Zazzle Shop

Screen printing

Wednesday, September 17, 2008

How to Run MAC OSX on an Eee PC

From Wired How-To Wiki

Jump to: navigation, search
EeeMac by Gregory Cohen, via TUAW.
EeeMac by Gregory Cohen, via TUAW.

Feel like stepping beyond the limits of Apple hardware? Want a Mac netbook for under $650? How about an EeePC running Mac OS X?

At least part of the appeal of the dimunitive EeePC netbook is its hackability -- from Linux to Vista, intrepid hackers have figured out how to run just about everything on the EeePC.

In fact, this tutorial was written on a Mac OS X-powered EeePC.

While many would question why you'd want to go to the trouble of installing OS X when there are many Windows and Linux distributions available out of the box? Maybe you're looking for a challenge. Installing OS X on non-Apple hardware provides plenty of chances to flex those (very metaphorical) geek muscles.

Glamour Shots

Here's the profile view.

Portrait view.

Feeling adventurous? Let's start hacking.

This article is a wiki. If you know of a way to get Hackintosh to work on the Eee PC, log in and help get this article in shape.

Contents

[hide]

Legal Caveats

But, before we get started there are a few things you should know. First and foremost, you're about to violate Mac OS X's licensing agreement, which specifically states that use must be limited to Apple hardware.

Therefore, there may be potential legal implications to running Mac OS X on non-Apple hardware. Although, as with most EULAs, Apple's binding agreement has never been upheld by a court of law. We're not lawyers and this guide is not intended to provide legal advice, so proceed at your own risk.

If violating the Apple license bothers you, we have a simple solution: Don't do it.

Known Issues

Before you remove your operating system in lieu of creating your own "Hackintosh," you should be aware of the lingering technical issues and missing features inherent in the hacked version of Mac OS. Eventually some developer will probably solve most of these problems, but so far no one has.

The shortlist of known issues at the time of writing is:

  • No Sound and No Flash -- Your EeePC Hackintosh will not have sound. This seems to carry over from and cause problems with Adobe's Flash plug-in. In my experience, using both Flash 9 and 10 beta, Flash movies will load, play for two seconds and then freeze up. There may be a solution for both problems. Try installing some sort of stereo audio driver and point OS X to it using the System Preferences Audio tab. Many users report success with cheap USB audio dongles.
  • Ethernet doesn't work -- Other experimenters have reported USB-to-ethernet dongles do indeed work to fix this problem. We haven' tried it. If you know something about this, log in and confirm or deny the reports.
  • No F-key support -- Software F-key functions work just fine -- e.g. F-9 activates Expose and so on, but the hardware functions like volume and brightness will not work.
  • Wifi requires a third-party app -- Yes you can get wifi and it does work, but it requires a third-party driver and utility that might be the stupidest Mac app you're ever going to use. It can't remember passwords and you'll have to turn it on and off every time you restart or wake your EeePC from sleep.


The good news is everything else works. Except for Flash, no apps have caused any problems. Although, be aware that Adobe Illustrator, Adobe Contribute and possibly some other graphics apps require larger screens and won't install on your EeePC.

The other good news is, even with the stock 1 GB RAM in the EeePC, Mac OS X is surprisingly snappy. Based on my own experience, the EeePC feels about as snappy as my Macbook. On the other hand, benchmarks actually put the performance on par with late model G5 Macs.

Battery life isn't quite such a happy story. On average, my EeePC Hackintosh gets about 3.5 hours. Firing up Photoshop or Lightroom can reduce the working time to something around 2 hours -- a far cry from the 6-7 hours some people can eek out of XP.

Installing

In order to install OS X you're going to need to download one of several Hackintosh OS X distributions. These distros contain modified version of OS X that allow it to run on non-Apple hardware. There are two known to work with the EeePC. Due to legal issues, I can't link straight to them, but here's a link to a torrent search for iDeneb 10.5.4 and Kalyway 10.5.2 which both work with the EeePC 901 and 1000H.

I used the iDeneb disk for my installation and followed the instructions found on Maceee.com.

In addition to the hacked version of OS X, here's a list of other things you'll need:


Here's a quick rundown of the installation process, along with some notes on where my experience differed from the Maceee instructions.

  1. Transfer the Ralink installer and patched ktext installer to a USB stick or similar.
  2. Download this modified BIOS file and use the ASUS Update tool pre-installed with Windows XP to update the BIOS. You can find the update tool through Start Menu >> Applications >> Asus >> Asus Update.
  3. With the modified BIOS installed you're ready to go, make sure you've burned iDeneb to a DVD and have a USB DVD drive attached to the EeePC. Pop in the iDeneb DVD and get started.
  4. Restart your EeePC and quickly press the F2 key to enter the BIOS menu. Navigate to Advanced >> CPU Configuration and disable everything but USB support. Also, go to Onboard Devices in the BIOS and disable everything. This step strikes me as unnecessary, but I haven't tried installing without it. Your mileage may vary.
  5. Now head to the BIOS Boot Devices menu, select your DVD drive as the main boot device and restart.
  6. When your EeePC reboots you should be in the iDeneb installer. If you need to format your disk, head to Utilities > Disk Utility, just as you would with a normal OS X install CD. Format your drive as "HFS+ journaled" and save. Two caveats: if you've got an EeePC with a solid state drive, don't use the journaled option when formatting. Second, you should realize this step does what it says and will erase your disk. Also of note, my trackpad did not work during the iDeneb install process. Luckily an attached USB mouse did.
  7. When you reach the drive selection screen, choose the drive you just formatted. Then, on the next screen choose Customize to select the correct packages. Expand the patch options and select the following:
    • Expand the triangle for Chipsets and check ICHx Fixed.
    • Expand the triangle for Kernel and check Kernel 9.4.0 Vanilla.
    • Expand the triangle for Wireless and check Broadcom.
    • Expand the triangle for Fix and check both FireWire Remove and ApplePS2Controller
    • Expand the triangle for Video, then the triangle for Intel. Finally, check the box for GMA950.


Click the install button and cross your fingers. From here it's a pretty normal install of OS X though it does take a bit longer than it would on a Mac. If all goes well, OS X will walk you through the account setup screens and you're up and running.

Unfortunately things did not go well for me. It seems to be a pretty common problem that OS X hangs at "Do you want to transfer information from another Mac" screen. Luckily there's a workaround. Just shut the EeePC and then start it up again holding down the F8 key. When the prompt appears type -s to enter single user command line mode. From there type the following commands, one at a time: 

sbin/fsck -fy
/sbin/mount -uw /
touch /var/db/.AppleSetupDone
passwd root


Set the root password and restart. Now OS X should boot at normal. Head to System Preferences, create your user and set the startup options you want. Reboot and login as the user you just created.

Restart the computer and access your BIOS settings. Turn everything we disabled earlier back on (i.e. onboard devices and CPU options) and restart.

Now you have OS X installed, but there's a number of things that are a bit screwy -- screen resolution, no wifi and more. To fix those issues we need the driver files we downloaded earlier. Using the USB stick or similar, transfer the Ralink installer and patched ktext installer to your desktop.

Double click and follow the install process for each. Once you're done, restart and the screen resolution will be fixed and you'll be able to connect to Wifi.

Here's how you connect: Head to the applications folder and double click WirelessUtilityCardbusPCI. Once the app opens, click the advanced tab and toggle the "radio" button off and then back on.


Now head to the site survey tab, select your desired Wifi network and click the connect button.


If you are attempting to use a protected network, it may ask you for a password.

Misc Issues

There are some other issues. While not necessarily deal breakers, they are things you should be aware of. First and foremost installing Apple updates is very bad idea -- they can break your installation entirely. App updates that don't require a restart are generally okay. iTunes 8, for instance, worked for me. But in general you're stuck with OS X 10.5.4 until the iDeneb hackers release an update.

Obviously the EeePC keyboard is different than Mac keyboards. The alt key is the command key, the Windows key is the option key and control is the Mac alt key.

The screen calibration is bit bluish by default, though you can fix it with the screen calibration tools in System Preferences.

Overall, despite some annoyances, I've been quite happy with my EeePC Hackintosh and wouldn't hesitate to recommend giving it a try, provided you're willing to spend some time fiddling with the installation to get everything working.

Posted by Chismillionaire at 11:37 AM 0 comments  

How to Build a Simple SMS notification app

Everybody's talking about how mobile devices are key to the web's future. It's easy to see we're headed in that direction, as iPhones and other devices are squishing real web browsers onto our tiny, pocket-sized screens.

What about everybody on slightly less cutting edge devices? Or, even iPhone owners with slow connections that want access to specific data quickly? The answer is the SMS app, which is now accessible to the average web developer.

When we wrote about three SMS services on the Webmonkey blog, we wondered what it would take to put something together ourselves. In a shockingly short time, we wrote the Sunrise SMS App, which accepts a city as input and gives the sunrise (and sunset) times.

In this tutorial, I'll show you how I built this SMS app and how you can build your own.

This article is a wiki. Got extra advice that could help improve it? Log in and contribute.


Contents

[hide]

What is an SMS App?

An SMS app takes input from a user's text message and replies with a new text message as a response. Let's take a look at some example applications.

First, our Sunrise app, which returns sunrise and sunset times for a user's city. To test out a working version, grab your phone and text "sunrise " to 41411. Here's an example response from my iPhone:


Google SMS has a vast array of features to their SMS app. You can use it to get sports scores, movie times -- all sorts of data. This shows the real power behind SMS apps.

Are you ready to create one of your own?

What You Need

  • A TextMarks account (which requires giving it your mobile number)
  • Google API key to geocode city names
  • Some basic server-side programming experience. My examples will use PHP5 with SimpleXML and cUrl.


Create Keyword With TextMarks

To create an SMS application, we need to first make a keyword for that application using the TextMarks service. You'll need an account and a mobile number, but you can get started without one by creating a keyword. It will walk you through creating an account at the same time.


  1. Choose a keyword. This may take a few tries to find one you want. Everything three letters or less is reserved by TextMarks, as are some common words. There are still many good keywords to choose from. Tip: if you choose a real word, see whether it's known by predictive text on phones without QWERTY keyboards.
  2. Tell TextMarks your URL. Click the "respond to a keyword with text from a web page" option. An app that returns plain text isn't really an app. We want to change our response based on input. To that end, be sure to include \0 somewhere in your URL, so that you can pass everything the user types to your application. Don't worry about getting that URL right the first time. You can edit it later.

That's it! Two steps and you're ready to start providing feedback to text messages. In the upcoming sections, I'll show you how to write a basic "Hello World" SMS app, then dig a little deeper with an example app that tells users when the sun will rise and set when given their current location.


Write a basic SMS App

Before dedicating a lot of effort to a project, I'd like to make sure to first prove the concept will work. For this "Hello World" app, we'll write a short message and then repeat what the user sent to us.

In a PHP file (I called mine /sun.php/), include the following few lines: 

$city = $_GET["city"];
print "It worked! You wrote: $city";
?>


Here, we're expecting something to be passed in the city parameter. You can test this in your browser before texting by bringing up the PHP page and passing a city value. For example, your URL might be: 

www.example.com/sms/sun.php?city=San+Francisco+CA


The results would be: 

It worked! Your wrote: San Francisco CA


Note that the plusses disappear from the city name. Those are URL encoded spaces and PHP decodes them automatically.

The corresponding TextMarks URL for this example would be: 

www.example.com/sms/sun.php?city=\0


Go ahead and text your keyword, plus a city name to 41411. You should get a similar result on your phone. It will include an advertisement on the bottom. That's just the way it goes when you're using a service for free.

I like to do this basic SMS test to make sure everything is working. I use the same URL that I will eventually use for my full-fledged application. We'll be doing the same thing in the next section. Let's take sun.php and turn it into an SMS app to return the sunrise and sunset times for a given location.


Sunrise/Sunset Example SMS App

Now that you have an idea of how information flows through an SMS app, let's create something with a little more substance.

We know Webmonkeys often work until dawn, so we wrote an SMS app that makes it easy to find out when the sun will be rising. I'll show you how we did it by tying into a couple of APIs as we create the sunrise/sunset example app.

To test out a working version, grab your phone and text "sunrise " to 41411. Again, here's an example from my iPhone:


Are you as eager as I am?

You can grab the entire PHP file from Webmonkey's Code Library, or follow along piece by piece below. Let's get to coding this app before the sun sets.


Geocoding the City Name

Before we can get sunrise and sunset information, we need to know the latitude and longitude points of the city the user sent us in the text message. I won't go into a lot of detail into geocoding, because Webmonkey already has a whole tutorial on using Google's HTTP geocoder.

The quick version is that we send Google a city name (Tip: ZIP codes and entire addresses work, too) and its geocoder replies with comma separated values. It has XML, too, but we don't need to get detailed results. All we want are the coordinates.

Here is the code for geocoding, using the "city" argument in the URL: 

/*** REMEMBER to use your own API key ***/
$apikey = "yourkeyhere";

// Get lat/long from Google HTTP Geocoder
$city = $_GET["city"];
$city = urlencode($city);
$geourl = "http://maps.google.com/maps/geo?q=$city&output=csv&key=$apikey";
$csvContent = get_url($geourl);
list($status, $accuracy, $lat, $long) = split(",", $csvContent);

if ($status != 200)
{
 display_output("Eek! Couldn't determine where you are based on: $city");
}
else
{
 display_output("Worked!\nLat: $lat\nLong: $long"); // For debugging--REMOVE at next step
}

/*** Functions used by the rest of the app go here ***/
function display_output($content)
{
 print header("Content-type: text/plain");
 print $content;
 exit;
}
?>


The CSV result from Google looks something like this: 

200,4,37.775196,-122.419204


There are four values returned:

  1. status - should be 200, or there was an error
  2. accuracy - city-level, zip-level, etc. More about accuracy here.
  3. Latitude
  4. Longitude

I used PHP to split the values into four variables. Then, if the status is 200, there's a message displaying latitude and longitude. We'll remove this message in the next step, but it's always a good idea to make sure everything is working as expected at each stage.


Determining the Time Zone

Now that we have the latitude and longitude, we can use it to determine sunrise and sunset times... except that we also need to know the time zone. Lucky for us, there are two different calls from the EarthTools API that help us with each of these pieces of data.

First, we'll retrieve the time zone and daylight savings information from EarthTools. Replace the debugging line that displayed the lat/long data with the following code: 

  // Get time zone from Earthtools
 // http://www.earthtools.org/webservices.htm
 $timeurl = "http://www.earthtools.org/timezone/$lat/$long";
 $xmlContent = get_url($timeurl);
 $xmlObject = simplexml_load_string($xmlContent);
 $zone = $xmlObject->offset;
 $localtime = reformat_time($xmlObject->localtime);
 $dst = dst_to_number($xmlObject->dst);

 display_output("Time zone: $zone\nLocaltime: $localtime\nDST: $dst"); // For debugging--REMOVE at next step


You'll also need these few helper functions. You can put them below the display_output function, but make sure they're above the ?> PHP tag: 

function reformat_time($time, $fmt="g:i A")
{
 return date($fmt, strtotime($time));
}
function dst_to_number($dst)
{
 if ($dst == "True")
 {
   return 1;
 }
 else
 {
   return 0;
 }
}
function get_url($url)
{
 // Create cUrl object to grab XML content using passed variable $url
 $c = curl_init();
 curl_setopt($c, CURLOPT_URL, $url);
 curl_setopt($c, CURLOPT_RETURNTRANSFER, 1);
 $content = trim(curl_exec($c));
 curl_close($c);

 return $content;
}


As with the previous step, I included a debugging line to show that everything is working properly. The time zone is reported with as the number of hours different than Greenwich Mean Time (GMT). For example, in the US, the number will be negative, because we are behind England.

To get an idea for what results come from the EarthTools API, try passing the $xmlContent variable to the display_output function. XML tags (such as the "offset" tag) are accessible as elements of the SimpleXML object. The Google geocoder tutorial, we go indepth about accessing SimpleXML results.


Retrieving the Sunrise and Sunset Times

Now that we have the longitude, latitude, and time zone, we can call the EarthTools API to get the sunrise and sunset data. Replace that debugging line from the previous step with the following code: 

  // Get sunrise/sunset data from Earthtools
 // http://www.earthtools.org/webservices.htm
 $daymonth = date("j/n");
 $sunurl = "http://www.earthtools.org/sun/$lat/$long/$daymonth/$zone/$dst";
 $xmlContent = get_url($sunurl);
 $xmlObject = simplexml_load_string($xmlContent);
 $sunrise = reformat_time($xmlObject->morning->sunrise);
 $sunset = reformat_time($xmlObject->evening->sunset);

 // Print out sunrise/sunset msg
 display_output("Sunrise: $sunrise\nSunset: $sunset\n\nbtw, we think it's $localtime where you are. Adjust accordingly.");


Here we grab the appropriate items from the EarthTools XML. In this case, we need to go down two levels and get the sunrise item from the morning item. The sunset item is part of the evening item. Again, check out the raw $xmlContent variable to see the full XML available.

The reason my output includes the user's local time is that EarthTools has some daylight savings time issues in some places, especially the US. If you know about a better way to determine whether DST is observed, or a different data source for our application, edit this Wiki-fied tutorial. An app can only be as good as its data.

As we've gone along, you've probably been checking progress in a web browser. That's the best and easiest way to test an SMS app. (Did you grab the full code from Webmonkey's code library?)

Now for the fun part: try it on your phone. Text to your keyword and include your city. Do you get sunrise and sunset information quickly back to your phone? Is that not the coolest?


Where to go from here

OK, so now you've copied our app, but how about making your own? You'll need to find a data source. ProgrammableWeb is an excellent resource for APIs.

Someone created an SMS domain name checker. Is there similar data you'd like to have at your fingertips anywhere you are?

Also, the best data source may be your own. Maybe the latest headlines from your blog? I created a WiFi finder for Portland using my own database of WiFi hotspots.

You'll also see that this tutorial is only a taste of the many possibilities for SMS applications. Check out the advanced Textmarks usage, such as using a user's unique code or creating multiple choice menus. There's a lot more that can be done and you could do it.

So, when you create a killer SMS app, be sure to let us know by adding it here or to your user profile page.

Retrieved from "http://www.webmonkey.com/tutorial/Build_an_SMS_Notification_App"
  • This page was last modified 23:37, 16 September 2008.

Posted by Chismillionaire at 11:36 AM 1 comments  

Andriod to be unveiled 9/23

google_phone_image.jpg

T-Mobile has sent out invitations for the official announcement of the first Googlephone, the HTC Dream. The press conference will be held in New York on September 23rd, although the Android-based phone won't hit stores until October (probably October 20th).

From the leaked picture above, it's hard to get an idea of the size of the Dream. Take a look at the video below, shot at a the Google Developers Day in London yesterday, and you'll see the tiny handset -- the branding is covered, but it's obviously the Dream.

We haved mixed feelings about Android. The Dream looks quite excellent, and from a geek's point of view the open nature of the platform is very attractive. But as with the iPod before, the general consumer will go for the prettiness and ease of use. If Google and its Androidal partners don't manage to make a big splash very soon (read: great ad campaign) then we can see the consumer market for smartphones being tied up in the same way as the consumer market for MP3 players.

For business, though, it's a different matter. That slide-out keyboard alone will be enough to sell this to a thousand Crackberry addicts.

Posted by Chismillionaire at 11:35 AM 0 comments  

Detecting Pollution with Living Biosensors


A bright idea: Bacteria that are genetically engineered to glow a specific color in response to a particular chemical help researchers spot contaminants more quickly and cheaply than traditional tests do. In this image, magnified 1,000 times, bacteria that normally glow pink glow green when polyaromatic hydrocarbons are present.
Credit: Olivier Binggeli and Robin Tecon, University of Lausanne

Last spring, on a research vessel cruising through the North Sea, Swiss scientists examined tiny vials of bacteria mixed with seawater for hints of fluorescent light. By analyzing how brightly the bacteria glowed, and with which colors, they were able to diagnose and characterize the early aftermath of an oil spill.

"We were actually very happy that we could do this, and that it turned out so well," says Jan Van der Meer, an environmental microbiologist at the University of Lausanne, in Switzerland. He announced his team's results last week at the Society for General Microbiology's autumn meeting in Dublin.

Living biosensors like these bacteria, which are engineered to glow a particular color in response to a given chemical, have graced petri dishes in research laboratories for decades. But it is only recently that they are being put to practical use, as scientists adapt and deploy them to test for environmental contaminants. Sensor bacteria give faster and cheaper--if somewhat less precise--results than traditional chemical tests do, and they may prove increasingly important in detecting pollutants in seawater, groundwater, and foodstuffs.

In preparation for their research expedition, Van der Meer and his team created three different strains of bacteria, each tailored to sense a particular kind of toxic chemical that leeches into seawater from spilled oil. They began with different strains of bacteria that naturally feast upon these chemicals, each releasing specialized enzymes when they come in contact with their chemical of choice. By hooking up the gene for a fluorescent or bioluminescent protein to the cellular machinery that makes those enzymes, the scientists effectively created a living light switch: whenever the chemical was present, the bacteria would glow.

For each class of toxic chemical, Van der Meer used a different color protein, so that he could easily determine which chemicals were present based on the wavelength of emitted light. And whenever possible, he transferred the entire switch mechanism into another strain of bacteria more suited to a highly controlled lab life than its exotic, oil-eating cousins.

The research team, working in concert with several other European labs, obtained permission from the Dutch government to create a small, artificial oil spill in the waters of the North Sea. They sampled seawater at various time points after the spill, using a luminometer to measure whether sensor bacteria added to each sample had detected the corresponding chemical. Unlike traditional chemical analyses, which can take weeks and require large, expensive instruments, the biosensor test could be performed on site in a matter of minutes.

"Analytical methods can potentially take a long time and a lot of processing," says Ruth Richardson, a bioenvironmental engineer at Cornell University. "It certainly isn't something you can do remotely."

Van der Meer adds that bacterial sensing, which is inexpensive compared with chemical methods, could be particularly useful for routine monitoring. "The extreme simplicity of this is that the heart of the sensor is the bacterial cell, and that the cell is a multiplying entity," says Van der Meer. "It's extremely simple to reproduce them, and then you have enough for thousands of tests."

Catching an oil leak in its earliest stages is critical for directing appropriate cleanup efforts, says Van der Meer. A spill may not leave a visible trace, in the form of tar, until long after its most toxic effects have come and gone. By allowing for quick and easy detection of spills very soon after they occur, biosensor bacteria may make possible an earlier, more effective intervention.

Chemical testing will still likely be necessary, however. The bacterial sensors can give a rough estimate of the relative amounts of each chemical class, but only rigorous chemical analysis can determine exactly how much of each substance is present. "We tried to develop this method to be relatively quick, and to give you an overview," says Van der Meer, adding that biosensors could perhaps identify areas where more-extensive testing is warranted.

Van der Meer ultimately hopes to incorporate the glowing bacteria into buoy-based devices, which would continuously monitor seawater for hints of an oil spill and relay pertinent information back to a laboratory. His group is developing microfluidic systems that could maintain a constant, contained population of sensor bacteria to periodically test the waters.

Such a device would be subject to the vagaries of living organisms: its usefulness would be entirely dependent on whether the bacteria were alive and thriving. A negative reading could mean that no toxins are present, but it could also mean that the bacteria have died. "If they're not healthy," says Richardson, "the system is broken." Deploying living sensors also raises the risk of releasing genetically altered organisms into the environment. In this case, the chemical-sensing bacteria are theoretically harmless and unlikely to survive long in the harsh open environment.

Beyond detecting oil spills, Van der Meer's group has developed and tested a bacterial strain that detects arsenic in rice. Other potential applications include testing for pollutants in soil and groundwater, and for antibiotics in meat and milk. But for now, his vision for the future of biosensor bacteria remains largely aquatic.

"Why not have a robotic fish that swims through the water," he speculates, "and if it detects something, it could send out a signal by GPS? Technically, I think these things are possible."

Posted by Chismillionaire at 11:33 AM 0 comments  

A Face Finding Search Engine


Fuzzy faces: A new face-recognition system from researchers at Carnegie Mellon works even on low-resolution images.
Credit: Pablo Hennings-Yeomans

Today there are more low-quality video cameras--surveillance and traffic cameras, cell-phone cameras and webcams--than ever before. But modern search engines can't identify objects very reliably in clear, static pictures, much less in grainy YouTube clips. A new software approach from researchers at Carnegie Mellon University could make it easier to identify a person's face in a low-resolution video. The researchers say that the software could be used to identify criminals or missing persons, or it could be integrated into next-generation video search engines.

Today's face-recognition systems actually work quite well, says Pablo Hennings-Yeomans, a researcher at Carnegie Mellon who developed the system--when, that is, researchers can control the lighting, angle of the face, and type of camera used. "The new science of face recognition is dealing with unconstrained environments," he says. "Our work, in particular, focuses on the problem of resolution."

In order for a face-recognition system to identify a person, explains Hennings-Yeomans, it must first be trained on a database of faces. For each face, the system uses a so-called feature-extraction algorithm to discern patterns in the arrangement of image pixels; as it's trained, it learns to associate some of those patterns with physical traits: eyes that slant down, for instance, or a prominent chin.

The problem, says Hennings-Yeomans, is that existing face-recognition systems can identify faces only in pictures with the same resolution as those with which the systems were trained. This gives researchers two choices if they want to identify low-resolution pictures: they can either train their systems using low-resolution images, which yields poor results in the long run, or they can add pixels, or resolution, to the images to be identified.

The latter approach, which is achieved by using so-called super-resolution algorithms, is common, but its results are mixed, says Hennings-Yeomans. A super-resolution algorithm makes assumptions about the shape of objects in an image and uses them to sharpen object boundaries. While the results may look impressive to the human eye, they don't accord well with the types of patterns that face-recognition systems are trained to look for. "Super-resolution will give you an interpolated image that looks better," says Hennings-Yeomans, "but it will have distortions like noise or artificial [features]."

Together with B. Vijaya Kumar, a professor of electrical and computer engineering at Carnegie Mellon, and Simon Baker of Microsoft Research, Hennings-Yeomans has tested an approach that improves upon face-recognition systems that use standard super-resolution. Instead of applying super-resolution algorithms to an image and running the results through a face-recognition system, the researchers designed software that combines aspects of a super-resolution algorithm and the feature-extraction algorithm of a face-recognition system. To find a match for an image, the system first feeds it through this intermediary algorithm, which doesn't reconstruct an image that looks better to the human eye, as super-resolution algorithms do. Instead, it extracts features that are specifically readable by the face-recognition system. In this way, it avoids the distortions characteristic of super-resolution algorithms used alone.

In prior work, the researchers showed that the intermediary algorithm improved face-matching results when finding matches for a single picture. In a paper being presented at the IEEE International Conference on Biometrics: Theory, Systems, and Applications later this month, the researchers show that the system works even better, in some cases, when multiple images or frames, even from different cameras, are used.

The approach shows promise, says Pawan Sinha, a professor of brain and cognitive sciences at MIT. The problem of low-resolution images and video "is undoubtedly important and has not been adequately tackled by any of the commercial face-recognition systems that I know of," he says. "Overall, I like the work."

Ultimately, says Hennings-Yeomans, super-resolution algorithms still need to be improved, but he doesn't think it would take too much work to apply his group's approach to, say, a Web tool that searches YouTube videos. "You're going to see face-recognition systems for image retrieval," he says. "You'll Google not by using text queries, but by giving an image."

Posted by Chismillionaire at 11:31 AM 0 comments  

Synthetic Tree hauls Water


Branching out: Microscopic channels etched into a thin sheet of hydrogel mimic the capillaries in the root and leaf system of a tree. Another channel represents the tree trunk.
Credit: Abraham Stroock and Tobias Wheeler

A tree can transport water an amazing distance--from its roots, through a trunk up to 85 meters tall, and finally to its leaves, where the water evaporates. Now, scientists at Cornell University have created a microfluidic system to mimic that process. Their "synthetic tree" opens up a new way to move liquids over long distances without using mechanical pumps.

Abraham Stroock, an assistant professor of chemical and biological engineering at Cornell, and graduate student Tobias Wheeler created the synthetic tree out of a thin sheet of hydrogel, a material more commonly used to make contact lenses. They etched two networks of parallel channels into the hydrogel to represent the capillaries in a tree's root system as well as the ones in its leaves. They connected the two networks with a single channel representing the trunk of the tree.

In a real tree, evaporation from the leaves is what pulls water up through the plant--a process known as transpiration. This evaporation occurs because plants need to take in carbon dioxide to perform photosynthesis. "When they open their cells up for all this CO2 diffusion, the water is diffusing out much faster," says N. Michele Holbrook, a professor of biology and forestry at Harvard University. "All this water that's coming up the tree is because it's trying to get CO2. Ninety-nine percent of that water is going right through the tree."

Stroock and Wheeler found that their system accurately mimics this transpiration process, pulling water through at strengths several times greater than those inside a real tree. The researchers' findings appeared last week in the journal Nature.

Furthermore, because the water in a tree is under negative pressure--as if it were being sucked up through a straw--the water is in a metastable state, meaning it is between a liquid and a vapor. So the synthetic tree could also serve as a model system for studying liquids in this state. "Metastable liquids, though they are important in fundamental issues of science, tend to be curiosities, as opposed to main components of technological applications," says Pablo Debenedetti, a professor of chemical engineering at Princeton University. "In the case of liquid under negative pressure, it would tend to boil and become a vapor to relieve the negative pressure. But trees have managed to handle water in a metastable state very efficiently, so that's why this work is so nice."

Choosing a hydrogel for the material was key to making the system work, Stroock says. His team knew that a porous solid generates the capillary action in plants to pull the water through the channels, and that a smaller pore size translates into larger negative pressures. What's more, the team knew that the pore size can be no greater than 10 nanometers or else "that pore will fail to hold on to the liquid, and the whole plant will dry out through that pore," Stroock says. "The characteristic of a gel that's important is, it's a porous solid, but the mixture of the solid phase and the liquid phase is down at the molecular scale. It's like getting subnanometer-scale pores."

Stroock envisions that the synthetic tree system could be used to move liquids passively without needing mechanical pumps. In heat-transfer applications, it could cool small devices, like laptop computers, or larger ones, like vehicles, or even buildings. It could also be part of an soil remediation system, Stroock says. Instead of needing to flood soil with water to flush out contaminants, a synthetic tree could pull the contaminated water out.

"This paper is more proof of principle, but by clever selection of materials and micromachining, it shows you can handle liquids under tension in a stable and reproducible way," says Debenedetti

Posted by Chismillionaire at 11:31 AM 0 comments  

2011 Volt Finally Revealed- production set for Nov 2010

RENAISSANCE CENTER, DETROIT -- After serving up live feeds from General Motors' operations around the world, a celebration designed to show the company's strength and diversity, Rick Wagoner, Bob Lutz and Fritz Henderson brought out the big present: the 2011 Chevrolet Volt.

"The world has changed a lot in the last hundred years. In fact, it's changed a lot in the last hundred hours," CEO and chairman Wagoner said. GM is committed "to leading the industry ... in the development of alternate fuel propulsion."

Like the GMNext program that began in January, the centenary celebration paid very little attention Tuesday to the automaker's past, and instead worked hard to convince the press and public that it has another century's life in it. Vice chairman for global product development Lutz, and Jon Lauckner, vice president for global program management, revealed a bit about the production Volt, which is set to go on sale in November 2010. For example:

  • Don't call it a plug-in, or parallel hybrid (the upcoming Saturn Vue hybrid is a plug-in). Lutz describes the Volt as an electric car that uses its internal combustion engine strictly to generate electricity beyond the expected 40-mile range.
  • The Volt is about 400 pounds heavier than the Chevrolet Cruze. GM is using pre-production Cruzes from South Korea, with their transmission tunnels widened for the powertrain, as mules for the Volt.
  • The heavy battery pack, placed low in the global GM Delta compact platform, results in a good, low center of gravity for better handling, Lutz says.
  • Lutz equates the competition's (Toyota's) insistence on developing nickel-metal hydride batteries for its internal combustion-generated electric to when he was at GM in the early '60s, and the company insisted on not switching to disc brakes because it had invested so much into drum brake production.
  • The Volt will use lithium-ion batteries, and the development is on time, Lutz insists. He says Chevy could sell it today, but GM isn't interested in putting a handful of cars on the street and call it "production," an obvious slam at the Honda FCX Clarity fuel cell car.
  • Top speed will be 100 mph, and GM expects a sub 9-second 0-60 mph time, Lauckner said.
  • "We want people to have a driving sensation that a car can be clean and fun to drive, at the same time," Lauckner added.
  • A real production car, Lutz said, means GM expects to sell about 10,000 Volts in its first full year of production, with a goal of 60,000 per year, or more if there's demand, when production ramps up. GM will sell it as both a Chevrolet and an Opel, but isn't talking about any other divisions just yet. This being GM, though, you can pretty much count on versions for Cadillac, Saturn, and one for the Buick-Pontiac-GMC channel at least.
">

Posted by Chismillionaire at 10:14 AM 0 comments  

Saab 9-X Air


PARIS — Saab plans to unveil a convertible concept, the 9-X Air, at the upcoming 2008 Paris Auto Show. The concept is described by insiders as a sneak preview of the all-new Saab 9-1X concept that is slated to go into production in 2009.

Sharing design cues with the Saab 9-X BioHybrid that was shown earlier this year at Geneva, the four-passenger 9-X Air features a unique "canopy top" that is made of fabric and automatically folds in three sections behind the rear seats. The newest Saab concept measures only 174 inches long — about the length of a Ford Focus coupe.

The 9-1X reportedly shares a version of General Motors' new Delta 2 platform, which will underpin a wide range of vehicles, from the new Chevrolet Cruze and Chevrolet Volt to the next-generation Opel Astra. The baby Saab will likely be sold in North America as a 2010 model, and is expected to be offered in both hatchback and convertible variants.

Like the 9-X BioHybrid, the 9-X Air was designed at GM Europe by a team led by Anthony Lo. In addition to wraparound side glass and rear "buttresses," the car forgoes a conventional trunk and deck lid in favor of a large rear storage compartment that is spring-loaded and slides out, drawer-like, from beneath the rear lights.

The vehicle is powered by a turbocharged 1.4-liter four-cylinder engine that runs on E85 biofuel and is linked to a hybrid electric motor. The engine makes 197 horsepower and 207 pound-feet of torque and drives the front wheels through a six-speed dual-clutch automatic gearbox. Saab claims a 0-60-mph acceleration time of less than 8.0 seconds, with CO2 emissions of just 107 g/km.

What this means to you: Will the production version look as sleek and futuristic as the concept?

Posted by Chismillionaire at 10:12 AM 0 comments  

Driving the Gen 2 RS6







Chismillionaire was tempted to not even post this, but since the article states the US will get the next generation RS6( a much faster and lighter machine) I felt obliged to pass along to our readership.


Strictly speaking, the 2009 Audi RS6 sedan should be labeled "Audi Quattro RS6 sedan," since the building of all RS models happens in the Quattro facility in Neckarsulm near Stuttgart. Though Quattro GmbH isn't as widely known as BMW's M division or Mercedes-Benz's AMG subsidiary, the reputation of the Audi high-performance division is growing, and the performance credentials of cars like the RS6 (RS stands for RennSport, or race sport) is responsible.

Any adventure with this high-tech all-wheel-drive wonder car with its 571-horsepower twin-turbo V10 provokes saucer eyes and fresh dialects of body English from any driver who thinks he's got skills. In the most general of senses, the 2009 Audi RS6 sedan is one grunting, panting thug of a car.

So Much Oomph, So Much To Oomph
We first noticed the thuggish tendencies of the RS6 personality back in January 2008 while urging the 2008 Audi RS6 Avant around the Paul Ricard circuit in southern France. After a few hairy laps in that bellowing Sepang Blue wagon, we were smiling like The Joker. Of course, we were also wondering what business any car bearing the RennSport title has weighing as much as a young circus elephant — some 4,464 pounds according to Audi.

Had it been a special version of the closely related S6 Avant, then fine. Even the Mercedes-AMG E63 wagon is acceptable to us at 4,399 pounds, because, well, it's a Mercedes. But anything "RS" really has to be fantastically clever and really enlightening at the track, as sheer power falls only in the middle of the top 10 list of RS credentials as developed by Quattro. And the RS6 Avant just didn't meet the cleverness quotient.

On the other hand, this Misano Red RS6 we've just driven on the heavily policed roads around Dusseldorf, Germany, and over some good stretches of no-speed-limit autobahn, seems in every way dynamically more precise than the Avant, though technically quite identical. We guess that the 87 fewer pounds hanging off the back of the sedan versus the wagon helps minimize both chassis flex and body roll. And the optional 20-inch wheels with 275/35ZR20 Pirelli P Zero treads also make a big difference.

This 2009 Audi RS6 also carries the optional 16.5-inch ceramic brake discs with eight-piston calipers up front, as well as 14-inch ceramics in back with floating single-piston calipers. These brakes (available only with the 20-inch wheel option) arrest your forward progress as if you'd hit a wall of wet cement. Even better, these ceramic rotors help peel away a total of 26.9 pounds in unsprung weight from the RS6 sedan and are guaranteed a lifetime of 190,000 miles.

Engine Art
As in the RS6 Avant, the ingredient that begs to get most noticed is the 571-horsepower twin-turbo 5.0-liter version of the Audi V10 engine. Though the majority of the engine architecture is shared with the S6's high-revving naturally aspirated 429-hp 5.2-liter V10, RS6 project director Jens Koch tells us, "More or less 400 different parts in the RS6 engine are unique parts, there being usually no more than 400 separate parts to any engine." Pretty unique, then.

Maximum boost pressure calibrated into the software that manages the twin variable-geometry IHI turbochargers is 10.2 psi, and it's this steady prodding by the turbos that explains how the 4,337-pound RS6 sedan launches to 100 km/h (62 mph) in just 4.5 seconds, or one whole tenth of a second quicker than the RS6 Avant. As project director Koch puts it, "These turbos can be programmed to assist the engine to a much higher degree, so you can imagine what the car could do if we let it."

Rumors abound that the 2009 Audi RS6 sedan has wiped its way around the Nürburgring in 8 minutes flat. Others tell us that unlimited prototypes routinely jumped above 200 mph. "Turbos are essential equipment for an RS car," adds Koch. "For one thing, it is a sure way to differentiate the Audi RS experience from the BMW M or Mercedes-AMG experience."

This is a throttle that almost obliges one to hammer it. There are 480 pound-feet of torque chugging the two axles forward all the way from 1,500 rpm to 6,250 rpm. Maximum power arrives exactly when the torque finally relents at 6,250 and then carries on to 6,700 rpm. As a result, forward thrust never lets up. And every second, the exhaust is rumbling and roaring through large twin oval exhaust tips in a way that makes the hair on the back of your neck stand right up.

The six-speed automatic transmission shifts relatively predictably via paddles on the steering wheel and proves a fine match for this engine, but we crave more crispness in both drivetrain response and shift action.

The bad part in all this is that the RS6 — for all its direct-injection wonderment and high technology — pollutes Mother Earth like a Greenpeace anathema. When conservatively driven, the RS6 sedan purportedly returns a combined average of 16.9 mpg, but we all know in our tree-hugging hearts that this number will be more like 12.5 mpg in real-world driving.

Best on Track Day
The 2009 Audi RS6 in either Avant or sedan guise is sought after by hot-foot executives in both Germany and the United Kingdom. In Britain, they grab an RS6 mainly for the luxo-prestige, since hurtling down the carriageways is not possible due to what always seems like a 1:1 ratio of motorists to policemen. In Germany, however, we can still haul as much ass as we like and frequently over sometimes long stretches of no-limit autobahn.

In these circumstances, we understand completely the reasons for the existence of the RS6. The sensation of speed is deeply physical and everything still feels absolutely under control while we're massaging the factory speed limiter at 155 mph. (Buyers can opt to extend the limiter to 174 mph if they really gotta make that appointment on time.)

Driven normally and around town, this second-generation RS6 is perfectly at home and we weren't wanting for comfort. With the optional Sport Suspension Plus tacked on top of the active suspension, the ride is optimized for any condition. Sport Suspension Plus is directed via the latest version of the Audi MMI onboard system by just pressing the "car" button on the center console and turning the MMI knob to either Comfort, Dynamic or Sport. In our seat-of-the-pants test, Comfort is Euro-cozy, Dynamic is typically Euro sturdy and Sport honestly gives the RS6 some unfortunate broncolike behavior over the blacktop.

Strong Looker
The design trick we love most is the creased fender blisters over all four wheel arches. This is a bit of hard-core heritage borrowed from the Audi Quattro S1 that dominated world rallying during 1985 in the amazingly capable hands of Walter Röhrl. These kinks in the RS6's armor also make room for the grippy set of 20-inch Pirellis.

Our red sedan was the first RS car ever entrusted to us fitted with the black optical pack, which means that all heavily chromed exterior bits turn black. Especially noticeable is the full-frame Audi grille looking like a fighting dog's muzzle. Add the optional-look Titanium-colored wheels and the darkness deepens. There is light, however, in the strip of 10 LEDs under the headlights (other Audis get only six).

The first thing we notice inside is the darker darkness. Between the carbon-fiber look adapted to the interior trim and the black optics here and there, we are feeling sucked into the space-time continuum. Fortunately, the seats are phenomenal support units for the whole back and shoulders, and the suede upholstery of steering wheel and shift knob keep you feeling in touch with the machine.





Just Wait Till Gen Three
North America reportedly will never get the 2009 Audi RS6 sedan, but we will be among the first clients for the third-generation RS6 variants in 2012. Director Koch insists that the next RS6 will be not only faster still, but also much lighter and (perforce) less polluting. "This will be a revolutionary car and much more RennSport at heart," he adds.

Full volume for the run of RS6 (Avant and sedan together) is 8,000 units, with 6,500 of these being Avants and just 1,500 taking sedan form. In Germany, the price starts at roughly $126,000 and Audi executives believe a price nearer $90,000 would be required for success in the U.S.

What with stock brokerages on Wall Street being swallowed whole left and right, the times clearly aren't right for this V10-powered thug to come to America.

Posted by Chismillionaire at 10:05 AM 0 comments  

Lamborghini shows a glimpse of possible 4 door upmarket Panamera


PARIS — Two of Europe's top sports-car marques will shift their ongoing battle to new turf at the upcoming 2008 Paris Auto Show, where Porsche and Lamborghini both are expected to unveil new high-performance four-doors.

Lamborghini on Tuesday released a teaser image of its as-yet-unnamed and -unspecified vehicle, which insiders have described broadly as a "grand touring" car — that is, a high-performance sedan. The automaker, a subsidiary of the Volkswagen group, revealed no details about the car, referring to its October 1 press conference at the Paris show.

The Lambo teaser appears to show a portion of the vehicle's rear end, detailing a carbon-fiber diffuser shrouding center-mounted dual exhaust pipes.

A day earlier, Porsche released a teaser shot of the 2010 Panamera, which goes on sale next year in Europe and North America. It is expected that the car, described by Porsche as a Gran Turismo, will make its official debut at the Paris show, perhaps as a thinly disguised concept.

What this means to you: Who knows what will happen next, now that Porsche has seized financial control of VW?

Posted by Chismillionaire at 10:00 AM 0 comments  

Porsche bumps stake in VW to 35% ensuring control

STUTTGART, Germany — Porsche Automobil Holding, the entity controlled by the Porsche and Piëch families, acquired an additional 4.89 percent of Volkswagen on Tuesday. This pushed its stake to more than 35 percent, ensuring de facto control of the larger automaker.

Porsche's chief executive, Wendelin Wiedeking, himself the subject of ongoing speculation in the European press as to his future with both companies, said: "Our goal continues to be to increase our stake in Volkswagen to more than 50 percent. We look forward to continuing and intensifying our cooperation with the managing board of Volkswagen, which is based on a spirit of mutual trust, and are hoping for a quick resolution of the conflict between the employee representatives of Porsche and VW."

Under German law, the labor unions are represented on the supervisory boards of publicly traded companies. Porsche said representatives of VW's unions will now take seats on the Works Council and Supervisory Board of Porsche.

A Porsche press release on Tuesday said Wiedeking, who has had a contentious relationship with VW's labor representatives, is "confident" that the unions of both companies would cooperate, leading to "a constructive and forward-looking coexistence."

Before it proceeds to acquire additional shares in VW, Porsche is awaiting the results of European antitrust and regulatory proceedings, which it said are to be completed shortly.

Porsche also said that German law requires it to make an obligatory offer for Audi, but it considers Audi to be an integral part of the VW group and it has no intention of separating the two.

In a related story, Britain's Financial Times carried a report that the power struggle between VW and Porsche has evolved into a family feud at Porsche between cousins Wolfgang Porsche, chairman of Porsche's supervisory board, and Ferdinand Piëch, chairman of VW's supervisory board.

According to the newspaper, Wolfgang Porsche, with the support of other family members, proposes to oust Piëch from his board position at VW because Piëch allegedly made the family "look like a fool" during the ongoing acquisition of VW and rancorous relations with the automaker's unions. The paper quoted Wolfgang Porsche as saying he was "appalled" at Piëch's behavior.

What this means to you: Germany's ongoing industrial soap opera makes The Tudors look pretty tame in comparison.

Posted by Chismillionaire at 9:58 AM 0 comments  

Learn to Love the Bear

(Money Magazine) -- With U.S. equities down 24% and foreign shares off 33% from their October peak, you probably think Wall Street is broken. It's not. In fact, dramatic downturns are actually a sign the market is working. Let me explain.

The way I see it, bear markets are like taxes. They're painful and inevitable, but ultimately they're a necessary evil. Just as we all have to pay taxes for a functioning government, investors must suffer occasional losses if they strive to build long-term wealth.

That's because bear markets are a reminder of one of the most important concepts in investing: the relationship between the risk you take and your expected returns.

No risk, no reward

You know, for instance, that in the long run owning stocks is highly likely to be more rewarding than putting your money into ultrasafe one-month Treasury bills. But you also know that equities don't outperform T-bills every year. Losses, in fact, are quite common.

In 23 of the 82 years from 1926 through 2007, the S&P 500 posted negative returns. And often these drops can be severe: Between March 2000 and October 2002, equities shed more than 49% of their value.

Alas, there are no guarantees on Wall Street. But that's the point: While you might wish that stocks never suffered any losses, without the risk of major setbacks, equities wouldn't provide you with those higher potential returns.

It has to do with a concept called risk premium. This term refers to the returns you can expect an investment to deliver beyond what an absolutely safe asset provides.

Think of it as combat pay - extra compensation for agreeing to put yourself in harm's way. The greater the risk, the greater the possible reward (see the chart to the right).

During bull markets, investors often lose sight of this relationship. We tend to assume that the good news that's driving up our stocks at a given moment will forever stay that way. But that's what bear markets are for - to remind us of the risk of being too exuberant.

Don't try to evade this tax

Isn't it possible to enjoy this premium while avoiding losses? Don't even think about trying to time the market. Just as taxes redistribute money from the wealthy to those in need, the market has a knack for transferring wealth from those without disciplined investing plans to those with them.

Consider the results of a 2005 study by Morningstar. In all 17 fund categories Morningstar tracks, the returns actually earned by fund investors were lower than the stated returns of the funds they used.

Why? Market timing: Investors try to chase hot returns but get in at the wrong time. Or they foolishly think they can avoid losses.

As former Fidelity Magellan manager Peter Lynch once said, "Far more money has been lost by investors in preparing for corrections or anticipating corrections than has been lost in the corrections themselves."

Of course, this lack of discipline represents its own form of risk - the risk that you'll undo your long-term strategy. Unfortunately, that's one risk you won't receive a premium for taking on.

Posted by Chismillionaire at 9:57 AM 0 comments  

AIG gets $85 Billion bailout- Why? And 5 Questions for AIG Customers

NEW YORK (CNNMoney.com) -- In an unprecedented move, the Federal Reserve Board is lending as much as $85 billion to rescue crumbling insurer American International Group, officials announced Tuesday evening.

The Fed authorized the Federal Reserve Bank of New York to lend AIG (AIG, Fortune 500) the funds. In return, the federal government will receive a 79.9% stake in the company.

Officials decided they had to act lest the nation's largest insurer file bankruptcy. Such a move would roil world markets since AIG (AIG, Fortune 500) has $1.1 trillion in assets and 74 million clients in 130 countries.

An eventual liquidation of the company is most likely, senior Fed officials said. But with the government loan, the company won't have to go through a tumultuous fire sale.

"[A] disorderly failure of AIG could add to already significant levels of financial market fragility and lead to substantially higher borrowing costs, reduced household wealth and materially weaker economic performance," the Fed said in a statement.

The bailout marks the most dramatic turn yet in an expanding crisis that started more than a year ago with the mortgage meltdown. The resulting credit crunch is now toppling not only mainstay Wall Street players, but others in the wider financial industry.

The line of credit to AIG, which is available for two years, is designed to help the company meet its obligations, the Fed said. Interest will accrue at a steep rate of 3-month Libor plus 8.5%, which totals 11.31% at today's rates.

AIG will sell certain of its businesses with "the least possible disruption to the overall economy." The government will have veto power over the asset sales and the payment of dividends to shareholders.

The company's management will be replaced, though Fed staffers did not name the new executives. The board will remain. For customers, it will be business as usual, officials said.

Taxpayers will be protected, the Fed said, because the loan is backed by the assets of AIG and its subsidiaries. The loan is expected to be repaid from the proceeds of the asset sales.

The government had resisted throwing a lifeline to AIG, hoping to entice investment firms to set up a $75 billion rescue fund. Officials opted not to bail out Lehman Brothers, which filed for bankruptcy on Monday. But by Tuesday night, it became clearer that the private sector would not step in to help AIG, which has a greater reach into other financial companies and markets than Lehman does.

"We are working closely with the Federal Reserve, the SEC and other regulators to enhance the stability and orderliness of our financial markets and minimize the disruption to our economy," said Treasury Secretary Henry Paulson. "I support the steps taken by the Federal Reserve tonight to assist AIG in continuing to meet its obligations, mitigate broader disruptions and at the same time protect the taxpayers."

Dramatic end, high stakes

The firm's options grew more limited as the day wore on. Its already-battered share price fell another 21% with more than 1 billion shares trading hands, and plummeted another 46% in after-hours trading.

At one point Tuesday morning, shares fell more than 70% - a day after losing 61% of their value.

In a statement late Tuesday night the company said, "AIG is a solid company with over $1 trillion in assets and substantial equity, but it has been recently experiencing serious liquidity issues. We believe the loan, which is backed by profitable, well-capitalized operating subsidiaries with substantial value, will protect all AIG policyholders, address rating agency concerns and give AIG the time necessary to conduct asset sales on an orderly basis."

The company also commended the Federal Reserve and the Treasury Department for "taking action to address AIG's liquidity needs and broader financial market concerns."

Furthermore, the firm expressed its gratitude to New York Governor Paterson, and other NY State as well as Federal officials.

New York State officials, who regulate the insurance titan, had urged the federal government to rescue AIG. The state attempted to help AIG on Monday by allowing it to tap into $20 billion in assets from its subsidiaries if the company could comes up with a comprehensive plan to get the much-needed capital, said a state Insurance Department spokesman.

Pleased with the federal government's response, New York Gov. David Paterson said Tuesday night: "Policy holders will be protected. Jobs will be saved. Business will continue."

The funding became ever more crucial as the insurer was hit Monday night by a series of credit rating downgrades. The cuts meant AIG (AIG, Fortune 500) could be forced to post more than $13 billion in additional collateral.

Late Monday night, Moody's Investors Service and Standard & Poor's Ratings Services each said they had lowered their ratings. A few hours earlier, Fitch Rating had also downgraded AIG, saying the company's ability to raise cash is "extremely limited" because of its plummeting stock price, widening yields on its debt, and difficult capital market conditions.

The downgrade could force AIG to post $13.3 billion of collateral, Fitch said in a statement. Also, the moves would make it more expensive for AIG to issue debt and harder for it to regain the confidence of investors.

All the while, analysts urged the company to unveil its restructuring plan.

"Management needs to address investor concerns now before the market sell-off becomes a self-fulfilling prophecy," Rob Haines, analyst at CreditSights, said Tuesday.

Global ripples

The failure of AIG could have caused unprecedented global ripple effects, said Robert Bolton, managing director at Mendon Capital Advisors Corp. AIG is a major player in the market for credit default swaps, which are insurance-like contracts that guarantee against a company defaulting on its debt. Also, it is a huge provider of life insurance, property and casualty insurance and annuities.

"If AIG fails and can't make good on its obligations, forget it," Bolton said. "It's as big a wave as you're going to see."

AIG has had a very tough year.

Rocked by the subprime crisis, the company has lost more than $18 billion in the past nine months and has seen its stock price fall more than 91% so far this year. It already raised $20 billion in fresh capital earlier this year.

Its troubles stem from its sales of credit default swaps and from its subprime mortgage-backed securities holdings.

AIG has written down the value of the credit default swaps by $14.7 billion, pretax, in the first two quarters of this year, and has had to write down the value of its mortgage-backed securities as the housing market soured.

The insurer could be forced to immediately come up with $18 billion to support its credit swap business if its ratings fall by as little as one notch, wrote John Hall, an analyst at Wachovia, on Monday.

This year's results have also included $12.2 billion in pretax writedowns, primarily because of "severe, rapid declines" in certain mortgage-backed securities and other investments.

The company brought in new management to try to turn the company around. In June, the company tossed out its chief executive, Martin Sullivan, and named AIG chairman Robert Willumstad, who joined AIG in 2006 after serving as president and chief operating officer of Citigroup (C, Fortune 500), in his place



NEW YORK (CNNMoney.com) -- American International Group is the nation's largest insurer and at the moment, Wall Street's biggest worry.

On Tuesday night, the federal government announced an $85 billion rescue of the company.

Despite the company's importance, the average American is probably not sure how, or why, its problems will affect them.

Here are five key questions and answers about AIG's current woes and what they mean to you.

I have insurance through AIG. How worried should I be about the problems at the company?

At least in the short term, you probably don't need to be worried at all. The problems are with the AIG holding company, not the individual insurance company subsidiaries that you do business with, according to a source with New York State's insurance regulator.

Even if AIG's holding company is forced to file for bankruptcy court protection, there's a good chance that the subsidiaries will continue to operate normally with no disruption in claims payments. That has happened in the case of other insurance holding companies' bankruptcies in the past, such as Conseco (CNO).

What guarantees that my claims will be paid?

Typically, if an insurance company falls into financial distress and is at risk of having claims that exceed the assets it holds to make those payments, the insurance regulator in its home state will take control of the firm and make payments.

The state regulator will not only use the firm's own assets to make those payments but, if necessary, can also make payments out of a state fund into which all insurers in the state are required to pay.

This guarantee applies not just to traditional insurance policies but also to retirement products that have a promised payout, such as annuities.

But there are limits to the payments that will be made to customers that vary depending on which state a particular AIG subsidiary is based, according to Joseph Belth, professor emeritus of insurance at Indiana University and editor of The Insurance Forum, a newsletter often critical of the industry.

Should I be thinking about changing my policy away from AIG to another insurer?

While credit rating agencies downgraded debt held by AIG (AIG, Fortune 500) on Monday, AIG's ratings are still considered investment grade and the company's insurance subsidiaries are considered to be secure, at least for now.

Belth said changing insurers is not a simple decision.

"A lot depends on what kind of insurance you talk about," he said. "If you're talking about life insurance, you have to think about whether you can qualify with a new insurer, if your health has changed. But it's something you have to consider if the ratings decline into the vulnerable range."

Why should I care about problems at AIG if I'm not a customer?

AIG is by far the world's largest insurer and its stock is found in many mutual funds, including any S&P 500 index fund. It is also a component of the Dow Jones industrial average. All by itself, it's been responsible for dragging the Dow down more than 400 points so far this year.

AIG is also active in the business of credit default swaps, complicated financial instruments used by investors to protect themselves from bond defaults. Lehman Brothers (LEH, Fortune 500) was another major player in that field. If both go away, it would create a tighter credit market for consumers and businesses trying to get loans.

For this reason, there is a debate about whether the Federal Reserve will agree to lend the company the tens of billions of dollars it needs to cover its short-term funding needs or if the Fed will try and get private firms to assist AIG instead.

AIG is an insurer, not a lender. Why do I keep hearing about its problems with subprime mortgages?

All insurers take money they collect in premiums and invest them in different forms of assets. The idea is to make money on those investments so that the insurer can keep their premiums low and attract more clients.

But AIG made a bigger investment into securities that were backed by subprime mortgages than most other insurers. As defaults and foreclosures of those loans rose, the value of those securities fell, creating big problems for the firm.

In the past nine months, AIG has reported net losses of more than $18 billion, largely due to its exposure to bad mortgages. To top of page

Posted by Chismillionaire at 9:50 AM 0 comments  

Subscribe to: Posts (Atom)