National / International News

Pain, humour and respect fill the air in Gavin Rees' changing room after defeat in Atlantic City, writes Steffan Garrero

On its surface, the case is about whether farmers can use seeds derived from patented crops. But the bigger question is, how much control does a company have over its patented products once they're in the hands of consumers?

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The dreaded federal budget axe known as the sequester is scheduled to fall on March 1. Congress and the president can only avoid the across-the-board cuts by coming up with a deficit reduction deal. The sequester standoff is causing widespread uncertainty and stress -- and not just for the more than four million federal workers. The cuts would be felt across the country in places that might surprise you, like a science lab in Baltimore. 

Jennifer Elisseeff doesn’t work anywhere near the marble halls of Congress. She’s much more at home among tangles of test tubes and microscopes.  

She teaches biomedical engineering. She’s gave me a tour of her labs at the Johns Hopkins Medical Campus in Baltimore, where she showed me tissue samples under the microscope.

The tissue that Elisseeff peered at is supposed to resemble knee cartilage. Her research focuses on re-growing body parts. She starts with cells she grows in the lab -- they’re attached to a sort of scaffolding that can be inserted into the body. 

“Just like you put scaffolding -- construction workers put scaffolding as a building is being built and then they take the scaffolding down after it’s finished,” she explained.

Elisseeff’s scaffolding is designed to biodegrade when the body is finished with it.  This is all pretty whiz bang stuff and it doesn’t come cheap. About 75 percent of Elisseeff’s  funding comes from the National Institutes of Health and the Defense Department. And those grants could be chopped as part of the across-the-board sequester cuts. Elisseeff says the uncertainty of the sequester is wearing on the scientists in her lab.

"When there is that stress and the uncertainty, it does affect people’s energy and excitement for building something,” she says.

Elisseeff contemplated the cuts’ consequences: Reductions in her staff of 25, slower, scaled–down research. She’s frustrated and suffering from sequester stress. One way she copes? Reassuring herself that Congress and the president would never let this happen.

“Part of me sees it as a political game," she says. "And so I’m not fully certain how much of it will be executed. But I think it’s a terrible game to play that will affect people’s lives.”

And could drive top scientists to other countries that would gladly fund their research. Elisseeff says it’s tempting. In fact, she’s going to take a temporary break from Johns Hopkins for a short sabbatical in Switzerland. 

Housing is on the economic stat agenda this week.

We get new-home starts and building permits on Wednesday. That’s a good indicator of where homebuilding and new-home sales are heading. Then on Thursday, existing-home sales are reported. That’s a barometer of how much consumers are starting to jump back into the market to buy a first-home or trade up, or move to a place where the sun shines a little brighter and there are more jobs.

To see how things are going on the ground, this reporter dropped in to see a model home in the Harris Ranch subdivision of Boise, Idaho, about five miles from downtown.

Salesman Travis Hunter of Boise Hunter Homes was showing a $299,000 two-story home in a fresh-platted section of the development that was just weeds and lonely streetlights for years after the housing bust of 2006-07.

“Downstairs in this house is the formal dining room,” Hunter crowed. “Appliances in the kitchen are all stainless steel, they come with hickory cabinets. . . .”

Other selling points included a two-head walk-in shower, master-bedroom suite with a huge closet for the woman of the house, and hardwood floors.

Hunter says he’s selling one of these homes every week or so now, and more are being built on adjacent streets by his firm and several other local homebuilders. The construction site is swarming with subcontractors: Roofers, floor-installers, and debris-haulers -- few of whom were able to land steady construction work as little as one year ago.

Economist Yelena Shulyatyeva at BNP Paribas in New York says the moderate upturn in housing is adding as much as 0.5 percent to annual GDP at this stage in the economic recovery.

“The housing sector was a bright spot last year,” she says, “and we will see housing starts grow this year,” says Shulyatyeva.

Shulyatyeva and other economists predict housing starts dipped in January. But that’s largely payback for a surge in home-starts in December, which was unseasonably warm, causing homebuilders to jump the gun and break ground early. She predicts new-home starts and building permits will rebound to a steadier pace of growth by mid-spring.

And, she says, multi-family apartment construction will continue to be stronger than single-family homebuilding this year. That’s because, with credit standards still tight, potential first-time homebuyers are excluded from the market or find it too difficult to navigate. Shulyatyeva says some continue to hesitate to invest in real estate -- even as prices begin to rise and interest rates remain low -- because they want to have the flexibility to move cities for new jobs.

But there are still a lot of cheap foreclosed homes for sale -- and more dribbling on to the market every day. This constitutes a considerable ‘shadow-inventory’ of existing homes for sale. So why build so many new ones?

“While there are many buyers -- often investors -- at the low-end of the market looking at foreclosures,” explains Nicolas Retsinas at the Harvard Business School, “for people in the middle of that market, and those in the upper middle of the market, buying a foreclosed property is still a stigma.”

It can also be considerably more confusing than buying a new home, or an existing home with a clean paper trail. Dealing with banks, courts, and ‘as-is’ sale conditions can be daunting, especially for first-time home-buyers.

So far this month there have been several big buyouts -- US Airways merged with American Airlines, Warren Buffet paid $23 billion to purchase Heinz and Dell went private for $24 billion. Banks are lending again, the stock market is rising and companies have a lot of cash lying around. That means the return of the mega deal. But do these mergers and buyouts make companies stronger and more profitable?

John Steele Gordon is a business historian with deep ties to the financial world. Both his grandfathers held seats on the New York Stock Exchange. Business history, he says, "is littered with the corpses of really bad mergers."

It took him a minute to come up with an example of a successful merger.

"I think maybe the successful ones are the ones you don't hear about subsequently," Gordon says.

George Anders wrote Merchants of Debt -- a book about the private equity firm KKR, which was responsible for the RJR Nabisco merger. Anders figures that for every deal that's a success, "you've probably got two that aren't."

If adjusted for inflation, the Nabisco deal is the biggest buyout in history, which did not go so well. Anders says it should be a cautionary tale:

"Spend more money than anyone else, get more problems than anyone else."

Despite the one in three odds, most companies think they can pull off the big deal.

"It's totally a case of yes it's a problem for everyone else but my deal is special," Anders says.

There's always an optimist who is convinced they will beat the odds.

So far this month there have been several big buyouts -- US Airways merged with American Airlines, Warren Buffet paid $23 billion to purchase Heinz and Dell went private for $24 billion. Banks are lending again, the stock market is rising and companies have a lot of cash lying around. That means the return of the mega deal. But do these mergers and buyouts make companies stronger and more profitable?

John Steele Gordon is a business historian with deep ties to the financial world. Both his grandfathers held seats on the New York Stock Exchange. Business history, he says, "is littered with the corpses of really bad mergers."

It took him a minute to come up with an example of a successful merger.

"I think maybe the successful ones are the ones you don't hear about subsequently," Gordon says.

George Anders wrote Merchants of Debt -- a book about the private equity firm KKR, which was responsible for the RJR Nabisco merger. Anders figures that for every deal that's a success, "you've probably got two that aren't."

If adjusted for inflation, the Nabisco deal is the biggest buyout in history, which did not go so well. Anders says it should be a cautionary tale:

"Spend more money than anyone else, get more problems than anyone else."

Despite the one in three odds, most companies think they can pull off the big deal.

"It's totally a case of yes it's a problem for everyone else but my deal is special," Anders says.

There's always an optimist who is convinced they will beat the odds.

CIA thrillers Argo and Zero Dark Thirty win the top screenplay honours from the Writers Guild of America.

World number one Rory McIlroy will play Shane Lowry in round one of the WGC Match Play Championship in Arizona.

A pretrial hearing in the Sept. 11 case was suspended briefly last week to investigate allegations of eavesdropping. The commissions' chief prosecutor launched an investigation, and said no one was "listening, monitoring, recording" the proceedings. Defense attorneys seemed to take his word, which given the history of the commissions, is a baby step toward progress.

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A famous doctor is on trial in Spain, accused of masterminding one of the world's largest sports doping rings. Dr. Eufemiano Fuentes' client list is believed to include at least one former teammate of disgraced cyclist Lance Armstrong. The doctor says he treated athletes from other sports, as well.

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Cancer patients often have to deal with side effects from their treatments. They may need speech therapy or help rebuilding their strength. The STAR program is helping break down the barriers to rehabilitation services.

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Thanks to drugs recently approved by the FDA, patients with the blood cell cancer multiple myeloma are living longer and without the pain. Don Wright was diagnosed 10 years ago and is currently training for his training for his 71st marathon.

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Angry Shias in the Pakistani city of Quetta protest and refuse to bury the victims of a weekend bombing, calling for action against the killers.

Carefully developed breeds are overpowering Eastern filbert blight, which had threatened to crush the U.S. hazelnut industry.

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The federal government once considered whistle-blowers a nuisance, or worse. But over the past few years, that attitude has slowly started to change. More agencies have been reaching out for tips about fraud and abuse, even if digging through the stacks of complaints can present a challenge.

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The environment secretary is set to meet food retailers and trade bodies later to establish what is being done to restore consumer confidence.

A large pod of dolphins proved to be an unexpected spectacle for tourists taking a boat trip near San Diego, California.

A 10-year-old boy is rescued by RAF helicopter after falling 165ft (50m) down a snow-covered mountain in the Lake District.

Save The Children says that more than 800,000 children could be saved each year if mothers breastfed immediately after birth.

Flooding and landslides in the Indonesian province of North Sulawesi leave at least 15 people dead, officials say.