Looking Inside a Mummy's Stomach

Analysis of swallowed plant material sheds new light on Oetzi the Iceman

By Stuart Fox Posted 12.02.2008 at 6:16 pm 0 Comments

The Iceman Cometh: (to chomp on some moss). Via Jacklee

Whether it was a quarter as a kid, some mean-looking peppers or that worm at the bottom of your shot glass, you've probably swallowed some weird things over the years. But six kinds of moss? Well then Oetzi, the famous, 5,300 year old frozen mummy found in the Alps nearly two decades ago, has got you beat. What’s more, a new anthology of research on Oetzi highlights those mosses, along with some other associated plants, to challenge theories about how he lived and how he died.

Previously, scientists believed Oetzi was shepherd, killed by a blow to the head after being shot with an arrow. However, new evidence calls into question the hypothesis that his skull was crushed by the person who shot him, and dung found with Oetzi suggests he was a hunter, not a herder. Researchers also used plant matter found on his person to link Oetzi with a farming culture east of the Alps, fleshing out our understanding of Oetzi’s world.

“The big news is that we are putting the knowledge of the iceman into a wider context,” said Klaus Oeggl, professor of archeobotany at the University of Innsbruck in Germany, “Up to now, everything was focused on the mummy and the situation at the top of the mountain. Now we want to know what the setting of the finding was.”

The findings, published in a special issue of the journal Vegetation History and Archeobotany devoted entirely to Oetzi, highlight six mosses in Oetzi’s stomach. The discovery of any moss is strange, as moss has no nutritional value. Oeggl and his colleagues showed that the mosses were not food, but were instead remnants of Copper Age technology. It seems Oetzi used one type of moss as a wrapper for food, and another as a bandage for wounds on his hand and shoulder, which (somewhat) explains how he might have accidentally eaten the mosses.

The presence of the antibiotic bandage moss seems to contradict a hypothesis put forward in 2002 at the Institute for Mummies and the Iceman in Bolzano, Italy. There, the researchers claimed a blow to the head killed Oetzi. The theory held that after Oetzi was shot, his attacker either bludgeoned Oetzi in the head or Oetzi hit his head on rock when falling. Instead, Oeggl says Oetzi bled to death from the arrow wound after the application of first aid.

In August of this year, a paper in Rapid Communications in Mass Spectrometry announced researchers had found hair in Oetzi’s clothes came from domesticated animals. However, an analysis of plant matter by Oeggl and his team confirm that the dung found beside Oetzi came from wild game, not domesticated animals. Additional stomach contents corroborate that finding, as Oetzi ate deer, not mutton or beef, as his last meal.

Oetzi was discovered in 1991 when two German hikers stumbled upon his remains, frozen in an Alpine glacier. Preserved by the freezing process, Oetzi has provided scientists with a wealth of data about ancient Europe. However, his tattoos, arrows, and bronze axe have led researchers to speculate he was everything from a hunter to a metal worker, from an impotent outcast to an adored victim of ritual sacrifice. And while many of those mysteries about Oetzi have been solved, it seems like there is still a great deal to learn about the iceman and his people.

Paid to watch Sports? A Career Path for Bernie's Red

New research into what people talk about when they watch the game is proving nice work if you can get it

By Brett Zarda Posted 12.03.2008 at 1:49 pm 0 Comments

Paying the Watchers: iStockphoto

Forget pay per view. In the UK, soccer fans are getting paid to view. Research at Glasgow University is ongoing to learn what people talk about while watching sports. The goal is to develop specific mobile phone applications for the sports obsessed to further immerse them during viewing.

"We want to find out what fans talk about and their reactions to events at a game,” said researcher Stuart Reeves to the BBC. "The aim is to design applications that can help them record events during the match, communicate in the gaps between play—before a game, during breaks in the game, at half time, after it has finished—and create a memory of the day.”

Think of it as a glorified instant messaging customized for sports aficionados. The researchers will select fifteen lucky fans who will be paid five pounds a piece for just watching games and an extra 10 for blabbing about why the spend a good portion of their days watching other grown men kick a ball towards a net. Hardly an income but not a bad bonus for doing what you’d do for free. And who is providing the £400,000 to conduct such critical research? Well, Microsoft and the University of California are collaborators but the cash is coming from the government organization the Engineering and Physical Sciences Research Council. And, we think baseball is a national pastime.

Via The Scotsman

11 Great Tips for Camera Owners

This Camera Belongs To...

Digital cameras are just the right size to slip out of your pocket on the subway. While aspiring detectives will enjoy trying to track down the rightful owner by identifying restaurant interiors and concert snapshots, it is a lot easier to keep a photo with your phone number on it. I think a handwritten note says it best. Many cameras allow you to lock a photo on the memory card. I recommend locking this one so that it is always your #1 photo and doesn't get cleared like the rest of the photos. This screen would also be a good place to put anything that emergency workers would need, like your blood type, drug allergies or organ donor status.

Maps

Until you are carrying around an iPhone or personal GPS unit, your camera can substitute. With modern 5-12 megapixel cameras, you can fit a lot of detail on a single photo, and most cameras allow you to zoom in on photos for a closer view. If you are new to an airport, snap a shot of their floorplan in case you have to find gate L45 in a hurry. This trick is also good for keeping a shot of the Metro system. Lately, when checking an address online, I've been snapping a photo of the Google Maps screen as an insurance policy. I've also found it useful when describing what part of the city our new house is in. This would also be good for people who find themselves challenged with describing where on earth to find Laos.

Parking Lots

One time I lost a car in the airport long-term parking lot. Back after a three-day vacation, I was faced with 1,000 twisty passages, all alike. If you've ever lost your car, and landmarks like R25 and H12 don't stick in your memory, take a photo of the parking lot section sign, or any other landmarks nearby.

Mechanisms

This is another insurance policy. Before you unplug your router, fix a guitar string or disassemble the lawnmower throttle linkage, snap a photo of what it used to look like. You probably won't need it, but if you have to drop the project for a few days, you might appreciate a visual refresh of what it looked like when it was just a little broken.

License Plates

Did you ever get the feeling that you weren't going to make it out of a parking lot unscathed? If a certain combination of carseat+close parking+exhaust modification sets off your "door ding" alarm, give yourself peace of mind by snapping a shot of your new neighbors.

Yellow Pages

Want to take a little info on the road? Rather than tearing out the page, snap a photo of those knitting supplies listings... and by knitting supplies, I mean drug and alcohol treatment centers.

Evidence for the Defense

Occasionally, I find myself in a less-than-lawful situation. For example, if the marked crosswalk looks dangerous or flooded, and I cross the street somewhere else, I do so with an eye towards my legal defense. To ease my mind, I will often take a photo of the offending situation, to show as evidence in the supremely unlikely circumstance that I end up in court. Other situations which warrant a little documentation: 1. Light rail ticket machine is broken 2. Parking meter malfunction 3. Ambulance behind me at a traffic light 4. I need to hop the fence into the childcare area of California Family Fitness because I'm being chased by a crazy ex-roommate with nunchucks. Some people would argue that just taking such a photo would prove that I was doing something I knew was illegal, and sometimes they would be right, but if you need to defend your justifiably illegal actions, it is good to have pictures to complement your story.

Chinese Food Menus

If you hang out with the kind of person who forgets what is available from Chinese take-out. I didn't really have a picture of a Chinese food menu, so I substituted this lid from a can of paint. This would be another good thing to use your camera for, copying a complicated code when the guys at the paint counter ask you to bring the lid from the old can

Recipes

If you are making a special trip to the store, take a photo of the ingredient list.

Rental Dings

Part of the process of renting a car or a truck is the ding-check, a thorough examination of the vehicle for pre-existing damage. If you are worried about getting charged for something you didn't do, take photos of the exterior. In the future, car rental places will do this for you (and them) and stow the photos themselves.

A Mirror

And finally, if you need to check your teeth for Cracker Jack particles, your lips for ink, or see how you look in very dark sunglasses, turn the camera on yourself.

An Earlier Information Age

Florence Nightingale teaches us a thing or two

By M. Farbman Posted 12.02.2008 at 2:01 pm 1 Comment

Diagram of the Causes of Mortality: Florence Nightingale

Plus, oil sands, oily studies, and more, in today's links.

• Canadian oil is closer to home, and also provides a closer look at the environmental havoc wreaked by the process of extracting oil from oil sands.
• It's not a new suggestion that the drug company studies that make it into medical journals do not tell the whole story. But a new study takes a look at how data submitted to the FDA stacks up against what gets published.
• We are about 21 nanometers closer to self-powered electric devices. That amount sounds like a little step, but it could mean a lot.
• If this is the information age, Florence Nightingale was far ahead of her time. She helped bring about the use of applied statistics, as well as graphics for displaying quantitative information.
• For when those little mini-bottles of liquor on the plane don't work, an experimental drug may help travelers overcome jetlag.

Baby Steps out the Window

Research shows tackling the hardest problems first could better teach children new skills

By Rachel Durfee Posted 12.02.2008 at 1:41 pm 2 Comments

Problem Solving Kid: iStockPhoto

Common wisdom dictates that in order to learn a complicated skill, it is best to break the skill down into parts, conquer simpler steps first, and then incrementally move forward, eventually getting to the hard stuff. For example, you don't just tackle a multivariable equation, you start with easier examples. First, you learn to add, subtract, multiply and divide. Then, you learn how to solve 2x=8, then x + y = 7, and so on and so forth until you are aptly equipped to solve 2(5x + z) = 30x + 3y + 10. For those who made it all the way from fourth grade mathematics to senior year calculus, that's an eight-year journey, and, until now, a necessary one. But what if that's not the best or only way to learn something? New research suggests that diving straight into the tough problems first could actually be a better method for teaching children new skills.

The key to the new study, conducted by University of California, Santa Barbara psychologists Brain J. Spiering and F. Gregory Ashby, was realizing that complicated problems usually involve abstract thinking. A group of volunteers was tasked with learning a set of problems by one of three different methods: starting with easy problems, starting with harder problems and then moving on to easier problems, or being shown easy and hard examples in random order. Firstly, the results proved that the best method heavily depends on what is being taught. For simple categories (i.e. was the line horizontal or vertical?), all three methods worked equally well. For complicated categories, however, the volunteers that began with harder problems and then moved on to easier problems produced the best results.

The reasoning behind the results? Simple rules that apply to easier problems do not always translate to higher level problems. When faced with complex problems, the simplistic method is so ingrained that students will continue to apply it, even though it is no longer valid. Conversely, if students are initially presented with complex problems, they will think outside-the-box from the beginning and have more success throughout the problem-solving process.

Teachers and educators, listen up! These results could be helpful in determining teaching methods for various skill sets. Depending on what is being taught, the materials should be presented in a different and specific order. Before we know it, fourth-graders could be solving binomials, which leaves us to wonder if twelfth grade will be all about adding two plus two, leaving plenty of time for students to study a very complex variable: senioritis.

GM to Shrink to 4 brands by 2012 according to their plan

DETROIT — General Motors' core brand portfolio will shrink from eight to four by 2012, according to the ambitious restructuring plan the automaker laid out for lawmakers on Tuesday. The surviving brands would be Chevrolet, Cadillac, Buick and GMC.

"Pontiac will be a specialty brand with reduced product offerings within the Buick-Pontiac-GMC channel," said General Motors in a statement. "GM will immediately undertake a global strategic review of the Saab brand. As part of the plan, the company also will accelerate discussions with Saturn retailers, consistent with their unique relationship, to explore alternatives for the Saturn brand."

GM has been shopping its Hummer brand since June.

The automaker said it needs $4 billion in federal loans by the end of December to stay in business. The automaker is requesting term loans of up to $12 billion from the government to "provide adequate liquidity levels through December 31, 2009." It is also requesting a $6 billion line of credit "to provide liquidity should a severe market downturn persist," it said. The automaker said it would begin repaying the loans by 2011.

While insisting it will remain "a full-line manufacturer," GM said it will substantially change its product mix over the next four years and "launch predominantly high-mileage, energy-efficient cars and crossovers."

It said it will invest about $2.9 billion in alternative fuels and advanced propulsion technologies during 2009-12, including plug-in electrics, gasoline-electric hybrids and fuel cells.

GM chairman and CEO Rick Wagoner has also agreed to accept a salary of $1 next year as part of the restructuring. Wagoner received a $1.6 million salary and $12.8 million in other compensation last year.

Inside Line says: If GM survives, it will be a shadow of its former self with a drastically reduced product portfolio. —

Holiday Sales: Outlook looks Bleaker

NEW YORK (CNNMoney.com) -- When stores report their November sales Thursday, analysts expect the scorecard will look pretty bleak once again.

What that means is there is likely very little hope left for the the 2008 holiday shopping season.

Analysts forecast that last month's same-store sales, or sales at stores open at least a year, will show a steep 2.4% decline, according to Thomson Reuters.

If the figures come in as expected, the monthly decline would mark the weakest same-store sales results ever registered since Thomson Reuters first started tracking the estimates in 2000.

Same-store sales rose 4% last November.

The firm tracks monthly sales for 34 of the nation's largest retailers including Wal-Mart (WMT, Fortune 500), Target (TGT, Fortune 500), Gap (GPS, Fortune 500), and J.C. Penney (JCP, Fortune 500).

Although reports indicate that total Black Friday sales were stronger than expected this year, once the early-bird super discounts were exhausted, experts said consumers pared back significantly on their trips to the mall on Saturday and Sunday.

The National Retail Federation said average spending on Black Friday was up 7.2% this year versus last year, but that the strong traffic on that day "did subside after Friday."

Traffic and sales tracker ShopperTrak reported that a 3% sales increase on Black Friday was followed by a 0.8% decline in sales on Saturday and a bigger 2.3% drop in Sunday's sales.

Excluding the impact of Wal-Mart, which many industry watchers expect will post a slightly improved gain over the same period last year, same-store sales are predicted to fall an even worse 6.9%, Thomson Reuters said.

Sales, minus Wal-Mart, rose 6% for the same period a year ago.

"It's become evident that the most notable threats to discretionary spending are unemployment, and the deteriorating credit and housing markets," Thomson's retail analyst Jharonne Martis, wrote in the report.

"Consequently, it appears that consumers continue to purchase basic necessities at the discounters," she said.

Another same-store sales tracking firm, Retail Metrics, expects a 2% overall sales decline in November and a 6.3% drop excluding the impact of Wal-Mart.

"Favorable weather, falling gas prices, increased refinance activity and deep discounts were overwhelmed by a parade of bleak economic news and plummeting retail earnings projections," Ken Perkins, president of Retail Metrics, wrote in a note Wednesday.

"Consumers have slashed their shopping lists this year to just kids and core family members," Perkins said. "With a laser-like focus, [consumers] are cherry-picking deeply discounted items and forgoing impulse purchases, which are key to retailers. All of this has led to reduced traffic levels and lower average transactions."

The November reporting period includes Black Friday, or the day after Thanksgiving which is the "unofficial" kickoff to the critical holiday shopping season, through the holiday weekend.

Combined sales for November and December can account for as much as 50% of merchants' annual profits and sales.

With a disappointing Thanksgiving weekend, one industry analyst now predicts that holiday sales will be even more dismal.

Britt Beemer, chairman of America's Research Group, lowered his holiday sales estimate Wednesday to a 3.5% decline from his earlier forecast for a 1% drop.

"When you look at the numbers, you see that over the weekend consumers were frugal and focused, staying within their budgets," Beemer said. "Add to that the finding that some consumers will give cash or nothing at all instead of gift cards this year makes me very pessimistic."

Richard Hastings, a consumer strategist with Global Hunter Securities, said he's sticking with his prediction for a 6 to 8% drop in holiday sales.

Other analysts are just as pessimistic that the one-day Black Friday sales rush won't save the season.

"It is important to remember the significant cost [of the Black Friday sales increases] to retailers of driving those sales given the breadth and depth of promotions," Amy Wilcox Noblin, analyst with Pali Research, wrote in a note this week.

"Unfortunately, Black Friday bargains will not save November or the holiday season, in our opinion," she said.

But Craig Johnson, president of retail consulting group Customer Growth Partners, is still holding out hope.

He's one of the few industry experts who is forecasting a holiday sales increase - between 2.5 to 3% - this year.

However, after a dramatic post-Black Friday slowdown in both sales and traffic this past weekend, he's "very cautiously optimistic' about that estimate.

"Black Friday was not great. The overall weekend was not great," Johnson said. "Retailers really need to dig out of a hole." His worst case scenario is for a holiday sales decline of 1 to 2% if things get worse in the next five weeks.

For its part, the NRF is maintaining its forecast for a 2.2% holiday sales increase, which would be still be the slowest pace of gain in six years.

Harvard's Endowment takes a 22% hit and expects further losses

CAMBRIDGE, Mass. (AP) -- Harvard officials say the university's largest-in-the-nation endowment lost about 22 percent of its value, or $8 billion, in the four months since the end of the last fiscal year.

The endowment was worth $36.9 billion as of June 30.

Harvard will have to take a "hard look at hiring, staffing levels, and compensation," university President Drew Faust and Executive Vice President Edward Forst wrote in a letter informing deans of the losses.

They say the university should plan for a 30 percent drop in endowment value by the end of next June.

Forst tells The Harvard Crimson student newspaper that the 22 percent estimate may be conservative because some university money is handled by external managers that have yet to report figures.

Mortgage Applications more than Double

NEW YORK (CNNMoney.com) -- Mortgage applications more than doubled in the holiday week ended Nov. 28, the Mortgage Bankers Association said Wednesday, as government bailouts led to sinking interest rates.

In the weekly report, the Market Composite Index - the association's measure of mortgage loan application volume - surged 112.1% on a seasonally adjusted basis from the week earlier.

On an unadjusted basis, the index increased 51.4% from the previous week; it was down 21.9% from a year earlier, the report said. Results include an adjustment to account for the Thanksgiving holiday.

Rates plummeted following the Fed's announcement that it would buy debt and mortgage-backed securities from mortgage finance companies Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), according to Orawin Velz, associate vice president of economic forecasting, in a statement.

"Many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound," Velz said.

The Mortgage Bankers Association said 30-year fixed-rate mortgages fell to 5.47% this week. That's was down from 5.99% last week.

Rates on 15-year fixed-rate mortgages fell to 5.13% from 5.78%, the report said. The rate on a one-year adjustable-rate mortgage declined to 6.61% from 6.87%

$400,000 and a Tropical Dream

Our Caribbean experts weigh in on which island is best for an expat’s bar biz.

Edd, Philadelphia, Pa.
I’m interested in starting a bar or café somewhere in the Caribbean. I have around $400,000 in startup capital and 20 years of experience managing restaurants. I am trying to find the best and easiest island on which to start my business.

By Blake Ellis, Fortune Small Business contributor
We set out to find the best locales in the Caribbean for entrepreneurs, and found a wealth of options for you.

Nerissa Golden, an entrepreneur and host of the annual Caribbean Young Entrepreneurs Symposium says that if you’re looking to make an investment of more than $100,000, the best option for you is to become a naturalized citizen before establishing a company, because being a citizen will make the process much easier. Some countries, such as Saint Kitts and Nevis, offer “investment programs” that allow foreigners to receive citizenship in return for an investment in local real estate.

The first step toward picking the right spot for your business is to visit various islands to see how their economy and culture suits you. Jim Beach, executive editor of InternationalEntrpreneurship.com, rattles off a number of features potential Caribbean expats should evaluate: “Do you like the rich, celebrity filled - and maybe a little snobby - St. Bart? Or the more relaxed St Lucia? Do you like arid places for scuba diving, like Bonaire? Do you want to live with mostly American tourists as customers in Jamaica, or Europeans in Curacao?”

To find the right place for your business, you need to select a spot where you fit in and feel at home. If your café doesn’t fit in with the distinctive atmosphere of the community it’s in, it won’t be successful. Language is also a factor: If you don’t know French, you’ll want to avoid one of the French-speaking islands, such as Martinique or Guadeloupe.

That said, Beach believes Curacao is the easiest place to start a business, thanks to its low crime rates and strong government protections.

“Jimmy Buffet is currently looking for someone to buy a Margaritaville franchise in Curacao, but $400,000 might not be enough to get that up and running,” he says. St. Lucia and the Turks and Caicos are the trendiest places, and “certainly ‘the places to be’ if you want to follow all the development.”

Golden says that St. Kitts, Anguilla, Antigua and St. Maarten are also good options. “They are experiencing a surge in foreign investors, and are very attractive to high-end tourists as well as other vacation travelers,” she says.

However, given the size of your startup capital, Beach thinks you might want to look outside the Caribbean at a less developed area instead. He cites Costa Rica as a hot spot for entrepreneurs with modest capitals.

Michael Stamler, a spokesman for the Small Business Administration, suggests looking at the World Bank’s latest “Doing Business In” report, which examines the ease of starting a business in countries all over the world. Puerto Rico ranks in the top 10 countries globally for making it easy for entrepreneurs to get off the ground: registration paperwork is quick and inexpensive. Jamaica is also a standout for startup efficiency - and none of the countries in the Caribbean have minimum capital investment requirements except Haiti.

Once you select an area, Golden advises you to contact a notary or a trust company to apply for a business license and permit of residency. That process takes between three months and a year, she says.

As you create a business plan, remember Golden’s advice: “Food and parties go together in the Caribbean, so some of your capital needs to be spent on having regular nights of live music or popular DJs or international acts.”

Another recommendation: “When it comes to marketing, research what is most effective on each island, because some islands are more radio-driven, so spending money on print advertising is not the best use of cash. On others with a heavy newspaper readership, print ads get you more bang for your buck.”

Nightmare on Wall St Continues

Right now, analysts are betting that Goldmans Sachs will book a loss of just over $900 million when it reports fourth-quarter results later this month.

NEW YORK (CNNMoney.com) -- The hits just keep on coming for Wall Street.

Later this month, the once venerated investment banks Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) will reveal their results for the fourth quarter and full year.

Neither firm has set a date for the reports, but most industry trackers are betting the numbers will be abysmal, particularly for Goldman Sachs.

A growing number of analysts have slashed their estimates for the New York City-based bank in recent weeks, saying they expect it to report a loss of about $900 million, or $1.82 a share, its first loss ever since the company went public in 1999.

A month ago, analysts anticipated the company would report a profit of $2.35 a share, according to Thomson Reuters.

And there are concerns that the losses could be even higher. Credit Suisse analyst Susan Roth Katzke warned earlier this week that Goldman Sachs could book a quarterly net loss of as much as $4 a share.

Morgan Stanley, on the other hand, is expected to remain in the black, booking a profit of nearly $94 million, or just 3 cents a share. Even though that is a dramatic reversal of last year's $3.59 billion loss - a first for the firm - analysts have also steadily cut their earnings estimates for the company in recent weeks. The consensus estimate was for a profit of 58 cents a share a month ago

"There is really not that many good things to say about the quarter," said Ada Lee, senior analyst at Sterne, Agee & Leach.

Tough times for the industry

In the months since these two firms last reported quarterly results, Wall Street and the broader financial services industry, have entered one of the most difficult operating environments in history.

The collapse of Lehman Brothers and a drought in short-term funding sources, considered crucial for investment banks, prompted both Goldman Sachs and Morgan Stanley to convert into bank holding companies.

Since then, both firms have taken a hard look at how to attract more deposits as a way of boosting capital. Morgan Stanley is said to be looking at potential regional bank acquisitions and has hired two retail banking veterans to help with those efforts. Goldman, on the other hand, is considering launching an Internet banking operation, the Wall Street Journal reported Wednesday.

Goldman and Morgan have taken other steps to insulate their position during the quarter. Both firms announced plans to raise capital by selling stock. In exchange for $5 billion, Goldman Sachs sold preferred stock to Warren Buffett's Berkshire Hathaway (BRKA, Fortune 500) in late September.

Morgan Stanley quickly followed that up with a deal that allowed the Japanese financial firm Mitsubishi UFJ to take a 21% stake for $9 billion.

But other measures, including the Treasury Department's decision to inject $10 billion of capital in each firm as part of the $700 billion rescue package, have done little to halt the painful selloff in both firms' stock.

Shares of Goldman and Morgan have lost close to a third of their value each in the last month alone, and are down 69% and 79% so far this year.

A quarter full of challenges

One of the most pressing concerns for investors has been the underlying health of some of their most important businesses.

Equity underwriting and their respective advisory businesses remain quite sluggish for both firms, eliminating a key source of revenue. Industry trackers have also pointed to a decline in fixed-income activity as a drag on profits. Plunging commodity prices and stock market volatility could also have a major impact on the results of their trading desks this quarter.

At the same time, both firms have announced moves to cut back on staffing levels in recent weeks, which will likely result in severance charges this quarter.

But what may be the biggest driver of this quarter's dreary numbers is the declining value of many of the assets that remain on both companies' books.

Each firm still has massive portfolios layered with securities that have tumbled in value in recent weeks, such as those backed by residential and commercial real estate.

It hasn't helped that institutional investors' appetite for these securities has frittered away, notes David Killian, a fund manager at Valley Forge Advisors LLC in Malvern, Pennsylvania.

"When you hold securities [that] history has proven are safe investments and the market walks away from them, prices drop pretty darn fast," said Killian, whose firm oversees $480 million in assets and owns shares of both Goldman and Morgan.

But some of the problems that Goldman and Morgan suffer from are unique to their institutions.

Analysts expect Goldman to take a hit as a result of its equity stake in Industrial and Commercial Bank of China. Shares of the Chinese bank have lost close to a third of their value through November.

Morgan Stanley, on the other hand, will probably report signs of trouble in its asset management and global wealth management businesses due to the broader market turmoil, warned Lee of Sterne, Agee & Leach.

Unfortunately, investors will have to live through all of this again in January. As a result of their conversion to a bank holding companies, both Goldman and Morgan will have to report fourth-quarter earnings again that month, even though those results will only reflect the month of December.

5 great used Cars

Here's a quick look at five cars that represent good value at the moment. Feel free to hit us back with your own suggestions too.

2007-2008 Acura TL Type-S -- The new for '09 TL is a technical advancement over the outgoing model. It offers a smidge more power, outstanding infotainment offerings, optional all-wheel drive, and more room in back. But it's so hideous-looking, I could never bring myself to buy one. The previous gen TL is just the opposite; one of the most attractive sedans on the market, and the Type-S is the performance version. At launch, we called it "A Japanese Alfa Romeo." Great V-6, good electronics (first car I ever tested with Bluetooth), and high quality. Shop now and you may still find a fresh one.

C5 Corvette Z06 -- Many Corvette guys I know have to have the latest and greatest. Now that the C6-series Z06 (and ZR-1) are in the marketplace, people are offing their previous gen Z06s. Sure, they have about the same horsepower as a base C6 -- but the price should be half or less. You have to be careful here; they are made to be run hard, and often are. And the first of them had some piston problems as I recall. But a lot of hardcore Vette types really care for their cars, and don't beat them to death. The newest of them is five years old now; find one that's lived a good life, and you'll have something special.

Volkswagen Phaeton -- The right car wearing the wrong badge. VW wanted to see how far upmarket it could take the brand in this country, and went one step too far. That takes nothing away from the greatness of the machine. They are fabulously engineered, looks the business, shared a lot of stuff with the Audi A8, and are fine driving cars. A bit of an odd duck as it came and went so fast, but its not an orphan as VW is still around, and will continue to be. If you want a top drawer luxury sedan for near econobox money, find a clean Phaeton, and enjoy flying first class for a coach fare.

2004-2008 Ford F-150 -- Even though fuel prices have halved in the last 90 days, the truck market is still chilly. Every time a new version of a high volume model, like the F-150, comes out, the latest-and-greatest crowd dumps their old ones. Between this phenom, and lots of lease turn-ins, means that a two, three, or four-year old F-150 can be a great deal if that's the vehicle you need. Bargain hard - there are many new choose from.

1990-2002 Mercedes-Benz SL-Class -- Even the newest of these falls well outside the three-year lease turn-in window, but they are superbly engineered machines. Although not a metal retractable hardtop, the SL's top is a one-touch unit. Engineered and built to high standards, these "Sacco era" SLs will run long miles without trouble. They don't have as many power goodies as the new ones, but they are great to drive, and still look good to many eyes, including mine. Get the latest, lowest mile example you can find, and it'll still be cheaper than a new four-banger Camry.

What's on your Great Deals list?

Nismo 370Z S-Tune

The latest Z-car as decorated by NISMO—for Japan. Will we see these parts in the States?

BY DAVID GLUCKMAN
December 2008

NISMO, Nissan’s in-house tuning arm, is responsible for producing variants of various vehicles as well as a line of performance parts. So when we first caught wind of a Nissan 370Z (or Fairlady Z as it’s called in its homeland) all decked out NISMO-style—leaked images have been clogging the Internet’s many tubes, including at the370Z.com—the possibility of improvements to what we’ve found to be an already-potent performance package intrigued us. After all, Nissan offered a NISMO 350Z here for 2007 as a kind of swan song for that model, and although it wasn’t the most appealing Z-car to look at, the package managed to improve the car’s track prowess for a premium of roughly $2000.

After poking around Nissan’s Japanese 370Z Web site and placing a call to Nissan’s stateside PR, it seems that this car is the S-Tune NISMO 370Z, created from an assembly of Japanese-market bolt-ons, although we wouldn’t be surprised if some or all of the parts made their way here as part of a U.S.-market NISMO 370Z package.

The Japanese 370Z site lists (in English, conveniently enough) the JDM car’s add-ons, which include front and rear fascias, new side skirts, and a rear spoiler. Lest you think those are simply look-fast parts, know that the aero pieces on NISMO’s last Z were developed in a wind tunnel, not simply scrawled on a sleep-deprived designer’s sketch pad. A stainless-steel exhaust system is also noted, as are 19-inch wheels, S-tune brake pads, and an S-tune body brace set that appears to be comprised of improved shock-tower bracing and radiator supports. The site also lists what we can only imagine is a stiffer S-tune suspension. This complement of parts mirrors those found on the NISMO 350Z, save for that car’s larger rear anti-roll bar, further making the case that this car will turn up—at least in part—as the next NISMO-edition Z. For their part, Nissan says no decisions have been made about a new NISMO Z model or accessory NISMO parts for the 370Z.

Delving deeper into the site, our interest was again piqued by what Nissan calls the Stylish Package—more specifically, by one of its included items. The group is mostly made up of dress-up pieces, although our favorite is the “sports horn.” Would that be considered a sound-fast part, and more important, what would it sound like? Leave it to the Japanese to tune a car’s honk for performance.

Pirates of the Amazon plug in seeks to pre empt Amazon purchases with BitTorrent downloads instead

Amazon, the world’s largest online retailer, is under attack by online pirates. An add-on for the Firefox browser called ‘Pirates of the Amazon’ makes it possible to shop at the Amazon store but leave without paying a dime. Instead, on Amazon product pages the add-on integrates links to ‘free’ copies on The Pirate Bay.

The timing of the ‘Pirates of the Amazon‘ launch could not have been more (un)fortunate. At the busiest time of the year for on- and offline retailers, this Firefox browser add-on offers users a download link to pirated copies of products that can normally be found in the Amazon online store.

When the add-on is installed, it integrates a new “download 4 free” button into the Amazon product page when the same article is also available via The Pirate Bay. It works for CDs, DVDs, games, books and basically all products that can be converted to a digital format.

With their mashup of the largest online retailer and the largest BitTorrent tracker, the project aims to “be a counterpart to the current models of media distribution”, and to “redistribute the wealth”.

The people behind the project have chosen to link to The Pirate Bay, but clearly state that they act independently. “We are not affiliated with The Pirate Bay, and do not host or even link to any illegal content,” they write. “This artistic project addresses the topic of current media distribution models vs. current culture and technical possibilities.”

‘Pirates of the Amazon’ is not the only pirate add-on for Firefox, in fact there are quite a few. IMDB, Last.fm, and Rotten Tomatoes all have their own pirate skin available. Most of them use the Greasemonkey add-on which allows the installation of all kinds of useful user scripts which customize the web to your pirate needs.

The Amazon Store with Pirated Alternative

From the Mechanic- Why the 2010 Mustang isn't good enough!

I'm bummed out about the new Mustang. After all the teaser shots, after all the hype and the secrecy, it hit my eyes with a thud. I stood there at the Los Angeles auto show staring at it, wondering, "That's the new 2010 Ford Mustang. That? What's so new?"

Of course, I was surrounded by hundreds of members of the easily impressed media, a throng that sings for any car revealed alongside a free buffet, and few had anything but praise for the new design. They couldn't even put down the free chicken fingers long enough to call Ford on the new Mustang's carryover powertrains, including a 4.0 V6 rated at a limp 210 horsepower. That's 90 ponies less than the Camaro's 3.6-liter V6.

Maybe I'm to blame. Maybe my expectations were too high. I was expecting something great. An inspired answer to the Dodge Challenger and coming Chevy Camaro. But Ford, strapped for cash as it is, punted, choosing instead to toss a few new body panels and a revised dashboard on the existing Mustang, a car that made Bill Ford, Mark Fields and gang look pretty smart when they unveiled it five years ago.

In other words, they decided to shelf the Mustang's needed redesign, instead giving it a midcycle refresh. That means the Mustang is on a 10-year life cycle. A 10-YEAR LIFE CYCLE!!!! Think about that. It means this car will be around until 2015.

It's hard to blame them. Without question, the 2005-'09 Mustang has been a rare highlight during a dark time in Ford's history. It not only kicked off the retro muscle car trend Chevy and Dodge are just now catching up on, it has had the segment all to itself for essentially half a decade. No, it wasn't the perfect car, not even close, but when you're the only game in town, it's hard to look bad.

And the Mustang looked good. So good, it again became Ford's signature product, an example of the company's ability to do something right, just as it had in the 1960s with the original and again in the 1980s with the 5.0. For the past five years, the Ford Mustang, from the lowly V6 all the way up to the GT500 KR, has been a Ford to desire. The Ford to desire.

While Bill, Mark and, more recently, Alan have been in The Glass House screwing up the rest of the Ford lineup (OK, the Edge is pretty good), enthusiasts like us and car lovers all over the world have given them a chance to turn it around. A real chance. Why? Partly because of the Mustang. We all figure that if they can get that so right, well then, they're not so far gone. They can get it. They do get it. They can do this.

Trouble is, the 2010 Ford Mustang squashes all that. It's not that it doesn't look better, it just doesn't look better enough. Soon the hot coupe market will be flooded with new product: the Challenger, the Camaro, the BMW 1 Series, the Hyundai Genesis Coupe, the new Nissan 370Z. And the sad fact is that the 2010 Ford Mustang is not equipped to handle the coming flood of competition.

This game is cutthroat, and the new Mustang is about to be put down like a quarter-horse with a torn hammy and I'm not happy about it.

But why did this happen? Has five years of having the rear-wheel-drive coupe market all to itself lulled the giant Blue Oval to sleep? I don't think so. The lack of zip in the 2010 Ford Mustang is simply a result of Mulally and Company having other fish to fry. Things like a $2 stock price, a collapse of the profitable SUV market, developing a decent small car, begging the Washington democrats for cash, trying to get Ecoboost to market without looking foolish, launching the new F-150 cash cow, saving Lincoln, saving Mercury, and of course flying the company jet to Florida every week to visit family. Sorry, Mark. I couldn't resist.

My point is that the disappointing Mustang is much more a result of Ford's present economic state and not the incompetence of its management team. Then again, Ford's present economic state is certainly a result of the incompetence of its management team, so....

I just hope Ford and its iconic pony car are around long enough for the lackluster 2010 Mustang to have a successor. Maybe it will be great. -

U.K. Only Evo X loaded with 400hp

CIRENCESTER, England — Pictures and specifications of the new U.K.-only Mitsubishi Evolution X FQ-400 have hit the world's automotive media. It's a high-performance sedan that was built in collaboration with ADR Motorsport.

Autocar says it's the fastest and most expensive Evo built, with its turbocharged 2.0-liter churning out a whopping 405 horsepower and 400 pound-feet of torque. This is thanks to a reprogrammed ECU and new exhaust, which also allow for a quicker 0-to-60-mph time of 3.5 seconds. The removal of the race clutch means driving the city streets will be much easier on the foot, and the standard manual gearbox is the only transmission available to help handle the increase in output.

Other performance modifications include upgraded brakes with six-pot calipers in the front and huge 18-inch alloys. A new body kit is also featured with more cooling intakes and vents, including a larger hood intake and slots to help cool the rear brakes.

Right now plans are to only build 100 FQ-400s, and Mitsubishi says the car will cost the equivalent of about $70,000.

Inside Line says: $70,000 is a lot of money for a turbocharged four-banger, but don't expect the 100 copies to last long.

Lamborghini's Black and White Themed Gift Line

SANT'AGATA BOLOGNESE, Italy — A black-and-white Christmas? Lamborghini eschews the traditional red and green for a lineup of gift items that match the black and white color scheme of the Gallardo LP560-4. They are designed for people who believe in "celebrating Christmas 'fast,'" the automaker says.

The Lamborghini gift selection includes three ceramic ornaments — one in Nero Noctis matte black, two in Mono Cerus matte white — priced at $71, and two slow-burning candles, one black and one white, for $56. Seat cushions with the Lamborghini logo embroidered on them ($40) are also sold in black and white.

"Younger Lamborghini fans" are targeted with a polar bear — not exactly the creature one imagines when thinking of Italy or sports cars — dressed in a black Lamborghini-logo sweater. They are priced at $33 for the small bear and $56 for the large. All prices are pretax.

Calendars and holiday cards are also available from the Collezione Automobili Lamborghini, as well as the year-round selection of clothing, accessories, office items and luggage with the Lamborghini logo on them.

All are available to order online, as well as from Lamborghini dealers.

Inside Line says: The "spirit of the world's most desirable super sports car," as Lamborghini puts it, is somewhat hard to find in this otherwise charming group of gifts. — Laura Sky Brown, Correspondent

November Auto Sales Continue Downward Spiral

DETROIT — In a depressing roll call, automakers on Tuesday began reporting devastatingly low November sales numbers. Ford reported a November sales plunge of 30 percent versus a year ago, while Toyota said its November sales in the U.S. were down 33.9 percent from last November. General Motors said November sales were down 41 percent compared with a year ago.

"Every manufacturer is posting awful numbers, and we are no exception," said Mark LaNeve, GM North America vehicle sales, service and marketing vice president. "The global economic crisis and credit freeze have had a very negative impact on the vehicle market which runs on consumer confidence and available financing."

The grim November sales picture emerged at the start of a pivotal week for Detroit's automakers. Ford, GM and Chrysler will make their second pitch this week in Washington, D.C., as they seek federal financial help and work to convince lawmakers that the wolf is indeed at the door. Ford issued its sales report just hours after making its formal presentation to lawmakers public.

"The economy continues to weaken and auto sales reflect this reality," said Jim Farley, Ford group vice president, marketing and communications, in a statement. He added: "We believe the economy will continue to weaken in 2009."

Farley's words were echoed in Herndon, Virginia, where Mark Barnes, Volkswagen of America's chief operating officer, said: "This is the toughest economic environment we've seen in a long time, and it presents a significant challenge." He added: "Nevertheless, our clean diesel TDIs continue to sell very well even in this tough economy and represented 17 percent of our monthly sales." Volkswagen of America said November 2008 sales dropped 19.2 percent versus a year ago.

American Honda posted November sales of 76,233, a decline of 31.6 percent versus November 2007. The Acura division recorded a November sales decrease of 38.9 percent compared with November 2007. Acura's rival Lexus did not fare much better. Toyota said Lexus recorded a drop of 40 percent versus November 2007.

At the same time, Edmunds.com estimated on Tuesday that the average automotive manufacturer incentive in the U.S. was $2,625 per vehicle sold in November 2008, down $52, or 1.9 percent, from October 2008, but up $346, or 15.2 percent, from November 2007.

"All three domestic automakers lowered their incentive spending this month, seeking to preserve cash during these incredibly tough times," said Jesse Toprak, Edmunds.com executive director of industry analysis. "Meanwhile, the imports have poured more money into incentives, attempting to seize the opportunity to gain market share. Toyota's monthly incentives spending hit a new record high in November, and the company's market share might follow suit."

The terrible November sales numbers come a day after the National Bureau of Economic Research declared that the economy slipped into recession in December 2007.

Inside Line says: The unbelievably bad November sales report may be yet another bit of ammunition that Detroit can use as it makes its case this week in Washington. — Anita Lienert, Correspondent

Instant Classic Audi A5/S5 Cabriolet

While every other car company in the world struggles with design, Audi stands alone in its ability to combine adventurous style with lasting beauty. You don't have to look any further than the 2010 Audi A5 Cabriolet to see the proof.

Scheduled to be introduced at the 2009 Geneva Auto Show, the 2010 Audi A5 Cabriolet and 2010 Audi S5 Cabriolet replace the long-lived Audi A4 cabriolet. The car will come to the U.S. in the fall of 2009 as a 2010 model, and it will be available in both all-wheel-drive and front-wheel-drive versions with a selection of engines and transmissions.

And even as the BMW 3 Series convertible, Mercedes-Benz CLK cabriolet and the recently introduced Infiniti G37 convertible and Lexus IS convertible compete for the attention of drop-top fashionistas, the 2010 Audi A5 Cabriolet already seems to have taken their measure.

The Audi Style Statement
The 2010 Audi A5 Cabriolet is one of the few European cars that has as much impact as a convertible as it does as a coupe. Audi's rounded fender forms have been with us a long time, yet they still capture a sense of modernity that the extruded forms of BMW, the surface flash of Mercedes-Benz and the elaborate proportions of the Infiniti and Lexus convertibles can't match.

As with the A4 sedan, the new cabriolet's full-frame grille finally seems natural, perhaps because it's complemented by such interesting headlights with their jewellike LED running lights. The rear of the new car is also distinctive, featuring broad taillights, a spoiler on the trunk and an aero diffuser in a contrasting color to the bodywork, plus you can even get LED-type taillights when you choose the optional xenon HID headlights.

The A5 cabriolet measures 182.2 inches long, is 72.8 inches wide and stands 54.3 inches tall with the top in place. Perhaps the most important specification of the A-Series convertible is its light weight, because Audi has disdained the elaborate hardtop configuration of the BMW and Infiniti convertibles and instead stuck with a power-operated fabric top.

It's All About the Top
Hard tops are all the style these days. The gizmos and gadgets necessary to package a folding metal hardtop have come a long way from the Disney-style execution of the 1957 Ford Skyliner with its three drive motors, four lock motors, 10 power relays, 10 limit switches, eight circuit breakers and 610 feet of electrical wire.

Now you find the electric hard top in everything from the Ferrari California to the Volkswagen Eos. It has become a desirable feature because it answers any questions about weather protection and acoustic insulation, plus it enhances security while parked on the street, which has become an issue in Europe where parking garages are a rare commodity.

Nevertheless, the A5 and S5 continue with a traditional fabric top. And quite a top it is, a three-layer design with a glass rear window that comes in four exterior colors and a choice of three headliner colors. The optional acoustic top substitutes a thick 0.6-inch foam layer in place of the standard cushioning pad, and the result reduces wind noise to nearly that of a coupe, Audi claims. The acoustic top even comes with a dome light for the headliner.

The prime advantage of a conventional fabric top is its light weight, which lowers the center of gravity and also minimizes the shift in weight distribution that comes with stowing a metal top. The Audi's fabric top is powered by an electrically operated hydraulic pump with four operating cylinders and it retracts beneath its metal tonneau cover in 17 seconds, then deploys again in 15 seconds — well within the cycle at any traffic light, although you can operate the top up to 50 km/h (31 mph) if you like.

A fabric top also makes the people packaging better. Convertible top mechanisms constrain rear-seat space, which is why you'll notice that the A5 cabriolet accommodates just two in the back. Even so, the combination of the fabric top and the relatively long 108.3-inch wheelbase of the A4 platform upon which the A5 is based means the rear-seat backrest doesn't have to be as upright to provide clearance for the top mechanism.

Moreover, the A5 cabriolet offers 13.4 cubic feet of trunk capacity when the top is erected, and the top takes up only 2.1 cubic feet of trunk space when it comes down. To enhance the A5 cabrio's practicality, it features a 50/50-split folding rear seat with a pass-through that's 27.6 inches wide, increasing overall cargo capacity to 26.5 cubic feet.

Modern Motoring
The 2010 Audi A5 and S5 Cabriolet are built on the platform of the Audi A4, the newest of Audi's designs. A repositioned transaxle stretches the wheelbase for better stability and a smoother ride, while reducing the front overhang and redistributing overall weight for a crisper turn into corners. In addition, a repositioned steering rack delivers more direct steering feel.

Once you slice off the top of any car, you lose a huge amount of structural rigidity, so the A5 cabriolet features the usual structural reinforcements, although these pieces are hot-formed by Audi from high-strength steel to minimize any weight penalty. In addition, the front fenders are made from aluminum to further reduce weight.

The 2010 A5 Cabriolet will be available in either front-wheel drive or Audi's latest all-wheel-drive system with its new, rear-biased torque split of 40 percent front/60 percent rear. Both the A5 and S5 convertibles will feature Audi Drive Select, which electronically alters the engine, transmission, steering, suspension and stability control calibration to suit your preference. If you chose the optional hard-drive-based navigation system, you can apparently program your own unique engine map.

Current information suggests 16- or 17-inch wheels are standard depending on equipment level, and the full range of Audi and Quattro GmbH wheels are available right up to 20-inch items.

The Power
Now that fuel-efficiency matters in the U.S., we'll get the full range of engine options for the A5 and S5 convertibles.

The recently redesigned 2.0 TFSI — a turbocharged 2.0-liter inine-4 with direct injection and variable valve-timing and -lift — delivers 211 horsepower and 258 pound-feet of torque. If you order the engine with front-wheel drive, it features Audi's continuously variable transmission (CVT), and when the engine is matched with all-wheel drive, it comes with a six-speed automatic.

The A5 cabriolet can also be had with the 3.2 FSI V6, a normally aspirated V6 with direct injection and variable valve-timing and -lift, which makes 265 hp and 243 lb-ft of torque. It's available only with all-wheel drive, and its six-speed automatic allows a top speed of 130 mph.

Naturally the 2010 Audi S5 is distinguished by a very special power plant, and it's the S5's 4.2-liter V8, which makes 354 hp and 325 lb-ft of torque. Either a six-speed manual transmission or a six-speed automatic can be specified. Only the S5 cabriolet is available with Audi's new rear limited-slip differential, which proportions torque delivery between the rear wheels to enhance not only traction but dynamic response during cornering.

For the 2011 Audi S5 Cabriolet, the 4.2-liter V8 will be replaced by Audi's 3.0 TFSI V6, the recently introduced supercharged V6. Developing 333 hp and 325 lb-ft of torque, this V6 will be available with either a six-speed manual transmission or Audi's new, seven-speed, dual-clutch automated manual. A top speed of 155 mph is promised even as overall fuel economy will improve over the A4 cabriolet.

The Luxury Experience
As you'd expect in a car that dares to be beautiful, the 2010 Audi A5 Cabriolet and 2010 Audi S5 Cabriolet offer a long list of convenience features, including a 505-watt Bang & Olufsen audio system, the third-generation Audi MMI control system with hard-drive-based navigation, a parking sonar system with back-up camera, and a blind-spot warning device.

Of particular interest is optional leather seat upholstery that inhibits solar heating while the car is parked in the sun by lowering the surface temperature by as much as 68 degrees F. In addition, there's a neck-level warming system built into the top of the front seatbacks to make driving in brisk weather a little more bearable.

Although the 2010 Audi A5 Cabriolet and 2010 Audi S5 Cabriolet are scheduled to appear in the U.S. in the fall of 2009, equipment levels and pricing won't be announced for some time. We'll look forward to seeing the car in person at the 2009 Geneva Auto Show.

GM Crossovers officially Crap! Missing seatbelt rivets

WASHINGTON — GM is recalling 16,667 2009 Buick Enclave, Chevrolet Traverse, GMC Acadia and Saturn Outlook vehicles because they may have been built with a safety-belt buckle in the second or third row that is missing a rivet.

"In a vehicle crash, if the rivet is missing, the buckle may separate from the mounting strap," said the National Highway Traffic Safety Administration in its recalls summary of the problem.

Dealers will inspect the safety-belt buckles in the second and third rows and replace them if necessary. The recall began on November 26. Owners may contact Buick at (866) 608-8080, Chevrolet at (800) 630-2438, GMC at (866) 996-9463 and Saturn at (800) 972-8876.

Inside Line says: If you own any of the aforementioned vehicles, have them checked out with your dealer ASAP.

U.S. Supreme Court: State Medical Marijuana Laws Not Preempted by Federal Law

Medical marijuana case appealed by the City of Garden Grove was denied review today

Washington, DC -- The U.S. Supreme Court refused to review a landmark decision today in which California state courts found that its medical marijuana law was not preempted by federal law. The state appellate court decision from November 28, 2007, ruled that "it is not the job of the local police to enforce the federal drug laws." The case, involving Felix Kha, a medical marijuana patient from Garden Grove, was the result of a wrongful seizure of medical marijuana by local police in June 2005. Medical marijuana advocates hailed today's decision as a huge victory in clarifying law enforcement's obligation to uphold state law. Advocates assert that better adherence to state medical marijuana laws by local police will result in fewer needless arrests and seizures. In turn, this will allow for better implementation of medical marijuana laws not only in California, but in all states that have adopted such laws.

"It's now settled that state law enforcement officers cannot arrest medical marijuana patients or seize their medicine simply because they prefer the contrary federal law," said Joe Elford, Chief Counsel with Americans for Safe Access (ASA), the medical marijuana advocacy organization that represented the defendant Felix Kha in a case that the City of Garden Grove appealed to the U.S. Supreme Court. "Perhaps, in the future local government will think twice about expending significant time and resources to defy a law that is overwhelmingly supported by the people of our state."

California medical marijuana patient Felix Kha was pulled over by the Garden Grove Police Department and cited for possession of marijuana, despite Kha showing the officers proper documentation. The charge against Kha was subsequently dismissed, with the Superior Court of Orange County issuing an order to return Kha's wrongfully seized 8 grams of medical marijuana. The police, backed by the City of Garden Grove, refused to return Kha's medicine and the city appealed. Before the 41-page decision was issued a year ago by California's Fourth District Court of Appeal, the California Attorney General filed a "friend of the court" brief on behalf of Kha's right to possess his medicine. The California Supreme Court then denied review in March.

"The source of local law enforcement's resistance to upholding state law is an outdated, harmful federal policy with regard to medical marijuana," said ASA spokesperson Kris Hermes. "This should send a message to the federal government that it's time to establish a compassionate policy more consistent with the 13 states that have adopted medical marijuana laws."

Further information:
Today's U.S. Supreme Court Order denying review: http://AmericansForSafeAccess.org/downloads/Kha_USSC.pdf
Decision by the California Fourth Appellate District Court: http://AmericansForSafeAccess.org/downloads/GardenGroveDecision.pdf
Felix Kha's return of property case: http://AmericansForSafeAccess.org/article.php?id=4412

Is Clinton Ineligible to Join the Cabinet?

By Peter Baker

Updated | 11:30 p.m. CHICAGO – Senate Democrats were working Tuesday to put together legislation making it possible for Senator Hillary Rodham Clinton to become secretary of state despite a constitutional clause that some critics argue should bar her from joining the cabinet.

The issue may seem esoteric but it generated attention Tuesday among legal scholars and bloggers arguing over whether it would be unconstitutional for Mrs. Clinton to serve as President-elect Barack Obama’s secretary of state because the salary for her new office was increased while she served in the Senate.

Judicial Watch, a watchdog group that made a name for itself investigating the Clinton administration in the 1990s, raised the matter Tuesday with a statement asserting that Mrs. Clinton was ineligible to become secretary of state because of the so-called “Emoluments Clause” of the Constitution. By the end of the day, Senator Harry M. Reid of Nevada, the Democratic majority leader, was consulting with Republican colleagues in hopes of putting together a bill to address the issue.

The issue stems from Article I, Section 6, of the Constitution, which says: “No Senator or Representative shall, during the Time for which he was elected, be appointed to any civil Office under the Authority of the United States which shall have been created, or the Emoluments whereof shall have been increased during such time.” Emoluments refers to compensation.

After Mrs. Clinton’s last Senate election in 2006, the salary for secretary of state and other cabinet positions was increased to $191,300 from $186,600. In the past, Congress has gotten around this by passing a resolution cutting the salary for the office at stake back to what it was before the nominee’s most recent election.

This became known as the “Saxbe fix,” after it was used to facilitate President Richard M. Nixon’s appointment of Senator William Saxbe of Ohio as attorney general. It happened most recently 16 years ago when incoming President Bill Clinton made Senator Lloyd Bentsen of Texas his treasury secretary.

“It’s been dealt with each and every time,” said Jim Manley, spokesman for Mr. Reid. “We’re confident it can be dealt with this time.” Mr. Manley said it was unclear whether the measure could be passed during a lame-duck session next week. “We’re trying to work on this as quickly as possible,” he said.

Judicial Watch, and some legal scholars, argued that the Saxbe fix is insufficient because the constitutional clause says a senator is ineligible if the salary was raised, which it was in this case, even if it is subsequently cut again.

“There’s no getting around the Constitution’s Ineligibility Clause, so Hillary Clinton is prohibited from serving in the Cabinet until at least 2013, when her current term expires,” said Tom Fitton, president of Judicial Watch. “Barack Obama should select someone who is eligible for the position of secretary of state and save the country from a constitutional battle over Hillary Clinton’s confirmation.”

Philippe Reines, a spokesman for Mrs. Clinton, said she and Mr. Obama had anticipated the issue and were prepared to resolve it. “This is a Harvard Law grad nominating a Yale Law grad here, so all parties involved have been cognizant of this issue from the outset,” he said. “But putting frivolous lawsuits by fringe groups aside, this issue has been resolved many times over the past century involving both Democratic and Republican appointments and we’re confident it will be here too.”

New Strategy Drives Obama Picks

By YOCHI J. DREAZEN

CHICAGO -- President-elect Barack Obama, unveiling his national-security team, said he will use the "power of our moral example" in making a clean break from Bush administration policies on Iraq, Afghanistan and overseas diplomacy.

Mr. Obama gave a prominent place during the presentation to his nominee for secretary of state, Sen. Hillary Clinton. She stood next to Mr. Obama, was the first of the nominees to speak and received the lengthiest introduction from the president-elect.

View Full Image

Reuters

Sen. Hillary Clinton speaks to the media after being introduced by President-elect Barack Obama (left) as his choice for secretary of state. General Jim Jones (right), Obama's pick for national security adviser, looks on.

Speaking to reporters, Mr. Obama said he would devote new energy to diplomacy and other nonmilitary aspects of U.S. global power.

"The national-security challenges we face are just as grave and just as urgent as our economic crisis," he said. "To succeed, we must pursue a new strategy that skillfully uses, balances and integrates all elements of American power: our military and diplomacy; our intelligence and law enforcement; our economy and the power of our moral example."

Sen. Clinton echoed the theme, saying U.S. interests "cannot be protected and advanced by force alone." Retired Marine Gen. James Jones, who was named national-security adviser, stressed that the U.S. would need to use "all elements of our national power and influence."

The comments reflect Mr. Obama's stance that the Bush administration's handling of conflicts in Iraq and Afghanistan suffered from an overreliance on the military and a failure to devote enough resources to political reconciliation and economic development in those nations.

Obama's Advisers

View Interactive

See some of the people expected to join the new administration.

A senior Obama aide said the incoming administration will create teams of diplomats and other civilian officials who can be quickly deployed overseas after natural disasters or political upheavals to help fragile countries get back on their feet.

The aide declined to say whether new spending on such teams would be offset by cuts in defense spending, which has increased significantly under President George W. Bush. Many Democratic lawmakers have begun arguing that the economic crisis and the skyrocketing federal budget deficit will force reductions in the Pentagon's budget, and senior military officials expect their funding to fall significantly.

Other members of the administration introduced Monday were Defense Secretary Robert Gates, who will remain in his post; Arizona Gov. Janet Napolitano, nominated to head the Department of Homeland Security; former Justice Department official Eric Holder, nominated for attorney general; and campaign adviser Susan Rice, who was tapped as ambassador to the United Nations.

The new cabinet includes several officials, notably Sen. Clinton and Mr. Gates, who have criticized some of Mr. Obama's positions. Mr. Gates has argued against a firm timetable for a withdrawal from Iraq, while Sen. Clinton questioned Mr. Obama's stated willingness to negotiate with Iran.

Clinton, Gates Among Obama's Cabinet Picks

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President-elect Barack Obama announces major players in his national security team, including former rival Sen. Hillary Clinton as secretary of state. He also announced he is retaining Defense Secretary Robert Gates. Video courtesy of Fox News.

Mr. Gates, who had often said he looked forward to leaving Washington with the rest of the Bush administration, said he felt an obligation to stay on at Mr. Obama's request. "I must do my duty as they do theirs," Mr. Gates said, speaking of U.S. military personnel.

Sen. Clinton, whose nomination was cleared once former President Bill Clinton agreed to publicly disclose all donors to his foundation, said she was swayed to take the post by a realization of the "daunting tasks ahead for our country."

"America cannot solve these crises without the world and the world cannot solve them without America," she said.

Mr. Obama laughed off a question reminding him of disparaging remarks his supporters made about Sen. Clinton during the heated battle for the Democratic presidential nomination. He said their disagreements were magnified and he wants "vigorous debate" in his administration.

"One of the dangers in a White House is that you get wrapped up in groupthink, and everybody agrees with everything and there's no discussion and there are no dissenting views," he said, adding that "the buck will stop with me."

Mr. Obama has spoken respectfully of Mr. Bush since the election, but he made clear that his policies will differ sharply.

View Slideshow

Associated Press

Defense Secretary Robert Gates will be retained by President-elect Barack Obama.

Mr. Bush, for example, has consistently described Iraq as the central front in fighting terrorism. His administration has devoted most American military muscle and financial resources to the war there, leading Adm. Mike Mullen, chairman of the Joint Chiefs of Staff, to refer to the Afghan war as an "economy-of-force mission."

Mr. Obama said he would shift resources to Afghanistan and described South Asia as the biggest danger to the U.S. "The safe havens for terrorists that have been established there represent the single most important threat against the American people," he said.

Mr. Obama also reiterated a campaign promise to order Mr. Gates and the Joint Chiefs of Staff to begin withdrawing American combat forces from Iraq, with the goal of having all of them out of the country by the middle of 2010. He promised to listen to the advice of his senior commanders, some of whom are privately wary of such a quick pullout, but said his commitment to drawing down forces remains intact.

"I believe that 16 months is the right time frame," Mr. Obama said, adding that the U.S.-led war in Iraq is entering a "transition period in which our mission will be changing."

Write to Yochi J. Dreazen at yochi.dreazen@wsj.com