vehicle's momentum, requiring more force to stop and thereby putting greater demands on brakes. Manufacturers have told the FTA the proposal will require them to upgrade several components.

Hospitals, too, are adapting to larger patients. The University of Alabama at Birmingham's hospital, the nation's fourth largest, has widened doors, replaced wall-mounted toilets with floor models able to hold 250 pounds or more, and bought plus-size wheelchairs (twice the price of regulars) as well as mini-cranes to hoist obese patients out of bed.

The additional spending due to obesity doesn't fall into a black hole, of course. It contributes to overall economic activity and thus to gross domestic product. But not all spending is created equal.

"Yes, a heart attack will generate economic activity, since the surgeon and hospital get paid, but not in a good way," said Murray Ross, vice president of Kaiser Permanente's Institute for Health Policy. "If we avoided that heart attack we could have put the money to better use, such as in education or investments in clean energy."

The books on obesity remain open. The latest entry: An obese man is 64 percent less likely to be arrested for a crime than a healthy man. Researchers have yet to run the numbers on what that might save.

(Editing by Michele Gershberg and Prudence Crowther)

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Reuters: Most Read Articles: China security chief down but not out after blind dissident's escape

Reuters: Most Read Articles
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China security chief down but not out after blind dissident's escape
Apr 30th 2012, 07:12

China's Politburo Standing Committee Member, Zhou Yongkang, waves to the press at the Great Hall of the People in Beijing October 22, 2007. REUTERS/Joe Chan (CHINA)

China's Politburo Standing Committee Member, Zhou Yongkang, waves to the press at the Great Hall of the People in Beijing October 22, 2007.

Credit: Reuters/Joe Chan (CHINA)

By Chris Buckley

BEIJING | Mon Apr 30, 2012 3:12am EDT

BEIJING (Reuters) - Strike two against China's once invulnerable domestic security chief, Zhou Yongkang.

An audacious escape by blind dissident Chen Guangcheng is the second uproar this year to hit Zhou, who has expanded China's policing apparatus into a vast, costly and - now for all the world to see - a flawed tool of Communist Party control.

But even one of the biggest domestic security embarrassments in more than a decade is unlikely to knock him out before a party congress late this year that will appoint successors to him and other retiring leaders, said several experts.

The question will be whether his successor gets to rethink his legacy and rein in the domestic security establishment whose $110 billion budget exceeds the People's Liberation Army's.

Chen outfoxed a cordon of guards and security cameras to flee home imprisonment in Shandong province in east China, escaping to what supporters have said is U.S. protection in Beijing. His feat was a rebuff to Zhou's security forces and it threatens to turn into a standoff with Washington.

Zhou was already bruised by a scandal in Chongqing in southwest China, after that city's former police chief, Wang Lijun, fled into a U.S. diplomatic compound in February for more than 24 hours. Wang revealed allegations of murder and corruption that have felled Bo Xilai, the ambitious Chongqing party chief who had courted Zhou as a patron.

The domestic security establishment was humiliated in 1999, when members of the Falun Gong spiritual movement held a surprise protest around the party leaders' compound in Beijing. Although smaller in scale, the two latest incidents are also embarrassing setbacks for the guardians of stability.

"All of the recent astonishing episodes - police brutality in Chongqing and Shandong, Wang Lijun's rise and his attempted defection to the U.S. consulate, and Chen Guangcheng's adventurous escape - have revealed severe flaws of the Chinese security system," said Cheng Li, an expert on Chinese politics at the Brookings Institution in Washington D.C.

"Zhou Yongkang, as the leader in charge of this functional area, deserves some blame," Li said in emailed comments.

EXTREME CAUTION

But Li added that China's top leadership was extremely cautious and hesitant to fire more senior leaders, especially someone whose status was even higher than Bo.

Since 2007, Zhou has been the member of the Politburo Standing Committee - the party's core council of power - who steers the police, law and security agencies.

The recent crises have intensified long-standing criticisms in China that Zhou's fiefdom has grown too powerful, unaccountable and yet incapable of meeting the party's expectations of defending social stability.

"You can't separate the case of Chen Guangcheng from Zhou Yongkang and his making stability preservation a national policy that has overridden all boundaries and rules," said Pu Zhiqiang, a lawyer in Beijing who takes on contentious cases about human rights and freedom of speech.

"This all comes down to Zhou Yongkang's policies for social control and domestic security, and this shows that in the end they can't work," added Pu, who said he hoped China's next leaders would rein in what they call the "stability preservation" apparatus after taking power from later this year.

Despite Internet-fed rumors that Zhou could fall because of ties to the disgraced Bo, he remains a hulking presence in politics. His recent regular appearances and speeches appear intended to show he remains out of political danger.

Zhou, 69, must retire at the forthcoming party congress, and ousting him before then could fan panic discord at a vulnerable time, said Xie Yue, a professor of political science at Tongji University in Shanghai. Xie studies domestic security.

"It is rumored that Zhou Yongkang has been under pressure internally, and the Chen Guangcheng incident offers more reasons to criticize him," Xie said in a telephone interview.

"But the priority is a smooth transition for the 18th Party Congress, and if Zhou Yongkang was ousted before then, that could be too much of a shock for the handover of power by the top levels of the Communist Party," said Xie.

A $9.5 MILLION BILL TO LOCK UP CHEN

For 19 months, Chen Guangcheng endured extra-judicial home jail in his village, a living symbol of the Communist Party's willingness to mobilize enormous resources to stifle the dissent and protest that it fears could challenge its power.

Chen, a self-schooled legal advocate who campaigned against forced abortions, had been held in his village home in Shandong province since September 2010 when he was released from jail for charges that he called spurious.

Chen's supporters have described a relentless effort to keep him locked up, while maintaining the official fiction that he was free. Squadrons of guards patrolled his Dongshigu village to keep him in and unwelcome visitors, including reporters, out.

A web of security cameras watched his home.

Officials told Chen they estimated well over 60 million yuan ($9.5 million) had been spent to keep him penned up, he said in a video released after his escape, adding that sum did "not include cash for paying off senior officials in Beijing".

"It's clear just how serious the corruption was, and how badly money and power have been abused," Chen said in the statement addressed to Chinese Premier Wen Jiabao and carried on YouTube. Chinese officials and police have refused to answer repeated questions from reporters about Chen and his comments.

His confinement was just part of a much larger "stability preservation" campaign to deter threats to party power. Chinese spending on police, militia and other domestic security arms will increase by 11.5 percent in 2012 to 701.8 billion yuan, according to the budget approved in March.

By comparison, China's defense budget for 2012 is 670.3 billion yuan.

The security spending surge has inflated the power of the police and militia forces under Zhou, an avid supporter of President Hu Jintao's campaign to strengthen "social management" and pre-empt unrest.

"Every province, every place has its own Chen Guangchengs, people who are kept under control and silenced without any legal basis or appeal," said lawyer Pu. "Chen Guangcheng was the most prominent example of this unfettered abuse of power."

RETHINKING?

Echoing the views of many liberal supporters of rule of law, Pu said he hoped the setbacks to China's domestic security agencies would give the country's next generation of leaders impetus to tether their power more tightly. Vice President Xi Jinping is expected to replace Hu as party chief and president.

"The next generation of leaders can make a break, and use these incidents to make their case," he said. "The stability preservation sector is a powerful interest group, but if leaders are determined to change it, it won't be able to resist."

There is uncertainty about who will succeed Zhou as domestic security chief. He was a provincial leader with a background in oil, and his successor could be another provincial boss.

Still, the standoff over Chen's fate is unlikely to force leaders to fundamentally revise their entrenched security policies, said several experts.

"I'm not optimistic that there will be much change. The whole model of stability preservation is part and parcel of the mode of rule, not the work of just one man," said Xie.

"Zhou Yongkang will retire, but the stability preservation model will not."

(Editing by Brian Rhoads and Mark Bendeich)

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Sunday, April 29, 2012

Reuters: Most Read Articles: Obama jabs at Romney at White House Correspondents' dinner

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Obama jabs at Romney at White House Correspondents' dinner
Apr 30th 2012, 03:29

U.S. President Barack Obama speaks at the White House Correspondents Association annual dinner in Washington April 28, 2012. REUTERS/Larry Downing

U.S. President Barack Obama speaks at the White House Correspondents Association annual dinner in Washington April 28, 2012.

Credit: Reuters/Larry Downing

By Lily Kuo

WASHINGTON | Sun Apr 29, 2012 11:29pm EDT

WASHINGTON (Reuters) - President Barack Obama poked fun at his likely presidential rival Mitt Romney and Republican opponents in Congress on Saturday night, including a dig at Romney's treatment of a pet dog, at the annual White House Correspondents' Association dinner.

The black-tie dinner, informally billed as the "nerd prom," is the biggest social event of the year for Washington media and gives presidents a chance to show a lighter side.

"I'm not going to attack any of the Republican candidates. Take Mitt Romney; he and I actually have a lot in common," the president said, telling the crowd of Hollywood celebrities and Washington power players that both men trailed their wives in national opinion polls.

Obama, who faces re-election in November, is expected to be matched against Romney, a multimillionaire and former Massachusetts governor.

He joked that the luxurious ballroom in the Washington Hilton hotel where the dinner was held was "what Mitt Romney calls a fixer-upper," a dig at Romney's sometimes clumsy references to his wealth.

Obama said he had expected a tough campaign but that one video had gone too far. A fake political attack ad rolled with a news clip of Romney defending himself against criticism for strapping the family dog, Seamus, in a crate on the top of the car during a family trip in 1983.

The clip showed images of the Obama family dog Bo, apparently miserable at being held captive by "European style dog socialism." A deep voice intoned: "American dogs can't afford four more years of Obama. To them, that's 28 years."

Obama also took a shot at former Speaker of the House Newt Gingrich, who has announced he would quit the Republican primary race. "Newt, there's still time man," he said to Gingrich, who was in the audience with his wife, Callista.

SECRET SERVICE 'CURFEW'

In a shot at the legislative branch of the U.S. government, Obama quipped: "Congress and I have certainly had our differences. Yet, I've tried to be civil, to not take any cheap shots and that's why I want to especially thank all the members who took a break from their exhausting schedule of not passing any laws to be here tonight. Let's give them a big round of applause."

Obama ended his speech with a reference to a recent scandal over Secret Service staffers consorting with prostitutes during a presidential trip to Colombia. "I had a lot more material prepared, but I have to get the Secret Service home in time for their new curfew."

Last year, the president told jokes at the expense of U.S. real estate mogul Donald Trump, mocking his possible presidential ambitions. That dinner came on the eve of the announcement that U.S. Navy SEALs had killed al Qaeda leader Osama bin Laden.

Late-night TV comedian Jimmy Kimmel, who was the featured entertainer, wondered "Who'll it be this year?" and joked, "You know there's a term for guys like President Obama, um, probably not two terms."

Kimmel continued the dog-themed jokes with a jab at the president, who shocked some Americans with the revelation that he ate dog meat as a child in Indonesia.

"When you go to a dog park, is this the same as when we look at a tank full of lobsters?" Kimmel asked.

Among the guests at the dinner, sponsored by the White House Correspondents Association, was a large contingent of entertainment celebrities invited by media organizations.

Among them were director Steven Spielberg, actors George Clooney, Sigourney Weaver, Claire Danes and Kevin Spacey, Eva Longoria, Goldie Hawn and Reese Witherspoon, and singer John Legend.

Seated at the same table were reality television star Kim Kardashian and actress Lindsay Lohan.

(Reporting By Lily Kuo; Editing by Eric Walsh and Todd Eastham)

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Reuters: Most Read Articles: Analysis: Even in emerging markets, Nokia's star is fading

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Analysis: Even in emerging markets, Nokia's star is fading
Apr 29th 2012, 12:14

Nokia's President and CEO Stephen Elop gestures as he speaks during a news conference for the launch of the new Nokia Lumia products in Beijing, March 28, 2012. REUTERS/Soo Hoo Zheyang

Nokia's President and CEO Stephen Elop gestures as he speaks during a news conference for the launch of the new Nokia Lumia products in Beijing, March 28, 2012.

Credit: Reuters/Soo Hoo Zheyang

By Devidutta Tripathy and Tarmo Virki

NEW DELHI/HELSINKI | Sun Apr 29, 2012 8:14am EDT

NEW DELHI/HELSINKI (Reuters) - Nokia phones once took pride of place in Manish Khatri's Mumbai store, but now models made by Samsung Electronics get the limelight.

He has nothing against Nokia, he says, but it's better for business to push the more popular models.

That simple calculation is being made in thousands of stores across India and similar emerging markets, where Nokia's rivals used to be relative minnows.

For 14 years the world's biggest seller of mobile phones, it was overtaken by Korea's Samsung in the first quarter of this year, having already watched both Apple and Samsung leapfrog its lead in the lucrative smartphone segment last year.

In the popular narrative of Nokia's eclipse, it is Apple's iPhone that steals the light, but the company is also losing its shine in the basic phone market, which had been a reliable generator of profits and carried the promise of years of strong growth in emerging markets.

No more.

Its basic phone sales fell 16 percent in the first three months of 2012, and have fallen in four of the last five quarters, while competitors like China's ZTE and Huawei have been growing fast.

In India, the world's second-biggest mobile phone market, with more than 900 million subscribers, Nokia's market share has halved in the three years to 2011, when it sold 31 percent of the total 183 million handsets sold, according to Indian researcher CyberMedia.

Analysts say it has failed to keep up with the changing tastes of the growing middle class, and, in a country where the thin-margin network operators don't tend to subsidize phones, is losing storeowners like Khatri, who influence buyers' choices.

"For dealers like us, we face a lot of problems from Nokia for getting even the basic (demonstration phone) dummies to show to the customer," he said. "There is no push from the company."

He said his store, which sells around 500 phones a month, is probably not a priority for Nokia, but Samsung has been sending staff to visit.

LOCAL FAVOURITES

In China, the world's largest cellphone market, operators have started to play a bigger role in selling phones, and that trend is working against Nokia.

"They prioritize domestic vendors over international companies," said analyst Pete Cunningham from Canalys.

In January-March its sales there shrank 62 percent from a year ago. Its share of the market had dwindled to 24 percent last year from 39 percent two years earlier, according to research firm Strategy Analytics.

In Africa, too, its market share slipped to 51 percent last year from 62 percent two years before. It's still ahead of rivals because of its superior distribution on the continent, says Neil Mawston at Strategy Analytics, but it has to act to arrest the decline.

"Nokia is drying up like a puddle in the sun and urgently needs new products to refill the puddle," he said.

In the meantime, it is racking up losses, its shares have lost more than three quarters of their value in a year, and this week two agencies cut its credit rating to junk status.

Nokia says it is continuing to invest to attract customers in these markets.

"Our mobile phones portfolio continues to be strong, especially in key markets like India, Nigeria, Brazil and Mexico where the Asha products are receiving record high scores from consumers," said Mary McDowell, EVP Mobile Phones.

She said the company would be announcing data plans for the new Asha 202 basic phone model with five operators in India on Monday.

MISSING TOUCH

Analysts also say Nokia can be slow to react on popular technology.

In emerging markets, for example, multi-SIM models have been a draw for people who want to take advantage of freebies doled out by competing carriers, but Nokia lacked such phones until mid-2011.

Another costly gap in its basic phones offering is a full touch-screen model. Around 105 million such phones were sold last year globally, according to Strategy Analytics.

"Nokia left the door wide open for Samsung and others by not delivering a full-touch feature phone. The Koreans figured it out three years ago, yet Nokia still does not have a product," said Ben Wood, head of research at CCS Insight.

"In the meantime, prices of Android smartphones have dropped, and Nokia's window of opportunity is almost closed."

Nokia is due to unveil a full-touch 306 feature phone model in the coming months.

SLIPPED HALO

"Nokia's main challenge this year is to arrest the sharp decline in its flagship smartphone portfolio and use it to rebuild a positive halo-effect for the overall Nokia brand," said Mawston.

The company abandoned its own Symbian smartphone operating system last year in favor of the largely untried Windows Phone alternative after Stephen Elop joined as chief executive from Windows maker Microsoft. Symbian sales have nosedived before the Windows models got off the ground.

This month it started sales of the first Windows smartphones in China with an aggressive marketing campaign and huge ads at subway stations, in magazines and newspapers.

There are some positive noises coming from customers.

"I just bought a new Nokia Windows phone and wasn't very used to its tile design, but the experience was quite good after half an hour. All the basic functions I need are there, and I'm beginning to think that Windows phones will make it," Wang Xiao said on his Sina microblog.

"Having an operating system which is Windows-based doesn't excite me," said 22-year old student Akshay Johar in New Delhi, looking at one of Nokia's new Lumia models, but added: "The phone has great features, it looks good, the touch screen is very responsive."

He is considering buying one, he said.

About 27 million people need to make that decision this year, 55 million next year, and 94 million in 2014, according to analysts polled by Reuters.

That only 2 million did in the first quarter shows how steep is the mountain that Nokia must climb.

(Additional reporting by Lee Chyen Yee in Hong Kong; Editing by Will Waterman)

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Reuters: Most Read Articles: Rasta pot smokers win legal leeway in Italy

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Rasta pot smokers win legal leeway in Italy
Jul 10th 2008, 21:06

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A young man smokes marijuana in a file photo. REUTERS/Mark Blinch

A young man smokes marijuana in a file photo.

Credit: Reuters/Mark Blinch

ROME | Thu Jul 10, 2008 5:06pm EDT

ROME (Reuters) - Rastafarians caught in possession of marijuana in Italy may now have legal recourse, thanks to a high court ruling made public on Thursday.

Italy's Court of Cassation ruled that since the Rastafari religion considers marijuana a sacrament, its members should be given special consideration when it comes to possession -- and how much makes a drug trafficker.

The case before the judges dealt with a reggae musician who was sentenced to 16 months in prison by a lower court in Perugia after being found in possession of enough marijuana to roll 70 cigarettes.

The Court of Cassation annulled his sentence, saying the amount appeared appropriate for personal use considering the heavy amounts that Rastafarians smoke, and ordered an appellate court in Florence to review the case.

"He was convicted because of the amount ... for trafficking, but it was for his own personal use," said the defendant's lawyer, Caterina Calia.

Rastafari, a religion that emerged in Jamaica in the 1930s, considers Ethiopia its spiritual home and that country's former emperor, Haile Selassie, a divine figure.

Up to 10 percent of Jamaicans identify themselves as Rastas, but they are virtually unheard of in Roman Catholic Italy.

(Reporting by Phil Stewart)

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