The economic uncertainty has shaken the market beyond any reason and it is hard to estimate what funds or investments will give you certain gains. During these hard times it is quite a task to make the right investment plan that is risk-free and at the same time help you make profits. In order to know if a Money market fund will generate gains you need to first understand what the fund is all about.
What is a Money market fund?
Money market funds are attractive because they possess lower risk. These funds are open-ended mutual funds that invest purely in the money markets and they are normally short-term investments and have features of a debt fund that expires in a year or less than a year. The main aim of this kind of fund is to generate interest for the shareholders. And many off such funds invest government securities for instance treasury bills and commercial paper. The money market funds are ideal for large financial institutions and an individual investor can enter the fund through a wide range of securities. Your investment matures in a short period of time and these funds are also called cash investments.
Functions of a Money market fund
The main function of the Money market fund is to protect the principal amount. The NAV or the Net asset value is constant; $ 1 for each share, which does not change in order to simplify accounting but the interest rate, tends to move up and down. The fund involves large sums of money unlike the stock market. And generally these funds are liquid that are used by financial sectors, which store the money that is not yet invested. The funds have low risk and are insured by private companies.
Advantages:
The low risk factor is the biggest plus point of a Money market fund and your principal amount is well secured. The funds are liquid and thus considered to be the safest options of investment.
Disadvantages:
Although the fund is popular for its safe option feature. The fund can still not perform well though the chances are bleak. One of greatest drawbacks of the fund is very less returns but you can be assured of the principal amount that will be safeguarded. And one of the risks of the fund is inflation that can possibly alter the return and thus crumble the buying power of the investor’s cash. Because the fund is based on conventional principles and they are less profitable.
Monday, April 27, 2009
Can Marijuana Stop Dementia?
Dementia is a typical problem of the brain where memory of the person gets affected and is unable to recollect or remember anything. This condition is characterized by loss of memory, difficulty in communication and most importantly trouble in performing daily activities. Dementia mainly occurs due to inflammation in part of brain cells. This inflammation or brain cells destruction can occur due to sudden stroke, brain tumor or even head injury. Dementia can be the result of natural process of aging or due to damage of cells because of Alzheimer’s disease. Several research studies indicate that inflammation in brain may accelerate dementia.
A new research study suggests that parts of marijuana have proved to be beneficial in treating memory loss. It has been seen that some constituents of marijuana has anti-inflammatory properties and it is this characteristic of marijuana that can help in treating inflammation in brain cells. Inflammation of brain cells is a part of aging but there can be situations when inflammation goes out of control and that results in deadly diseases such as dementia or even Alzheimer.
In an experiment by a group of scientists, synthetic drug with components similar to marijuana were administered to a group of rats. The result showed that both young and old rats exhibited considerable improvement in memory with even reduced inflammation of brain cells in some old rats. There were other experiments as well that showed drug acted on parts of brain that was responsible for appetite, memory, mood and even pain.
Research studies from Ohio State University conclude that a synthetic drug similar to marijuana triggers production of brain cells and neurons and help cut inflammation. The most important component of marijuana is the chemical tetrahydrocannabinol (THC). Medicines based on this chemical compound have been in use to keep dementia at bay, and this is proven and widely accepted.
There are also evidences that suggest people who smoked marijuana in 1960s and 1970s rarely developed memory loss or Alzheimer’s disease. However use of marijuana cannot be recommended because of its psychoactive properties. The challenge is to find a drug or a synthetic substitute to marijuana without its negative impact that is without making the patients feel dizzy and high as in the case of smoking marijuana. So the need is to find a compound that will help treat neurogenesis and inflammation in an efficient way to produce best results.
However, the focus as of now is to find a pill or pills that will reduce brain inflammation without adverse effects of marijuana.
A new research study suggests that parts of marijuana have proved to be beneficial in treating memory loss. It has been seen that some constituents of marijuana has anti-inflammatory properties and it is this characteristic of marijuana that can help in treating inflammation in brain cells. Inflammation of brain cells is a part of aging but there can be situations when inflammation goes out of control and that results in deadly diseases such as dementia or even Alzheimer.
In an experiment by a group of scientists, synthetic drug with components similar to marijuana were administered to a group of rats. The result showed that both young and old rats exhibited considerable improvement in memory with even reduced inflammation of brain cells in some old rats. There were other experiments as well that showed drug acted on parts of brain that was responsible for appetite, memory, mood and even pain.
Research studies from Ohio State University conclude that a synthetic drug similar to marijuana triggers production of brain cells and neurons and help cut inflammation. The most important component of marijuana is the chemical tetrahydrocannabinol (THC). Medicines based on this chemical compound have been in use to keep dementia at bay, and this is proven and widely accepted.
There are also evidences that suggest people who smoked marijuana in 1960s and 1970s rarely developed memory loss or Alzheimer’s disease. However use of marijuana cannot be recommended because of its psychoactive properties. The challenge is to find a drug or a synthetic substitute to marijuana without its negative impact that is without making the patients feel dizzy and high as in the case of smoking marijuana. So the need is to find a compound that will help treat neurogenesis and inflammation in an efficient way to produce best results.
However, the focus as of now is to find a pill or pills that will reduce brain inflammation without adverse effects of marijuana.
Sunday, April 26, 2009
10 Most Money Saving tips for Senior Citizens
With increasing baldness and gray hair, it is accepted that one gains more wisdom, one gets classified as a privilege class of senior citizen, and you get more time to spend but yes with it come a fixed source of income. With rising inflation you need to spend wisely to maintain a perfect balance in the tightrope walking of living a meaningful and qualitative life over the years.
Here are some price-chopper ideas into living each day:
1. Shopping on Senior Citizen Days: If you do your purchases on the designated days of the week when it’s called senior citizen days you can save some bucks in the form of discounts. Most shops discount it on your bill without you having to ask for, but in some cases you need to remind them so you need to be informed in the first place to get the discount.
2. Shopping at Charity Stores: If you need to buy gift items for your grandchildren or wish to read between the lines of a new novel, walk into any charity shops where you can buy the stuffs at much less price. Not only that you also contribute to a social cause by purchasing from a charity shop.
3. Use unbranded items: Most items, if branded carry the cost of the brand image or credibility and pass it on to the consumers with increased price tag. So, buy unbranded items especially food items and get yourself treated with mega deals and discount offers. It helps you sane few bucks always.
4. Cut cost by shopping @ 99p store: As a senior citizen you can further cut cost if you purchase some items such as deodorants, tea, coffee and other essential items from these stores as the prices here is much less. In this way your grocery bill can be reduced to a great extent.
5. Cook your sauce: Instead of spending money on sauces and rubs, cook your homemade sauce. It adds to healthy well being besides saving some money.
6. Save energy: It not only helps in controlling pollution but also helps save in electricity bills by not heating all the rooms. Use energy efficiently by replacing the electrical fittings with LED bulbs. It will help you curtail cost on electricity.
7. Reduce gasoline cost: Keep your vehicle well-maintained with regular tuning such as checking on tires and air filters so that fuel efficient is at its maximum. You can save few bucks by buying less expensive gas to run your vehicle.
8. Save on your insurances: From health to auto, you can save money on your insurance policies by being that little extra vigilant and using some research diligently online to compare costs before registering into one. If you are healthy and if you drive safe, there are insurance companies that provide with the best deals to the senior citizen.
9. Check on the State Benefits: Due to limited earnings, many senior citizens are not needed to pay the council taxes, one need to check on the local council to get benefited from the scheme.
10. Know other allied state benefits: There are other benefits such as free TV license if you are aged above 75 years and also pension credits to boost income.
Saturday, April 25, 2009
Is America a Christian nation?
Just last month, President Obama speaking in Turkey said that we are not a Christian nation. Not surprisingly, the media had a field day with those comments, placing them in a context of secular liberalism that denies the historical roots of American culture. Also, not surprisingly, most of the commentators who were critical of the president failed to show the full context of his comments.
What he actually said was, “I’ve said before, one of the great strengths of the United States is, although as I mentioned, we have a very large Christian population, we do not consider ourselves a Christian nation or a Jewish nation or a Muslim nation … we consider ourselves a nation of citizens who are bound by ideals and a set of values.”
It would seem that the president was more in tune with the pulse of American feelings about faith and religion than his media tormentors. The cover of Newsweek, April 20 edition, proclaims: “The Decline and Fall of Christian America.” Curiously it was not written in response to the president’s comments; it came as the result of a recent survey on faith in America.
The Newsweek poll conducted by Princeton Survey Research Associates, found that there has been a 10 percent decline in the number of people who identified themselves as Christian from 1990 to 2009. Further, the bulk of that shift seems to have taken place within the last years of the Bush administration and most prominently in the Northeast.
But before we fall into a state of monumental lamentation, let’s consider that even under these new low survey results, 76 percent of Americans today identify themselves as Christian, down from 86 percent in 1990. Now, when three-fourths of everyone in America claims they are Christian, it seems unrealistic to announce the new post-Christian age, though agnostic and atheist people now represent 15 percent of all Americans, a near doubling in the past 19 years.
The place of religion in American has been a hot topic since Jamestown was established. Many of our earliest citizens came here because they were experiencing religious persecution in their homelands and this is still true today.
I think it is important that America never consider itself a “Christian nation.” Most governments of the world dictate the religion, or lack of religion, of their people.
To become a Christian nation, we would need Congress to enact legislation dictating Christianity as the official religion of the United States of America. And, the Supreme Court would have to decide not to object to that new law. The result of this would be that we would lose our freedom to choose our faith system. Are you ready to have Washington tell you what to believe?
America is a free market for religion and we were founded on that basis. Our founders knew all too well the intolerance associated with state religions. They also could look back on several hundred years of wars and see clearly that a majority of them were fought for religious reasons. Religious hatred stirs more action than religious tolerance. Since religion deals with ultimate truths, people are more than willing to make ultimate decisions — life and death — for other people who don’t think like them.
As a Christian pastor, I have no question in my own mind about what I believe. But as an American, I have no question in my own mind that you are completely free to agree or disagree with me. I understand my church will thrive because the values I preach resonate with the values that people in the pews feel in their hearts. In church-going America, people vote with their feet. If I am not preaching the love of God in my sermons, people’s feet with take them elsewhere on Sunday mornings.
As some denominations have gotten more aligned with a political agenda, some people have felt manipulated by their leaders. The Newsweek poll indicates that a real crisis is growing for the Republican religious right. A majority of people who identify themselves as Evangelical Christians voted for the Democratic party in the last election.
The irony here is that 40 years ago, the liberal churches were heavily involved in the social movement and trying to affect legislation. The evangelical churches pointed to this involvement in politics and said, “The role of religion is to save souls, not to change society.”
People began leaving those mainstream liberal churches back in 1959 and going to conservative and more evangelical churches. Now the evangelical churches are seeing an erosion of influence due to their heavy political involvement. The same central truth is at work; people don’t like to mix religion and politics. Americans feel the salvation of our souls should not be dependent on the policies of our government.
America is the hope of the world! If we can show that a great nation can rejoice in the religious freedom of all faiths, can worship God as we understand God to be, can support and defend the freedoms of faiths different than their own, and can prosper while we do that, then there exists a great hope that other nations and other peoples can learn to do the same.
I believe American is the most faithful nation on the planet.
I believe we can show the world it is possible for different faiths to worship side by side, without killing each other.
I do believe we are the hope of the world.
And I believe that the love of God, calls us to do no less.
The Rev. Steve Petty is pastor of First United Methodist Church. He welcomes your e-mail at spetty.record@verizon.net.
April 24, 2009
What he actually said was, “I’ve said before, one of the great strengths of the United States is, although as I mentioned, we have a very large Christian population, we do not consider ourselves a Christian nation or a Jewish nation or a Muslim nation … we consider ourselves a nation of citizens who are bound by ideals and a set of values.”
It would seem that the president was more in tune with the pulse of American feelings about faith and religion than his media tormentors. The cover of Newsweek, April 20 edition, proclaims: “The Decline and Fall of Christian America.” Curiously it was not written in response to the president’s comments; it came as the result of a recent survey on faith in America.
The Newsweek poll conducted by Princeton Survey Research Associates, found that there has been a 10 percent decline in the number of people who identified themselves as Christian from 1990 to 2009. Further, the bulk of that shift seems to have taken place within the last years of the Bush administration and most prominently in the Northeast.
But before we fall into a state of monumental lamentation, let’s consider that even under these new low survey results, 76 percent of Americans today identify themselves as Christian, down from 86 percent in 1990. Now, when three-fourths of everyone in America claims they are Christian, it seems unrealistic to announce the new post-Christian age, though agnostic and atheist people now represent 15 percent of all Americans, a near doubling in the past 19 years.
The place of religion in American has been a hot topic since Jamestown was established. Many of our earliest citizens came here because they were experiencing religious persecution in their homelands and this is still true today.
I think it is important that America never consider itself a “Christian nation.” Most governments of the world dictate the religion, or lack of religion, of their people.
To become a Christian nation, we would need Congress to enact legislation dictating Christianity as the official religion of the United States of America. And, the Supreme Court would have to decide not to object to that new law. The result of this would be that we would lose our freedom to choose our faith system. Are you ready to have Washington tell you what to believe?
America is a free market for religion and we were founded on that basis. Our founders knew all too well the intolerance associated with state religions. They also could look back on several hundred years of wars and see clearly that a majority of them were fought for religious reasons. Religious hatred stirs more action than religious tolerance. Since religion deals with ultimate truths, people are more than willing to make ultimate decisions — life and death — for other people who don’t think like them.
As a Christian pastor, I have no question in my own mind about what I believe. But as an American, I have no question in my own mind that you are completely free to agree or disagree with me. I understand my church will thrive because the values I preach resonate with the values that people in the pews feel in their hearts. In church-going America, people vote with their feet. If I am not preaching the love of God in my sermons, people’s feet with take them elsewhere on Sunday mornings.
As some denominations have gotten more aligned with a political agenda, some people have felt manipulated by their leaders. The Newsweek poll indicates that a real crisis is growing for the Republican religious right. A majority of people who identify themselves as Evangelical Christians voted for the Democratic party in the last election.
The irony here is that 40 years ago, the liberal churches were heavily involved in the social movement and trying to affect legislation. The evangelical churches pointed to this involvement in politics and said, “The role of religion is to save souls, not to change society.”
People began leaving those mainstream liberal churches back in 1959 and going to conservative and more evangelical churches. Now the evangelical churches are seeing an erosion of influence due to their heavy political involvement. The same central truth is at work; people don’t like to mix religion and politics. Americans feel the salvation of our souls should not be dependent on the policies of our government.
America is the hope of the world! If we can show that a great nation can rejoice in the religious freedom of all faiths, can worship God as we understand God to be, can support and defend the freedoms of faiths different than their own, and can prosper while we do that, then there exists a great hope that other nations and other peoples can learn to do the same.
I believe American is the most faithful nation on the planet.
I believe we can show the world it is possible for different faiths to worship side by side, without killing each other.
I do believe we are the hope of the world.
And I believe that the love of God, calls us to do no less.
The Rev. Steve Petty is pastor of First United Methodist Church. He welcomes your e-mail at spetty.record@verizon.net.
April 24, 2009
Italy's Mafia thrives in global financial meltdown
While businesses around the world are hunkering down for survival, the Italian mob is living a golden moment.
Italy's various organized crime syndicates — often lumped together colloquially as Mafia Inc. — are gobbling up gas stations, muscling in on supermarket franchises, making loans to cash-starved businesses, taking over trattorias and acquiring buildings in swank neighborhoods in Rome and Milan, investigators say.
These mobsters have lots of what is in short supply for many businesses these days — liquidity — as well as centuries-honed expertise in preying on the vulnerable, whose ranks are swelling in the current financial crisis.
It all means the mob is free to sink cash into two areas that lie at the heart of the global meltdown: real estate and credit markets.
The crime syndicates are flush with billions of euros from extortion rackets, drug trafficking and booming sales in fake designer clothing made in China expressly for the Italian mob — an increasingly lucrative trade as hard-hit consumers search for bargains, prosecutors and police said in recent interviews.
For the mob bosses, the global economic meltdown "is only an advantage," said anti-mafia prosecutor Franco Roberti, in his office in Naples, the chaotic port city that is home to the Camorra, one of the Italy's major crime syndicates.
Italy has scored some spectacular successes in its decades-long fight against the Mafia, capturing top bosses, persuading turncoats to testify, and encouraging ordinary citizens to resist shakedowns.
But the mob keeps growing — and its drive in recent years to grab chunks of legitimate business is paying off big time in the financial crisis.
In Rome, in the high-rent neighborhoods around the Spanish Steps, Piazza Navona and Trevi Fountain, mobsters are snapping up real estate, anti-Mafia prosecutor Giancarlo Capaldo said in a courthouse interview.
In probes of what Capaldo described as "indications" that mobsters have taken over hotels, restaurants and cafes in Rome, police seized assets of some of these businesses, although the establishments remain open.
"These places are well run because they want to make money," Capaldo said. He declined to identify the establishments because the probe is still being conducted, saying only that "you'll find some of them in tourist guide books."
Capaldo's office also confiscated auto dealerships in Rome from suspected Camorristi or their allies.
"The Camorra makes the money here in the south, but it invests it in legal activities up north," customs and tax police Gen. Giovanni Mainolfi said in his Naples office.
If the mobsters built posh places in the largely undeveloped south "they would stand out, but do it in Milan ... and they blend right in," Mainolfi said.
In an operation code-named "Easy Money," police this year seized a hotel in the exclusive Tuscan sea resort of Punta Ala, as well as a supermarket, two Ferraris, a gas station in the wealthy northern Reggio Emilia region and other properties, altogether totaling euro30 million (about $40 million). All were believed to be owned by the Camorra, flush with drug profits.
The revenues raked in by Italy's crime syndicates would be more than respectable for many a stock market-listed company these days — although, of course, the mobsters hardly issue annual reports.
The Rome-based Eurispes think tank has estimated that in 2008, "Mafia Inc." earned euro130 billion (then $167 billion), or about 8 percent of Italy's GDP, from its criminal activities, nearly half of that from drug trafficking.
Eurispes, which analyzes social, economic and criminal trends, said loansharking brought in an estimated euro12.6 billion ($17 billion) of that income. It calculated that some 180,000 merchants and other businessmen got their loans, directly or indirectly, through organized crime in Italy.
With much of the world financial crunch making its impact in Italy in the first months of this year, it's too early to tell how much more profit organized crime might make.
Government probes have found that as they launder illicit revenues, mob bosses are increasingly moving their money out of the underdeveloped south where the syndicates are rooted and into affluent central and northern Italy.
In March, Italy's intelligence services warned in a report that rising unemployment and the credit crunch could help crime syndicates tighten their tentacles around vast swaths of the nation's business sector, including supermarkets, real estate and tourism.
A main engine of the mob's recent strength — the age-old practice of loan-sharking — is thriving as banks hoard cash, allowing the Mafia to elbow in on legitimate businesses.
The mobsters are poised to "acquire control of businesses in difficulty, especially through their consolidated practice of loan-sharking," as well as to "snap up assets put on the market by enterprises experiencing liquidity crises," the intelligence report said.
The dire predictions seem borne out by businessmen's complaints.
SOS Impresa, an Italian business lobby dedicated to fighting organized crime, estimated in a report late last year that in the Camorra has "multiplied by 10, 100, perhaps 1,000 times, its penetration of the economic and social fabric, stepping up its business presence in our country, in Europe and the world."
In Rome, Camorra men or those in their employ have been spotted hanging out at pawnbrokers' auctions to learn which businesses might be in financial straits, said Carabinieri Lt. Col. Roberto Casagrande. Those businesses would then be approached — and offered a loan they could scarcely refuse.
The Camorra offers shaky businesses attractive interest rates, calculating that the businesses will end up part of its economic empire if the owner falls behind on payments, Roberti said. The mobsters sometimes leave the original owner as a figurehead to thwart suspicion, police said.
The 'ndrangheta crime syndicate — based in Calabria, the "toe" of Italy's boot — is also brazenly taking over struggling businesses and snapping up prime northern Italian property at a bargain during the real estate slowdown, investigators say.
Genoa Mayor Marta Vincinzi told a rally against organized crime in Naples late this spring that Mafia bosses, particularly from the 'ndrangheta, were "gobbling up entire neighborhoods" and pressuring merchants to pay "protection money" in the gritty, northwestern port city.
Investigators believe that flourishing ties with Colombian cocaine cartels have helped the 'ndrangheta to surpass Sicily's Cosa Nostra in international drug dealing.
Cosa Nostra has taken blows in recent years. Longtime fugitive bosses have been captured and a rebellion by island businessmen against paying "protection money" is starting to take root. But the anti-extortion revolt is not widespread enough to significantly reduce the Sicilian Mafia's coffers, the intelligence services' report noted.
Particularly tempting to the mob is Italy's recent explosion of supermarkets, a boon to consumers long frustrated by the often limited hours and selection offered by mom-and-pop stores.
In Sicily last year, authorities seized euro$700 million (then worth $900 million) in assets, including supermarket outlets, from a businessman who was known as the island's "king of supermarkets" and was suspected of letting Cosa Nostra use his businesses to launder money.
Prosecutors in Palermo said the owner's name turned up on handwritten notes scribbled by Bernardo Provenzano, the longtime fugitive "boss of all bosses" who was captured in 2006.
The intelligence services report predicts that mobsters would step up production of counterfeit name-brand goods given consumers' apparently increased appetite for fake designer items. The Eurispes think tank estimated this growing business earned the mob euro6.3 billion ($8.5 billion) last year.
Naples anti-organized crime prosecutor Roberti said the Camorra has pumped up what once was a kind of cottage industry, with crime clan bosses knitting closer ties with mobsters in China, where fake designer clothing, shoes and accessories are now churned out in factories for the mob.
Trafficking in fake designer goods — which investigators suspect the Camorra is also peddling in the United States, France, Britain and Germany — is now becoming more profitable for the Neapolitan syndicate that dealing in cocaine and hashish, said Mainolfi, the customs and tax police general.
He has calculated that for every euro it costs to manufacture the counterfeit designer goods, the Camorra earns 10 euros, while for every euro spent to run drug trafficking, it earns six or seven euros.
The fakes, sold in street stalls and clothing shops in the Naples and Rome areas, arrive by the tons in Naples' sprawling, chaotic port, where custom officials manage to check only some 5 percent of the shipping containers being unloaded, Mainolfi said.
Italy's various organized crime syndicates — often lumped together colloquially as Mafia Inc. — are gobbling up gas stations, muscling in on supermarket franchises, making loans to cash-starved businesses, taking over trattorias and acquiring buildings in swank neighborhoods in Rome and Milan, investigators say.
These mobsters have lots of what is in short supply for many businesses these days — liquidity — as well as centuries-honed expertise in preying on the vulnerable, whose ranks are swelling in the current financial crisis.
It all means the mob is free to sink cash into two areas that lie at the heart of the global meltdown: real estate and credit markets.
The crime syndicates are flush with billions of euros from extortion rackets, drug trafficking and booming sales in fake designer clothing made in China expressly for the Italian mob — an increasingly lucrative trade as hard-hit consumers search for bargains, prosecutors and police said in recent interviews.
For the mob bosses, the global economic meltdown "is only an advantage," said anti-mafia prosecutor Franco Roberti, in his office in Naples, the chaotic port city that is home to the Camorra, one of the Italy's major crime syndicates.
Italy has scored some spectacular successes in its decades-long fight against the Mafia, capturing top bosses, persuading turncoats to testify, and encouraging ordinary citizens to resist shakedowns.
But the mob keeps growing — and its drive in recent years to grab chunks of legitimate business is paying off big time in the financial crisis.
In Rome, in the high-rent neighborhoods around the Spanish Steps, Piazza Navona and Trevi Fountain, mobsters are snapping up real estate, anti-Mafia prosecutor Giancarlo Capaldo said in a courthouse interview.
In probes of what Capaldo described as "indications" that mobsters have taken over hotels, restaurants and cafes in Rome, police seized assets of some of these businesses, although the establishments remain open.
"These places are well run because they want to make money," Capaldo said. He declined to identify the establishments because the probe is still being conducted, saying only that "you'll find some of them in tourist guide books."
Capaldo's office also confiscated auto dealerships in Rome from suspected Camorristi or their allies.
"The Camorra makes the money here in the south, but it invests it in legal activities up north," customs and tax police Gen. Giovanni Mainolfi said in his Naples office.
If the mobsters built posh places in the largely undeveloped south "they would stand out, but do it in Milan ... and they blend right in," Mainolfi said.
In an operation code-named "Easy Money," police this year seized a hotel in the exclusive Tuscan sea resort of Punta Ala, as well as a supermarket, two Ferraris, a gas station in the wealthy northern Reggio Emilia region and other properties, altogether totaling euro30 million (about $40 million). All were believed to be owned by the Camorra, flush with drug profits.
The revenues raked in by Italy's crime syndicates would be more than respectable for many a stock market-listed company these days — although, of course, the mobsters hardly issue annual reports.
The Rome-based Eurispes think tank has estimated that in 2008, "Mafia Inc." earned euro130 billion (then $167 billion), or about 8 percent of Italy's GDP, from its criminal activities, nearly half of that from drug trafficking.
Eurispes, which analyzes social, economic and criminal trends, said loansharking brought in an estimated euro12.6 billion ($17 billion) of that income. It calculated that some 180,000 merchants and other businessmen got their loans, directly or indirectly, through organized crime in Italy.
With much of the world financial crunch making its impact in Italy in the first months of this year, it's too early to tell how much more profit organized crime might make.
Government probes have found that as they launder illicit revenues, mob bosses are increasingly moving their money out of the underdeveloped south where the syndicates are rooted and into affluent central and northern Italy.
In March, Italy's intelligence services warned in a report that rising unemployment and the credit crunch could help crime syndicates tighten their tentacles around vast swaths of the nation's business sector, including supermarkets, real estate and tourism.
A main engine of the mob's recent strength — the age-old practice of loan-sharking — is thriving as banks hoard cash, allowing the Mafia to elbow in on legitimate businesses.
The mobsters are poised to "acquire control of businesses in difficulty, especially through their consolidated practice of loan-sharking," as well as to "snap up assets put on the market by enterprises experiencing liquidity crises," the intelligence report said.
The dire predictions seem borne out by businessmen's complaints.
SOS Impresa, an Italian business lobby dedicated to fighting organized crime, estimated in a report late last year that in the Camorra has "multiplied by 10, 100, perhaps 1,000 times, its penetration of the economic and social fabric, stepping up its business presence in our country, in Europe and the world."
In Rome, Camorra men or those in their employ have been spotted hanging out at pawnbrokers' auctions to learn which businesses might be in financial straits, said Carabinieri Lt. Col. Roberto Casagrande. Those businesses would then be approached — and offered a loan they could scarcely refuse.
The Camorra offers shaky businesses attractive interest rates, calculating that the businesses will end up part of its economic empire if the owner falls behind on payments, Roberti said. The mobsters sometimes leave the original owner as a figurehead to thwart suspicion, police said.
The 'ndrangheta crime syndicate — based in Calabria, the "toe" of Italy's boot — is also brazenly taking over struggling businesses and snapping up prime northern Italian property at a bargain during the real estate slowdown, investigators say.
Genoa Mayor Marta Vincinzi told a rally against organized crime in Naples late this spring that Mafia bosses, particularly from the 'ndrangheta, were "gobbling up entire neighborhoods" and pressuring merchants to pay "protection money" in the gritty, northwestern port city.
Investigators believe that flourishing ties with Colombian cocaine cartels have helped the 'ndrangheta to surpass Sicily's Cosa Nostra in international drug dealing.
Cosa Nostra has taken blows in recent years. Longtime fugitive bosses have been captured and a rebellion by island businessmen against paying "protection money" is starting to take root. But the anti-extortion revolt is not widespread enough to significantly reduce the Sicilian Mafia's coffers, the intelligence services' report noted.
Particularly tempting to the mob is Italy's recent explosion of supermarkets, a boon to consumers long frustrated by the often limited hours and selection offered by mom-and-pop stores.
In Sicily last year, authorities seized euro$700 million (then worth $900 million) in assets, including supermarket outlets, from a businessman who was known as the island's "king of supermarkets" and was suspected of letting Cosa Nostra use his businesses to launder money.
Prosecutors in Palermo said the owner's name turned up on handwritten notes scribbled by Bernardo Provenzano, the longtime fugitive "boss of all bosses" who was captured in 2006.
The intelligence services report predicts that mobsters would step up production of counterfeit name-brand goods given consumers' apparently increased appetite for fake designer items. The Eurispes think tank estimated this growing business earned the mob euro6.3 billion ($8.5 billion) last year.
Naples anti-organized crime prosecutor Roberti said the Camorra has pumped up what once was a kind of cottage industry, with crime clan bosses knitting closer ties with mobsters in China, where fake designer clothing, shoes and accessories are now churned out in factories for the mob.
Trafficking in fake designer goods — which investigators suspect the Camorra is also peddling in the United States, France, Britain and Germany — is now becoming more profitable for the Neapolitan syndicate that dealing in cocaine and hashish, said Mainolfi, the customs and tax police general.
He has calculated that for every euro it costs to manufacture the counterfeit designer goods, the Camorra earns 10 euros, while for every euro spent to run drug trafficking, it earns six or seven euros.
The fakes, sold in street stalls and clothing shops in the Naples and Rome areas, arrive by the tons in Naples' sprawling, chaotic port, where custom officials manage to check only some 5 percent of the shipping containers being unloaded, Mainolfi said.
Is Bottled Water Really Better Than Tap?
From coast to coast, the United States has some of the finest supplies of drinking water in the world. But you’d hardly know it to judge from the number of people toting around bottles of designer H2O.
According to the Beverage Marketing Corporation, an industry research and consulting firm based in New York City, Americans drank more than 8.2 billion gallons of bottled water in 2006 — nearly double the amount consumed by the second-place country. That’s 28 gallons per person, or half a gallon a week. We drink more bottled water than milk, coffee or beer. Only carbonated soft drinks have a bigger market share.
Beverage Marketing estimates that Americans spent nearly $11 billion in 2006 on a product they could have had practically for free. State and local governments spend trillions — yes trillions — of dollars to deliver clean, fresh water to homes and businesses. The water that comes out of your kitchen sink routinely wins taste tests over bottled water and costs a tiny fraction of the $1.64 a gallon that Americans spend on the bottled stuff, according to ACNielsen, an international market research firm based in Illinois.
Testing the waters: Is tap water really safer?
Plain old tap water may be safer, too, because its purity is tested far more often than bottled water. Federal law requires municipalities to test the purity of their drinking water at least once a day — and in most cases, multiple times a day, says Dale Kemery, spokesman for the U.S. Environmental Protection Agency (EPA), which sets the regulations for public drinking water.
The EPA’s Lead and Copper Rule of 1991 requires testing at customer taps because lead (which isn’t usually in source water) can enter water through corrosion of lead-bearing materials that may be present in service lines and home plumbing. Systems must work to ensure that the corrosivity of their water is minimized to keep lead from leaching.
“We’re talking about flowing water,” Kemery says. “It’s a constantly changing situation, so we’re constantly sampling it.” The frequency of testing depends on the size of the water system, but in larger cities, Kemery says the public water supply is analyzed hundreds or even thousands of times per day.
EPA regulations require drinking water to be tested as it enters the local distribution system as well as at various points along the way in order to protect against contamination in the aquifers. Every public system must also report the quality of its water to the public at least once a year. (For a copy of your city’s Consumer Confidence Report, call the EPA at 800-426-4791, or check www.epa.gov/safewater.)
Bottled water is regulated as a food product — not by the EPA but by the U.S. Food and Drug Administration (FDA), which requires bottlers to test their water for bacterial contaminants just once a week, according to FDA spokesman Mike Herndon. Some regulations on bottled water are not as stringent as those on public drinking water.
For example, the FDA permits bottled water to contain trace amounts of E. coli and/or fecal coliform bacteria, while “the maximum level of bacteria in public drinking water is zero,” Kemery says.
Are all bottled waters the same?
Not all bottled waters are created equal. Members of the International Bottled Water Association (IBWA) — an Alexandria, Va.-based trade group that represents both small and large bottlers and major brands such as Evian, Crystal Geyser, Poland Springs and Deer Park — must meet standards that are stricter than the FDA’s. IBWA membership requires zero tolerance for E. coli and fecal coliform bacteria — just like the EPA guidelines for tap water. These companies must also submit to a surprise annual inspection from an independent third party.
“We’re trying to raise the standards for bottled water quality,” says Joe Doss, the IBWA’s president and CEO. “We’ve asked the FDA to make the E. coli standard a zero-tolerance policy.” Doss adds that there are 31 substances for which IBWA regulations are more stringent than both the FDA’s and EPA’s.
But regulation without enforcement loses a lot of punch. In this area, tap water again receives better marks from just about every consumer and environmental organization.
State governments are responsible for implementing regulations on public drinking water, while the FDA does its own policing — and very little of it. “The FDA has less than one full-time staff person enforcing bottled water regulations,” says Victoria Kaplan, organizing director of Food & Water Watch, a national consumer advocacy group in Washington, D.C.
What’s more, bottlers do not have to reveal the results of their bacterial tests; they’re only required to keep the data on file for two years in case an FDA inspector visits.
“The FDA is constantly understaffed and underfunded and relies on bottled water companies to police themselves,” says Gigi Kellett, director of Think Outside the Bottle, a Boston-based campaign to restore consumer confidence in public water systems. “When there’s a problem with our public water, we know it right away because it’s so rigorously tested.” By contrast, Kellett notes, a contaminant in bottled water could go undetected for longer.
The sources of bottled water
Bottled water companies spend millions of dollars to persuade consumers that their product comes from pristine mountain springs and is therefore cleaner or purer than tap water. But in reality, many bottled waters are simply tap water that’s been filtered (which, ironically, can remove the beneficial fluoride — although some firms also add fluoride back into their water) and packaged.
In July, PepsiCo announced that its Aquafina bottles would spell out the fact that the water inside it comes from the same place as local tap water. Dasani, bottled by Coca-Cola, is also nothing more than filtered tap water. This filtering process “doesn’t make [the water] any healthier,” says Aquafina spokesman Dave Dececco. It merely removes salts, chlorides and other dissolved solids that may affect taste. Together, these two brands make up a quarter of the bottled water market.
Acknowledging the folly of buying bottles of filtered versions of their own tap water, municipalities such as Los Angeles, San Francisco, Minneapolis and Salt Lake City have recently prohibited the use of city funds to purchase bottled water.
“For a long time, I’ve viewed [bottled water] as a huge marketing scam,” says Salt Lake City Mayor Rocky Anderson. The City Council of Ann Arbor, Mich., passed a similar resolution earlier this year, while New York City is spending $700,000 to promote its tap water (which, reportedly, many Manhattan diners often request by name).
These governments are publicly acknowledging what water industry experts have long known: that our public drinking water is safe and healthy. The water flowing from San Francisco’s taps, for example, comes from snowmelt into the Hetch Hetchy Reservoir near Yosemite National Park. It’s so pure that it passes all contamination tests without even being filtered.
Flowing to market: Bringing bottles to consumers
San Francisco's tap water comes from a natural downhill flow from the Sierras into the aqueducts that feed the city’s homes and businesses. Bottled water, on the other hand, requires a great number of resources to make that same journey in petroleum-derived containers.
According to the Container Recycling Institute, a nonprofit organization in Washington, D.C., it took 18 million barrels of crude oil to make 50 billion polyethylene terephthalate (PET) plastic bottles in 2005 alone. That process released a staggering 800,000 metric tons of carbon into the environment.
Trucking those bottles to market entails even more use of petroleum and more carbon emissions, especially when that water comes from far-flung places like Europe or Fiji. In July, 2007, ABC News estimated that 2 ounces of oil were consumed in bringing each 1-liter bottle of water from France to Chicago — and that doesn’t count the petroleum used to make the bottle.
But everyone recycles! Don't they?
Less than a quarter of plastic bottles get recycled. “Only half the U.S. has access to curbside recycling,” says Betty McLaughlin, executive director of the nonprofit D.C.-based Container Recycling Institute. She adds that even in communities where recycling facilities exist, people usually drink bottled water when they’re away from home and on the go — and much less likely to recycle the bottle.
Statewide bottle bills — in which consumers pay a deposit (usually 5 cents) on beverage containers — are one of the most successful methods of improving recycling rates, but the IBWA has lobbied against them. Just four states (Oregon, Hawaii, California and Maine) charge deposits on water bottles in addition to beer and soda containers.
The IBWA also claims immunity from the environmental issue, pointing to evidence that bottled water sales are merely displacing purchases of sugary drinks like soda. Gary Hemphill, managing director of the Beverage Marketing Corporation, agrees, noting that the greatest growth in water sales has come in single-serving bottles. Bulk sales of large jugs, which consumers usually buy as a substitute for tap water, have grown more slowly.
“Our competition is not tap water — it’s other beverages like teas and carbonated soft drinks,” says the IBWA’s Doss. “We have research that indicates consumers choose both tap and bottled water. They may choose bottled water to eliminate calories from their diets.”
Doss also trumpets his industry’s green efforts. “We take seriously our responsibility to be good stewards of the environment.” He notes that plastic water bottles are already 100% recyclable and that several bottlers have recently switched to a lighter bottle that uses 40% less resin.
So what does it all mean? Well, the choice between bottled and tap depends largely on where you are. On the road, at a convenience store or at a stadium where you’d otherwise choose something fattening, bottled water is a healthful alternative. But at home, at work or in restaurants — anywhere tap water is readily available — the house brand is best.
“There’s no reason bottled water and tap water can’t coexist,” says Aquafina’s Dececco. “When you’re out and about, bottled water is more convenient. When you’re home, there’s absolutely no reason not to drink tap water.”
According to the Beverage Marketing Corporation, an industry research and consulting firm based in New York City, Americans drank more than 8.2 billion gallons of bottled water in 2006 — nearly double the amount consumed by the second-place country. That’s 28 gallons per person, or half a gallon a week. We drink more bottled water than milk, coffee or beer. Only carbonated soft drinks have a bigger market share.
Beverage Marketing estimates that Americans spent nearly $11 billion in 2006 on a product they could have had practically for free. State and local governments spend trillions — yes trillions — of dollars to deliver clean, fresh water to homes and businesses. The water that comes out of your kitchen sink routinely wins taste tests over bottled water and costs a tiny fraction of the $1.64 a gallon that Americans spend on the bottled stuff, according to ACNielsen, an international market research firm based in Illinois.
Testing the waters: Is tap water really safer?
Plain old tap water may be safer, too, because its purity is tested far more often than bottled water. Federal law requires municipalities to test the purity of their drinking water at least once a day — and in most cases, multiple times a day, says Dale Kemery, spokesman for the U.S. Environmental Protection Agency (EPA), which sets the regulations for public drinking water.
The EPA’s Lead and Copper Rule of 1991 requires testing at customer taps because lead (which isn’t usually in source water) can enter water through corrosion of lead-bearing materials that may be present in service lines and home plumbing. Systems must work to ensure that the corrosivity of their water is minimized to keep lead from leaching.
“We’re talking about flowing water,” Kemery says. “It’s a constantly changing situation, so we’re constantly sampling it.” The frequency of testing depends on the size of the water system, but in larger cities, Kemery says the public water supply is analyzed hundreds or even thousands of times per day.
EPA regulations require drinking water to be tested as it enters the local distribution system as well as at various points along the way in order to protect against contamination in the aquifers. Every public system must also report the quality of its water to the public at least once a year. (For a copy of your city’s Consumer Confidence Report, call the EPA at 800-426-4791, or check www.epa.gov/safewater.)
Bottled water is regulated as a food product — not by the EPA but by the U.S. Food and Drug Administration (FDA), which requires bottlers to test their water for bacterial contaminants just once a week, according to FDA spokesman Mike Herndon. Some regulations on bottled water are not as stringent as those on public drinking water.
For example, the FDA permits bottled water to contain trace amounts of E. coli and/or fecal coliform bacteria, while “the maximum level of bacteria in public drinking water is zero,” Kemery says.
Are all bottled waters the same?
Not all bottled waters are created equal. Members of the International Bottled Water Association (IBWA) — an Alexandria, Va.-based trade group that represents both small and large bottlers and major brands such as Evian, Crystal Geyser, Poland Springs and Deer Park — must meet standards that are stricter than the FDA’s. IBWA membership requires zero tolerance for E. coli and fecal coliform bacteria — just like the EPA guidelines for tap water. These companies must also submit to a surprise annual inspection from an independent third party.
“We’re trying to raise the standards for bottled water quality,” says Joe Doss, the IBWA’s president and CEO. “We’ve asked the FDA to make the E. coli standard a zero-tolerance policy.” Doss adds that there are 31 substances for which IBWA regulations are more stringent than both the FDA’s and EPA’s.
But regulation without enforcement loses a lot of punch. In this area, tap water again receives better marks from just about every consumer and environmental organization.
State governments are responsible for implementing regulations on public drinking water, while the FDA does its own policing — and very little of it. “The FDA has less than one full-time staff person enforcing bottled water regulations,” says Victoria Kaplan, organizing director of Food & Water Watch, a national consumer advocacy group in Washington, D.C.
What’s more, bottlers do not have to reveal the results of their bacterial tests; they’re only required to keep the data on file for two years in case an FDA inspector visits.
“The FDA is constantly understaffed and underfunded and relies on bottled water companies to police themselves,” says Gigi Kellett, director of Think Outside the Bottle, a Boston-based campaign to restore consumer confidence in public water systems. “When there’s a problem with our public water, we know it right away because it’s so rigorously tested.” By contrast, Kellett notes, a contaminant in bottled water could go undetected for longer.
The sources of bottled water
Bottled water companies spend millions of dollars to persuade consumers that their product comes from pristine mountain springs and is therefore cleaner or purer than tap water. But in reality, many bottled waters are simply tap water that’s been filtered (which, ironically, can remove the beneficial fluoride — although some firms also add fluoride back into their water) and packaged.
In July, PepsiCo announced that its Aquafina bottles would spell out the fact that the water inside it comes from the same place as local tap water. Dasani, bottled by Coca-Cola, is also nothing more than filtered tap water. This filtering process “doesn’t make [the water] any healthier,” says Aquafina spokesman Dave Dececco. It merely removes salts, chlorides and other dissolved solids that may affect taste. Together, these two brands make up a quarter of the bottled water market.
Acknowledging the folly of buying bottles of filtered versions of their own tap water, municipalities such as Los Angeles, San Francisco, Minneapolis and Salt Lake City have recently prohibited the use of city funds to purchase bottled water.
“For a long time, I’ve viewed [bottled water] as a huge marketing scam,” says Salt Lake City Mayor Rocky Anderson. The City Council of Ann Arbor, Mich., passed a similar resolution earlier this year, while New York City is spending $700,000 to promote its tap water (which, reportedly, many Manhattan diners often request by name).
These governments are publicly acknowledging what water industry experts have long known: that our public drinking water is safe and healthy. The water flowing from San Francisco’s taps, for example, comes from snowmelt into the Hetch Hetchy Reservoir near Yosemite National Park. It’s so pure that it passes all contamination tests without even being filtered.
Flowing to market: Bringing bottles to consumers
San Francisco's tap water comes from a natural downhill flow from the Sierras into the aqueducts that feed the city’s homes and businesses. Bottled water, on the other hand, requires a great number of resources to make that same journey in petroleum-derived containers.
According to the Container Recycling Institute, a nonprofit organization in Washington, D.C., it took 18 million barrels of crude oil to make 50 billion polyethylene terephthalate (PET) plastic bottles in 2005 alone. That process released a staggering 800,000 metric tons of carbon into the environment.
Trucking those bottles to market entails even more use of petroleum and more carbon emissions, especially when that water comes from far-flung places like Europe or Fiji. In July, 2007, ABC News estimated that 2 ounces of oil were consumed in bringing each 1-liter bottle of water from France to Chicago — and that doesn’t count the petroleum used to make the bottle.
But everyone recycles! Don't they?
Less than a quarter of plastic bottles get recycled. “Only half the U.S. has access to curbside recycling,” says Betty McLaughlin, executive director of the nonprofit D.C.-based Container Recycling Institute. She adds that even in communities where recycling facilities exist, people usually drink bottled water when they’re away from home and on the go — and much less likely to recycle the bottle.
Statewide bottle bills — in which consumers pay a deposit (usually 5 cents) on beverage containers — are one of the most successful methods of improving recycling rates, but the IBWA has lobbied against them. Just four states (Oregon, Hawaii, California and Maine) charge deposits on water bottles in addition to beer and soda containers.
The IBWA also claims immunity from the environmental issue, pointing to evidence that bottled water sales are merely displacing purchases of sugary drinks like soda. Gary Hemphill, managing director of the Beverage Marketing Corporation, agrees, noting that the greatest growth in water sales has come in single-serving bottles. Bulk sales of large jugs, which consumers usually buy as a substitute for tap water, have grown more slowly.
“Our competition is not tap water — it’s other beverages like teas and carbonated soft drinks,” says the IBWA’s Doss. “We have research that indicates consumers choose both tap and bottled water. They may choose bottled water to eliminate calories from their diets.”
Doss also trumpets his industry’s green efforts. “We take seriously our responsibility to be good stewards of the environment.” He notes that plastic water bottles are already 100% recyclable and that several bottlers have recently switched to a lighter bottle that uses 40% less resin.
So what does it all mean? Well, the choice between bottled and tap depends largely on where you are. On the road, at a convenience store or at a stadium where you’d otherwise choose something fattening, bottled water is a healthful alternative. But at home, at work or in restaurants — anywhere tap water is readily available — the house brand is best.
“There’s no reason bottled water and tap water can’t coexist,” says Aquafina’s Dececco. “When you’re out and about, bottled water is more convenient. When you’re home, there’s absolutely no reason not to drink tap water.”
Ford loses $1.4 billion
Ford Motor reported a narrower-than-expected loss for the first quarter Friday, and its CEO said he is confident the company will not need the same kind of federal bailout that is keeping its U.S. rivals alive.
Ford posted net losses of $1.4 billion, or 60 cents a share. That compares to a profit of 3 cents a share in the year-ago period.
Excluding special items, Ford (F, Fortune 500) lost $1.8 billion, or 75 cents a share, compared to a profit on that basis of $477 million, or 20 cents a share a year in the first quarter of 2008. Analysts surveyed by Thomson First Call had forecast a loss of $1.23 per share on this basis.
Ford's revenue plunged 37% during the quarter to $24.8 billion, as vehicle sales in the U.S. dropped 43%. But revenue was also better than analysts' forecasts. Wall Street was expecting sales of $22 billion.
0:00 /2:44Ford chief: Plan's working
Still, the latest losses come on top of $30 billion in net losses the company reported from 2006 through 2008.
In addition, the company reported a $1.9 billion pre-tax operating loss on its automotive operations, which brings those losses to just under $40 billion since that core unit started losing money in 2005. And the company expects those losses to continue through at least next year.
But the report also once again showed Ford is in far better shape to weather the crisis in the global auto industry than its two U.S.-based rivals.
CEO Alan Mulally told analysts that the company is still confident it will not need a federal loan unless the economy gets significantly worse, or unless there is an uncontrolled bankruptcy in the industry that disrupts the flow of parts from Ford's suppliers.
Ford had asked the government for up to a $9 billion line of credit last December, but said at that time it didn't expect to need such help unless sales were worse than expected.
While sales have been far worse than the company's forecast at that time, Mulally said the debt restructuring and new union contract that the company completed during the quarter will allow it to continue without federal assistance.
Chrysler LLC is racing to reach deals with unions, creditors and Italian automaker Fiat before a deadline next Thursday that could force it to file for bankruptcy.
0:00 /1:36Ford's competitive disadvantage
General Motors (GM, Fortune 500), which faces its own bankruptcy deadline at the end of May, announced Thursday it is extending shutdowns at 12 of its 15 U.S. assembly plants due to weak sales.
By contrast, Ford announced a modest 10,000 vehicle increase in second quarter production plans Friday. Its total North American production target of 435,000 is still down 36% from year-ago levels, however.
Ford's automotive operations burned through $3.7 billion in cash during the quarter. But the company burned through cash at a much lower rate than in the past two quarters -- Ford burned through nearly $15 billion in the six months prior to the first quarter.
The company was helped by an agreement with the union to use stock rather than cash to pay for future retiree health care costs. In addition, by tapping into $10.1 billion in revolving lines of credit during the quarter, a move announced in February, the overall company was able to end the quarter with $21.3 billion in cash on hand, up $7.9 billion from the end of 2008.
Ford's cash position gives it a cushion to weather the losses the company expects to continue for the rest of this year and next. Ford chief financial officer Lewis Booth added that the company believes the first quarter will be the worst period of 2009 in terms of using cash, and that the burn rate will fall in each of the next three quarters.
Ford said action taken during the quarter to restructure its debt and changes in its labor contract with the United Auto Workers union will allow it to meet its goal to break even or make money on a pre-tax basis on its North American auto operations by 2011.
The company has previously said it expects about $500 million a year in reduced costs due to the changes in the UAW contract, although those full savings will not be seen this year as the changes are phased in.
Ford also expects that its balance sheet restructuring, in which lenders accepted equity in return for about $10 billion in outstanding debt, will save it about $500 million a year, pro-rated for this year.
Ford posted net losses of $1.4 billion, or 60 cents a share. That compares to a profit of 3 cents a share in the year-ago period.
Excluding special items, Ford (F, Fortune 500) lost $1.8 billion, or 75 cents a share, compared to a profit on that basis of $477 million, or 20 cents a share a year in the first quarter of 2008. Analysts surveyed by Thomson First Call had forecast a loss of $1.23 per share on this basis.
Ford's revenue plunged 37% during the quarter to $24.8 billion, as vehicle sales in the U.S. dropped 43%. But revenue was also better than analysts' forecasts. Wall Street was expecting sales of $22 billion.
0:00 /2:44Ford chief: Plan's working
Still, the latest losses come on top of $30 billion in net losses the company reported from 2006 through 2008.
In addition, the company reported a $1.9 billion pre-tax operating loss on its automotive operations, which brings those losses to just under $40 billion since that core unit started losing money in 2005. And the company expects those losses to continue through at least next year.
But the report also once again showed Ford is in far better shape to weather the crisis in the global auto industry than its two U.S.-based rivals.
CEO Alan Mulally told analysts that the company is still confident it will not need a federal loan unless the economy gets significantly worse, or unless there is an uncontrolled bankruptcy in the industry that disrupts the flow of parts from Ford's suppliers.
Ford had asked the government for up to a $9 billion line of credit last December, but said at that time it didn't expect to need such help unless sales were worse than expected.
While sales have been far worse than the company's forecast at that time, Mulally said the debt restructuring and new union contract that the company completed during the quarter will allow it to continue without federal assistance.
Chrysler LLC is racing to reach deals with unions, creditors and Italian automaker Fiat before a deadline next Thursday that could force it to file for bankruptcy.
0:00 /1:36Ford's competitive disadvantage
General Motors (GM, Fortune 500), which faces its own bankruptcy deadline at the end of May, announced Thursday it is extending shutdowns at 12 of its 15 U.S. assembly plants due to weak sales.
By contrast, Ford announced a modest 10,000 vehicle increase in second quarter production plans Friday. Its total North American production target of 435,000 is still down 36% from year-ago levels, however.
Ford's automotive operations burned through $3.7 billion in cash during the quarter. But the company burned through cash at a much lower rate than in the past two quarters -- Ford burned through nearly $15 billion in the six months prior to the first quarter.
The company was helped by an agreement with the union to use stock rather than cash to pay for future retiree health care costs. In addition, by tapping into $10.1 billion in revolving lines of credit during the quarter, a move announced in February, the overall company was able to end the quarter with $21.3 billion in cash on hand, up $7.9 billion from the end of 2008.
Ford's cash position gives it a cushion to weather the losses the company expects to continue for the rest of this year and next. Ford chief financial officer Lewis Booth added that the company believes the first quarter will be the worst period of 2009 in terms of using cash, and that the burn rate will fall in each of the next three quarters.
Ford said action taken during the quarter to restructure its debt and changes in its labor contract with the United Auto Workers union will allow it to meet its goal to break even or make money on a pre-tax basis on its North American auto operations by 2011.
The company has previously said it expects about $500 million a year in reduced costs due to the changes in the UAW contract, although those full savings will not be seen this year as the changes are phased in.
Ford also expects that its balance sheet restructuring, in which lenders accepted equity in return for about $10 billion in outstanding debt, will save it about $500 million a year, pro-rated for this year.
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