Build Trust on U.S. vaccine by experts

When advisers to the U.S. Food and Drug Administration met to discuss a new vaccine against H1N1 swine flu last week, some of the biggest critics of vaccination were not only in the room, but at the table.

Likewise for a meeting on Wednesday of advisers who decide who will be first in line to get the vaccine, which drug companies are racing to make, test and distribute all within the space of a few weeks.

Registered nurse Vicky Debold, on the board of the National Vaccine Information Center, which questions vaccine safety, is also a member of the FDA's Vaccine and Related Biological Advisory Committee. The group's founder, Barbara Loe Fisher, asked extensive questions at the meeting.

Lyn Redwood, president of SafeMinds, a group that advocates about potential links between mercury and neurological disorders, asked questions at a meeting on Wednesday of vaccine advisers to the Centers for Disease Control and Prevention.

The U.S. federal government is more ready than it has ever been for questions, criticisms and fear of vaccines -- a state of preparedness more than 30 years in the making.

"We know that there are some people who are reluctant to vaccinate and they have heard information that concerns them," Dr. Anne Schuchat of the U.S. Centers for Disease Control and Prevention told reporters late on Wednesday.

The concerns:

*Will a vaccine against a swine-like virus cause more adverse reactions than a seasonal flu vaccine?

*Will special additives called adjuvants cause reactions?

*Will the vaccines contain thimerosal, a mercury-based preservative that critics say might cause problems?

*Is it dangerous to vaccinate against both seasonal flu and the new H1N1 flu at the same time?

QUICK SPREAD

H1N1 swine flu has swept around the world in weeks, infecting millions and killing more than 800 by official counts. While only a "moderate" pandemic by World Health Organization standards, it could worsen as temperatures cool in the Northern Hemisphere, making conditions better for viruses.

Five companies are making H1N1 vaccine for the U.S. market -- AstraZeneca's MedImmune unit, Australia's CSL Ltd, GlaxoSmithKline Plc, Novartis AG and Sanofi-Aventis SA.

CSL has started trials of its vaccine in people and the U.S. National Institutes of Health starts trials next month. They will compare vaccines with and without adjuvants -- ingredients that boost the immune system response to a vaccine.
Adjuvants are used in flu vaccines in Europe but not the United States and although it would be possible to get a U.S. license under Emergency Use Authorization, officials have chosen to use vaccines without it for now.

Companies such as Glaxo say they will be ready to start vaccinating people in Europe just as the first data from those trials start emerging at the end of September. Some have questioned this speed.

The FDA's Dr. Hector Izurieta said the agency had set up an exceptionally extensive network for what is known as post-marketing surveillance.

"If something happens after vaccination, the vaccine will be accused," Izurieta told last week's meeting. "There will be many, many reports of things that could be, or not, associated with vaccination."

Vaccine regulators and public health experts are painfully aware of the last swine flu vaccination campaign. In 1976, the U.S. government rushed out a mass immunization against a swine flu virus that never spread off one military base.

Several hundred cases of a rare, paralyzing neurological disease called Guillain-Barre syndrome were reported afterward and although no clear link has ever been found to the vaccine, the incident made many people mistrustful of immunizations.

More recently, fears center on thimerosal, taken out of most vaccines after activists claimed it could cause autism -- a link discredited by many scientific studies but one that some vocal activists say is still valid.

Instead of fighting the perception, Schuchat said the CDC will roll with it. "There will be thimerosal-free formulations available for those people who are interested in that sort of preparation," she said.

10 U.S. banks to need more capital on stress test

About 10 of the 19 largest U.S. banks being stress tested will be instructed by regulators to raise more capital, according to a source familiar with official talks.

The banks have been negotiating with their regulators about the depth of their capital needs, should the recession prove to be deeper and longer than anticipated. Markets have been anxiously anticipating the results, which will differentiate the strongest banks from those still expected to sustain considerable credit losses.

The exact roster of banks needing to build their capital positions is still unclear. Banks are expected to be briefed on the official results on Tuesday. The Federal Reserve and Treasury Department will also tell them how policymakers plan to publicly unveil the market-sensitive results, the source said, speaking anonymously because the discussions are private.

The Treasury and Fed declined to comment on how many banks will be directed to raise more capital.

The largest U.S. banks have spent recent days making the case to regulators that they have the financial firepower to withstand a deeper recession, as Bank of America on Monday denied a report it was trying to raise capital of $10 billion.

Some industry insiders worry the stress test results come at a time when the sector is starting to see positive effects from some surprisingly strong first-quarter earnings figures.

"I think the great risk there is that you create some new uncertainty and concerns at the very time the financial condition of the banking industry is turning for the better," Wayne Abernathy, an executive at the American Bankers Association and a former Treasury official said earlier on Monday.

Banks found to be in need of more capital will have to embark on a recovery plan that could involve converting preferred stock, raising fresh private capital, or accepting government help -- assistance which comes with close scrutiny from Congress that will certainly be unwelcome on Wall Street.

Banks found to need capital will likely want to lay out capital-raising plans quickly to avoid being punished by panicky investors, although regulators won't require them to put a plan on the table immediately.

The emphasis will be placed on raising capital from within or private outlets. Pouring more public money into banks would put political pressure on President Barack Obama, whose administration is keen to avoid asking lawmakers to approve more bailout money for shortfalls that some analysts think may reach $150 billion.

The Treasury could soon have more funds on hand to infuse into weaker institutions, as officials estimate that stronger banks will return at least $25 billion doled out from the government's financial rescue fund. However, they want to ensure enough capital remains in the system as a whole.

Policymakers are expected to soon lay out conditions banks would need to meet to return funds.

White House spokesman Robert Gibbs on Monday said that the administration does not see a need to ask the U.S. Congress for additional funds to support banks, and that the banks will be encouraged to seek extra funds through private sources.

"I think everyone involved will be looking for banks to raise this through either private means or the selling of some assets that they have or that they control," Gibbs said.

He also said that the banks themselves will determine which steps they will take to raise capital. "They'll have a certain amount of time to put together a plan that meets ... the test of regulators to ensure that stability," Gibbs told reporters.

Some banks have complained that regulators were too harsh in their assessment over how much of a buffer they need to absorb future losses, and were underestimating profitability.

"The banking system can handle an awful lot of loss and be okay," JPMorgan Chase & Co Chief Executive Jamie Dimon said on a conference call, adding that he agreed with legendary investor Warren Buffett who said many banks have enough earning power to make up for future losses.

NOT SO BAD?

Bank of America Corp shares rose more than 19 percent after it denied a Financial Times report that it was working on plans to raise fresh funds to fill a $10 billion capital hole.

The KBW Banks index, which includes about two dozen large banks including Bank of America, rose almost 15 percent.

But investors remained on edge as Thursday's deadline neared. The Associated Press reported that Wells Fargo was asked to raise more capital after its stress test.

Citigroup has also been identified as a bank needing to raise its capital buffer. The firm will need to boost its common equity by up to $10 billion, a person familiar with the matter said Monday.

Bank of America, Wells Fargo and JPMorgan did not immediately respond late on Monday to a request for comment. An official from Citigroup declined comment.

Ratings agency Standard & Poor's said it may lower the counterparty credit ratings of 22 financial firms -- including Bank of America, Wells Fargo and Citigroup -- based on results of its own stress testing.

"These rating actions identify companies that we believe have at least a one-in-two likelihood of a ... downgrade within 90 days," S&P said in a statement. "That said, we believe that most rated institutions will be able to earn their way out of these credit losses during the cycle."

As analysts crunched their own numbers, at least one found that balance sheets may not be in as bad shape as feared.

David Trone, a Fox-Pitt Kelton bank analyst, said he expected Thursday's results to show a few banks were in need of more capital, although the shortfalls would probably be modest and "bank stocks won't collapse."

The U.S. Federal Reserve and other regulators have spent the past few weeks poring over holdings of the 19 largest banks, examining real estate and other assets that have lost significant value as the housing market crashed.

The process aimed to gauge how banks would hold up if the economy were to continue its steep descent and home prices fell another 22 percent this year and 7 percent in 2010.

The institutions undergoing stress tests include Citigroup Inc, Bank of America, Goldman Sachs Group Inc, JPMorgan Chase & Co, Morgan Stanley, MetLife Inc, Wells Fargo & Co, PNC Financial Services Group Inc, US Bancorp, Bank of NY Mellon Corp, SunTrust Banks Inc, State Street Corp, Capital One Financial Corp, BB&T Corp, Regions Financial Corp, American Express Co, Fifth Third Bancorp, KeyCorp and GMAC LLC.

U.S. confirmed First swine flu death as cases increase

A 22-month-old child became the first swine flu fatality in the United States Wednesday, as the number of confirmed cases of the virus increased.

An official at the World Health Organization said Wednesday evening that his agency had confirmed 114 cases of swine flu worldwide. However, that number did not include additional cases announced by the Centers for Disease Control and Prevention (CDC), now at 91.
The WHO was still listing 64 swine flu cases for the United States. "It's clear that the virus is spreading, and we don't see it slowing down at this point," said Dr. Keiji Fukuda, assistant director-general of WHO, at a news conference.
Meanwhile, a spokeswoman for Houston's Health Department told CNN that the dead child had traveled from Mexico to Houston, for treatment.
Kathy Barton said the child, who died Monday, was not an American citizen. She did not know where the child was from in Mexico.
President Barack Obama expressed his condolences to the family and called on schools in the U.S. with confirmed or possible swine flu cases to "strongly consider temporarily closing so that we can be as safe as possible."
The apparent spread of swine flu was not unexpected, CDC acting director Dr. Richard Besser told CNN.
"Flu is a very serious infection and each virus is unique, and so it's hard to know what we're going to be seeing," Besser said. "But given what we've seen in Mexico we have expected that we would see more severe infections and we would see deaths."
Six of the 91 confirmed swine flu cases in the United States have been reported in Texas, according to the CDC.

A preliminary image of the swine flu virus from the Centers for Disease Control.
The United States is taking precautionary measures to stem the spread of the disease, of which most cases are not severe.
U.S. Homeland Security Secretary Janet Napolitano said Wednesday that the federal government would be releasing nearly 13 million doses of antiviral medications to try to stem the spread of the virus.
Besser added that the CDC is "taking aggressive action to try and limit the impact of this on our communities," but is not changing its recommendations as a result of the confirmed swine flu death.
"I expect we'll see more cases," Besser said. "And as we do, we'll learn more about this, and if there needs to be more stringent or less stringent recommendations, we'll be making those."
He stressed that people should maintain their perspective on the swine flu outbreak.

"Seasonal flu each year causes tens of thousands of deaths in this country, on average, about 36,000 deaths," Besser said. "And so this flu virus in the United States, as we're looking at it, is not acting very differently from what we saw during the flu season."
Germany and Austria became the latest European countries to report swine flu, while the number of cases increased in Britain and Spain.
Mexico is where the global outbreak originated. While only 26 cases have been confirmed in Mexico -- including the seven deaths -- health officials there suspect the swine flu outbreak has caused more than 159 deaths and roughly 2,500 illnesses.
They also believe they may have found "patient zero" in the global outbreak in the small village of La Gloria in the mountains of Mexico.
Five-year-old Edgar Hernandez -- known as "patient zero" by his doctors -- survived the earliest documented case of swine flu in the current outbreak. He lives near a pig farm, though experts have not established a connection between that and his illness.

Edgar has managed to bounce back from his symptoms and playfully credits ice cream for helping him feel better.
Researchers do not know how the virus is jumping relatively easily from person to person, or why it's affecting what should be society's healthiest demographic. Many of the victims who have died in Mexico have been young and otherwise healthy.
The deadly outbreak in Mexico has prompted authorities to order about 35,000 public venues in Mexico City to shut down or serve only take-out meals as health officials tried to contain spreading of the virus.
Governments around the world are scrambling to prevent further outbreak.

Some, such as China and Russia, have banned pork imports from the United States and Mexico, though the World Health Organization says the disease is not transmitted through eating or preparing pig meat. Several others countries, such as Japan and Indonesia, are using thermographic devices to test the temperature of passengers arriving from Mexico.

Obama said the outbreak is a cause for concern, not for alarm. The U.S. government has urged travelers to avoid non-essential travel to Mexico.
The U.S. Food and Drug Administration has issued emergency authorization for the use of two of the most common anti-viral drugs, Tamiflu and Relenza. The authorization allows the distribution of the drugs by a broader range of health-care workers and loosens age limits for their use.
In Mexico City, however, there is a shortage of such medication. And it became impossible to find protective surgical masks, which the government had handed out to one out of every five residents.

Swine influenza, or flu, is a contagious respiratory disease that affects pigs.
When the flu spreads person-to-person, instead of from animals to humans, it can continue to mutate, making it harder to treat or fight, because people have no natural immunity.

Symptoms include fever, runny nose, sore throat, nausea, vomiting and diarrhea.

Common seasonal flu kills 250,000 to 500,000 people every year worldwide, far more than the current outbreak of swine flu.

U.S.,swine flu alert level

The World Health Organization has raised its pandemic alert level in response to the outbreak of swine flu that originated in Mexico.

The move to a level four alert indicates the world body has determined the virus is capable of significant human-to-human transmission.
Dr. Keiji Fukuda, WHO assistant director-general, said the move did not mean a pandemic was inevitable. He added the agency would focus efforts on mitigating, rather than containing, the virus. Fukuda said it was too early to predict whether there will be a mild or serious pandemic.

Relatives of flu patients wait outside Mexico's National Institute of Respiratory Diseases.

More cases were confirmed Monday in the United States, Canada and Europe. The WHO said the U.S. has confirmed 47 cases, Mexico 26, Canada six and Spain one. Two more were confirmed in Scotland. In Mexico the virus is believed to be responsible for at least 149 deaths -- though most of those have not yet been confirmed -- while almost 2,000 have been hospitalized. Some health experts fear the disease could become a pandemic, partly because it has killed young, healthy adults in Mexico. Health Secretary Jose Angel Cordova Villalobos said, "The number of cases, unfortunately, will continue to increase.

Mexico closed all schools until at least May 6 to help curb the spread of swine flu, officials announced Monday.
A U.S. federal official confirmed the U.S. figure -- up from 20 with all the new cases coming from a New York school where eight cases were previously confirmed.U.S. President Barack Obama said Monday that the outbreak was a "cause for concern" but not a "cause for alarm."
He said the federal government was "closely monitoring" emerging cases and had declared a public health emergency as a "precautionary tool" to ensure the availability of adequate resources to combat the spread of the virus.
Health Library :MayoClinic.com: Influenza (flu)
Israel and New Zealand, where 22 students and three teachers were quarantined after returning for a three-week trip to Mexico, are also investigating suspected cases. South Korea says it will test travelers arriving from the U.S.

A security guard at the Spanish hospital where a man is being treated

Swine flu is a contagious respiratory disease that usually affects pigs. It is caused by a type-A influenza virus. The current strain is a new variation of an H1N1 virus, which is a mix of human and animal versions.
When the flu spreads person-to-person, instead of from animals to humans, it can continue to mutate, making it harder to treat or fight off because people have no natural immunity.
The symptoms are similar to common flu. They include fever, lethargy, lack of appetite, coughing, runny nose, sore throat, nausea, vomiting and diarrhea.

The virus spreads when an infected person coughs or sneezes around another person. People can become infected by touching something with the flu virus on it and then touching their mouth, nose or eyes.
In 1968, a "Hong Kong" flu pandemic killed about 1 million people worldwide. And in 1918, a "Spanish" flu pandemic killed as many as 100 million people
Dr. Richard Besser, acting director of the Centers for Disease Control and Prevention in Atlanta, Georgia, said only one of the U.S. cases has been hospitalized, and all have recovered.
The European Union's health commissioner Monday urged people "to avoid non-essential travel to the areas which are reported to be in the center of the clusters" of a swine flu outbreak.
Andorra Vassiliou's latest comments soften an earlier statement urging people "to avoid traveling to both Mexico and the United States due to concerns about swine flu."

The EU issued a statement clarifying that Vassiliou's remarks were her personal comments and that travel advisories can be issued only by member states and not by the EU itself.
The first case of swine flu in Europe was confirmed Monday in Spain. Health minister Trinidad Jimenez said a 23-year-old man who returned from studying in Mexico last Wednesday tested positive for the virus at a hospital in the country's southeast.
At least 16 more cases are being treated as possible swine flu, Jimenez told a news conference. Earlier, Jimenez met with health officials to discuss Spain's response to the crisis.

"We do not have an emergency situation in Spain, but we are working to prevent any possible development, and we are taking action in accord with the World Health Organization," she said.
Spain's Ministry of Health has urged travelers recently returned from Mexico and the U.S. to be on the lookout for symptoms of the virus, including fever, coughing and respiratory problems.
A few hours later, Scottish Health Secretary Nicola Sturgeon said, "Tests have demonstrated conclusively that the two Scottish cases of swine flu are positive."
U.N. Secretary-General Ban Ki-moon said: "We are concerned that this virus could cause a new influenza pandemic. It could be mild, in its effects, or potentially be severe. We do not yet know which way it will go. But we are concerned that, in Mexico, most of those who died were young and healthy adults.
Dr. Besser, of the CDC, said the EU warning was "not warranted

U.S. swine flu case unbelievable numbers rise; Possible to more

More than 40 people in five states have been sickened by new strain of swine flu that doctors fear may cause a pandemic, U.S. officials said on Monday, promising more cases to come.
Schools were ordered closed in California and Texas, while nervous investors sent U.S. stock prices tumbling on expectations that the flu outbreak could further undermine the economy, which is struggling in recession.
President Barack Obama said he was monitoring the situation while bad news piled up from southern neighbor Mexico, where up to 149 people have died and more than 1,600 have been infected by the never-before-seen virus.
The U.S. government on Sunday declared the flu strain a public health emergency -- a fresh challenge for the Obama administration, which is still mindful of the damage inflicted on his predecessor George W. Bush over his government's inept handling of Hurricane Katrina in 2005. No American deaths have been reported and most affected by the virus had light symptoms, recovering fast. But it has popped up in New York, Ohio, Kansas, Texas and California as well as Canada and Europe, raising fears of a pandemic.
"This is obviously a cause for concern and requires a heightened state of alert. But it is not a cause for alarm," Obama told a meeting of the National Academy of Sciences.
In New York City, Mayor Michael Bloomberg said more than 100 sick students at a high school in Queens were being tested and that 45 were confirmed or likely cases of swine flu.
"We believe that there are probably more than 100 cases of swine flu at the school and lab tests are confirming what we have suspected," he told a news conference.
A first case was confirmed in northern California, where a student was found with the virus at a school in a Sacramento suburb. The school was closed. Ten other cases have been confirmed in southern California close to Mexico's border.
Texas, meanwhile, confirmed a third case of swine flu near San Antonio. All three cases involve students at the same school, and Texas officials have closed 14 area schools in an attempt to contain it.
Department of Homeland Security chief Janet Napolitano said inspections were being boosted at U.S. borders and airports, while the national stockpile of antiviral drugs was being activated and should be fully deployed by May 3.
The U.S. State Department urged Americans on Monday to avoid all "nonessential" travel to Mexico over the next three months because of the flu outbreak.
NO HEALTH SECRETARY
The flu scare comes as the Obama administration seeks to fill a number of senior health vacancies.
Obama's choice for health secretary, Kansas Gov. Kathleen Sebelius, has not yet been approved by the Senate where some Republicans are upset over her support for abortion rights, but Democrats hope Sibelius will get the nod soon.

U.S. destroyers on move as N. Korea prepares rocket launch

WASHINGTON -- As North Korea prepares for an expected rocket launch next month, the U.S. Navy says it is moving to the Sea of Japan ships capable of shooting down ballistic missiles.

Later Thursday, Japanese Defense Minister Yasukazu Hamada said that debris from the North Korean rocket would be fired on and destroyed if the launch fails and fragments fall into Japanese territory, ministry spokesman Yuichi Akiyoshi said.

The USS Chaffee is one of two destroyers headed to South Korea for an upcoming ceremony, the Navy said.
The U.S. ships, with powerful Aegis radar that can track ballistic missile launches, are on regularly planned deployments but are "prepared to track a launch or more, if afforded," according to a U.S. Navy official who could not be named because of the sensitivity of the information.
The United States generally has a number of Aegis-capable ships in the Sea of Japan because of the threat by North Korea to launch missiles. The ships monitor the region and are designed to track and if need be shoot down ballistic missiles.
North Korea says it will launch a commercial satellite on top of a rocket sometime between April 4 and April 8. But Western governments fear the North Koreans will put a long-range missile on top of the rocket.
If North Korea launches, the Obama administration may have has little as five minutes to decide whether it is a threat and, if necessary, try to shoot it down.

The USS Hopper, a destroyer with the Aegis radar system aboard was scheduled for a port call in Japan in coming days. But the port call was canceled and the ship will remain in the Sea of Japan ahead of the launch, the official said.
Two other U.S. Navy Aegis-capable destroyers, the USS Chaffee and USS McCain, are leaving the port in Sasebo, Japan, and are heading to South Korea for a ceremony in the coming days, according to the U.S. Navy official with direct knowledge of the operations.
The U.S. Navy just wrapped up military exercises with the South Korean military that brought a number of U.S. ships into the region. (CNN)

Hidden homeless emerge as U.S. economy worsens

SACRAMENTO, California - Emergency shelters brimming with homeless people in California's capital are quietly turning away more than 200 women and children a night in a sign of the deteriorating U.S. economy.
The displaced individuals on waiting lists at St. John's Shelter and other facilities often turn instead to relatives or friends for temporary living quarters, perhaps moving into a spare room, garage or trailer. The less fortunate might sleep in their cars or a vacant storage unit.
They are the hidden homeless. And their ranks appear to be growing as rising joblessness and mortgage foreclosures take their toll in Sacramento and other U.S. cities, experts say.
U.S. President Barack Obama recognized the trend in his televised news conference this week, saying, "the homeless problem was bad even when the economy was good," and he vowed to bring greater government resources to bear to deal with it.
"It is not acceptable for children and families to be without a roof over their heads in a country as wealthy as ours," he said.
A "tent city" of up to 200 homeless in Sacramento was thrust into the media spotlight last month as a symbol of the battered U.S. economy. California authorities said this week they would shut down the illegal settlement and find other shelter for its residents, most of them chronically homeless.
Homeless advocates say they expect such encampments, which already exist around the country, to spread as the housing crisis worsens and shelters fill up.
"I think there's a slight trickle of people who've been at risk of homelessness who are winding up in tent cities or knocking on shelter doors," said Michael Stoops, director of the National Coalition for the Homeless in Washington. "I expect a tremendous increase in homelessness over the next couple of years."
Stoops, who has worked with the homeless for 35 years, said the newly dispossessed often retain some income and seek initially to downsize or find cheaper accommodations.
WORST NIGHTMARE
"Their worst nightmare would be winding up on the streets, in a tent city or a shelter," he said. "That's the last stage. They will do everything they can before that happens to them."
Maria Romero, 52, who held a series of low-paying jobs over the years before steady work became hard to find, said she lived out of her automobile for a year before reluctantly moving to St. John's Shelter in January.
"I'd rather be by myself. My car was my own space," she said, adding she would never consider living in a tent city.
"It wouldn't be safe, especially for a single female," said Romero, a high school dropout forced by circumstance to live in a car or shelter more than once in her life.
Her experience illustrates the complexity of homelessness in America, where the most economically vulnerable are often the first to fall through the cracks during hard times.

The latest national figures, in a January report by the National Alliance to End Homelessness, actually showed a 10 percent decline in the homeless population two years ago -- from about 744,000 per night in January 2005 to nearly 672,000 per night in January 2007.
But 36 of the 50 states reported increases and homeless advocates worry that the national trend will be reversed because of the deepening recession and housing crisis.
As of 2007, the report said, 42 percent of homeless people in the United States, and 70 percent of those in California, slept on the streets, in cars, tents or abandoned buildings.
The "Skid Row" area of Los Angeles is thought to have the nation's highest concentration of homeless, with more than 5,000 counted in that 50-block area in 2007.
Experts say it typically takes six to eight months to go from losing one's home to turning up at a shelter doorstep. Some already have noticed more than a trickle.
RUN ON THE SHELTERS
"I've never seen it like this before, and I have 30 years of experience working with the homeless," said Darlene Newsom, head of the UMOM Day Centers emergency housing project in Phoenix, Arizona, where the number of homeless families seeking services has doubled in the past three months.
Loaves & Fishes, a Sacramento charity that supports the homeless, now provides a free lunch to about 650 people a day, up about 10 percent from a year ago, but private donations to the organization have been flat.
"We are struggling to keep our doors open," director Joan Burke said.
Nearby St. John's Shelter, which caters to women and children, has been running at or near capacity for months -- filling roughly 100 beds a night -- with a waiting list well over twice that long, case manager Kellie Dockendorf said.
This is up from the daily average of 80 women and children turned away in 2008. And getting in can take up to 45 days.
The mix of clientele is changing too, she said.
"We're getting a lot more working people. We're getting more people with education. We're getting a lot more people who are working part-time or not getting enough hours to pay their bills," she said.
Keysia Bell, 38, had made a living as a caregiver for the elderly until full-time work became harder to find.
After a period of paying to stay with friends or relatives for weeks or months at a time, then renting a house she could no longer afford, she ended up at St. John's two months ago with her 17-year-old and 10-month-old daughters.
"I'm out of a job. I'm out of a place to stay. I have a baby daughter, and it all just became overwhelming," she said. (Reuters)

U.S. economy shrinks, profits plunge in Q4

WASHINGTON - U.S. corporate profits plunged a record $120.1 billion in the fourth quarter as the economy shrank at its fastest pace since 1982, depressed by a slump in consumer spending and exports, government data showed on Thursday.
In another snapshot of the distressed economy, the number of workers collecting state jobless benefits rose to a record 5.56 million earlier this month, while new claims climbed to 652,000 last week, according to a separate government report.
"It is indicative of the sharp decline in overall economic activity experienced in the fourth quarter," said Joseph Brusuelas, an economist at Moody's Economy.com in West Chester, Pennsylvania, speaking of the drop in corporate profits.
The Commerce Department said after-tax corporate profits dropped 10.7 percent in the fourth quarter, the largest decline since the first quarter of 1994. Profits fell $5.2 billion in the third quarter.
Domestic profits of financial firms skidded $178.7 billion, compared with a $75.5 billion decline in the third quarter. Non-financial corporations' domestic profits tumbled $89.1 billion in the fourth quarter after increasing $52.1 in the prior period.
Shrinking profits came as gross domestic product, which measures the total output of goods and services within U.S. borders, fell at an annual rate of 6.3 percent in the October-December quarter, the steepest decline since the first quarter of 1982.
But analysts said the October-to-December quarter was probably the worst of the 15-month recession and they expect the economy to start stabilizing, although first-quarter output would still show another deep fall.
"We think that the decline in GDP reached its trough in the fourth quarter. GDP will not decline again as fast as it did in the fourth quarter," said Zach Pandl, an economist at Nomura Securities International in New York.
The government last month estimated the drop in fourth-quarter GDP at 6.2 percent and the modest revisions to the output estimates reflect adjustments to business inventories and investment figures.
U.S. stocks rose on relief that the decline in GDP was not worse than market expectations of a 6.5 percent contraction. The Dow Jones industrial ended up 174.75 points at 7,924.56, while the S&P 500 closed 18.98 points higher at 832.86.
Government bond prices firmed, breaking a five-session losing streak, ahead of the Federal Reserve's purchases of long-dated U.S. Treasuries on Friday. These are part of a broader plan to halt the downward economic spiral triggered by the collapse of the housing market.
WORST MIGHT BE OVER
The economy expanded 1.1 percent in 2008, the smallest advance since 2001, after growing 2.0 percent in the prior year, the Commerce Department said.
Recent data, such as housing and retail sales, have been surprisingly upbeat, raising cautious optimism that the recession is probably close to reaching a bottom. The economy is widely expected to start growing in the fourth quarter as the government's $787 billion stimulus filters through.
"The worst might be behind us in terms of the contraction in economic output," said Moody's Economy.com's Brusuelas.

"We are starting to see a slight uptick in some of the high frequency data. That suggests we are approaching a level where the economy could stabilize. We are still going to see another three quarters of contraction in output."
During the fourth quarter, private business inventories fell $25.8 billion as business responded to the slump in demand by cutting output.
Business investment, typically made when companies are planning production increases, fell at a 21.7 percent rate, the biggest fall since the first quarter of 1975.
Residential investment fell 22.8 percent in the fourth quarter. Consumer spending, which accounts for more than two-thirds of domestic economic activity, dropped at a 4.3 percent rate. Exports were down 23.6 percent.
"We are still of the belief that the first quarter will be the last awful quarter and the second quarter could be the last significantly negative quarter," said Stephen Stanley, chief economist at RBS Greenwich Capital in Greenwich, Connecticut.
A separate report from the Labor Department showed the number of workers on state unemployment benefits surged 122,000 in the week ended March 14, from 5.44 million the prior week.
That pushed the insured unemployment rate to 4.2 percent from 4.1 percent the prior week, the highest since May 1983.
"The duration of unemployment is extending along with the increase in the incidence of unemployment. Workers are finding the labor market much more difficult to re-enter after they have been laid off from their previous employment," said Nomura's Pandl. (Reuters)

First-time U.S. homebuyers likely to purchase: poll

NEW YORK (Reuters) - Buying a home has never been more affordable by some measures, and potential first-time U.S. buyers said they are likely to buy a home in the next two years, a survey released on Thursday found.
Record low mortgages rates and a new first-time homebuyer tax credit are large incentives, despite obstacles that include greater difficulty getting loans approved, according to the poll conducted for Century 21 Real Estate.
All of the 1,000 potential U.S. homebuyers surveyed in an online survey conducted March 2-7 by Penn, Schoen & Berland Associates, said they were likely to buy a house for the first time in the next two years.
More than three-quarters of those polled said this is a good time to buy a home, and almost 70 percent said now is a better time than six months ago.
"Most prospective first-time home buyers feel that housing prices will continue to fall throughout the next six months, but will begin rising within two years," the study said. "This explains why most are not in a hurry to buy immediately, but would like to do so within the next two years."
Nine of 10 people surveyed said they also were worried about the economy, and 42 percent were "very worried," with unemployment at a 25-year high and seen rising.
However, more than three-quarters of those polled said the $8,000 federal tax credit makes them more likely to buy a house in the next six months.
Eighty-five percent said current home prices are affordable, and 25 percent said they are very affordable.
Home loan rates hover near all-time lows, around 4-3/4 percent, and are headed toward 4-1/2 percent.
Prices have tumbled more than 26 percent since peaking nearly three years ago, based on Standard & Poor's/Case-Shiller indexes.
"The first-time homebuyer is a group of folks that doesn't have to get rid of a home to make a purchase," and thus play a key role in the early stages of a housing upturn, Tom Kunz, chief executive of Century 21 Real Estate, said in an interview on Wednesday.
The survey shows "we have ready, able and willing buyers sitting on the fence," many of whom had been priced out of the market during the record sales and price spike earlier this decade. "There has never been a better buyer's market than right now."
INCENTIVES VS OBSTACLES
But three-quarters of the potential buyers also said they view it is harder to get a mortgage than over the last year.
And nearly 30 percent said they are less likely to buy now because of economic and financial concerns.

Having the money for a down payment and getting an affordable mortgage are among top concerns for potential buyers, the survey found.
More than half of potential first time buyers are seriously considering a property in distress. Foreclosures are at a record high.
Nearly all renters said they would probably buy if they could got a mortgage comparable to their current monthly payments.

U.S. analyst warns of N. Korea missile

WASHINGTON -- North Korea has positioned what is thought to be a long-range missile on its launch pad, a U.S. counter-proliferation official said on Wednesday.The official confirmed a Japanese media report.
North Korea recently informed a pair of U.N. agencies that it plans to launch a satellite. The launch is slated for sometime between April 4-8, according to Yonhap, South Korea's state-sponsored news agency.
North Korea is technically capable of launching a rocket in as little as two to four days, according to Kim Taewoo, an expert at the Korea Institute for Defense Analyses, but who doubts a launch will come that soon.
It would not make sense for Pyongyang to make such a move after going through official channels with its plans, Kim said.

A North Korean soldier stands guard in the border village of Panmunjom on December 1, 2004 in South Korea.
"The North could delay the launch if they experience problems with the weather, or within the leadership, but I don't see any reason why they would fire it ahead of time," Kim said.

North Korea's announcement has triggered international consternation. U.S. and South Korean officials have long said the North is actually preparing to test-fire a long-range missile under the guise of a satellite launch. Watch what might motivate Pyongyang to pursue missile tests »
Japan said this month that it could shoot down the satellite that North Korean officials said they plan to launch. What the North Koreans would be testing may not be known until an actual launch.
A U.N. Security Council resolution in 2006 banned North Korea from conducting ballistic missile activity. Japanese officials said they could shoot down the object whether it is a missile or a satellite.
"As the U.N. resolutions prohibit (North Korea) from engaging in ballistic missile activities, we still consider it to be a violation of a technical aspect, even if (the North) claims it is a satellite. We will discuss the matter with related countries based on this view," Japanese Foreign Minister Hirofumi Nakasone said this month.
The United States has no plans to shoot down the North Korean rocket, U.S. Secretary of State Hillary Clinton said Wednesday, but will raise the issue with the U.N. Security Council if Pyongyang carries out a launch.
"We are doing our best to dissuade the North Koreans from going forward, because it is provocative action," Clinton said. "It raises questions about their compliance with the Security Council Resolution 1718. And if they persist and go forward, we will take it up in appropriate channels."
South Korea echoed Clinton's statements.
"The South Korean government believes that if the North conducts its launch despite continuous warnings of the South Korean government and the international community, it is a provocative action that constitutes a serious threat to the security of northeast Asia and the Korean peninsula," said Foreign Ministry spokesman Moon Tae-Young.

"The launching of the long-range rocket is a clear violation of the U.N. Security Council Resolution No. 1718, and we strongly urge North Korea to immediately stop such measures."
The North Korean Taepodong-2 missile is thought to have an intended range of about 4,200 miles (6,700 kilometers) that -- if true -- could strike Alaska or Hawaii. (CNN)

IBM to cut 5,000 jobs in U.S.

NEW YORK - IBM will cut about 5,000 jobs in the United States, adding to similarly large cuts in the past few months, sources with knowledge of the matter told Reuters on Wednesday.
The job cuts will account for over 4 percent of IBM's U.S. workforce, which totaled around 115,000 at the end of 2008. The sources, who were not authorized to speak publicly on the issue, said the cuts will mostly be in IBM's global services business, which includes outsourcing and consulting services.
An International Business Machines Corp spokesman declined to comment. The company, which had a total workforce of 398,455 as of end 2008, has not disclosed how many jobs it has cut so far this year, but has said it was making "structural changes" to reduce spending and improve productivity.
IBM, which now earns around two-thirds of its revenue from outside the United States, has been expanding its workforce in emerging markets like India and China.
At the end of 2008, employment in the BRIC countries -- Brazil, Russia, India and China-- totaled around 113,000.
IBM has been hit by slower U.S. technology spending, although it has fared better than many rivals thanks to its global footprint and a decreased emphasis on hardware sales.
A month ago, IBM affirmed its full-year forecast of $9.20 earnings per share, and said contract signings for its business services had grown so far this year.
Wednesday's news also comes as IBM is in exclusive talks to buy Sun Microsystems Inc, according to sources familiar with the matter, a move that would create a clear leader in the high-end computer server market.
IBM shares fell 0.42 percent to close at $97.95 on the New York Stock Exchange. (Reuters)

Weak U.S. economy influencing college choices

BOSTON - Nearly 70 percent of graduating American high school students say the economic downturn has directly influenced where they applied to college, a study released on Wednesday showed.
About 38 percent of those students said they had applied to colleges with lower tuition than they would have otherwise, while 34 percent applied to schools they were confident they could afford, according to the Princeton Review, a test-preparatory firm.
The survey of 12,715 college applicants comes as the United States faces one of the worst economic downturns since the 1930s.
About 28 percent of the students said they were applying to "schools closer to home" to save on travel costs, while 85 percent said financial aid -- education loans, scholarships or grants -- will be extremely or very necessary.
The survey also asked students and parents to name their "dream college" if cost were not a factor. Students picked Stanford University and the parents chose Harvard University.
The survey can be found here. (Reuters)

U.S. rehab centers see bankers driven to drink

NEW CANAAN, Connecticut - Cocaine and martinis On Wall Street? Nothing new there. Masters of the Universe admitting they have an alcohol problem? Not so common.
Experts say more and more people in finance are seeking treatment for addiction as the global economic crisis sinks its teeth into a high-stakes industry where confidence is the name of the game and nobody wants to admit to a weakness.
"We absolutely do see more people coming in naming either a job loss or huge financial reversals or big investments with Bernie Madoff," said Sigurd Ackerman, medical director at Silver Hill Hospital rehabilitation facility in New Canaan, Connecticut.
"They're being admitted with depression or increases in substance abuse, or both."
Ackerman said there was a high concentration of financial professionals in the town, 40 miles from New York, whose main streets are lined with high-end boutiques catering to the well-heeled wives of hedge fund managers and bankers.
"You're supposed to be a master of the universe, you're supposed to be on top of everything," said one financial services executive who began alcohol rehab in August.
"There's not a lot of sensitivity training or meetings where you sit around and ask how everyone is feeling," said the Connecticut executive, who spoke on condition of anonymity. "No one walks around saying 'I feel your pain.'"
Alcohol has long oiled the wheels of commerce on Wall Street, where bankers working long hours will entertain clients over dinner and drinks, or let off steam at late-night clubs with hard liquor and drugs.
Robert Curry, founder of Turning Point for Leaders, a coaching and consulting firm in New Canaan that creates treatment programs for senior executives, said the financial crisis was a factor in more drink and drug use.
"We've got more than 50 homes in foreclosure in this town and that's unheard of," Curry said. "Domestic violence incidents have spiked, and that is very closely tied to substance abuse."
Struggling with a divorce, the Connecticut executive sought help at Turning Point. A residential rehab program will be just the first step in a program that would last at least a year and include follow-up counseling, therapy and support groups.
Curry is a former financial executive who started working with substance abusers two decades ago, around the time his alcoholic father died and he realized he had a drinking problem of his own. Despite the recession, demand is growing.
"Companies are downsizing," he said. "Budgets are being trimmed, and yet we're seeing an increase in our business."
Clients include bankers, businessmen and doctors and are overwhelmingly male.

Harris Stratyner, a psychologist with Caron Treatment Centers, a leading non-profit addiction treatment foundation with offices in Manhattan, said stars of the financial world were by nature more prone to risky and extreme behavior.
"There's an adrenalin rush that's connected to economics," he said. "Why are so many people attracted to that world? Not all, but many, already are adrenalin junkies, and are looking for the high highs and the low lows."
Stratyner said economic anxiety can push people over the edge, but also allows addicts to rationalize their behavior, blaming stress or claiming they can't afford treatment.
"There's a lot of people out there who are unconsciously ... grateful that there's a problem going on, so that someone really and truly has an excuse to get high," he said.
Stratyner said mental illness and addiction, which often occur together, cost the United States $171 billion a year in lost workplace productivity.
Joseph Califano, a former U.S. secretary of health who founded the National Center on Addiction and Substance Abuse in 1992, said anxiety clearly raised the risk of substance abuse in all socio-economic groups.
People drink more in hard economic times, Califano said, but banks and other financial firms have traditionally not done enough to help employees cope.
"There's still tremendous stigma and shame," he said. "This is not a moral failing, it's a disease."
Another recovering alcoholic, aged 64, who works on Wall Street also requested anonymity because of the stigma.
"It's not so easy to get somebody to recognize their problems," he said. "If you have a series of occasions where you don't remember parts of the evening, that is a bit of a warning sign that maybe you should be seeking some help. The other is if embarrassing things happen to you."
A month in rehab costs from $25,000 at Caron up to around $60,000 at high-end private facilities. Curry said most of his clients pay out of pocket for privacy reasons.
The Connecticut-based executive was paying his own way.
"It's more than I'd like," he said. But "it's less expensive than losing your job ... less expensive than losing a client or losing your family, or losing your home or getting in trouble with the law."(Reuters)

U.S. renters turn buyers as homes become affordable

NEW YORK - After six years of renting in San Francisco, Kate Wilusz jumped at the chance to swap her tiny apartment for a roomy four-bedroom Victorian home. But she is paying a mortgage instead of rent -- and coming out even.
"I could not be more thrilled," said Wilusz, a financial planner who recently closed on the dream house with her husband, Charley.
In some U.S. markets, prices appear to have fallen enough to make buying cheaper than renting. Mix that with mortgage rates that are near record lows and renters who want to become buyers are rejoicing.
"The U.S. government is helping bail out those who bought at the top, but I got my own personal stimulus package through falling home prices and low interest rates on mortgages," said Wilusz, who works at Ameriprise Financial.
Wilusz said instinct told her it was time to buy, and her new home costs her as much to own as it would have to rent.
"Everyone was saying home prices in San Francisco would never go down, but any time someone says something will never happen, it usually happens and it is time to be a contrarian," she said.
San Francisco, one of the metropolitan areas covered in the widely watched Standard & Poor's S&P/Case-Shiller Home Price Indices, has shown significant home price depreciation. Home prices fell 3.8 percent in December from November.
San Francisco was also one of the worst-performing cities in terms of year-over-year declines in December, with home prices dropping an average 31.2 percent.
The silver lining in these clouds over California's housing market is clear: Lower prices are luring buyers.
Home sales in California rose 42.5 percent in February from a year earlier as the median home price slid 39.9 percent, driven by sales of foreclosed properties, according to a MDA DataQuick report last week.
The report said 29,225 new and resale houses and condominiums were sold in California last month, down 0.8 percent from January. The median price for a home in the most populous U.S. state was unchanged from January at $373,000.
OWNING COSTS LESS
"You can now own a home in so many areas of the country for less than it costs to rent," said Mollie Carmichael, senior vice president at John Burns Real Estate Consulting in Irvine, California.
Out of the 76 metropolitan area markets across the United States tracked by the company, a whopping 50 percent show that a person can buy a house for less than renting when considering the after-tax cost of homeownership, she said.
Prices have dropped so much in some areas of California that monthly mortgage payments on single-family detached homes are significantly lower than apartment rents.

Carmichael said that in California's foreclosure-plagued Inland Empire, Riverside and San Bernardino counties east of Los Angeles, the average monthly rent for an apartment is $1,157 and the average after-tax monthly mortgage payment on a median-priced single-family detached home is $971 - and is projected to decline to $872 by mid-year.
"It is one of the best times to buy a home," she said.
The U.S. housing market is in the worst downturn since the Great Depression and its impact has rippled through the recession-hit economy, as well as the rest of the world. Economists contend that the economy might not emerge from its slump unless the housing market stabilizes.
Affordability, at least by some measures, is at a record high right now.
The National Association of Realtors' housing affordability index surged 13.6 percentage points in January to 166.8, the highest since tracking began in 1970.
"A family earning the median income could afford to purchase a home that cost 59 percent more than the median priced home," said Celia Chen, a director of housing economics at Moody's Economy.com in West Chester, Pennsylvania.
"Low mortgage rates and rapidly falling house prices are causing the surge in affordability, even though income growth has slowed," she said.
Home prices should fall even further from a weak economy, rising unemployment, significantly tighter lending standards and foreclosures continuing to flood the market, she said.
Interest rates on U.S. 30-year fixed-rate mortgages averaged 4.98 percent for the week ending March 19, according to Freddie Mac. Nine weeks earlier, mortgage rates were 4.96 percent, the lowest since Freddie Mac began surveying them in 1971.
Wellie Chao, an entrepreneur and founder of Micro Office Solutions in New York, plans to buy a Manhattan apartment.
"I am a pragmatic person and prices are starting to come down to where owning really makes more sense and it is always best to buy on the downswing," he said.
A person can rent a one-bedroom apartment in a doorman building in Manhattan for around $2,700 per month, but that person can buy a similar place for $600,000, according to Ray Schmitz of Coldwell Banker Previews International in New York.
Schmitz said with the downpayment and a 740 credit score they can borrow 80 percent and lock in a low 30-year fixed-rate mortgage, lowering their payment to $2,600 per month. The taxes and maintenance fee are usually more than made up for with tax deductions of homeowners, he said.
"The numbers speak for themselves," he said. (Reuters)

Brown: U.S., Britain to tackle world's problems

WASHINGTON -- British Prime Minister Gordon Brown, speaking Wednesday to a joint meeting of Congress, highlighted the many bonds between his country and the U.S. and offered a hopeful vision that the world's problems can be overcome.

"Working together, there is no challenge to which we are not equal, no obstacle that we cannot overcome, no aspiration so high that it cannot be achieved," Brown said in a speech punctuated by frequent standing ovations on both sides of the aisle.

Joseph Biden and Nancy Pelosi watch Wednesday as Prime Minister Gordon Brown addresses Congress.
Brown hit on much the same theme Tuesday in an Oval Office meeting with President Obama in which the leaders said the "special relationship" between the U.S. and Great Britain not only will survive the current global economic turmoil but also will be strengthened in the long term.
At the meeting, Obama and Brown agreed the global economy will recover from the recent sharp downturn but will require a common effort to combat protectionist impulses, coordinate economic stimulus efforts and update antiquated regulatory structures. Watch Brown explain how "protectionism protects no one" »
Brown's speech Wednesday centered on the economy and security concerns but also strongly highlighted the leadership role the United States plays in the world.
"Throughout your history," he said, "Americans have led insurrections in the human imagination, have summoned revolutionary times through your belief that there is no such thing as an impossible endeavor. It is never possible to come here without having your faith in the future renewed."
Brown pledged Britain's help in rooting out terrorism and other global threats.

"And let me, therefore, promise you our continued support to ensure there is no hiding place for terrorists, no safe haven for terrorism," he said.
The prime minister also said Britain will work with the United States to bring about peace in the Middle East and to stop Iran from developing nuclear weapons. Watch Brown tell Congress that Europe is a friend »
Brown also paid tribute to U.S. and British soldiers in Iraq and Afghanistan, comparing their efforts -- and sacrifices -- to those endured by Allied soldiers in World War II.
"And let me pay tribute to the soldiers, yours and ours, who again fight side by side in the plains of Afghanistan and the streets of Iraq, just as their forefathers fought side by side in the sands of Tunisia, on the beaches of Normandy and then on the bridges over the Rhine," Brown said, drawing a standing ovation.
He continued, "Almost every family in Britain has a tie that binds them to America. So I want you to know that whenever a young American soldier or Marine, sailor or airman is killed in conflict anywhere in the world, we, the people of Britain, grieve with you. Know that your loss is our loss; your families' sorrow is our families' sorrow, and your nation's determination is our nation's determination that they shall not have died in vain."
Speaking about the global recession, Brown outlined a series of measures to reignite growth, overhaul global institutions and lay the groundwork for a more environmentally friendly economic future.
"In these days, the world has learned that what makes for the good economy makes for the good society," Brown said. "My father was a minister of the church, and I have learned again what I was taught by him: that wealth must help more than the wealthy, good fortune must serve more than the fortunate and riches must enrich not just some of us but all."
At the beginning of his speech, Brown announced that Sen. Edward Kennedy, D-Massachusetts, is receiving an honorary knighthood.
"Northern Ireland is today at peace, more Americans have health care, more children around the world are going to school, and for all those things we owe a great debt to the life and courage of Sen. Edward Kennedy," he said. Watch Brown announce Kennedy's knighthood »

Kennedy, who underwent surgery for brain cancer last year, was not present, but his colleagues gave him a standing ovation when the honor was announced.
In a statement, the long-serving Massachusetts Democrat and head of one of the most prominent families in American politics said that he is "deeply grateful." (CNN)

U.S. close to handing pirate suspects to Kenya

WASHINGTON-- The U.S. Navy could hand over seven suspected pirates held aboard a U.S. ship to Kenyan authorities for prosecution as early as this week, according to U.S. military officials.

Pentagon officials said the transfer of the pirates to Kenyan authority was close. The suspects had been moved to a smaller U.S. ship that would move them to a Kenyan port to be handed over, they said.

The U.S. Navy apprehends suspected pirates February 12 in the Gulf of Arden
The handover would be the first since the United States and Kenya struck an agreement to move suspected pirates caught off Africa's east coast to Kenya for prosecution.
The suspected pirates have been held by the United States since February 11, when they were captured off the coast of Somalia after attempting to take over a Marshall Islands-flagged tanker, Polaris.
The tanker reported that men aboard a small skiff were attempting to board the ship using ladders, but its crew removed the ladders before the would-be hijackers could get aboard, the Navy said.
A Navy ship found and boarded the pirate skiff, and the tanker's crew identified the men aboard the skiff as their would-be hijackers.
The Navy has been holding the suspects in a makeshift detention facility aboard the USS Lewis and Clark until the U.S. and Kenyan governments worked out the final details of how to move pirates detained by the United States into Kenyan authority, officials said.
The Navy had been holding 16 suspected pirates, but earlier this week it announced the release of nine of the detainees "because of a lack of evidence in their case," it said.

Those nine suspects had been detained by the Navy on February 12 after the captain of an Indian-flagged ship, Premdivya, broadcast a distress call to all ships in the area that it had come under attack by a small boat.
The nine were brought into Somali waters and then handed over to the Puntland coast guard. Puntland is the self-proclaimed Somali state that includes the point of the Horn of Africa. (CNN)