Wednesday was a good day for Fawad Khan.
He got up shortly before 3 a.m. and headed to a bank of computers in his Mississauga basement. While his family slept, he started trading.
One screen charted the euro in real time. It looked like the seismic readout for an earthquake. Trading in this kind of market, with one
Amazon.com Inc., the world
Hundreds of Longshore workers overpowered security guards in an aggressive raid on a Washington state grain terminal, officials said Thursday, and the action drew quick rebuke from a federal judge that has tried to curb the union’s escalating tactics in an ongoing labor dispute.
Workers have been battling for the right to work at the new terminal in Longview. But U.S. District Judge Ronald Leighton issued a preliminary injunction to restrict union activity, saying there was no defense for the aggressive tactics used in recent days.
Protesters twice blocked the pathway of a train carrying grain to the terminal at the Port of Longview on Wednesday, and early Thursday morning hundreds of them stormed the facility, overwhelmed guards, dumped grain and broke windows, police said.
The dispute halted work at four other Washington ports, including Seattle, on Thursday as hundreds of longshoremen refused to show up or walked off the job.
Leighton said he felt like a paper tiger because the International Longshore and Warehouse Union clearly ignored a temporary restraining order he issued last week with similar limits. He scheduled a hearing for next Thursday to determine whether the union should be held in civil contempt.
“The regard for the law is absent here,” the judge said. “Somebody is going to be hurt seriously.”
Six guards were trapped for a couple of hours after at least 500 Longshoremen broke down gates about 4:30 a.m. and smashed windows in the guard shack, Longview Police Chief Jim Duscha said. He initially referred to the guards as “hostages,” but later retracted that after the guards clarified no one had threatened them.
“The guards absolutely could not get out,” Duscha said. “They feared for their lives because of the size of the crowd and the hostility of the crowd.”
No one was hurt, and nobody has been arrested _ although Duscha said that could change if police are able to use surveillance video or other means to identify the protesters.
Most of the protesters returned to their union hall after cutting train brake lines and spilling grain from a car at the EGT terminal, Duscha said. They also pushed a private security vehicle into a ditch.
The union believes it has the right to work at the facility, but the company has hired a contractor that’s staffing a workforce of laborers from another union, the Portland-based Operating Engineers Local 701 cheap pay day loans. Representatives of the engineers union did not immediately return a call seeking comment.
In Seattle, Tacoma, Everett and Anacortes, hundreds of Longshore workers failed to show up or walked off the job Thursday in apparent solidarity with the Longview activists, halting work at those ports. Union leaders said they had not called for any such actions.
“It appears the members have taken action on their own,” said ILWU spokesman Craig Merrilees from union headquarters in San Francisco.
He said some workers might have been motivated by a photograph of ILWU President Bob McElrath in police custody in Longview on Wednesday.
McElrath was not arrested, but an Associated Press photo showed him being grabbed by several police officers before union activists intervened and grabbed him back.
Police arrested 19 protesters as they blocked railroad tracks on Wednesday night, allowing the train to finally arrive at the terminal.
The protesters in Longview have portrayed themselves as being on the front line in the struggle for jobs and benefits among American workers in an economic downturn. But while union strife has flared up around the country _ most notably in Wisconsin _ the aggressive tactics seen in Longview have been a rarity in recent labor disputes.
Labor activists insist that after receiving tax breaks and promising to create well-paying jobs at the new $200 million terminal, EGT initially tried to staff the terminal with nonunion workers. Following a series of protests by the Longshore workers this year, the company announced it would hire a contractor staffed by workers from a different union.
“Today, the ILWU took its criminal activity against EGT to an appalling level, including engaging in assault and significant property destruction,” the company’s chief executive, Larry Clarke, said in a written statement. “This type of violent attack at the export terminal has been condemned by a federal court, and we fully support prosecution of this criminal behavior to the fullest extent under the law.”
Damage from Irene appears to be less than feared, a bit of reassuring news for a fragile economy.
Insured damage from Irene will range between $2 billion and $3 billion, and the total losses will likely be about $7 billion, according to preliminary estimates by Kinetic Analysis Corp. a consulting firm. Both figures are less than had been feared and will likely have little impact on the nation’s $14 trillion economy.
“Irene left several places with black eyes, but it doesn’t seem to have delivered an economic knockout,” said Ryan Sweet, an economist at Moody’s Analytics.
The estimates from Kinetic Analysis, based in Silver Spring, Md., suggest that Irene will have caused far less insured damage than the $6 billion the industry paid out after Hurricane Isabel struck the East Coast in 2003.
The long-term costs of Irene will grow as storm-ravaged areas deal with lost business, insurance claims, dislocated workers and transportation disruptions _ costs that will take months to fully calculate.
Still, rebuilding and repairing the damage from the storm will likely be enough to boost economic output in the final three months of this year, economists say.
For now, power outages and flooding will close some businesses, costing workers lost pay and likely boosting temporary layoffs. Transportation and shipping may also be disrupted.
Chuck Watson, Kinetic’s director of research and development, noted that the impact on businesses was limited, in part, because the impact was felt on a weekend payday loan. Even so, Watson and Sweet said small businesses on the North Carolina coast will likely lose two weekends of tourist activity, including the travel-heavy Labor Day weekend.
Millions of people have lost power from the storm, and analysts said the length of the outages and the extent of disruption to public transportation in cities like New York will help determine the economic damage.
Crews are already restoring power in Southern states hit by the storm and are starting work in the northeast.
Irene slammed into a region that is key to the nation’s economic health. The mid-Atlantic and New England are home to several major cities and account for about 16 percent of the nation’s economic output, Sweet said. The region also has about 14 percent of the country’s workforce.
That led many analysts to worry about the potential impact of a major hurricane. The economy is struggling. Any major shock could tip it back into recession. The economy expanded at a meager 0.7 percent annual rate in the first six months of the year.
Watson said his firm initially feared Irene would be much more powerful when it made landfall in North Carolina and would remain strong by the time it pummeled New York City. That could have caused damage of as much as $30 billion, he said.
But by Friday it was apparent the storm had weakened and would cause much less damage.
The endgame at hand, House Republicans lined up Thursday to pass legislation to prevent looming government default while slicing nearly $1 trillion from federal spending. Senate Democrats pledged to scuttle the bill swiftly in hopes of forcing a final compromise.
“Let’s pass this bill and end the crisis,” said House Speaker John Boehner, the president’s principal Republican antagonist in a new and contentious era of divided government. “It raises the debt limit and cuts government spending by a larger amount.”
President Barack Obama has threatened to veto the measure, and in debate on the House floor, Rep. Debbie Wasserman Schultz of Florida savaged it as a “Republican plan for default.” She said the GOP hoped to “hold our economy hostage while forcing an ideological agenda” on the country.
Despite the sharp rhetoric, there were signs that gridlock might be giving way.
“Around here you’ve got to have deadlock before you have breakthrough,” said Sen. Kent Conrad, D-N.D. “We’re at that stage now.”
Wall Street suffered fresh losses as Congress struggled to break its long gridlock. The Dow Jones industrial average was down for a fifth straight session.
The Treasury Department moved ahead with plans to hold its regular weekly auction of three-month and six-month securities on Monday. Yet officials offered no information on what steps would be taken if Congress failed to raise the nation’s $14.3 trillion debt limit by the following day.
Without signed legislation by Aug. 2, the Treasury will not have enough funds to pay all the nation’s bills. Administration officials have warned of potentially calamitous effects on the economy if that happens _ a spike in interest rates, a plunge in stock markets and a tightening in the job market in a nation already struggling with unemployment over 9 percent.
White House press secretary Jay Carney outlined White House compromise terms: “significant deficit reduction, a mechanism by which Congress would take on the tough issues of tax reform and entitlement reform and a lifting of the debt ceiling beyond … into 2013.”
The last point loomed as the biggest obstacle.
The House bill cuts spending by $917 billion over a decade, principally by holding down costs for hundreds of government programs ranging from the Park Service to the Agriculture Department and foreign aid.
It also provides an immediate debt limit increase of $900 billion, which is less than half of the total needed to meet Obama’s insistence that there be no replay of the current crisis in the heat of the 2012 election campaigns.
An additional $1.6 trillion in borrowing authority would be conditioned on passage of at least $1.8 trillion in further savings to be recommended by a newly created committee of lawmakers. Those deficit reductions would presumably come from cuts to benefit programs such as Social Security and Medicare, as well as an overhaul of the tax code generating additional government revenue.
The GOP bill’s $917 billion in upfront spending cuts was trillions less than many tea party-backed rank-and-file Republican lawmakers wanted, but a total that seemed nearly unimaginable when they took power in the House last winter with an agenda of reining in government. Numerous Republicans grumbled that the legislation didn’t cut more deeply, and Boehner and the rest of the GOP leadership have spent their week cajoling reluctant conservatives to provide the votes needed to pass it.
By most accounts, they were succeeding.
“It gives us a little bit of heartburn because it doesn’t go big enough,” said Rep. Sean Duffy, R-Wis., a first-term lawmaker who said he would vote for the bill as the best one available.
Another first-term Republican, Rep. Martha Roby of Alabama, said the bill was “far from perfect. But I don’t have the luxury of writing the plan by myself, and neither does Speaker Boehner.”
While the White House and Democrats objected to the House bill, they readied an alternative that contained similarities.
Drafted by Senate Majority Leader Harry Reid, it provides for $2.7 trillion in additional borrowing authority for the Treasury. It also calls for cuts of $2.2 trillion, including about $1 trillion in Pentagon savings that assume the end of the wars in Iraq and Afghanistan.
Even before the House voted, Reid served notice he would stage a vote to kill the legislation almost instantly.
“No Democrat will vote for a short-term Band-Aid that would put our economy at risk and put the nation back in this untenable situation a few short months from now,” he said.
With the House and Senate focused on debt-limit legislation at opposite ends of the Capitol, eleven religious leaders protesting budget cuts were arrested in the Rotunda midway between the two chambers.
Democratic Rep. Chellie Pingree of Maine said on the House floor that they were praying for those who will be “hurt the hardest” by the bill being considered.
Rep. David Dreier, R-Calif., countered that he, too was praying _ to avoid a default.
The day’s events marked the climax of a struggle that began last winter, when the Treasury Department notified Congress it would need additional borrowing authority, and Boehner said any increase would have to include steps to reduce future spending.
At first the White House balked at the terms, then relented. That gradually morphed into a series of bipartisan negotiations, one led by Vice President Joe Biden, then another by Obama, and finally, a round of golf that led to stab at a “grand bargain” between the president and Boehner.
Boehner announced last Friday he was calling off the talks, setting in motion a frantic week of maneuvering as the default deadline grew near.
Google may be entering a make-or-break phase in its history now that U.S. regulators have opened an investigation into whether the company has been abusing its dominance of Internet search and advertising to stifle competition.
The probe by the Federal Trade Commission, confirmed by the company Friday, will require Google to convince regulators that its closely guarded recipe for search results is designed to give people the best recommendations, not bury links to its rivals free credit report and score.
The inquiry also is expected to peer into Google’s financial engine: the advertising links tied to the subject of each search request. Some of these commercial messages appear, shaded in color, at the top of the results page, while others are stacked in the right-hand column.
Even as Google has expanded into video, mobile phones and TV, the text advertising that pops up alongside search results and other Web content generates most of Google’s revenue
Sudan’s president threatened to block pipelines in the south if the government there doesn’t pay to transit oil or share it with Khartoum, the official news agency reported Wednesday.
Southern Sudan voted overwhelmingly in January to secede from Sudan and become an independent country in July. That vote was part of a 2005 peace deal that ended more than two decades of war.
The two governments are still negotiating how oil wealth will be shared between the north and the south.
President Omar al-Bashir’s comments late Tuesday in the port city of Port Sudan seem to be hardening his side’s negotiating position, particularly in the context of borders clashes.
Al-Bashir said the southerners “have one of three options: either we share the oil, or they pay fees and taxes for every single barrel that passes through the north or we will shut down the pipeline,” according to Sudan’s official news agency.
Relations between the two partners remained rocky throughout the transitional period, and tension has increased since the vote. Oil is at the center of the fraught relations, as most of it lies in the south, but all the pipelines and the transporting port are in the north.
The south, which does not have any refineries of its own, relies on oil for more than 95 percent of its budget.
Even so, al-Bashir said his country still wants good relations with the south.
Troops from northern Sudan moved into the disputed central Abyei region last month, sending tens of thousands of people who are aligned with the south fleeing.
After regional mediation, the two sides signed an agreement Monday to demilitarize the area.
President Barack Obama urged north and south Sudan to agree to an immediate cease-fire in the state of South Kordofan. In a statement, he praised an agreement to allow Ethiopian peacekeepers into the contested Abyei area.
The U.S. says Sudanese forces have shelled and bombed the area and that there are reports that forces aligned with the government are arresting and allegedly executing southern Sudanese forces and sympathizers.
Obama said reports of attacks based on ethnicity were “deeply disturbing.”
Airline profits will likely plummet this year because of natural disasters, political violence and higher fuel prices, an industry group said Monday.
Airlines will probably earn about $4 billion in 2011, down from $18 billion last year, the International Air Transport Association said. IATA’s previous forecast in March estimated 2011 profits of $8.6 billion.
“Natural disasters in Japan, unrest in the Middle East and North Africa, plus the sharp rise in oil prices have slashed industry profit expectations,” IATA Director General Giovanni Bisignani said in a statement. “That we are making any money at all in a year with this combination of unprecedented shocks is a result of a very fragile balance.”
Higher fuel costs _ crude rose to $115 last month from $84 in February _ are the largest obstacle to airline profitability, IATA said.
The industry’s fuel bill will likely rise by $10 billion this year to $176 billion and fuel now accounts for 30 percent of an airline’s costs, up from 13 percent in 2001, IATA said.
Airlines are counting on the global economy continuing to grow to help offset higher oil prices. Passenger numbers will likely increase 4.4 percent this year while cargo should grow 5.5 percent, though both forecasts are below IATA’s March estimates.
“The corporate sector is cash-rich, business confidence is high, and world trade continues to expand,” IATA said. “The key risk to this outlook is a weakening of global economic growth.”
IATA expects a razor thin 0.7 percent profit margin for airlines this year on revenue of $598 billion.
The arrest of IMF chief Dominique Strauss-Kahn complicates a key European meeting on whether to give Greece billions more in aid _ but experts insisted one man’s troubles won’t keep the 17 eurozone nations from trying to contain a debt crisis that threatens them all.
Eurozone financial leaders are to discuss Greece’s deteriorating economy Monday at a Brussels meeting where experts will brief them on the situation in Athens. Key questions include what conditions to put on more help to the debt-strapped nation, with European leaders unhappy at what they see as limited Greek efforts to raise money by selling government property.
Strauss-Kahn was arrested Sunday in New York on suspicion of sexual assault on a hotel maid.
Despite the arrest, the International Monetary Fund said in a statement it remains “fully functioning and operational.” The IMF Executive Board convened an informal session Sunday and made Strauss-Kahn’s deputy, John Lipsky, acting managing director while its chief was unavailable.
The Washington, D.C.-based lending body also sent Nemat Shafik, a deputy managing director who oversees IMF work in several EU countries, to Monday’s eurozone meeting to replace Strauss-Kahn.
Strauss-Kahn had to cancel his Sunday meeting with Chancellor Angela Merkel in Berlin, where the German public is deeply skeptical about putting up any more money for Greece. Germany, as Europe’s largest economy, provided a large chunk of the euro110 billion ($157 billion) bailout for Greece from the European Union and the IMF last year.
Greek government spokesman Giorgos Petalotis insisted the arrest would not affect his nation’s efforts to resolve its financial woes.
“The Greek government deals with institutions, not individuals, and continues unimpeded to implement the program that will get it out of the crisis,” Petalotis said.
German Finance Minister Wolfgang Schaeuble struck a similar tone, saying the eurozone meeting would go ahead as planned. And European politicians had already gotten used to the idea that Strauss-Kahn may leave his post soon to run for president of France next year.
Yet others said Strauss-Kahn’s immediate departure from the financial stage adds additional uncertainty to the already difficult situation in Europe.
“The leadership vacuum at the IMF comes at a highly inopportune time for Europe, which is teetering on the brink of a full-blown debt crisis,” said Eswar Prasad, a professor of international economics at Cornell University and a former IMF official us fast cash.
Many investors believe that Greece’s financial troubles are so overwhelming that a Greek default or a restructuring that would give creditors less than the full value of their bonds is inevitable. But that would be a serious blow to the euro, and eurozone governments and the European Central Bank appear determined to prevent it.
Merkel has stressed that her government will need clear conditions for any new Greek loans before it will back more help. But Schaeuble has conceded that if the experts’ full report in June shows that Greece can’t pay its debts, something more will have to be done.
The IMF put up euro30 billion ($43 billion) of that Greek loan and also supplies expertise in assessing whether Greece and other countries that get emergency loans are living up to the conditions attached to them.
A euro78 billion ($111 billion) bailout for Portugal was also on the agenda for Monday’s meeting in Brussels, as is Ireland’s progress in dealing with the financial morass that led to its own EU-IMF bailout. With the terms of the Portuguese bailout largely decided, EU finance ministers are expected to signal approval of that deal.
Although eurozone ministers were talking about Greece, a new bailout announcement was not planned for Monday. Instead, investors expected a general statement of support, followed by days or weeks of more haggling.
Marco Valli, chief eurozone economist at UniCredit, said Greece’s troubles were separate from those of Strauss-Kahn, and he expected a decision on more help for Greece in the near future.
“There is no way that just because the IMF’s chief gets into personal trouble that Greece would be left alone,” Valli said. “Maybe it can have some impact on timing, but our view is that this is not going to have a meaningful impact on the bottom line, which is that Greece would get a second bailout package.”
Other analysts agreed that the IMF will simply navigate through the upcoming difficulties.
“The IMF is not a one-trick pony,” David Buik at BGC Partners in London. “European markets may be damaged by this news for a few hours but there is plenty of depth to the IMF.”
TOKYO/NEW YORK
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