Category: News

Michael Giberson

And while linking to the Master Resource blog (as I did in the prior post), check out Guillermo Yeatts’s excellent article posted this morning, “Subsoil Oil and Gas Privatization: Private Wealth for the Common Good.”

Privatization, or at least partial privatization, has been tried and has failed in several Latin American countries, as Yeatts notes.  His discussion of those failures, as well as the way that government-control of mineral wealth is used to sustain political coalitions – reward cronies, buy off potential opponents – reminded me of the North, Wallis, and Weingast book, Violence and Social Order.  I think the North, Wallis and Weingast book, too, provides the framework for identifying what more, in addition to privatization of subsurface resources, is necessary for sustaining growth and development in Latin American countries.

IPS Asia-Pacific is looking for a regional editor to oversee editorial production in the region. IPS Asia-Pacific headquarters is in Bangkok, Thailand but flexibility on location within the region can be considered. The successful candidate will oversee planning and coordination of the Asia-Pacific diary, including budgeting, overseeing project editors as well as maintaining a network of correspondents and stringers in the coverage area.

The regional editor is involved in the assignment of stories to correspondents and stringers, editing of such work consistent with IPS style rules and the transmission of edited stories to the IPS World Service. The editor also liaises with project officers when necessary to ensure IPS Asia-Pacificp’s projects are completed at the standards required.

Applicants are required to have at least five years’ experience editing Asia-Pacific stories, experience in managing/training teams of journalists and have a capacity to manage people and editing processes. Knowledge of other Asian languages is an advantage. The full terms of reference are available from IPS Asia-Pacific administration, to be given to shortlisted candidates.

The closing date for applications is 26 May, 2010. Applicants are requested to submit a CV and samples of three published clippings to asiadesk(at)ips.org.

Applicants not contacted by 15 June, 2010 should consider themselves unsuccessful.

The U.S. economy continued to strengthen in the first quarter of 2010, growing at an annualized pace of 3.2%, according to the Bureau of Economic Analysis. This matched economists’ expectations for real gross domestic product (GDP) growth. The data continues to indicate that the U.S. is in recovery. In particular, the changes in the various contributions to growth make clear that the U.S. economy appears to be on the right track.

First, here’s how GDP growth has looked for the last 16 quarters:

The American Consumer is Back

3.2% isn’t as aggressive growth as we saw in the fourth quarter of 2010, when the economy grew at a 5.6% pace. But at that time, economic activity was mostly driven by companies ramping up their inventories — rather than the American consumer picking up the slack. That changed in the first part of 2010. In Q4, consumer spending only made up 1.2% of the 5.6% growth rate. In Q1, it made up 2.6% of the 3.2%. To put that in perspective, in the final quarter of 2009 consumer spending accounted for only 21% of GDP growth, but in the first quarter of 2010 it accounted for 80%. Since consumers are traditionally responsible for around 70% of GDP, this is an important shift.

The kind of consumer spending that drove the rise in GDP is also encouraging. Some purchases that get cut back on during hard times saw stronger sales, like clothing. In particular, services made up a much larger portion of GDP growth last quarter than in the previous, adding 1.2% compared to just 0.5%. That was due to factors including more restaurant dining and recreation.

Business is Good

Since ramping up inventories played such a major role in growth for Q4, it’s only natural that they would play a less significant role in Q1. But businesses did continue adding to inventories to respond to renewed consumer demand — just not as aggressively. They accounted for 1.6% of GDP growth, compared to a 3.8% contribution the quarter prior.

Interestingly, business investment actually decreased for structures, which may imply that commercial real estate inventory has caused a decline in business expansion-driven construction. All other metrics for business investment rose, however. Equipment and computer software investment continued to be a standout, adding 0.8% to GDP growth.

Net Exports Worsen

The import-export news was mixed. Although the U.S. economy benefitted from additional goods and services being sold overseas, more imports overshadowed the increase. As a result, a net exports actually brought down GDP growth by 0.6%. This contrasts with Q4, when net exports resulted in a 0.3% positive contribution. U.S. consumer and business demand is benefiting global businesses as well as those at home.

Less Government

Finally, government spending had a smaller contribution to economic growth in the first quarter. This is also a good sign, as private enterprise overshadowing government is exactly the kind of trend that indicates real recovery. Government spending actually brought down GDP growth by 0.4%, since there was less of it. That was driven mostly by states spending 4% less. Federal government spending, however, actually increased by a little.

Overall, today’s report is very encouraging. It’s clear that American consumers are opening their wallets again, and even spending on non-necessity items. Business also continued to flourish last quarter, adding to equipment and inventory. Finally, government is generally pulling back its influence, with private growth vastly taking up the slack. The most significant discouraging news from this report is net exports, which isn’t particularly surprising, since American consumers have long exhibited a strong demand for goods and services from overseas. Of course, we should bear in mind that this is just a first estimate and will be revised twice. Last quarter, however, the revisions turned out to be insignificant.

While today’s news provides reason for optimism, challenges still remain for this recovery, particularly in the labor market. For this growth rate to be sustainable, underemployment needs to come down significantly and income growth needs to improve. As businesses growth healthier, those changes should follow — it’s just a question of how quickly.

Note: All statistics are seasonally adjusted.

(Nav Image Credit: tinkerbrad/flickr)

Excepcional video promocional de Audi para presentar su deporivo de lujo R8 en su versión Spyder.

www.youtube.com/watch?v=Ctt70KFWE1g

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If you’ve been itching to get your hands on the TELUS BlackBerry Pearl 3G, which is expected to launch within the next couple weeks, then we have good news for you! Best Buy Canada is now taking pre-orders for the Pearl 3G from TELUS. All you have to do is leave a $50 deposit and they will hold one for you, once they’re available. It’s expected the Pearl 3G will run $29.99 with three year contract, or $449.99 without. For more details visit BestBuy.ca or your local store.

You’re reading a story which originated at BlackBerrySync.com, Where you find BlackBerry News You Can Sync With…

This story is sponsored by the new BlackBerry Sync Mobile App Store. Grab your free copy today at www.GetAppStore.com from your BlackBerry.

Pre-order the TELUS BlackBerry Pearl 3G from Best Buy

Related posts:

1. TELUS places BlackBerry Pearl Flip 8230 as “Coming Soon” TELUS has updated their smartphone guide to now include…
2. Telus lowers prices on Pearl, Curve and Storm! Making room for new models? Luke just let me know that Telus has just…
3. BlackBerry Pearl 9100 is in testing at TELUS – Launching Shortly? We heard from sources that TELUS would be getting…

With HP poised to bring Palm into their corporate fold, we find ourselves tempering our enthusiasm for the rescue of Palm and webOS with the fear of what corporate culture may entail for the plucky Sunnyvale-based smartphone maker. Specifically, fear that the corporate culture will not just shun, but shut down, the brilliant and creative efforts of the webOS homebrew community that helped prop up Palm to this point.

So HP, while we have faith that you know what you’re doing, we still feel like we need to take a trip down memory lane to make it clear just how much we think homebrew should be important to you. And the story we’re going to tell is yours.

read more

Aphids, those sap-sucking foes of gardeners, come in a variety of colours. We usually think of them as green, but pea aphids sometimes wear a fetching red ensemble. That may not strike you as anything special; after all, lots of animals are red. But the aphid’s colour is unique in a couple of extraordinary ways.

The colour comes from pigments called carotenoids. Animals use them for all sorts of purposes; they act as antioxidants, and they contribute to red, orange and yellow colours. But the pea aphid is one of only a few known species (all aphids) that manufacture their own carotenoids; everyone else gets theirs from their food. But it’s the source of the pea aphid’s ability that’s truly remarkable – it stole the skill from fungi. By integrating fungal genes into its own genomes, it gained a superpower that almost all other animals lack.

These sorts of “horizontal gene transfers” go on all the time in bacteria, but they’re supposedly a rarity among more complex creatures like animals and plants. And yet, scientists have recently documented several examples of such transfers. Rotifers smuggle genes from fungi, bacteria and plants. “Space Invader” genes have jumped across animals as diverse as lizards and bushbabies. One bacterium, Wolbachia, has even inserted its entire genome into that of a fruit fly. And parasites can transfer their genes to humans.

In most of these cases, it’s unclear whether the imported genes are actually doing anything useful. But the story of the pea aphid, told by Nancy Moran and Tyler Jarvik, is very different. The colour of a pea aphid determines the predators that target it. Ladybirds (one of their major enemies) prefer to attack red aphids on green plants but parasitic wasps are more likely to lay their eggs in green aphids, to fatal effect. Colour clearly matters to an aphid, so here is a clear example of a transferred gene shaping an obvious trait in its new host and in doing so, shaping its evolution.

Moran and Jarvik knew that both red and green pea aphids have carotenoids, but their source was a mystery. These pigments dissolve easily in fat but not water, and they’re unlikely to be found in the plant sap that the aphids suck. Aphids carry beneficial bacteria but none of their genomes carry any traces of the genes required for creating carotenoids. And aphids that are cured of their hitchhikers don’t lose their colour. So where do the carotenoids come from?

Fortunately, Moran and Jarvik knew what to look for, since all organisms that make carotenoids, including plants, fungi and bacteria, do so with a common set of genes and enzymes. They also knew where to look, for the genome of the pea aphid had been recently sequenced. Their search yielded seven genes that are clearly involved in producing carotenoids. But to their surprise, none of this septet matched any gene in any other animal genome. Instead, their closest relatives are found in fungi.

Moran and Jarvik think that the original donor was a species of fungus that either infected the ancestors of today’s pea aphids, or formed an alliance with them. Either way, we know that this mystery donor transferred at least two genes to the insects, which have since duplicated into the current seven. And we know that the relocation happened before the pea aphid diverged from the related peach-potato aphid, which has the same genes.

Today, the genes explain the two hues of the pea aphid. The green aphids have carotenoids that are yellow in colour. The red ones do too, but their palette is bolstered by two bright red carotenoids that the green aphids lack. The greens can’t make these extra pigments because one of their seven fungal genes is missing a small sizeable chunk. This broken gene means that the green aphids can’t complete a chemical reaction that converts one of the yellow carotenoids into the two red ones.

The pea aphid’s story tells us that genetic swaps between complex species like fungi and animals are possible, although probably still rare. Before now, scientists did actually try to search the pea aphid genome before for genes transferred from other species. But they only looked for genes of bacterial origin; no one considered that the donors might be fungi, so the carotenoid-making genes were never found.

When Moran and Jarvik searched for other fungal genes, they didn’t find any, demonstrating that such swaps are the exception rather than the rule. But what fascinating exceptions – and the growing number of full animal genomes will surely help us to discover more.

Reference: Science http://dx.doi.org/10.1126/science.1187113

Image: by Charles Hedgcock

More on aphids:

• Virus and bacteria team up to save aphid from parasitic wasp
• Aphids defend themselves with chemical bombs
• Are red autumn leaves a warning sign to insects?
• The suicide plasterers – aphids that repair their homes with their own bodily fluids
• Aphids hide from parasitic wasps among the corpses of their peers

More on horizontal gene transfer:

• Gut bacteria in Japanese people borrowed sushi-digesting genes from ocean bacteria
• Dormant viruses can hide in our DNA and be passed from parent to child
• Attack of the killer tomato fungus driven by mobile weapons package
• Genes from Chagas parasite can transfer to humans and be passed on to children

Howard Lovy wrote:

Wayne State University in Detroit and Walsh College in Troy, MI, will get an entrepreneur training program called LaunchPad off the ground thanks to a $2 million grant from the Blackstone Charitable Foundation. Detroit’s New Economy Initiative will partner with New York-based Blackstone to launch the program that it hopes will be come a “national model for fostering entrepreneurship through higher education.” A similar program at the University of Miami attracted more than 1,000 students and young alumni who received support enabling them to create 45 new businesses and 102 new jobs, according to Blackstone.

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Filed under: Spy Photos, Budget, Sedan, Volkswagen

If a report from Autocar India is to be believed, the upcoming four-door version of the Volkswagen Polo may be badged as the Vento in India. Vento is not a new name for VW – the Mk III Jetta sedan used that badge in the European market throughout the mid-90s.

Volkswagen has reportedly increased the wheelbase of the three-box Polo by two inches to provide rear seat passengers a bit more space. The lengthened roof should also aid head room out back, although eliminating the hatch will surely cut down on cargo volume and accessibility.

The Indian Vento is powered by either a 1.6-liter inline-four or a 1.6-liter common rail turbodiesel. If and when this car makes it to America it will probably use the 105 horsepower turbocharged and direct injected 1.2 TSI four-pot available in Europe.

Although Volkswagen still hasn’t officially committed to selling the Polo in the U.S., VW of America officials have said that they would probably wait until a four door sedan is available with a probable launch in 2011. The Vento is expected to launch in India this summer.

[Source: Autocar India]

Report: Volkswagen Polo sedan to be dubbed Vento in India, coming in July originally appeared on Autoblog on Fri, 30 Apr 2010 08:28:00 EST. Please see our terms for use of feeds.

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We’ve heard of two for the price of one. It’s generally considered a good deal if you can get it. So what would you call one for the price of two?

Maybe “Barry Diller.” As chairman and chief executive of IAC/InterActiveCorp (IACI), the sprawling Internet conglomerate, and chairman and “senior executive” of Expedia (EXPE), the online travel service, Diller collected just about two of everything last year — and it made for a tidy sum indeed.

We caught a glimpse of this when Expedia filed its proxy on April 27, but we didn’t get the big picture, as it were, until IAC followed with its own proxy filing on Wednesday. We’ll cut to the chase:

• Diller’s salaries were modest by titan-of-industry standards: $965,000 combined, with $500,000 coming from IAC (despite being the smaller company, at $2.65 billion market-cap to Expedia’s $7.1 billion).
• The companies made up for that with bonuses: $3.7 million total, of which $2 million came from Expedia.
• Only Expedia awarded options last year, valued at $1.34 million.
• Diller’s total haul: $7.74 million, with IAC paying 42% and Expedia paying 58%.

But the perks really made the one-for-two special shine. Without putting both proxies side by side, you might miss the fact that Diller’s employers spent a whopping $1.7 million on his personal air travel: $991,553 at IAC and $704,262 at Expedia. And that doesn’t even include the $911,000 in personal flights that IAC says Diller paid for. (It’s not clear whether he also paid Expedia for some flights beyond those reported as income; the company doesn’t appear to disclose any such payments, however.)

The explanation is the usual one for both companies. Here’s IAC:

“Pursuant to Company policy, Mr. Diller is required to travel, both for business and personal purposes, on corporate aircraft. In addition to serving general security interests, this means of travel permits him to travel non-stop and without delay, to remain in contact with the Company while he is traveling, to change his plans quickly in the event Company business requires, and to conduct confidential Company business while flying, be it telephonically, by email or in person. These interests are similarly furthered on both business and personal flights, as Mr. Diller typically provides his services to the Company while traveling in either case. … For certain personal use of the corporate aircraft, Mr. Diller reimburses the Company at the maximum rate allowable under applicable rules of the Federal Aviation Administration.”

And here’s Expedia’s:

“Pursuant to Company policy, Mr. Diller … [is] encouraged to travel, both for business and personal purposes, on corporate aircraft. In addition to serving general security interests, this means of travel permits [him] to travel non-stop and without delay, to remain in contact with the Company while traveling, to change plans quickly in the event Company business requires, and to conduct confidential Company business while flying, be it telephonically, by email or in person. These interests are similarly furthered on both business and personal flights, as Mr. Diller … typically provide[s] services to the Company while traveling in either case.”

(We removed references to the company’s chief executive officer, who also gets free personal plane rides, from Expedia’s original language.) But we did find it interesting that IAC said Diller’s jet usage was required and at Expedia, it’s encouraged.

We hesitate to think how much time Diller spends in the air. That kind of cash could buy 98 last-minute, first-class round trips from New York’s JFK airport to Tokyo’s Narita on American Airlines (with nearly $2,500 left over for cab-fare) — and those tickets were $17,279 a pop when we checked on kayak.com early this morning. The companies also say they spent a total of $871,000 on salaries, and possibly other costs on maintaining the corporate aircraft generally — with $471,000 from IAC –but that covers business use as well as personal.

The rest of Diller’s perks are a little harder to itemize: They add up to $70,519 (61% from IAC), and include everything from personal use of third-party car services to office-space and technical support for Diller’s personal staff.

Equally intriguing may be the way Expedia and IAC have decided “to share certain expenses associated with such usage, as well as certain costs incurred by IAC in connection with the provision of certain benefits to Mr. Diller.” Expedia picks up 35%, and IAC picks up 65%. Over the course of the year, IAC says Expedia paid it $241,000 under this arrangement (Expedia pegs it at “approximately $250,000″), presumably balancing out any divergence from that split. “Expenses include costs for personal use of cars and equipment dedicated to Mr. Diller’s use and expenses relating to Mr. Diller’s support staff,” the proxy says, so there’s some overlap with the figures above.

Of course, the more we look at it, the more we realize it really is a two-for-one deal — for Diller. From that perspective, it’s not half bad.

Technology Review has an article on efforts to capture energy when users press the touch-screens of mobile devices – Self-Powered Flexible Electronics.

Now researchers at Samsung and Sungkyunkwan University in Korea have come up with a way to capture power when a touch screen flexes under a user’s touch. The researchers have integrated flexible, transparent electrodes with an energy-scavenging material to make a film that could provide supplementary power for portable electronics. The film can be printed over large areas using roll-to-roll processes, but are at least five years from the market.

The screens take advantage of the piezoelectric effect–the tendency of some materials to generate an electrical potential when they’re mechanically stressed. Materials scientists are developing devices that use nanoscale piezoelectronics to scavenge mechanical energy, such as the vibrations caused by footsteps. But the field is young, and some major challenges remain. The power output of a single piezoelectric nanowire is quite small (around a picowatt), so harvesting significant power requires integrating many wires into a large array; materials scientists are still experimenting with how to engineer these screens to make larger devices.

GUANTANAMO BAY — Col. Patrick Parrish, the judge presiding over Omar Khadr’s military commission, gaveled the third day of the proceedings into session. For the second morning in a row, Khadr is not in the room.

Khadr received medical treatment yesterday for what a retired Army medical corps general called an “urgent” condition resulting from shrapnel that remains in his eyes from his 2002 capture in Afghanistan. He initially resisted attending his hearing after officers at the detention facility attempted to place blacked-out goggles on his face for transportation to the courthouse, which he considered painful and humiliating and which aggravated his condition, according to ret. Brig. Gen. Stephen Xenakis.

Jeff Groharing, the chief prosecutor in Khadr’s case, immediately called Khadr’s absence “voluntary.” Marine Capt. Laura Bruzzese testified that Khadr told her this morning his eye is feeling better — at one point, she said, he joked with her, “I hope you don’t have to be a witness today” — but objected that the guards “are trying to intimidate” him by performing what she said was a standard search of his waistband to ensure no items were smuggled out of Camp Delta. The search entails a guard using a finger to stretch the elastic waistband on a detainee’s pants all around his midsection, shaking it, to see if anything falls out. “The cuffs were hurting his shoulder” as well, she testified he told her “almost an aside.”

“I want to come to court, but I want to come respectfully,” Khadr told Bruzzese, she testified. Rather than experience another provocation and potentially jeopardize his case through an outburst, she said, he opted not to attend.

“I understand the sensitivity” with testimony about detainee movements from Camp Delta, said Khadr lawyer Barry Coburn, but requested Parrish to consider the impact of the procedures for transferring detainees “insofar as it relates to his state of anxiety.” His cross-examination of Bruzzese briefly took an odd detour into figuring out “which digit” is typically used by a guard in a waistband search.

“My client is perceiving he is being penalized… by an actual de facto change in the process,” Coburn said, despite firm denials from the military that no deviation from standard procedure for detainee transport has occurred in Khadr’s case.

Parrish ruled that Khadr’s absence is voluntary and without extenuating circumstance. “No one has disrespected Mr. Khadr,” he said. “We will continue without him.”

Four years in the making, the Acadalus tripod head uses motors and an inclinometer to relieve you of fiddling and make sure your shots are absolutely, positively straight. Of course, that perspectival perfection comes at a price: $5000. More »

Ford has announced a series of changes to key personnel for its Asia Pacific and Africa (APA) region. The changes pertain to senior management positions and are intended to strengthen regional operations in what Ford has targeted as key markets.

Ford’s group vice president and president, Asia Pacific and Africa, has announced a series of senior executive appointments across the APA region involving members of the leadership teams in China, India, Japan and the Philippines.

Among the many moves come appointments of new country presidents in the Philippines and Japan, a newly promoted sales head in the emerging market of India, a new leadership post within Ford’s joint venture in China, Changan Ford Mazda Automobile (CFMA) and a key international development assignment.

List of changes to executive personnel

*Randy Krieger is appointed president of Ford Group Philippines, replacing Rick Baker. Krieger previously served as president of Ford Japan.

*Tim Tucker is appointed president of Ford Japan, replacing Krieger. Tucker previously served as vice president of Sales, Ford India.

*Richard Baker, appointed deputy general manager of CFMA, replacing Wesley Liu. Baker previously served as president of Ford Group Philippines.

*Wesley Liu is assigned to a new post at Ford’s World Headquarters in Dearborn, Michigan. He was formerly deputy general manager of CFMA.

*N. Raja is named vice president of Sales, Ford India, replacing Tucker. Raja was previously general manager of Sales, Ford India.

Ford says that it has started a renewed focus on the APA regions now that they have begun to earn a profit in the U.S. market, allowing more resources and time to be allocated to other key global markets.

Source: Leftlane

Charles Stross is in good form with an essay on the post-PC world. It’s the world we’ve been expecting since Netscape Constellation (1996) and Larry Ellison’s proto-netbook (1995). That world became real for me in 2007 (yes, it was that long ago) with the iPhone and in 2008 with the Target netbook [1].

I agree with almost everything he wrote, with one big exception….

… Moreover, the PC revolution has saturated the market at any accessible price point. That is, anyone who needs and can afford a PC has now got one…

Uhhh, no. PCs are not cheap. Not at all. The iPad is cheap [3], but PCs are very expensive.

Yes, you can buy a “PC” for a pittance. It makes a crummy boat anchor though. If you want it to do something useful you need to buy internet service. Where I live that’s about $600 a year – year after year. Unless you bought a Mac, or are geek enough to go without, you need to buy antiviral software. In theory you also need to $150 or so for Microsoft Office. And good luck with backup.

But that’s not the real cost.

The real cost is that you need an IQ-equivalent of 110 or higher, and a love of debugging and troubleshooting. For most of the population, that’s absolutely unaffordable.

PCs are very, very, expensive. The iPad 2.0, or its rivals to come, can be the poor person’s computer [4].

So Charlie got this one point wrong – but it only strengthens his overall argument. My four month old quad core iMac running 10.6 is an anachronism [2]. Its era is passing. Welcome to the third era of the personal computer.

[1] I thought things would blow up in 2009. Didn’t happen! Microsoft dropped the price of XP to about nothing and crawled back enough control of the netbook to stun the market (same thing they did with Palm in the 90s by the way). It’s still going to happen, but that’s not the first time I’ve been wrong on transition times. I’ve since learned to take my time estimates for technology transitions and triple them.

[2] Charlie also omits the role Digital Rights Management (DRM) plays in driving this transition. DRM is one of the reason there’s so much good software being produced for the iPhone. Your CDs may be worth money some day.

[3] Not least because of the pay-as-you-go capped data plan. That’s as big a deal as the device. Yes, I know iPad’s require a PC-as-peripheral, but that will change within the year.

[4] Of course that’s what the original Mac was – the “computer for the rest of us”. Closed architecture. All applications were to be vetted by Apple. Strict UI standards. Heavy investments in usability and design. Single button mouse. It worked too – it really was easy to use. Much easier to use than OS X. Almost as easy to use as the iPad. History doesn’t repeat, but sometimes it spirals.

Now that Adobe has moved on from trying to bring its services to Apple’s iPhone/iPod Touch, they are focusing most of their efforts towards Android. A public demo (once again) of Flash 10.1 is expected to make an appearance at this year’s I/O with the program finally being released in June. We’ll see how this turns out in June.

We look forward to delivering Flash Player 10.1 for Android smartphones as a public preview at Google I/O in May, and then a general release in June. From that point on, an ever increasing number and variety of powerful, Flash-enabled devices will be arriving which we hope will provide a great landscape of choice.

Froyo is expected to come with Flash integration. So if Flash is released in June, it may come as a part of Froyo at that time. So all you Nexus One owners can rejoice, you will surely receive this update first. The Droid and others should follow.

[via adobe]

The big macroeconomic news today is that the United States’ GDP grew at a 3.2 percent per year pace in the first quarter — the third straight quarter of strong growth, weaker than the 5.6 percent pace in the fourth quarter of 2009 and right in line with  economists’ expectations.

The Bureau of Economic Analysis cites growth in personal consumption (that is, consumer spending), private inventory investment (stores restocking their shelves), exports and nonresidential fixed investment (business purchases of things like wells, hotels, computer systems and plumbing) as the major factors accounting for the growth. Consumer spending increased at a 3.6 percent pace, the strongest in more than three years.

Of course, GDP is just one number among many. But its pace of growth slowing is a sign of how strong the headwinds remain as the government withdraws its crisis programs and unemployment remains high (a lag on GDP growth, because all those unemployed people are not producing much, nor are they consuming much). The stronger the growth, the faster the United States fills its output gap.

With more than half of the companies in the S&P 500 having reported first quarter results, corporate profits have again come in well above consensus estimates. The normalization of credit conditions, a steep yield curve, improving prospects for global business and cost cutting made up much of the profit surprises.

As the economic recovery process deepens, cost cutting efforts are realized and global credit conditions thaw, analysts have responded by steadily increasing their earnings estimates.

While earnings are expected to accelerate further, the scope for further upside earnings surprises is waning, UBS Wealth Management Research warns. In contrast to this past year when analysts were playing catch up with the business cycle, most have now reset expectations and the bar has now been raised.

“With earnings revisions a key driver behind directional moves in equities, an absense of upside surprises should temper gains in stocks until year-end,” Michael Ryan and Stephen Freedman of UBS said in a report.

Despite the profit surge, they are sticking with a neutral (benchmark) tactical allocation in equities, an overweight in commodities, and below benchmark allocations to both fixed income and cash.

While market bears frequently point to the vulnerability of earnings estimates as a potential catalyst for a sharp pullback in equities, George Vasic noted that analysts have become more prudent over the years.

Despite what his colleagues noted, UBS Securities Canada's chief economist and strategist looked at the pattern of earnings revisions and found that it now takes far more economic weakness to generate the same earnings cuts as in the past.

“Accordingly, bears looking for earnings disappointment as the catalyst are either living in the past or expecting a very severe double dip for the economy,” he told clients.

With the economy representing a significant source of uncertainty, the magnitude of earnings revisions natural tracks GDP growth. But what investors may not have noticed is that the relationship between the two has shifted in recent years.

Mr. Vasic pointed out that in the past, it took an absolute boom in the economy for earnings estimates made at the beginning of the year to actually come to pass. However, in the new relationship, Mr. Vasic cited the example of the 30% cut to 2009 estimates as being consistent with a 2.6% drop in real GDP. He said the implication for investors is that 3% GDP growth in 2010 should only lead to modestly negative revisions. In the past, the strategist said this would have been consistent with a cut of more than 20%.

“Stated otherwise, it will likely require a major double dip in the economy to generate the earnings cuts envisioned by equity bears.”

Jonathan Ratner

U.S. equity index futures are mixed this morning. S&P 500 futures are down 1 point in pre-opening trade. Index futures eased slightly following release of the advanced first quarter GDP report. Consensus was annualized real growth at a 3.3% rate. Actual was growth at a 3.2% rate.

Commodity prices including gold, crude oil, silver and copper are slightly higher following mild weakness in the U.S. Dollar Index.

Canada’s economy continues to grow at a satisfactory rate. Real GDP recorded a gain of 0.3% in February. Consensus was a gain of 0.3%. The Canadian Dollar was unchanged on the news.

First quarter earnings reports continue to surprise on the upside. Domtar and Chevron reported higher than consensus earnings.

Goldman Sachs fell 3% after Federal prosecutors confirmed that they were exploring the possibility of registering legal charges against the company.

Cenovus Energy slipped slightly after UBS downgraded the stock from Buy to Neutral. Target price is $31.

The U.S. oil services sector is trading lower after FBR Capital downgraded the sector. President Obama announced this morning that no new offshore drilling will be allowed until after the Gulf of Mexico oil spill disaster is investigated. 

Don Vialoux, chartered market technician, is the author of a free
daily report on equity markets, sectors, commodities, equities and
Exchange-Traded Funds. For more visit Don Vialoux's Web site 

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Price: Free
Availability: All Xbox LIVE regions except China
Dash Text: LOST PLANET returns with the long-awaited sequel to the 2 million-plus selling action shooter! LOST PLANET 2's all-new co-op feature allows up to 4 players to team up in Campaign Mode, forming new tactics and strategies to tackle situations that would be impossible alone. In this multiplayer demo, you and 15 other players battle it out on an all-new map, Turbulent Jungle. Choose from one of two modes popularized in the original LOST PLANET: Elimination or Post Grab. All the new VSs, weapons, and support items from the Campaign mode are also available in multiplayer. Grab your weapon of choice, plan out your attack, and get into the heat of battle with players from all over the world!

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