Should G.M. Be Allowed To Go Bankrupt.

There is a continuous debate as to whether General Motors should be allowed to go bankrupt or not.In fact the American public is being mentally prepared to accept the possibility of a 'structured bankruptcy' for G.M.,whatever that means.

Much has already been said about why G.M. finds itself in the present mess.So let us see what we stand to lose if G.M. is allowed to go bust.

Coming at a time when the entire economy is in a mess the impact of G.M. going bankrupt would be very large indeed.The immediate impact would be that sales would fall sharply as customers fret about everything from financing to warranties. Car rental companies who account for almost 15% of the vehicles sold by G.M. and have complex financing and buy back arrangements with it may be the first ones to rethink their relationship with it. As it is G.M. accounts for more than 1% of American G.D.P. Add to it the contribution of various industries dependent on the auto sector from glass and rubber to consumer electronics and the figure would be larger.Big auto parts makers rely on G.M. for a large chunk of their business. While some of the bigger ones would survive, the smaller ones may certainly follow G.M. into bankruptcy.Its pensioners and workers would be adversely impacted as would be its investors.Its stockholders would definitely see their investment getting wiped out, while its bondholders may have to accept reduced repayments over a longer period of time. Its dealers are also likely to lose money and create further unemployment.It also has to be kept in mind that the automotive sector is one of the biggest investors in R&D in America.G.M. set up the world's first automotive research center in Warren,Michigan and currently holds over 500 patents!It is the world leader in certain technologies,never mind that Toyota is able to earn more per car that it sells than G.M.Reduced spending in this area will have far reaching consequences.

The federal government's approach to bailouts has been uneven to say the least. On the one hand you have the example of Lehman Brothers who got nothing, while on the other you have AIG who got everythingIn comparison to AIG the auto companies want very little. Let's hope better sense prevails and all this talk of G.M.'s bankruptcy is nothing but pressure tactics to extract concessions from the UAW union and its creditors.Bankruptcy for G.M. would be a wrong decision at the wrong time.

Will Changes in M to M Accounting End the Financial Crisis.

The mark to market accounting system,as an accounting device became popular in the 1980's. The system was supposedly a foolproof method for valuing various financial instruments.Large corporations and banks adopted these rules as they felt that they provided a more transparent method of determining profits.
Now these very rules are being blamed for precipitating much of the subprime mortgage crisis.It is argued that they have compelled financial institutions and banks to exaggerate their losses on hundreds of billions dollars worth of assets.These massive write downs have been blamed for forcing several giant companies to seek federal aid in order to avoid bankruptcy.It is argued that this wholesale reduction of lending capacity is the primary reason behind the current economic slowdown.
It is tempting to accept the above argument. Unfortunately it does not give the true picture. M to M rules are perhaps the most accurate method of valuation if the assets are liquid and are traded regularly. However if the assets are not very liquid,as most of the mortgage backed securities are,then distress sales are likely to cause wild fluctuations in their prices. The present problem arose when companies needed to put up extra cash and had to liquidate such securities in a hurry.In a market where liquidity had suddenly dried up price fell very sharply.Compounding the problem was the fact that many of these securities were novel instruments which did not enjoy a ready market even in normal times.Many banks that held them perhaps had no intention of selling them.
The FASB has approved changes that will allow auditors to use 'significant professional judgment' to value such illiquid securities.Although the change may prevent further write downs it remains to be seen whether it will allow the reverse or 'write ups' to happen. Till houses and cars start selling again and the overall economic scenario takes a turn for the better, it is unlikely that any accounting jugglery is going to help matters.

Gasoline Cars vs Hybrid Cars - Which is Cheaper?

Today people are queuing up for hybrids for a host of reasons. More mileage, cleaner emissions, less dependence on imported oil and the likes.

So how do conventional cars really match up to hybrids. Well here's a look.

As far as fuel efficiency goes the odds are clearly in favor of hybrids. You could get savings of 20%-25% on your gasoline bills if you are driving a hybrid. But before you get rid of your gas guzzler and rush off to the nearest Toyota/Honda dealer there are some things you must consider.

There is a lot of hype about the fuel efficiency of a hybrid. In fact the mileage that you actually get may be lower than what is advertised. This is because driving conditions in which the battery of a hybrid gets recharged fastest is by deceleration and regenerative braking. This simply may not always happen, resulting in a noticeable difference between the advertised and the actual mileage.

Then there is the premium that you pay for a hybrid: It shouldn't be anything less than $2,000 . If you consider the fuel that you save then at the current gas prices you will need to drive about 150,000 miles before you recover the initial difference in cost. If you don't drive too much it could be at least a ten year wait. What's more hybrid's store energy in large battery packs. These are costly to replace, more than $2,500. Although they last a long time, the cost of replacement is certain to drive down the resale value of used vehicles.

Again mixing of electric power and traditional internal combustion engines requires a lot of fine tuning. Then there are risks associated with handling powerful batteries. Small hiccups may mean a trip to sophisticated garages rather than the mechanic round the corner. The result, more money spent on maintenance.

However inspite of these apparent drawbacks it seems hybrids will win in the long run. As their production increases, prices are bound to come down because of economies of scale. Then the federal government offers a tax credit for buying a hybrid, which is about $2,000 for a 2007 Honda Civic. Additionally some companies also offer cash incentives to employees buying hybrids.

All in all, no matter what your calculator tells you now , hybrids are the cars of the future. Even today the extra dollars spent on one are a small price to pay for preserving the environment.

Japanese vs.US Hybrid Cars-Why the Difference?

Hybrids are the fastest growing segment of the American car market.In 2006 the sales of hybrids rose to 1% of total car sales ,an increase of 22%over the previous year.This high rate of growth looks set to continue with the public growing increasingly concerned about depleting world oil resources and the environmental impact of fossil fuels.

The figures speak for themselves.Hybrids can cut fuel consumption by up to as much as 40%.As far as cleaner environment goes the new Ford Escape Hybrid produces less than one pound of smog producing pollutants in a 15,000 mile drive.Its significance can be understood only when you consider that for non hybrid passenger vehicles the corresponding figure is 67 pounds!

It was Toyota which first demonstrated the hybrid-electric concept at the Tokyo Auto Show in 1995.At that time Toyota set an aggressive development schedule to bring the Prius to the Japanese market in two years time in an effort to be the first car company in the world to offer a production hybrid-electric car for sale.And succeed they did.The Prius was offered to the Japanese public in 1997 before the signing of the Kyoto Protocol.

The Prius went on sale in the US in 2000 and was an instant success.The first hybrid electric model in the US market,however, was the Honda Insight in 1999.The Honda Civic hybrid went on sale in 2002.

The year 2004 will be remembered for the launch of the second generation Prius.In addition the first full size pickup hybrids the Dodge Ram and the Chevy Silverado as well as the first SUV hybrid the Ford Escape hit the streets this year.

The success of the 2004 Prius led some experts to call it the most successful car model of all times.At one time it sold at a premium of $2000 over its sticker price!Even today the Prius sells more than all the other models combined.

So what did Toyota and the other Japanese automakers get right which the US automakers got wrong?Nothing really because it was just a question of focusing on a particular area.US automakers concentrated all along on pure electric cars and hydrogen fuel cars.While electric cars were introduced in the market they did not become popular because of limitations of size,speed and range.The hydrogen fuel car is still under development although GM hopes to introduce it in the market by 2010.

Of late the US manufacturers have sought to duplicate the success of the Prius.Encouraged by the success of the Ford Escape they have directed their energies into developing an American hybrid.But unlike the Ford escape which has been built under a licensing agreement with Toyota,GM's forthcoming Chevy Tahoe hybrid is st to be a very important event for the American auto industry.

Why so?The Prius recharges its battery pack through deceleration and regenerative braking.Thus while it improves fuel economy significantly in the city its results are not so spectacular on the highways.The USA is a huge country with a vast highway network.The Tahoe hybrid and all GM dual mode hybrids offer some additional tricks on the highway, which is very important in the US.

The year 2008 therefore promises to be an interesting one for the US hybrid industry.While none of the models are going to match the efficiency of Toyota,US automakers are clearly back in the reckoning.

Is The U.S. Justice System Flawed?

A report released recently informs us that almost 2.2 million people are in US jails. This marks an eight fold rise in the number of Americans in prison since 1970.It costs the taxpayer about $65 billion annually. The report has been produced by the JFA Institute a Washington criminal justice research group.

The impact of such a large number of people in prison is awesome.Once you include the families the prisoners leave behind,the prison guards and the prison administration, the lawyers and the justice system, it would seem that the system affects almost everybody.

The benefits of the present system are clearly visible. The streets are definitely safer.The homicide rate in the 1990's fell by 43% and continues to decline. The value of a safe neighborhood certainly outweighs the costs of imprisonment.

On the flip side, the prison population is set to increase by almost 200,000 over the next five years and it will cost another $27.5 billion to build and run the additional prisons that will be needed.Such a judicial system also serves to deepen the divide between the privileged and the disadvantaged.This is because the disadvantaged, the less skilled and the less educated are more likely to end up in jail.Spending their productive years in jail not only reduces their lifetime earnings but also adversely affects the prospects of re-employment upon their release.It also certainly affects the financial prospects of the families they leave behind.Critics also argue that in spite of such a harsh system the crime rate is where it was in 1973.

So what needs to be done about it. Before attempting an answer it is necessary to understand the reasons that lie behind this prison boom.It happened because crime increased and there seemed to be no way to control it except by imposing tougher penalties.This resulted in longer jail sentences being handed out with fewer chances of an early release.The war on drugs led to the arrest of a large number of small time users and drug dealers.Presently almost 60% of prison inmates are in for drug offenses.Supreme Court Justice Anthony M. Kennedy remarked:'Our resources are misspent, our punishments too severe, our sentences too long.'

Maybe it's time to give the entire system a re look.To start with, prison sentences for petty crimes could be shortened and prisoners could be made eligible for early release in deserving cases.Alternate forms of punishment also need to be considered.There is also a case for being a bit lenient on 'soft drugs.'Debates on legalizing marijuana for medical use seem to indicate that this option is being seriously considered.

An editorial in The Washington Times said that prisoners deserve punishment.'But we shouldn't forget that a vast majority will also be returned to society, which has as much at stake in their rehabilitation as they do.'

Move Over G.M.-The Honda FCX Clarity Is Here!

Honda may have found the answer to $4 plus gas.It has started production of the FCX Clarity fuel cell car that goes on lease in California this year. It is the first regular production fuel cell car aimed at individuals. The others have been aimed at fleet operators. The response has been overwhelming. People have been literally falling over themselves to get a chance to drive the sleek four door car, and Honda has drawn a lottery to decide who will be among the around 100 lucky ones who get to drive it.Mind you, this is when leasers will have to pay $600 a month as lease charges plus extra for fuel. The $600 a month however includes both collision insurance and maintenance.Even then it is a bargain as each car is estimated to cost more than $300,000 to build.A gallon of hydrogen fuel costs about the same as as a gallon of gasoline, but you get two to three times the mileage with hydrogen. Although GM has about a six month start with its Chevy Equinox fuel cell vehicle, Honda has come up with a much more attractive car.

The car's V-flow fuel cell has been developed in-house by Honda. It uses hydrogen to generate electricity, which powers the 134hp electric motor. The car is a front wheel drive, and travels 270 miles on a full tank of hydrogen. It has a top speed of 100mph, and goes from 0-60mph in 10 seconds. Honda intends to develop up to 300 FCX Clarity models over the next three years.

But presently there is a big negative to using hydrogen as a fuel. Making hydrogen takes more energy than hydrogen produces. It is proposed to produce hydrogen from natural gas and the world's reserves of natural gas are limited. Till such time that hydrogen can be produced from sea water, the days of really cheap fuel are still far away.

Hedge Fund Owner Cheats Investors Of $450 Mill,, Vanishes

Samuel Israel, founder of the Bayou hedge fund group has disappeared the day he was to begin a 20 year prison term for defrauding investors of $450 million. Police have put out 'Wanted' posters, and describe him as 'armed and dangerous.'

Founded in 1996, the fund raised about $300 million from investors, promising them that the fund would grow to $7.1 billion in ten years. The fund however never seems to have made any money and got along by overstating gains, or reporting gains where there were losses. In 1998, about three years after the fund was launched, international financial markets were in turmoil following the Asian crisis, and in America things were made worse by the threatened collapse of Long Term Capital Management. The fund made huge losses. In order to cover their losses the group approached investors for fresh money. In order to attract investors , Israel allowed them to join by bringing in a minimum of only $250,000, which is much smaller than the amounts typically demanded by hedge funds. He also waived his management fees and charged only 20% of the fund's profits as his remuneration. Simultaneously he hired a fresh firm of auditors who were willing to fake accounts to hide the mountain of losses the firm was saddled with.

But it was these very practices that started making people suspicious. As news got around about the true state of affairs, investigations were started, and in September 2005 the Commodity Futures Trading Commission filed a complaint in court alleging misappropriation and fraud.

In April of this year, Israel was sentenced to 20 years in prison and ordered to pay a fine of $300 million after pleading guilty to defrauding investors. On the 10th of June he vanished just hours before he was to begin serving his sentence. It could be suicide, but people suspect that he has faked his death and is on the run.

U.S. Economic Slowdown Threatens Deflationary Spiral.

When the subprime crisis first broke in August of last year, few anticipated the extent and depth of the crisis. At that time it was estimated that subprime related losses would be about $140 billion. The situation was bad but not impossible and Bernanke rightly assumed that simple adjustments to interest rates would take care of the situation. But the banks and financial institutions had hidden their risky investments too well in off balance sheet entities, to avoid regulatory supervision, as a result of which losses were grossly underestimated. As the magnitude of the crisis unfolded, there was panic all round and the Fed's primary task became one of saving the financial system, never mind inflation or the value of the dollar.

In order to prop up the financial system an unprecedented amount of money has been pumped into the market. It is this growth in money supply which lies at the root of inflation, although it has become fashionable to blame emerging market growth and commodity prices for it. Inflationary pressures coupled with falling home prices, have finally taken their toll on consumer sentiment. A near stagnant economy, together with falling asset prices and the devaluation of the dollar has impoverished the American people.

The economic numbers released lately paint a picture of the economy which is not as grim as expected, which has prompted many experts to stick their necks out and predict that the worst is over. But this may not be the case, and in fact the worst may just be about to begin. This is because in order to fight inflation the Fed will have to increase interest rates sharply, although it may choose to wait till after the November elections to do so. Central banks all over the world are expected to follow the Fed in raising interest rates to tame runaway prices. The impact of rising interest rates on an economy already teetering on the brink of recession is almost a foregone conclusion. Economic activity in the US is expected to decline further. These recessionary conditions will put further pressure on asset prices and they are expected to fall across the board. Bond prices will fall as interest rates rise, as will stocks, as higher interest rates eat into corporate profitability and falling demand reduces their ability to raise prices. Home prices are already projected to continue falling till the end of the year at the very least.

Banks and other financial institutions have already written down the value of their assets by about $389 billion, which has impacted their share prices. Reduced economic activity will impact future revenues and reduce earnings as well as valuations. The only chance of avoiding this scenario would be if by some miracle oil and commodity prices were to come down sharply. If this happens without having to raise interest rates too far, a deflationary spiral may perhaps be avoided.

High Oil Prices May Cause De-Globalization!

The global economy today is more integrated than ever before. Globalization has on the whole, brought tremendous benefits to the participating nations.Among other reasons, the unprecedented worldwide economic boom witnessed in the last few years was due to manageable oil prices. I say manageable because, while oil prices which were around $30 a barrel before the start of the US led invasion of Iraq, rose to about $60 a barrel by the end of 2006, they were still well below earlier peaks after adjusting for inflation. Trade between nations has grown exponentially, particularly between the US and other Asian countries, which have been able to successfully leverage their low wage structure. In the process these Asian countries, notably China, came to enjoy sustained double digit rates of growth, which lifted a large proportion of its huge population out of poverty. The cheap goods which they exported to the US, helped in keeping inflation there in check and prevented any major increases in wages. This led to a tremendous improvement in US corporate productivity and profitability.

Now the dream is coming to an end.The cost of transporting both goods and people is rising at such a fast pace that it threatens to derail global trade. Shipping costs to the US from Asia have already tripled since 2000, and are set to rise further as oil prices show no signs of coming down.Not only is the cost of shipping goods to the US from China increasing, China finds that the cost of importing raw materials is increasing as well, which will undoubtedly impact its profitability. The rising cost of imports will further increase inflationary pressures within the US economy and will make the Fed's job of restraining inflationary pressures more difficult. The Fed is well aware of the problem that it faces, and in recent comments Bernanke has focused more on the dangers of inflation with the housing crisis taking a back seat. It has to perform a tough balancing act in the days to come. Faced with expensive imports, consumers are likely to switch their demand to locally manufactured goods, which though being good for local industry as it gives them pricing power, will certainly impact global trade. The process of de-globalization seems to have begun.

China Buys Its Way Into Wall Street

After Abu Dhabi Investment Authority, which made news last year for picking up a 4.9% stake in Citigroup for $7.5 billion, it is now the turn of the Chinese government owned Chinese Investment Corporation to get into the act.

Eager to cash in on the opportunity thrown up by the debt crisis the Chinese Investment Corporation has ploughed billions of dollars into the best known names on Wall Street. In control of almost $100 billion of China's huge forex reserves it has pumped in close to $5 billion into Morgan Stanley in a deal announced at the end of 2007. This means that China has ended up with almost as much as 9.9% of one of Wall Street's most powerful banks. This is the latest in a string of high profile investments made by the Chinese. The CIC already has a stake in the US private equity firm Blackstone and the Chinese Development Bank owns 3% of Barclays.

The deal only serves to highlight how things have changed over the last few moths, all due to the credit crunch. Two years ago a Chinese oil company wanted to buy the small US oil group Unocal. US politicians cutting across party lines asked that the plan be dropped and demanded that China open up its economy and protect intellectual property rights. Likewise when Dubai Ports World took over strategically important US ports last year, it kicked up a political storm which ended only when the bidder agreed to sell off the US ports.

Till now it was the US banks which were keen to acquire stakes in Chinese banks in a bid to gain a foothold in China to tap into the growing wealth of its population. Now it seems to be the other way round. China not only holds a stake in Barclays but also has a director on its board. Morgan Stanley for its part has made it clear that CIC will not have a representative on its board. This may well have been a condition imposed by the White House, one readily accepted by China after its Unocal experience.

Such investments by China in the capitalist world would have been unthinkable a few years back. Indeed there are many who view them with suspicion, as having been prompted by other than purely business considerations. The Chinese had clearly anticipated this problem and have constituted CIC as an independent company with its separate board of directors. They are at pains to point out that it is free from any state control whatsoever and argue that it is necessary to develop institutions to manage the $1.3 trillion worth of forex reserves they presently hold.

With its economy unaffected by the current financial crisis, the Chinese look set to follow the oil rich nations of the Middle East as big investors in the US economy. In a way it may be good for the global economy. Once the largest economies of the world are more closely interconnected and interdependent it would be less likely that any one of them would want to spoil the party.

Credit Card Use Increasing Despite Economic Slowdown.

America's love for plastic money has grown over the years. Total consumer debt in the US stands at more than $2.4 trillion.Total US consumer revolving debt is over $900 billion. Fifty-one percent of the US population has at least two credit cards, with one in ten consumers carrying more than ten credit cards in their wallets. There has been a tremendous increase in the number of credit card holders in the recent past. This is because many cards now offer points which can be accumulated and used to pay for merchandise or airline tickets.

The current economic slowdown does not seem to have had any significant adverse impact on the credit card industry. MasterCard forecast Thursday, that its revenue growth in 2008 will be in double digits. It also raised its long term profit outlook significantly. It now expects average annual net income growth of 20% to 30% through 2011, compared with earlier estimates of 15% to 20%.

Credit cards were first issued in the US in the 1920's, when individual firms, such as hotel chains and oil companies began issuing them to customers. The inventor of the first bank issued credit card was John Biggins of the Flatbush National Bank of Brooklyn in New York. In 1950 the Diners Club issued their credit card in the US which was intended to pay restaurant bills. American Express and Bank of America issued their credit cards in 1958.

These cards were an overnight success. Initially credit cards were targeted at traveling salesmen for use on the road.Over the years credit cards have evolved into a form of credit from a device of convenience. One in six families with credit cards pays only the minimum due every month, and almost 37% users carry more than $10,000 of debt. Deregulation of interest rates has allowed very high rates of interest to be charged. Courts also lifted restrictions on the amount of late fees a credit card company could charge. Interestingly, both Visa and MasterCard were started as non-profit organizations.

Credit Card Use

Barbie versus Bratz slugfest lands up in court.

Sales of Barbie dolls, Mattel's flagship brand have been declining within the US for sometime now. Most of the decline is due to the growing popularity of the Bratz range of fashion dolls. These dolls were launched by MGA Entertainment in June 2001, and quickly emerged as a serious competitor to Barbie.

Bratz was created by Carter Bryant an ex-employee of Mattel. Bryant presented his drawings to Isaac Larian the CEO of MGA Entertainment. Larian's eleven year old daughter Jasmin, who was visiting his office at that time was fascinated by the sketches, and Bratz was born.

Sales of Bratz have grown rapidly and currently stand at more than $3.5 billion annually. Most of this has undoubtedly come at the expense of Barbie. Mattel finally decided that enough was enough and have launched legal action accusing MGA and Bryant of copyright infringement. They are seeking millions of dollars in compensation.

Mattel claims that Bryant worked on designing Bratz while he was their employee.'He concealed his Bratz work from Mattel and wrongfully sold Bratz to MGA while he was a Mattel employee,' they say.

MGA says that Bryant first got the idea in 1998 while he was not working for Mattel, and that the dolls were develped by its own engineers in late 2000 and 2001. MGA claims that it is only after sales of Bratz started hurting profits of Barbie that Mattel has initiated legal proceedings. It says Mattel's claims are baseless , and plans to counter-sue for a billion dollars in damages once the current court case is over.

Landowners Being 'Conned' By Gas Companies.

Landowners in many parts of the US are sitting on top of a fortune without knowing it. There are large deposits of natural gas stretching from the suburbs of New York to West Virginia and in parts of Indiana and Texas. Rising prices have made these deposits valuable, and improved technology has made it possible to tap them.

'Landmen,' persons who obtain mineral rights for companies are on the prowl getting unsuspecting people to sign over their rights for as low a price as possible. Many landowners have been conned into signing over the rights for as low as $5 an acre and 12.5% royalties. Others who held out or formed bargaining groups have ended up getting up to as much as $2,400 an acre and 15% royalties.

Some lawyers have started campaigns to educate landowners about mineral leasing. They are advising landowners not to be rushed into signing documents and also about the kind of leases they should enter into.

Soldiers Hit Hardest By Foreclosure Crisis.

The foreclosure crisis is deepening as home prices continue their journey southwards. They have fallen by a huge 14.1% in the first quarter of this year, according to data released Tuesday. Although precise data is not available, it is feared that the group hit hardest by the current crisis is the US serviceman.Foreclosures in towns where US soldiers live are increasing at a pace almost four times the national average. The biggest increase is reported from Columbia, South Carolina, where the army trains recruits for duty in Afghanistan and Iraq at its Fort Jackson facility.

The main reason for this is low salaries, which for recruits with about four years experience, even after adding allowances, falls well short of the median household income of $59,224 in 2007. Unfortunately it was this group which was targeted aggressively by lenders during the housing boom with Adjustable Rat Mortgages, offering attractive initial rates of interest. Now as rates reset at much higher levels, these soldiers are unable to pay, and thanks to the slide in home prices,they are also unable to sell it at a price which covers their outstanding loans. Although the law protects members of the armed forces from foreclosure while on active duty, the protection is available only for 90 days after they return home. Often when a soldier returns after being discharged due to stress or injury his chances of finding new employment may be compromised. The current economic downturn has only made matters worse.

New legislation is proposed to raise the refinancing limit for a VA guaranteed home loan, and also to prohibit lenders from foreclosing on servicemen for a year after their return from active duty.

Says a veteran,' It's heartbreaking to see people struggling with a foreclosure while they or someone they love is in a war zone, or when they're trying to adjust after coming back from one.'

Hottest Car Accessory Is A Free Handgun!

Salesmen at one Missouri auto dealership aren't offering a free CD player or an air conditioner to boost sales. They are offering free handguns instead. Mark Muller, owner of Max Motors hit upon a novel idea to promote auto sales. He has a dealership in Missouri that sells both used and new vehicles including General motors and Ford products. He started offering buyers a choice between a $250 gas card or a $250 credit at a gun shop. Sales have quadrupled since the start of the offer. All but two of the buyers have opted for the gun rather than the gas card. 'Except one guy from Canada and one old guy,' every buyer has chosen the gun, said Muller. One of these two exceptions said she had plenty of guns at home.

Buyers are given a certificate for a free handgun of their choice, but Muller recommends his customers select a Kel-Tec .380 pistol, which he describes as 'a nice little handgun that fits into your pocket.'

His advertisement is available online. The offer continues till the end of the month. An approved background check on gun ownership is however required.

Australian Man Pardoned 87 Years After Hanging!

Colin Campbell Ross was hanged for allegedly raping and strangling 12 year old Alma Tritschke almost 87 years ago. Ross, who ran a wine saloon was alleged by the Crown to have given alcohol to the little girl before comitting the crime on New Year's Eve 1921. He was sent to the gallows the following year, although witnesses had placed him elsewhere at the time of the murder.

Ross always maintained his innocence, and a review of the case has found that hairs found on a blanket at his home and used as evidence against him did not belong to the victim.

'This is a tragic case where a miscarriage of justice resulted in a man being hanged,' Victoria Attorney-General Rob Hills told The Age newspaper.'It also sends a salutary warning to those who still believe that the death penalty still has an appropriate place in our legal system,' he added.

The case was reopened because of a campaign by the families of both Tritschke and Ross. A forensic examination of the hair revealed it was not Tritschke's.

'It's a tragedy for everybody that the actual perpetrator was not caught and an innocent man lost his life,' a spokeswoman for the dead girl's family said.

Betty Everett, the hanged man's niece said,' I have lived with this fear and doubt for most of my life, the more as I began to have children, that perhaps I carried the genes of a murderer. That shadow has gone.'

Premier John Brumby said that the request for pardon had been a joint request by both Ross' and the victim's families.

23% Americans Shorten Memorial Day Travel Due To High Gas.

Gas at almost $4 a gallon has really hit travelers hard.An estimated 23% Americans shortened or abandoned their weekend travel plans because of the record gasoline prices, according to a survey by consulting firm Deloitte and Touche. Among families with younger children, under 13, 35% changed their plans.

About 37.9 million people traveled at least fifty miles during the holiday weekend, which started May 23rd and ends tomorrow, according to AAA, the largest US motorist group. It is one percent lower than last year and the first fall since 2002.

Many travelers who usually drive have already switched to mass transits to reach their destination. The number of passengers using Amtrak has increased by eleven percent over last year, according to figures released by the company. The company is due to release figures for the Memorial Day weekend next week.

Hotel chains with economy and mid size rooms are seeing brisk business as travelers seek value and economize. People are shopping around for deals and packages and hotel chains offering such bargains expect to be fully booked for the entire summer.

23% Americans Shorten Memorial Day Trvel Because Of High Gas Prices.

Gas at almost $4 a gallon has really hit travelers hard.An estimated 23% Americans shortened or abandoned their weekend travel plans because of the record gasoline prices, according to a survey by consulting firm Deloitte and Touche. Among families with younger children, under 13, 35% changed their plans.

About 37.9 million people traveled at least fifty miles during the holiday weekend, which started May 23rd and ends tomorrow, according to AAA, the largest US motorist group. It is one percent lower than last year and the first fall since 2002.

Many travelers who usually drive have already switched to mass transits to reach their destination. The number of passengers using Amtrak has increased by eleven percent over last year, according to figures released by the company. The company is due to release figures for the Memorial Day weekend next week.

Hotel chains with economy and mid size rooms are seeing brisk business as travelers seek value and economize. People are shopping around for deals and packages and hotel chains offering such bargains expect to be fully booked for the entire summer.

Charity Means Giving Away For Free,Says Supreme Court.

Non-profit organizations are concerned a recent Minnesota Supreme Court decision could strip them of their non-profit status.

A tax assessor of Mille Lacs county had ruled that a juvenile center was liable to pay property taxes as it was not doing any charity. The day care center appealed.The Minnesota Supreme Court ruled in December 2007 that the center was not eligible for a property tax exemption, mainly because it did not provide services for free or at a discounted rate.

The judgement gives a boost not only to other local authorities across the country, seeking to tax such institutions, but also to members of Congress who feel that the tax exempt status of many so called non- profit institutions is not justified. They may well have a point there, as the activities of many such institutions are in no way different from the activities of other similar institutions which do not enjoy tax exemption. The rationale behind granting tax exemption to charitable institutions is that they perform a social function which the government would otherwise have to do, only they do it more efficiently. But the justification for tax exemption disappears if the non-profits are organized on business lines, and charge the same price for their services as the non exempt institutions. Members of Congress complain that rich universities and hospitals are neither subsidizing needy students nor treating patients for free.

'The extent to which the recipients of the charity are required to pay for the assistance received tests for a value that is fundamental to the concept of charity-that is, whether the organization gives away anything,' Chief Justice Russell A. Anderson wrote in the decision.