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California's Failing Project Could Spell The End Of High-Speed Rail For The Whole Country

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High speed rail

As high-speed rail projects across America have run into political trouble or been cancelled, California's the largest and most ambitious has continued to move forward.

Proponents of fast trains hoped that a successful line in California could spur development elsewhere.

But now even California's plan is in jeopardy. Its ambition has been scaled back and its projected costs have increased.

Even voters have turned on it. A new survey by USC-Dornsife and the Los Angeles Times found that if given a second chance to vote on the 2008 $9 billion bond issue that is funding the early stages of the project, 59% of survey respondents would vote it down. 

Part of what's happened here is that high-speed rail, like almost everything promoted by President Barack Obama, has become an intensely partisan issue in America. Republican governors across the country have criticized high-speed projects and rejected federal money to fund rail development. Mr Obama, meanwhile, has redistributed the rejected money to states like California that are run by Democrats and are more receptive to high-speed rail.

All this makes sense. Mr Obama made high-speed-rail funding a big part of his 2008 stimulus package, and political scientists generally believe that a president weighing in on an issue polarizes people's opinions about it. In California, 76% of Republicans now oppose the high-speed-rail project, compared to just 47% of Democrats. 

The other problem, of course, is that powerful local and regional interests are threatened by the high-speed-rail plans. Airlines, freight transporters and not-in-my-backyard activists all have problems with the project. High-speed rail's opponents smell blood and are not going to fall in line, and the train plan is many years from completion. Unless California's leaders are truly committed to pushing high-speed rail forward and spending political capital to do so this plan is probably doomed. And when it comes to high-speed rail, as goes California, so goes the nation.

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Use Cognitive Dissonance To Make People Pay Attention To You

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yelling

In her excellent book 100 Things Every Presenter Needs to Know About People, Susan Weinschenk lays out a research backed 3 step process that really impressed me:

1) Start with what you know they believe.

If you start your presentation with the opposite of what they believe, they may turn you off right away. For example, if you start a presentation to me by saying how amazing Android phones are or that Android phones are superior to iPhones, then you’ve likely lost me already. But if you start with an idea I agree with or know about— for example, how amazing iPhones are— then you have a chance of getting through to me.

2) Surprise people.

One way to get past people’s filtering is to present them with information or an experience that they did not expect. For instance, I recently heard that over 50 percent of smartphone sales are Androids and only 33 percent are iPhones. That surprised me and made me stop and think, “Perhaps I should find out more about Android phones.”

3) Set up a situation of cognitive dissonance.

In 1956, Leon Festinger wrote a book called When Prophecy Fails. In it, he describes the idea of cognitive dissonance, which is the uncomfortable feeling a person gets when they are presented with two ideas that they believe might both be true. For example, if I believe that I am a person who cares about others but I don’t give money to charitable causes, then I now have cognitive dissonance.

The two ideas conflict with each other, and the cognitive dissonance will make me feel uncomfortable. I can either deny one of the ideas (for example, I can deny that I’m a caring person or deny that I didn’t give any money to charity this year) or change my behavior to get rid of the dissonance (for example, I might now be interested giving a donation to the charity I hear a presentation on).

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Related posts:

10 tips for giving a world class presentation

The last damn thing you'll ever need to read about influence, persuasion and negotiation

10 steps to getting better at absolutely everything

 

 

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Why Russia And China Do Not Act On Syria

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Bashar al-Assad

In a recent interview with the Business Insider, I said that "problems in Iran and Syria are 'wonderful for the Russian economy.'" I meant it.

Adam Taylor's article, "For all the bluster, these three reasons show Russia's position on Iran may be surprisingly sane" explores well why Russia is interested in the ambiguity around Iranian nuclear program. In brief, two things to keep in mind: the unstable region means higher oil prices (good for Russia), and Iran as a neighboring Islamic nuclear power means an imminent threat to Russia beyond any American's imagination (bad for Russia). After all, world economics and politics are a fine art of balancing, and that's what Russia is doing; playing a dangerous game, one that's paying off well so far with Putin's balanced federal budget.

The new unstable player of the region is Syria, and many Americans, including Secretary of State Hillary Clinton, cannot wrap their mind around Russian and Chinese stance of non-involvement. The situation is similar to the one with Iran and Libya, but if one takes a closer look, it is different and only "better" for Russia and China. Suffering and dying of innocent people are of course bad things; however, they are bad only for the people experiencing them. The Russian Orthodox Church, led by a former colleague of Putin, condemns the violence, but would also remind you that there is a lot of suffering in the world, and the best immediate thing we can do is just pray for the victims. Gadhafi was a stabilizing force in his country, and NATO's help to the Libyan rebellion meant instability (higher oil prices, better budget in Russia). Gadhafi was a Russian ally, and Russia faced the loss of a $4 billion weapons contract. However, that monetary loss was offset by the significant increase in oil prices, and Gadhafi's old age helped Russia shape its decision to control the timing of his imminent "departure."

Syrian President Bashar Hafez al-Assad (coincidentally born on September 11) is a different animal. His leadership means instability in the region, for which American farmers are paying at the gas pumps, and with which Russian members of parliament are balancing the books. So, if the case of Syrian nation's slaughter is monetarily good for Russia, why would the Chinese go along? After all, they import oil as well. That's where many reporters (and Secretary Clinton) forget a small detail of a very large transaction that took place seven years ago.

Do you remember the dismantled Yukos and jailed Mikhail Kohodorkovsky? Did you know that in 2005 Russian government's Rosneft bought out Yukos' assets in a closed auction after Western courts ruled the possibility of such transaction illegal? Then Yukos' and Khodorkovsky's lawyers were successful in winning court cases in America that made it impossible for a German bank to go ahead and lend billions to Russian government's oil corporation Rosneft. The decision came nearly 24 hours before the auction, and created a peculiar situation for the Kremlin; the situation that Chinese helped resolve, literally, overnight. Chinese gave the Kremlin the needed credit which is being paid off not with money but with crude oil deliveries locked at that day's historically cheap price.

As long as President al-Assad's regime causes instability, oil prices stay high; the Russian budget is balanced and Chinese gain the competitive advantage. The situation is nearly ideal for Russia and China, and is the result of a series of decisions that stretch as far as 2005.

One can argue that it is unethical to swap the killing of innocent people in exchange for financial and regional stability of a few nations. However, that argument needs to be weighed against such words as "democracy," "terrorism," "oil," "influence," "Iran," "Afghanistan," "Lybia," "Bosnia," "NATO"... The reader is welcome to mix and match these words to justify the death of hundreds of thousands of civilians in these countries, but should also keep in mind that President Assad is Syria's president, and no other nation technically has the right to meddle in his nation's affairs.

Bill O'Reilly says that "spin stops here." Maybe it does in his studio, but it's the opposite in the real world of business, politics, and policy. It's all about the spin.

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NDAA, CISPA, And (Misplaced) Bravery

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Anyone can look good when they are winning.

Real courage is shown, however, when you are dealt an atrocious hand and you stay at the table regardless. You play it out.

We are losing, friends and beloved readers. America is racing headlong into a fascist state entirely of our own making. We can't blame this one on our foreign enemies; this one is all us.

The TSA, an unconstitutional agency that criminally gropes women and shames honest taxpaying men into submission, has expanded rapidly on Mr. Obama's watch (more than 65,000 employees to oversee just 450 U.S. airports, and they are expanding their grope-gloves to train stations, highways, and bus depots).

Guantanamo Bay, a torture facility that would be absurd if it were not, in fact, real -- has released less men and women on Mr. Obama's watch than during Mr. Bush's.

Mr. Obama signed NDAA into law, giving him and all future presidents the right to imprison American citizens (and all other human beings on the planet) INDEFINITELY, without access to a trial or attorney. Revoking due process rights, on suspicion alone. As if 9/11 happened yesterday, and not more than a decade ago.

Major U.S. cable networks including CNN refuse to cover NDAA and its implications for the future of this nation.

And now the wide-ranging surveillance bill CISPA looks as if it will soon become law, authorizing the government -- and even private security companies -- to access your most intimate online activities without a warrant or proper court authorization... Facebook messages, Google searches, e-mails, and so forth.

How ludicrously arrogant I was back in December to think that I could warn everyone in time. Stop what's happening now. Go against a multi-billion dollar defense lobby that literally hires "sock puppets" to promote false views on Twitter and Facebook, and to harass journalists who don't fall in lock-step with their utterly sinister, un-American ambitions.

Good night readers, and goodbye. I wish things hadn't turned out as they did.

But you are (partially) to blame, you know. You did nothing when you were warned. You didn't even donate your time or money to change our fate. This nation's founding fathers and veterans would be disgusted with our apathy. That is the hard truth.

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10 Tips To Get The Most From Car Rentals

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Route 66, Santa Monica, road trip

The summer driving season is upon us, and with gas prices so high, I thought it would be helpful to put together this list of the top 10 ways to save on car rentals so you can get where you need to go without emptying your bank account to get there.

1. Continuously check for lower rates: Most car rental reservations are cancellable up until the last minute, so even after you make your reservation, be sure to check back over time and use different coupon codes and discount codes to see how low you can go.

Another great way to make sure you get the lowest rate possible is to book through Autoslash, a website where you can make car rental reservations through several of the major agencies.

However, unlike other aggregate sites, this one will automatically check for better rates based on your reservation every day and will automatically rebook you at lower price levels if better rates become available. Just note, Thrifty and Hertz are no longer supported on Autoslash, so if either of those is your program of choice, you’ll have to do your own homework. 

Key tip: Priceline and Hotwire are very good at finding deeply discounted car rental rates. However, these reservations are generally non-refundable and you don’t earn miles on rentals made through them. The savings can be so steep that this is totally worth it, though. As always, do your math before you commit.

2. Discount code, discount code, discount code! Car rental prices can be deeply discounted for members of frequent flyer programs, corporate travelers, AAA subscribers and even members of AARP, so do some internet research and play around with different discount codes, which are easily Google-able. I don’t want to get into the ethics of using a corporate discount rate, but in my hundreds of legitimate car rentals, I’ve never been asked to verify my discount code or employer.

3. Rent from a non-airport location: It might be a little less convenient if you’re flying somewhere and renting a car, but airport car rental agencies tack on a concession fee for rentals originating and/or ending at airport locations. This can be up to 10% of your rental cost, so picking up your car elsewhere can save you a huge chunk of change, even if it does require a short taxi ride.

4. Check out weekend and weekly rates: Depending on where you are renting a car, weekend rates can be much lower than renting a car during the week, so if you have flexibility in your travel plans, check out the dates before and after you plan to travel and see when the lowest rates are available. Not only that, but sometimes you can score super-low weekly rates on rentals that can actually be lower than just renting a vehicle for 3-4 days, and then you can just return the car early with no penalty, so be sure to research all your options.

5. Be savvy about your gas: Never take the pre-fill option, which assumes you will bring the car back on empty and pre-charges you for a tank of gas. Even though the rate might be slightly lower than what you can buy gas for at a station—the only way you get ahead is if you drop it off with almost no gas, and who really wants to do that?

On the topic of gas, make sure you maximize the points you earn by using a credit that offers a points bonus on spending at gas stations.

The Citi ThankYou Premier card scores you 5x points on gas station spending (among other category bonuses) and there’s no annual fee for the first year, so you could consider getting this card if you’re going to have a lot of driving expenses this summer.

Also just in time for summer, the Chase Freedom quarterly spending bonuses will include a 5x bonus on gas stations from July-September, so be sure to register your card here by June 15.

The PenFed Visa Platinum Gas/Cash card rewards cardholders with 5% cash back on all gas spend up to $50,000 a year and posts to your statement, so you can see immediate savings.

Meanwhile, the Amex Blue Cash Preferred card gives you 3% cash back on gas purchases and the Amex Blue Cash gives you 2% cash back on them, while the Amex Premier Rewards Gold you 2x points on money spent at gas stations, and the Hilton HHonors Surpass card even offers 6 points per dollar spent at gas stations (the other Hilton credit cards offer between 3x and 6x points on gas), so you’ve got a lot of options.

6. Earn credit card spending bonuses on car rentals: Just like with spending on gas, some credit cards also offer spending category bonuses on travel. For instance, car rentals fall under the travel category on the Chase Sapphire Preferred, earning you 2x points on your rental spending, while the new Fairmont Visa also offers 2x points car rental agency expenses.

7. Use Points for Rental Car Certificates and Gas Cards:
Car rentals certificates: Let me be very clear: this is not your best redemption option, but if you’re looking to burn some points while saving cash, both Amex Membership Rewards and Chase Ultimate Rewards offer the opportunity to convert points into rental car certificates—usually at low ratios.

You can use you Amex Membership Rewards points to redeem for Avis, Enterprise and National rental certificates at a rate of 1 cent per point, while Ultimate Rewards can be redeemed for Avis, Budget and Hertz rental certificates at the same rate.

Gas: Both Ultimate Rewards and Membership Rewards points can be converted into gas cards (kind of like gift cards). Note, this is not the savviest redemption for your points, but it is a possibility for those who are rich in points and want to save in their budget. You can get Exxon and Mobile gift cards worth $10 each for 1,000 Ultimate Rewards points, or a $25 BP card for 2,500 Ultimate Rewards points with free shipping, so you’re redemption rate is 1 cent per point. Gas cards are also 6,500 Amex Membership Rewards points for $50, a value of about 0.77 cents each.

8. Negotiate your upgrade: Premium cars can cost an arm and a leg, but counter reps will negotiate much lower prices if they are available when you pick up your car. Ask at check-in if you can upgrade to a higher category, and if they quote you a price, be sure to negotiate since they won’t start at their best price.  Here’s another tip: being super nice also helps. Just like with airline reps, rental agency reps are harried, overpaid and underworked underpaid and overworked, so if you can be sweet and nice, you’re likelier to get an upgrade. Another way to get upgraded is to have elite status with your chain of choice. However, if you’re not a frequent renter, you can also capitalize on certain cards that automatically confer car rental agency elite status as part of their benefits packages, such as the Amex Platinum (Hertz Gold, National Executive) and the United Club Card (Avis President’s Club elite status). Having elite status can confer valuable perks such as automatic one- and two-category car rental upgrades, meaning you get a lot more car for your dollar and offsetting the high annual fees of these benefits-rich cards.

9. Don’t over-insure yourself: Don’t buy insurance you don’t need. Check your regular insurance policy to see if it covers car rentals as well, and research whether your credit cards provide rental car insurance. In most cases, the insurance you buy at a rental agency is duplicative. Do you really want to pay $50 to waive a $250 co-pay on your rental in case you get into an accident? I’m a betting man and would wager that you won’t get in an accident more than one out of every five times you rent a car, so you’re better off without it. Also be sure to check your credit card benefits. For instance, most World Mastercards like the Ink Bold and United Club card offer primary insurance, which alleviates the need for any extra insurance from the car rental agency.

10. Get the most miles for your rental: One of the best ways to earn extra points and miles on your car rental is to credit your agency’s airline or hotel partners. Check here to see a list of current bonuses and promotional codes, but for example, you can earn 3,000 bonus US Airways Dividend miles on a qualifying rental of three or more consecutive days at Avis airport locations in the US and Canada with coupon codesMUAZ027 or U106508 along with your Dividend Miles when you make your reservation; or earn triple Hawaiian Airlines miles when you rent a compact or larger car for two days or more with Dollar and use the promo code HA5; or earn quadruple American Airlines AAdvantage mile when you rent any Hertz vehicle in the US, Peurto Rico, Canada and several European nations using the coupon code CDP#217692 with Hertz. Those are just a few of several examples, and you can often find lucrative bonus combinations of your airline and rental agency of choice.

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Coyotes Forward Shane Doan Has A Hockey Stick Made Of Skittles

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shane doan skittles hockey stick

Hey Doan, two minutes for tasting the rainbow!

Phoenix Coyotes captain Shane Doan loves Skittles as much as I love a cold beer on a warm Christmas morning, so the company behind the multi-colored candy went and made Doan a rather unique item that meshed his love of Skittles with his pro hockey career…a hockey stick made of Skittles.

And it looks delicious.

That seems like a lot of Skittles for one man to eat, even for a guy who is totally enamored with those little balls of sugar, corn syrup, hydrogenated palm kernel oil, fruit juice, citric acid, and natural and artificial flavors like Doan is.  Hopefully he paces himself and doesn’t forget to brush, lest he end up with tooth decay and a nasty stomach ache.

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PENULTIMATE MESSAGE FROM VICTOR RASHNIKOV — WHEN WILL FLINDERS MINES UNDERSTAND?

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By John Helmer, Moscow

A three-judge appeals court panel in Chelyabinsk this morning preserved the injunction against Magnitogorsk Metallurgical Combine (MMK) completing its takeover of Australian iron-ore miner, Flinders Mines.

Today’s proceedings were a continuation of the May 30 hearing in Appeal Court no. 18 of the Chelyabinsk Arbitrazh Court, when Judge Galina Fedina, accompanied by judges Irina Sokolova and Svetlana Ershova, postponed consideration of parallel appeals submitted by MMK and Flinders Mines. Lawyers for the Australian company submitted additional materials yesterday, according to a notice on the court website.

They made no difference to the ruling. According to court spokesman Olga Tige, the Flinders Mines appeal has been decided and this morning dismissed. The MMK appeal has been left pending without a final decision.

The practical effect is that the deal-breaker remains in effect until July 2, the next scheduled date for a hearing by Judge Natalia Bulavintseva of the lower court. Bulavintseva imposed the injunction on March 30, following a brief hearing on an application by minority shareholder, Elena Egorova. The judge has refused to hear argument by both sides on the substance of the deal, the reasons for the deal reported in the minutes of the MMK board of directors, and evidence Egorova has offered to demonstrate the financial damage the A$556 million acquisition would inflict on MMK’s balance-sheet.

Egorova and her paperwork have failed to see the light of day for the two and half months of this unusual case. Her lawyer exists, however. She is Dina Danilchenko, and this is the background she has placed on her facebook page. Danilchenko was contacted at her Moscow law firm, Sofos Quatro, and invited to respond to questions about the case and to substantiate the existence of her instructing client. Her secretary responded: “if Dina considers it necessary, she will get in touch”. It wasn’t; she hasn’t.

Undecided, the court case now heads for the June 30 deadline when Flinders Mines and MMK must either agree to extend the quit-date for finalizing their deal, or to abandon the transaction altogether.

Australian promoters of the Flinders Mines share price have been placing in the press claims that Rio Tinto and Posco, the South Korean steelmaker, are potential buyers. Hedge fund managers gossip among themselves that there are also Chinese and Japanese bidders. Until June 30, however, there can be no formal negotiations for a new sale. On this speculation, the Flinders Mines share price has traded between 13 cents and 16 cents. The MMK takeover offer price was 30 cents.

“We will be doing everything we can to close the deal as we took this obligation under the agreement with Flinders,” Kirill Golubkov, MMK’s spokesman, has been telling the Australian media. His next announcement will be more informative.

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The Pension Reform Prairie Fire Has Started

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prairie fire

After the defeat of Governor Scott Walker’s recall, we thought we’d post this piece from January 2011.   Big pension reform ballot measures won big in San Jose and San Diego.   This gives us our children hope.

Interestingly,  Europe is dealing with very similar issues, but on a cross-country basis and without political union.

Smells like a  prairie fire to us and the President is caught offside.   Expect markets to start flirting with and sniffing out that Romney rally.

P.S.  We were way wrong about Governor Brown.

State and Local Governments, Man Your Battle Stations!

Posted on January 6, 2011

Take a look at the new cover of the Economist. We have been all over the coming “battle royal” between the state and local governments and their public sector unions, but not as much as Mike Shedlock over at the Global Economic Trend Analysis blog.    We love teachers, fighter fighters, policemen, and all productive public servants, but think they are being led over the cliff by their unions.

image

You should hear the conversations in our golf foursomes.  On one side, our plumber and contractor buddies, who’ve seen their 401Ks go to 201Ks and back 301Ks.  On the other, retired at 55 public sector buddies, who are living on annual pensions equivalent to 80-90 percent of the salary of their last year worked.  We’re not making this up and it gets nasty as the debate always ends up about fairness.   In the end, it’s really a contrast between defined contribution pensions versus defined benefit pensions.

The November election results were not just about another hard learned lesson by Democrats and reality check that the majority of the country lives, not on the Michael Moore left, but in the political center, but it was also about anger.   Anger from those who feel that they do the right thing, work hard, pay their taxes,  pay their mortgage, and accept the consequences of their actions and fume while they watch others receive preferential treatment by their government for doing the wrong thing.

Whether it’s Wall Street bailouts or seeing their neighbors continue to live, in some cases, for  years in their homes without making a mortgage payment, while they continue to pay in full and receive the cold shoulder when trying to modify their own underwater mortgages.   It is our bet “burden sharing” will become a big part of 2011 political lexicon.

The Economist writes,

LOOK around the world and the forces are massing. On one side are Californian prison guards, British policemen, French railworkers, Greek civil servants, and teachers just about everywhere. On the other stand the cash-strapped governments of the rich world. Even the mere mention of cuts has brought public-sector workers onto the streets across Europe. When those plans are put into action, expect much worse.

“Industrial relations” are back at the heart of politics—not as an old-fashioned clash between capital and labour, fought out so brutally in the Thatcherite 1980s, but as one between taxpayers and what William Cobbett, one of the great British liberals, used to refer to as “tax eaters”. People in the private sector are only just beginning to understand how much of a banquet public-sector unions have been having at everybody else’s expense (see article). In many rich countries wages are on average higher in the state sector, pensions hugely better and jobs far more secure. Even if many individual state workers do magnificent jobs, their unions have blocked reform at every turn. In both America and Europe it is almost as hard to reward an outstanding teacher as it is to sack a useless one.

Governor Brown just appointed a California Teachers Association union lobbyist to the Board of Education, in a state where education consumes over 50 percent of the general fund (see chart below).  This could be, and we sure hope it is, a very shrewd political move.   President Lyndon Johnson said it best when reappointing someone who may have been more damaging outside his administration,   It’s probably better to have him inside the tent pissing out, than outside the tent pissing in.

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Weak And Unstable Leaders Are Making The Global Debt Crisis Worse

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cameron obama merkel

One of the most troubling features of today’s global economic crisis is the lack of political leadership anywhere. No one has the courage to tell their people the truth.

And the truth, alas, is that four of the pillars of today’s global economy — Europe, America, China and the Arab world — have, each in their own way, squandered huge dividends they enjoyed in recent decades, and now they have to dig out of their respective holes with fewer resources, less time and, almost certainly, more pain.

There is no easy way out. But, as confronting these hard truths becomes unavoidable, I think we’re likely to see some wild, angry and destabilizing politics that could make the economic recovery even more difficult. Deep holes and weak leaders are a bad combination.

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The US Government Should Learn From Ford And GM's Pension Buyouts

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factory ford assembly line

Ford wasn’t bailed out along with General Motors, but they are both making some savvy business decisions and the U.S. government should take notes. In an attempt to reduce the size of their future debt obligations, both companies plan to make offers to buyout employees’ pensions.

This maneuver could end up saving both companies tremendously and clean up much of their balance sheets.

The U.S. government would be wise to employ this tactic with Social Security if they ever expect to make good on their debts to the American public.

The Detroit News reports:

“Ford Motor Co. said Thursday it will make offers as early as August to buy out the pensions of 98,000 U.S.-based salaried retirees and former white-collar workers.

The Dearborn automaker, in offering more details of a plan announced in April, is making the pension pitch as part of an unprecedented strategy to shed up to one-third of its $49 billion U.S. pension liability.

Ford hopes the lump-sum payout plan will help close the funding gap for its pension obligation and shore up its balance sheet, a move that could also boost its cash flow, credit rating and stock price. Ford’s $74 billion global pension liability was underfunded by $15.4 billion at the end of 2011.

It’s unclear how many workers will accept the offer, said Ford spokesman Jay Cooney.

‘The level of participation is difficult to predict, given the voluntary and unprecedented nature of the program,’ Cooney said. ‘It is a highly personal decision and will depend largely on an individual’s unique set of circumstances.’

‘It’s absolutely and completely voluntary,’ he added.”

More from the Free Press:

GM is offering pension buyouts to 42,000 salaried workers, and in a move that’s breathtaking in its size, is paying an insurance company to take over $26 billion in pension obligations expected to remain after the buyouts this year.

‘The size of the transaction alone makes it unique within corporate America and the pension industry,’ said Aon Hewitt, the global human resources consultant.

GM is paying $29 billion to Prudential Insurance Company of America to take over the $26 billion of pension obligations. ”We will never have to deal with it again,” CFO Dan Ammann said. ”This ’de-risks’ the balance sheet.”

Investors loved the idea, announced midday Friday, and GM stock rose more than 10(PERCENT) before closing, as the market sank, at $22.01, down 19 cents and well off the 52-week high of $32.08.”

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Zombie Apocalypse, Big Brother Surveillance State, And Other News

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Here are some of the headlines and recent developments you might have missed this week if you depend only on the "mainstream media" for your news --

1. We all know the government spends a lot of money on crazy spying technology, but few could have believed this: the National Reconnaissance Office of the federal government recently gifted two aging satellites to NASA, both of which reportedly offer "100 times the Hubble's field of vision."

That's right, our government's garage sale, hand-me-down garbage is 100 TIMES MORE POWERFUL than NASA's most celebrated space telescope project. And you think they can't see your license plate from space. Ha.

2. Speaking of our creepy Big Brother spy state, even several months after WIRED broke the story that the NSA is building a $2 billion data center in the desert to spy on and analyze Americans' Internet communications and phone calls, and even after a NSA whistleblower went on national television (Ok, Democracy Now is not exactly Sean Hannity in terms of viewership numbers, but still!) to disclose that his agency had intercepted 20 TRILLION or more communications between American citizens -- without a warrant... Even after all that, the story hasn't broken terribly wide, and many Americans are completely oblivious to the fact that our text messages, emails, and even Google searches are likely sitting (quite illegally, I might add) on a government spy server somewhere in the middle of nowhere.

3. Rumors of a "zombie apocalypse" reached fever pitch in the days after a Miami man unexpectedly ate the face of another human being, and after a naked U.S. cage fighter reportedly ripped the heart out of his personal trainer's body and cooked it... and after news broke that a man in Sweden flew into a rage and ate his wife's lips. The rumors reached so far and wide that the CDC confirmed to the press there is no zombie apocalypse underway.

And I think that's even more frightening, ultimately, than the possibility of a virus that causes violent insanity in its victims. You see, if there's no zombie apocalypse, it means you and I are surrounded by crazy people -- just one traffic ticket or delayed IRS refund away from going full Dexter on any of us, at any time.

Just as the ancient Roman empire reportedly fell in part due to widespread lead poisoning, perhaps there is something in our modern environment -- cell phone electromagnetic radiation, genetically modified food, the Kardashians -- that is making us all a bit "off." Historians could look back on today in shock that we didn't realize something was making us lose it.

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Smart Money Is Shorting Treasuries More Than Anytime Since 2004

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In the good ol' days, we would worry about bond yields (and thus bond prices) compared to silly things like the inflation rate, dividend yields, mortgage rates, etc.  But it is a brave new world now.

The key driver for valuing Treasury bonds at the moment is the utility they offer as a form of collateral among banks loaning money to each other.  So with Europe's debt markets in even greater turmoil now than when Greece's debt got a "haircut" last year, T-Bond prices are zooming up once again to the top of the 3-decade rising trend channel.

Back in January 2012, I wrote about how T-Bond prices were turning down from near the top of that trend channel.  We can see now that the pullback from that peak only made it down to about halfway between the channel lines.  Now the recent upturn has taken the price of T-Bond futures all the way back to the upper channel line.

T-Bond futures prices since 1980

History shows that bond prices can hang around at the upper channel line for quite a while, as we saw with the 1986 top.  But the more common result is for bond prices to make a spike top, and then to fall back down with a slope that is symmetrical to the slope of the ascent into the spike top. 

That latter type of outcome seems the more likely one also because of what we see in this chart:

T-Bond COT data

Commercial traders of T-Bond futures have now moved to their biggest net short position since late 2004.  They are the big money traders, and presumably the smart money, so when they get to a really lopsided net position like this, it is worth paying attention to.  Commitment of Traders (COT) Report data is a topic that I address every Friday in our Daily Edition.

We also know from studying the 60-year cycle in T-Bonds that bond prices are supposed to be declining (yields rising) from now to around 2040.  So for bond prices to still be hanging around at the top of the 3-decade rising trend channel means that they are putting off the task of transitioning to the new trend direction.  Historically that means bond prices are going to have to work extra hard at some point to make up for lost time. 

My guess is that such a point will arrive when the Fed's inflation of the money supply turns into actual consumer price inflation.  M2 is up 9.7% from a year ago, and 36% since April 2007.  Eventually all of that excess money is going to get to work pushing prices upward, and bond traders are going to realize that locking up a 2.5% yield for 30 years is not such a good deal.

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Related Charts

Apr 06, 2012
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Deserved or Not, T-Bonds Are Set Up For A Rally
Jan 20, 2012
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Bonds Turning Down From Top of Channel
Aug 27, 2010
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60-year Cycle In Interest Rates

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Traveling On A Budget Doesn't Mean You Can't Do It In Style

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eiffel-tower

If the uptick in travel on Memorial Day is any indication, Americans are ready to hit the road again—but they want to save money while they do so. AAA reports a 1.2 increase in travelers over Memorial Day this year as compared with last year. That means it estimates about 34.8 million people traveled at least 50 miles from their home over the holiday weekend.

With the economy still getting its legs back, many travelers are searching for frugal options. Woody Woodring and his wife, Janie, scour travel sites such as www.travelzoo.com, www.vacationstogo.com, and www.smartertravel.com, which alert them to discounts. On a trip to Pigeon Forge, Tenn., in the Great Smoky Mountains, the couple cooked their own meals, which saved them a few hundred dollars on the three-night trip. Woodring, a retired procurement official who lives in Greenville, S.C., shares his tips for frugal living at www.woodysretirementblog.com.

Judie Fernandez, a retired attorney who lives in Menlo Park, Calif., takes advantage of Road Scholar, a nonprofit that organizes educational trips for seniors. She took her grandsons on a Harry Potter-themed trip to London in 2007 and has also traveled to Russia, Mongolia, China, and India with Elderhostel groups. "It's like a university without walls," she says. Unlike many commercial tours, Elderhostel trips cover all costs—including food and activities.

Many of Don and Judy Mac Isaac's trips have taken them far from their home in New York's Catskill Mountains. The couple, authors of Adventures After 50, went on tours to Tanzania, Nepal, and Antarctica after Don retired from corporate life. They managed their costs by focusing on tours that incorporated camping and other low-cost accommodations with regular hotel stays. As the couple has gotten older, they have opted for lower-key getaways, such as visits to the Franklin D. Roosevelt Presidential Library and Museum and the adjoining home of Eleanor Roosevelt in Hyde Park, N.Y.

The Woodrings, Fernandez, and the Mac Isaacs make their trips affordable by planning extensively, taking advantage of group programs, and carefully selecting their destinations. Travel experts also recommend the following strategies:

Make the most of discounts. AARP negotiates discounts for members with tour providers, hotels, and car rental companies. An Expedia website designed for AARP members (www.expedia-aarp.com) lets seniors search for discounts—usually about 10 percent off the regular price—that apply. AARP isn't the only organization offering deals: For those 62 and older, the National Park Service sells $10 lifetime passes to parks, and Amtrak gives a 15 percent discount. Many cities also offer reduced-price or even free rides on public transportation systems. Non-seniors can look for discounts related to locality (many pools and museums offer discounts to local residents), days of the week (some museums are free on Mondays or Tuesdays, for example), and veteran status. Certain organizations, such as AAA and neighborhood groups, also offer discounts to members.

Make sure you're getting the best deal. Travel expert Peter Greenberg recommends finding out whether the discount being offered is really the lowest price. If it's 10 percent off the highest rate, travelers might be better off doing their own comparison shopping online. Making a phone call to speak to a tour operator or company also can result in more savings, he says. "The myth is that the Internet is displaying all the inventory, but it's not," says Greenberg. He recommends calling a hotel and asking to speak to the director of sales or manager on duty, who will know if there have been any last-minute cancellations or if the hotel has special deals that aren't listed online.

Ask for additional perks. Joan Rattner Heilman, author of Unbelievably Good Deals and Great Adventures that You Absolutely Can't Get Unless You're Over 50, points out that breakfast and parking can cost as much as a $60 nightly hotel rate, so she suggests asking if they can be included. "Don't expect anybody to offer you anything. You need to ask," she says.

Book trips later than usual. Some travelers have been slow to make advance bookings because of the economy, and many parts of the travel business, including hotels and cruises, have lowered their prices, says Tim Fitzgerald, senior director of travel products at AARP Services. "The wise consumer in the travel space is waiting until the last minute," when prices fall the most, he says. Of course, there is a risk that space on tours will run out.

Consider volunteer vacations. "It doesn't mean you'll be working in swamps for 10 days straight," says Greenberg. These trips, which are growing in popularity among seniors, usually incorporate traditional travel activities alongside volunteer work, ranging from collecting data in rain forests to visiting hospices. Seniors often enjoy bringing their grandchildren on volunteer vacations, Greenberg adds. For domestic trips, the government website www.seniorcorps.gov connects people ages 55 and older to volunteer opportunities throughout the United States.

Explore alternate means of transportation. Greenberg recommends buses for trips of less than 400 miles. He says buses' bad reputation is outdated. "It's not gross. They have great leather seats, Wi-Fi, an attendant with soft drinks—it's quite nice," he says. Plus, with airplanes so often delayed, opting for the bus can save you time as well as money. A bus trip from New York to Washington runs $20 and up.

Regardless of the mode of transportation travelers choose, Judy Mac Isaac urges everyone to take trips while they still can. When her husband turned 50, they made a list of 31 retirement adventures, from parachuting from a plane to attending the Olympic Games. Thirty-plus years later, they've completed 21 of them. She says, "Now that we've reached this age, we've slowed down and have no big trips planned, but we're so glad we have those memories."

DON'T MISS: This is how a personal finance expert books a trip to Ireland >

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If You Thought You Could Retire With A Million Bucks, Think Again

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golf, golf course, sports

If you think you'll need $1 million to retire, you'd better make it $3 million.

Setting the stage for financial security in your golden years requires diligent savings starting … yesterday.

In order to retire, you need to make careful planning decisions today, says Jocelyn Evans, associate dean of undergraduate programs and finance professor at the School of Business of Charleston College.

Part of that planning requires making trade-offs between discretionary spending and saving for the future. In this interview, professor Evans provides insight and advice for retirement planning.

Has the current economic situation changed retirement planning for baby boomers?

Yes. In the past, people counted on stock market average earnings of 12 percent to 15 percent a year. Getting a higher return from compounding means putting less into a 401(k), Roth individual retirement account or traditional IRA.

And now the market has changed and is much more volatile. Greater risk is associated with investing in the market. There are a greater number of periods where you have a down cycle in the same decade, so you are not going to get that 12 percent return. If someone had started investing in her 401(k) in 2000, by 2010, she would have broken even -- she would not have made anything. That is something American investors are just not used to.

In order to compensate for market volatility, many people make less risky investments because they do not trust the stock market, the bond market or the real estate market. These investments yield substantially lower returns. If originally you had to save $400 or $500 a month to meet your retirement goal, you might now have to save $1,000 to $1,500 per month to reach that goal. That is a problem for many people in our consumer-driven society. They will have to cut back on spending and consumption to save that much.

For retirees already on a fixed income, what effects have the recession caused?

The recession has hurt retirees because Treasury bills and notes are paying less than 1 percent. With earnings that low, many retirees do not have revenue strength. To compensate for lower returns, people may have to move into riskier investment areas that they are not used to, knowledgeable about or comfortable with. This is a time when they cannot afford to lose their principal, but that could very well happen.

How can an individual plan for retirement and determine the total amount he or she needs once retired?

The individual should decide in advance the minimum amount he or she could live off in retirement. Many people think that in retirement, they are going to live the same or better than before. Once they have determined the minimum amount they need, by calculating the time value of money, we can figure out the amount they should have saved by the age of retirement.

Another change is that although historically many people have helped their adult children financially, they may not have the means to do that anymore.

What significant impact has the economic meltdown had on investment plans such as 401(k)s?

Many people are risk-adverse and cannot handle volatility. But not understanding the connection between risk and return can lead to future problems. Risk affects the total amount they can earn for retirement. When it's time to retire, people who haven't planned well are going to be in trouble.

Is there an ideal age retirement planning should be put first on the list of savings?

The younger the better, but there are trade-offs. If you are trying to be a medical doctor, for example, or if you want to go to graduate school, you are consuming and you may be borrowing. As long as you are making decisions that will increase your income in the future, then the ideal savings is a function of your aspirations and your future career. And you may be delayed in beginning actual savings.

But if you get out of school in your early 20s and you have a job that allows you to save, then you should invest as much as possible even though it may force you to trade off between discretionary spending such as expensive cars or trips with friends.

Is there any advice you would like to give to individuals who are planning for their retirement?

Do not underestimate. Inflation will raise prices as much as the market will bear. If you think you need $1 million, you may really need $3 million.

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These Two Charts Prove A College Education Just Isn't Worth The Money Anymore

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For decades we have argued about education’s merits and ills, real or imagined. But while there was still a positive return, demand grew and we were able to educate our nation and workforce.

We have now reached a tipping point. The ROI of education has diminished for all and become negative for many.  We have lost the ubiquitous positive financial return on education.

DNU

Further, for the first time in the history of our country, the majority of unemployed Americans attended college. There are now more people without jobs who went to college than those who did not.

DNU 

And for those college graduates lucky enough to have jobs “forty percent… are mal-employed, meaning they’re working at jobs that don’t require [their] college degrees,” says Andrew Sum, a professor of economics and the director of the Center for Labor Market Studies at Northeastern University.

Higher education has always had a positive financial return. But, like the unraveling of the fabled housing market that “only ever goes up,” education has reached its breaking point.

But to say education is a bubble is too simple an analog. 

The housing bubble was a function of financing and price. But the underlying product—homes—was still sound. We still like homes and they serve our needs well. Bad debt had to be unwound, and prices adjusted, but solving the crisis didn’t demand that we invent a new kind of home to live in. 

And therein lies the drastic difference with the education crisis.

Education is broken. It has been for a long time. The underlying product has survived intact since the industrial revolution. Resolving this crisis is not simply a matter of financing and price.  We must address the underlying model of education and reinvent it for a new era.

At the heart of the problem is the degree itself.

TIME magazine writes, “The tight connection between college degrees and economic success may be a nearly unquestioned part of our social order. Future generations may look back and shudder at the cruelty of it… It is inefficient, both because it wastes a lot of money and because it locks people who would have done good work out of some jobs.”

Universities do not have a monopoly on learning—only credentialing. There isn't a single job that actually requires a degree. People simply require knowledge and skills to perform jobs successfully.

Mark Cuban recently wrote, “As an employer I want the best prepared and qualified employees. I could care less if the source of their education was accredited by a bunch of old men and women who think they know what is best for the world. I want people who can do the job. I want the best and brightest. Not a piece of paper.”

The diploma was a fitting credential for an economy requiring knowledge to be stockpiled early in one’s career. Now, learning is increasingly happening “just in time” and from a diversity of sources, both formal and informal. Today, there are more ways to learn—many better suited to the demands of our technology driven, knowledge economy. 

Harvard and MITx recently announced edX, several top Stanford professors just left to start Udacity, and Coursera offers courses from Princeton, Stanford, U. of Michigan, and Penn, all online and for free. General Assembly and Dev Bootcamp are examples of new, offline course providers enjoying great demand.

With the advent of these new ways to learn, a new form of credentialing is emerging. Degreed validates and scores users’ lifelong education from any source, both formal, like Harvard, and informal, like Udacity, facilitating a course-by-course, ad hoc, lifelong model of education. 

Fast Company wrote in 2009, “Why can’t we take robotics at Carnegie Mellon, linear algebra at MIT, law at Stanford? And why can’t we put 130 of these together and make it a degree? These are the kinds of innovations waiting to happen.” 

Now, it seems that the required ingredients are finally coming together to make that vision a reality just as the financial pressures have finally stoked a heat hot enough to catalyze the change required of education.

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4 Things You Need To Remember When Translating Powerful Contacts Into New Business

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Network

I know two different rock-star business owners who have the types of access you and I would kill for.

In their databases are the personal contact information for C-suite executives of the biggest companies, government agencies and influence peddlers in their respective industries.

Yet, these two are like the beauty queens stuck at home on Saturday night—they seem unable to translate those contacts into new business.

What should they be doing and what can you learn?

1. Influence can't be delegated.

The first mistake that I see made by these power connectors is that they try to delegate contacts into their organization too quickly. When a contact is made at a very senior level, the connector should maintain and develop the relationship herself.

If you are the connector, you can bring an entourage to later meetings and discussions, but you have to be there—and you need to stay connected to your power contact. "Let's get our people together" is a cliché and a miserable handoff. Remember that your power contact is influenced at a personal level first.

2. Offer help and counsel.

Your first point of entry? Help someone with a problem. The ask is simple: "I've enjoyed our conversation and the chance to discuss business with you. What initiatives are you working on in the area of [insert your specialty here]? I don't know if we can be of help to you or not on a vendor level, but I want to be helpful. Why don't we sit down together to see what expertise we might lend to the thought process?"

It's a soft ask; it's a sincere offer to help. It's an opportunity to exchange more thoughts and develop the relationship as well as demonstrate value.

3. Stay connected.

Being top of mind in the world of power connections is very important. A friend of mine, Matt Heinz from Heinz Marketing, talks about a simple, powerful, "5-4-3-2-1″ system of connecting:

  • Send 5 thank-yous
  • Schedule 4 catch-ups
  • Make 3 recommendations
  • Offer 2 referrals
  • Write 1 hand-written note

Power connectors are able to amplify their influence through this type of daily contact diet. These can be quick: text messages rather than long emails, for instance. Voicemail messages may be appreciated. Leverage LinkedIn for your recommendations and forward blogs and articles for your "thinking of you" comments.

The point is that power connectors are busy. If you want to stay top of mind, you have to work at it.

4. Be a cat, not a butterfly.

Cats can watch a target for long periods of time without chasing after everything that flutters by. I often see power connectors chasing the next connection rather than maximizing what they already have.

To make the powerful take notice, they need to feel important and get laser focus from you. If you have made this connection and there is a shared sense of value, then take it all the way through the discovery process yourself.

Remember, the goal is not collecting contacts—it's making business happen.

Your sphere of influence may be at the neighborhood level, the city or state level, or beyond. But regardless of the scale you're working at, you need to know how to maximize your own access to the key players.

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5 Surprising Ways Banks Are Actually Helping Your Finances

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chase-bank-customer-happy-banking-consumer

I know that many people dread going to the bank, but as a bank employee I have to say that I am personally offended.  Going to the bank doesn’t always mean that we need financial help and clients definitely shouldn’t think the worst about their bank. There are many things that our bank can help us with from starting our own business to planning for retirement.

The next time that you are in your bank branch take a look at their marketing pamphlets to see all of the ways that your bank can help you.  We know that our bank can help us open a checking and savings account as well as apply for a credit card. But our bank can help us out with so much more than just our basic banking needs.

Here are 5 ways our bank can help us be financially successful:

1. Financial Planning. Many banks have at least one certified financial planner on staff who can help you plan for your future and achieve your personal financial goals. If you want financial planning services you do not have to visit a private wealth management firm and pay expensive service fees, all you have to do is ask for a certified financial planner at your local bank branch.

2. Personal Budgets.  Many banks offer personal budgeting tools, they just don’t advertise the service.  Many bank employees who are currently working as tellers or customer service representatives are studying in personal finance (at least at my bank branch) and they are more than qualified to help you plan your personal budget. Many banks also offer budgeting software or an online application to help you track your income, your spending, and your savings.

3. Small Business Loans.  Although our state and provincial governments should be the first source of information when we are applying for a small business loan, our bank branch may also offer some helpful information.  Banks usually offer account and deposit services for already established businesses that have banking needs, but they also offer programs to help finance a small business loan.

4. Personal Insurance.  Very often we search for an independent insurance company to purchase our life, home, and auto insurance policies. However we don’t need to go through all of that trouble, all we have to do is visit our local bank branch and ask for assistance.  Very often personal insurance policies are not physically sold in the bank branch, but at least our personal banker can direct us towards the correct department.  If we purchase insurance with our bank we may be entitled to additional discounts on our insurance policies for already being a client of the bank.

5. Donations.  If you are a volunteer for a charitable organization or a good cause and you need to do some fund raising I suggest that you ask your local bank branch manager.  My bank has an annual budget of $2000 that we can donate to various organizations and causes throughout the year.  You never know if your bank can help you until you ask.

SEE ALSO: How one man moved to the wilderness and turned his head on currency forever >

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Why China Is Likely To Get More Involved In Afghanistan

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China, Beijing, Military, Soldiers

As the United States and other Western nations prepare to withdraw their military forces from Afghanistan, China is growing nervous about the prospect of chaos after they have left.

So, after years of standing in the background, Beijing is starting to show signs of closer engagement with its strife-torn neighbor in a bid to ward off disaster, say Chinese and foreign analysts.

When Afghan President Hamid Karzai meets his Chinese counterpart Hu Jintao here on Friday, they will raise their countries’ bilateral relations to a “new strategic level,” an Afghan official told reporters in Kabul this week.

Though it is still unclear what that will mean in practice, the step reflects Beijing’s feeling that “it is urgent that China strengthen its relationship with Afghanistan,” says Zhang Li, an expert on South Asia at Sichuan University in Chengdu.

“Afghanistan’s security situation will have a direct impact on China’s security,” he adds. The Western military pullout “clearly presents China with more problems than opportunities.”

China to the plate

Some observers here believe it is time that China stepped up to the plate. “It is not rational to rely on a distant and remote country to provide security for the region,” says Hu Shisheng, an analyst at the China Institute for Contemporary International Relations, referring to the United States. “China has to take more responsibility.”

But after leaving things to the Americans for so long, warn others here, Beijing may not be well placed to exert influence. “We cannot play a significant role because we do not have a sufficient presence in Afghanistan,” cautions Ye Hailin, an Asian affairs analyst at the China Academy of Social Sciences, a government-linked think tank in Beijing.

The one thing China will not be doing as Western soldiers leave Afghanistan is get involved militarily there itself. With scarcely any experience of peacekeeping operations abroad, the Chinese Army “would be stepping into uncharted territory in a potentially very kinetic situation,” points out Raffaello Pantucci, a scholar who follows China’s relationship with Central Asian nations. “It would be a huge jump for them.”

 “We are not qualified to play a military game in Afghanistan,” adds Mr. Ye. “Only empires can do that, and neither the British, nor the Soviet Union, nor the Americans have won.”

The security question

Closer ties with Kabul could bring more aid, more infrastructure projects, and more training for Afghan policemen and soldiers, say Chinese observers. That security support, they suggest, could come through the Shanghai Cooperation Organization, a group of Asian nations led by Beijing and Moscow at whose summit here this week Afghanistan is expected to be admitted as an observer.

Beijing is also likely to step up its tentative diplomatic involvement in the Afghan conflict, suggests Professor Zhang, after it hosted a first trilateral meeting with Afghan and Pakistani officials last February that “showed China’s intention of strengthening its influence in Afghan security issues.”

At that meeting, Chinese diplomats reportedly sought to convince the Afghan and Pakistani governments to work more closely together to regain control over their borderlands. Armed Uighur separatists, fighting for the independence of China’s mainly Muslim Xinjiang region, which abuts Afghanistan and Pakistan, are believed to have set up camps in North Waziristan. (See map here.)

“Stability in those tribal regions is of utmost national security importance to China,” says Mr. Hu.

Why China cares

If Western troops leave the Afghan Army and the Taliban still locked in combat, China is worried that the Uighur “East Turkmenistan Independence Movement,” which Beijing regards as a terrorist group, might find refuge in Taliban-controlled zones. Officials here also fear an upsurge of drug smuggling through Xinjiang.

More frightening, though, is the prospect that continued fighting and possible Taliban gains would spill over into Pakistan, China’s closest regional ally. “A disaster in Afghanistan could undermine China’s strategic bulwark in the region,” points out Andrew Small, an analyst at the German Marshall Fund in Washington who is writing a book about China’s relationship with Pakistan.

At the same time, a security vacuum in Afghanistan could prompt a proxy conflict there between regional rivals India and Pakistan, further complicating China’s position.

“If Afghan troubles spilled into Pakistan, that could turn our alliance into chaos,” warns Ye. “China has the same interest as the Americans in preventing Pakistan from becoming a nest of terrorists.”

Indeed China’s interests in Afghanistan coincide strongly with Western interests, says Mr. Pantucci. “They want a stable, peaceful, prosperous country that they can trade with and build roads through and where they can seek natural resources,” he says. “Stability in Afghanistan would contribute to stability in Central Asia, and that would help Beijing develop Xinjiang, its biggest and poorest province.”

For the past decade, China has not played a significant role in Afghanistan. Its state owned companies have built roads and invested $3.5 billion in a copper mine, but according to the Chinese Embassy in Kabul, Beijing has contributed only $246 million in aid over the past decade; that is less than one-tenth of Japan’s aid, or half of South Korea’s.

Until now, concerns in Beijing about the proximity of NATO bases to Chinese territory have been offset by relief that at least somebody else was dealing with the problem in Afghanistan.

Now, says Zhang, “China has to face the fact that a withdrawal timetable has been confirmed and we have to focus on all the new problems that may crop up.”

In the US, adds Ye, “a lot of people may think that after their military withdraws in 2014, Afghanistan is not their business anymore. We, on the other hand, see 2014 as a very crucial year for Afghanistan, but we don’t see it as the end of anything. We are going to have to live with that.”

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Don't Even Think About Buying A Used Car Over This Summer

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car-fall

Used car prices, after rising sharply this year, are starting to fall.

But experts advise waiting until later this year to buy a vehicle to take advantage of the best deals.

Small and midsize used cars will drop in value by 5 percent during June, predicts analyst Jonathan Banks of the NADA Used Car Guides. 

Prices for all used cars are forecast to decline about 2 percent next month, with the decrease driven largely by the falling cost of gas. Banks cites the example of the 2009 Toyota Camry, which saw its price rise 15 percent, to $13,325, from January to May. He expects the value of that same Camry to decline by $675, or 5 percent, in June. 

But that vehicle and other used cars will be cheaper still by this autumn, says senior market analyst Alex Gutierrez of Kelley Blue Book's kbb.com website. He expects prices to continue to drop 2  to 3 percent a month until fall.

5 used cars NOT to buy
Made in America: 4 new cars roll from U.S. factories
Don't buy a used car with a dangerous defect

This is the second straight year in which used car prices have spiked. The 2011 Japanese earthquake and tsunami, which resulted in a shortage of some new cars, combined with rising gas prices to push up used car values. This year, gas prices surged early in the year to a peak national average cost of $3.93 a gallon for regular, according to the AAA fuel gauge. But now, with crude oil prices declining, that figure was down to $3.57 this week.

In addition, a long-term supply problem for used cars is beginning to be solved. Starting with the financial crisis in 2008, fewer new cars were sold or leased. In recent years, that resulted in a shortage of trade-ins or off-lease cars in the used car market. But rising new-car sales, expected to top 14 million this year in the U.S., are today boosting the used car supply with trade-ins.

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Morgan Freeman Sounds Off On Religion, Aliens and Batman

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morgan freemanMorgan Freeman exudes gravitas. He has played the president and God. His name is almost synonymous with authority.

So as he patiently explains that aliens might be traveling to Earth to eat us, you can't help but feel a little nervous.

The man-eating alien scenario is just one of the possibilities Freeman explores with his Science series "Through the Wormhole," returning for its third season tonight. Each episode addresses a different question about the universe, no matter how difficult or contentious. Tonight's premiere, for example, is titled, "Is There a Superior Race?"

We asked the Oscar winner, 75, his thoughts on that and other questions upcoming shows will address, including, "Did We Invent God?" and "Can We Eliminate Evil?"

We also asked about a certain evil eliminator for whom he plays inventor-in-chief in "The Dark Knight Rises." He surprised us by answering very directly when asked if his character survives the upcoming film.

TheWrap: You're asked to do projects like "Through the Wormhole" because have such an authoritative presence. Is that something you aspired to as a young actor?

Freeman: Oh heavens no. No, no, no, no, no, no, no, no. When I was a young actor I just set out to get work. Like the rest of us.

What drew you to answering life's big questions?

I think I just fall into a huge pot of people who are fascinated with what's out there. I used to read a lot of science fiction... particularly that of Isaac Asimov and Robert A. Heinlein and some other very interesting people, and they came up with thoughts about what's possible on Earth.

Imagine if you could live for a thousand years. Considering that -- when did the Wright Brothers fly? In the next 200 years, what will we be doing?

I was hoping to ask for your personal answers to some of the questions raised in upcoming episodes. The season premiere asks, "Is there a superior race?" I'm not sure if that refers to an alien race or races on Earth.

We discuss the idea of a superior race coming here. Professor Michio Kaku has an interesting discussion on it. Intelligence apparently requires an enormous amount of protein. Which is why we eat meat. Instead of being vegetarians. We have this enormous brain capacity.

Suppose a superior race did come from outer space and land here. It would need a food supply because if they were superior, they would have an even larger brain than we do. So we might -- might -- qualify as sustenance.

Do you think that meat-eating humans are smarter than vegetarian humans?

Ehhh. You don't want to get me in trouble here. ... I don't know. The question is evolutionary. Whoever is a vegetarian today, they didn't evolve as vegetarians. They became vegetarians.

Another question from the show: Can we eliminate evil?

No. You cannot. Because if you eliminate evil you'll also eliminate good.

What is evil?

Evil is the opposite of good. Like up is the opposite of down, left is the opposite of right. You only have one because you have the other.

You don't play a lot of villains, but do you think there are villains? Because we always hear that villains don't think that they're villains.

I think that there is balance in the universe. And these questions are the questions of balance.

This next question may be the hardest, and I'm especially curious about your answer because you've played God, and had to guess how God would act...

Well, I need to play the devil now, to balance it out. [Laughs.]

"If I believe in God, and I do, it's because I think I'm God," — Morgan Freeman

Did we invent God?

Yes.

So there isn't a God up in the sky somewhere. We came up with God ourselves.

Well, here's a scientific question: Has anybody ever seen hard evidence? What we get is theories from our earlier prophets. Now, people who think that God invented us think that the Earth can't be more than 6,000 years old. So I guess it's a question of belief. My belief system doesn't support a creator as such, as we can call God, who created us in His/Her/Its image.

Would you consider yourself an atheist, or agnostic?

It's a hard question because as I said at the start, I think we invented God. So if I believe in God, and I do, it's because I think I'm God.

Of the questions you ask on the show, which one was the closest to you? What did you think about the most?

Travel. The idea of travel. That incorporates two or three different questions. One is how long can we live? Is it possible for us to extend our lifespan into, I don't know, not infinity, but let's say a thousand years? If we could, the idea of space travel would become much more plausible.

Would you like to live a thousand years?

Absolutely. ... You're just satisfying your curiosity. Imagine if you could live for a thousand years. Considering that -- when did the Wright Brothers fly? In the next 200 years, what will we be doing?

Do you think we'll still be going to movie theaters and watching TV?

I could foresee holograms in your living room.

One of the big questions in my little universe: Will your character, Lucius Fox, make it out of the "Dark Knight Rises" alive?

Yeah.

How does it feel to be done with the Batman series?

I don't see it so much as being done with it. It's the end of a chapter, that's all.

The third season of Science's "Through the Wormhole" premieres tonight at 10/9 c.

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