Iraq's Kurdish region trying to restore economy

Billboards in Kurdistan's capital boast that luxury malls and hotels are on the way, but banking and insurance systems barely function. Cranes loom over building sites, but few government inspectors check the quality of construction.

This is economic development, on the fly. A sign at the office of a trade association sums up the freewheeling business environment in the part of Iraq controlled by a Kurdish administration.

"Please leave your gun at reception," it says.

The Kurdish zone north of Baghdad is mostly peaceful, while much of the rest of Iraq is a patchwork of factions at war with US-led troops or one another. Development occurs because security is relatively good, but the economy is weak, dependent on imports and prone to political uncertainty, institutional pitfalls and a lack of transparency.

Some investors are diving into this poor region full of untapped oil wealth, taking risks that would be unacceptable in a Western-style business environment. The! y include Kurdish businessmen based in Europe and the US, Turks, Gulf Arabs and a smaller number of Europeans and Americans.

Sigma International Construction, a Chantilly, Virginia-based company, is building more than 350 luxury homes on the outskirts of Irbil. Right now, the "American Village" development is little more than leveled earth and shells of half-completed houses, designed with walk-in closets, back doors of sliding glass and fully equipped kitchens.

Jim Covert, Sigma's director in Kurdistan, said 80 homes had been sold in advance, and several ministers from the regional Cabinet were clients. The most expensive residence, the "Palace," sells for US$580,000.

"People don't blink," said Covert, who employs Serb foremen and Bangladeshi laborers because they are more skilled than Kurdish workers. "People have money here and they have nothing nice to spend it on."

The same optimism is visible at construction sites across the city, though most of them seem! a long way from the Utopian billboard images of gleaming offi! ce tower s and five-star hotels bordered by lush lawns. At least one housing development near the airport, named "Dream City," is behind schedule.

The regional investment board has licensed 51 projects with a total value of US$5 billion since last year; about 20 percent of that money has been spent.

Two decades ago, most of Kurdistan's villages were systematically destroyed during former Iraqi president Saddam Hussein's Anfal campaign against the Kurdish population. UN sanctions imposed on the dictatorship also hurt the Kurds, even though they enjoyed a US-backed safe haven.

Pell-mell development since the fall of Saddam in 2003 has yielded real benefits in the territory of about 4 million.

The two main cities, Irbil and Sulaimaniyah, have new airports and are building new roads, housing, malls and schools. Despite a recent outbreak of cholera in Kurdistan, many Irbil residents have access to clean water from a treatment facility built with help from the US Army Corps of ! Engineers.

Irbil, home to the regional government, has a big park with rose beds, trimmed lawns and a canal with paddle boats. A granite monument displays the names of 98 people, including top Kurdish officials, who were killed in two suicide bombings in February 2004.

One new gasoline station in Irbil looks as good as anything in a US suburb or freeway stop. It takes credit cards, and has 16 pumps and a mini-market that sells potato chips, chocolate bars and other junk food from Turkey.

Hundreds of Turkish companies operate in Kurdistan, even though their government has threatened to stage a cross-border attack on a separatist rebel group of Turkish Kurds who have bases in remote parts of northern Iraq.

Another source of political uncertainty is Kurdistan's relationship with Baghdad, where disputes over drafts of oil and revenue-sharing laws have blocked progress toward a unified, central government.

Kurdistan's leaders signed an exploration deal with Hunt ! Oil Co of Texas after drafting their own oil law, and the nati! onal oil ministry quickly questioned its legality.

Nazaneen Muhammad Wusu, regional minister of municipalities, said international bank loans for Kurdistan have to be approved by the central government, which amounts to a bottleneck on progress.

"Baghdad is not in a normal situation," she said. "They are more busy with security issues, political difficulties. We are suffering indirectly from the situation there."

Kurdistan is also on the national power grid, and suffers constant blackouts that force people to use private generators.

Eager to attract business, Kurdistan passed an investment law last year that allows foreign investors to get free land, as well as import materials and repatriate profits without paying tax. But the banking system is so basic that it is difficult to wire money out of the country, and insurance is virtually nonexistent; most car owners, for example, drive without it.

Foreign agencies are helping to build up Kurdistan's institutions, teachi! ng basic skills such as how to use a computer.

Still, a culture of transparency has yet to take hold and business deals often rely on the power of personal connections.

"There may be some corruption here and there, we don't deny it," said Falah Mustafa Bakir, head of the foreign relations department of the regional government.

But he said Kurdistan was committed to an open business environment that could eventually make it an economic "gateway" to the rest of Iraq.

Kurdistan, however, lacks a strong industrial and agricultural base and is heavily dependent on imports of products such as milk and grain, a legacy in part of the UN oil-for-food program during Saddam's rule that delivered foreign products to Iraq.

Kurdistan has bottled water plants, but many Kurds prefer to buy water from Iran and Turkey because they think the quality is better.

For all their problems, many Kurds exude an optimism that is all but impossible to find elsewhere in Iraq.

"I th! ink things will get better," said Ali Abdullah, an Irbil books! hop owne r whose best-sellers are romance novels and books of Islamic teachings. "There's a lot of development in this city. It will have a knock-on effect on other businesses."

Source: http://www.taipeitimes.com/News/editorials/archives/2007/10/01/2003381231
home based business idea, home based small business

EDITORIAL: Michigan can still play well nationally -- here's how

That is not the case -- yet. But Michigan's disarray has reached a perilous point.

Decisions made now may set events in motion that will affect the state's reputation and its ability to perform for years.

Firms that work in employee recruitment and site selection do not dismiss Michigan. The UAW strike doesn't really matter because, as one Texan politely put it, companies that are "labor sensitive" weren't coming to Michigan anyway.

"You've got great universities, great R&D. Other than in the union complex, you've got excellent labor markets," said C.R. (Buzz) Canup Jr., president and CEO of Canup and Associates in Austin, Texas.

Camille Crist, executive director of Grant Cooper and Associates in St. Louis, Mo., a company that assists hospitals and physician practices with recruitment, said Michigan's main drawback -- and only to some recruits -- is its winter weather. "When it's quite cold up there, it can be harder to sell," she said.

Rec! ruits generally are far more interested in the job itself or whether it will get them closer to family. When looking at Michigan, "so many times, they'll say it's a great hospital, or a great organization or a great position," Crist said.

Great schools

Universities and a quality medical system, the top of these two people's lists, are Michigan assets that often go unappreciated by the home crowd. They are also at risk if the state can't keep itself going.

The health of hospitals, plus the ability to attract doctors and other medical specialists, is woven tightly into the number of insured, including those who get coverage under Medicaid. Hospitals are required to treat anyone who shows up in their emergency rooms, insured or not. Every cut in Medicaid, a big target because it eats up so much of the state budget, endangers their fiscal health. And because Medicaid costs are shared roughly 50-50 with the federal government, cutting people or the lev! el of coverage takes more money out of the health care system ! than jus t the amount represented by state taxes.

The less coverage by Medicaid, the shakier many Michigan hospitals -- most of which have fine reputations -- become.

State universities, often No. 1 in the national perception of what makes Michigan desirable, also will suffer if state support dwindles. Michigan State University Provost Kim Wilcox said Lansing's inaction is increasingly a topic of conversation when the university recruits faculty. While the uncertainty has yet to change a candidate's mind, he said the impact is undeniable.

"From afar, Michigan State and the University of Michigan have a halo that's pretty impressive," he said. "But that halo is at risk of getting a little tarnished as the state situation wanes."

At the intersection of higher education and medicine, Wayne State University has found success recruiting for its nursing program. New faculty have traded in positions at schools such as Seton Hall in New Jersey and the University o! f California, San Francisco, to come to Detroit.

Some of the trend is attributable to Michigan's dire need for nursing faculty and the fact that WSU is home to the first Center for Health Research within a nursing program. Such programs are precisely the sort of assets that can bring new lifeblood to Michigan, if they aren't overshadowed by shortsighted state leadership.

Work in Michigan?

For school districts hunting for strong leaders, Michigan's budget situation is already a deterrent.

Eight superintendent jobs sit open around the state, none in high-profile districts. But William H. Mayes, executive director of the Michigan Association of School Administrators, said he suspects even a high profile opening would be a difficult sell.

"We're competing with states that have their legislative and budget processes in order," Mayes said. Superintendent candidates, he explained, are "really concerned because they know they're going to be ! held accountable by school boards for the choices they make, t! hough we have no budget to work with. They have no control."

Michigan's internal sense of crisis has also reached out-of-state job recruiters, who know they can more easily convince young college graduates here that their prospects are better if they leave.

Phil Gardner, director of the College Employment Research Institute at MSU and compiler of an annual national survey of employment trends for graduates, says about 60% of MSU's business and engineering graduates now leave Michigan, the highest numbers he has ever seen.

"Most kids who grew up here would really like to stay in Michigan, but they are willing to start their careers in other states, and they are being courted," Gardner said.

"Recruiters still like Michigan kids. They like the work ethic, and what I would describe as the blue-collar values. They're steady, dependable. They do the job."

And finally, from site selection executive Canup, comes a caution about how state budgeting affects ! nationwide reviews. Once a short list of sites is ready, he said, each state's financial strength -- bond ratings and debt, for example -- comes into play.

A reputation for competent budgeting can take years to rebuild once it is lost. If Michigan lets its assets erode and doesn't keep its own books in order, no one can claim surprise if the stage lights dim.

Source: http://www.freep.com/apps/pbcs.dll/artikkel?Lopenr=709300542&Ref=AR&Dato=20070930&Kategori=OPINION01
Top Home Based Business

Gloria Estefan returns to her roots

MIAMI -- The 90-mile marker at the edge of Key West points south to Cuba.

The number resonates among Cubans on both sides of the Florida Straits; noventa, Spanish for 90, stands for separation, for hostilities and suspicions, for yearnings and pain, for hope.

And it's the title of Gloria Estefan's first Spanish-

language album in seven years, 90 Millas, released Sept. 18.

It's the 25th album in the career of Miami's homegrown superstar, and it signals Estefan's return to the public eye after her retirement from touring three years ago.

90 Millas is new material. Still, the album is imbued with Cuban tradition -- a who's who of Cuban musicians backs the singer.

"(Cuban culture) is the only thing we have because we don't have our country," Estefan said last month in Key West. "We are missing something very important to a human being, and to share that culture is to counteract the political image we have."

Said her husband and ! producer, Emilio Estefan: "When I came from Cuba alone in my teens, it was the most depressing phase of my life. Without my parents. Without income. My only release was to grab a guitar, an accordion, percussion."

In his Crescent Moon studios in Miami, Emilio still looks like the laid-back "godfather" of Latin music.

Gloria, who recently turned 50, proves she can move freely between American pop and Latin roots, while Emilio can provide state-of-the-art production for her.

Gloria insists that her new release is no political album.

Like most other children

of Cuban exiles, she grew

up with an overabundance

of political tension.

"Dad was in Bay of Pigs and was a prisoner in Cuba for two years," the singer said.

But her songs aren't barbs aimed at the Castro regime.

They are, instead, reflections of an inner life, which includes the yearning of exiles to make it back home.

Her 25 albums have s! old more than 70 million copies, topped charts and won Grammys! . 90 Mil las -- which, like the 1993 Grammy-winning Mi Tierra, reinterprets typical Cuban genres -- is poised to match her achievements.

Her latest is the top Latin album on Billboard and No. 25 on the top 200 chart.

Two years in the making, 90 Millas has quality to burn.

The greatest living Cuban musicians are featured: trumpet player Alfredo "Chocolate" Armenteros, who has had a successful career on the New York Latin scene; bassist Cachao, who later this month will celebrate his 80th anniversary in the business; Sheila E.; Jose Feliciano; Generoso Jimenez, the famed trombonist from Beny More's band; and Carlos Santana.

Source: http://www.dispatch.com/live/content/life/stories/2007/09/29/2_ESTEFAN.ART_ART_09-29-07_E4_4M81MK7.html?
Ho! me Business Articles Blog

Jury blames murders on mob defendants

CHICAGO — Three members of the Chicago mob's top echelon face life behind bars after being blamed by a jury for a 16-year wave of murder aimed at silencing witnesses and settling old scores.

But the federal government's victory Thursday at one of the biggest mob trials in Chicago history isn't expected to put organized crime out of business. Prosecutors say their war with the Chicago Outfit will continue.

"The Outfit isn't going away, but we aren't going away," prosecutor Mitchell A. Mars said after the jury found three men he called "old-time ranking bosses of the Outfit" responsible for 10 mob murders.

Robert D. Grant, special agent in charge of the FBI's Chicago office, said the city is still plagued by 28 "made guys" and more than 100 associates who do the dirty work but are in the mob's inner circle.

But he said the jury's decision was something to celebrate.

"These people were charged and convicted in this trial for being the! murderous thugs that they really are," Grant told reporters.

The jury had already convicted the three men and two others on Sept. 10 of taking part in a long-running racketeering conspiracy that included extortion, gambling, loan sharking and 18 long unsolved mob murders.

Jurors deliberated for eight days to determine which defendants were individually responsible for specific murders — the prerequisite for imposing a maximum sentence of life in prison. That verdict came Thursday.

James Marcello, 65, was held responsible for two murders, including that of Tony "The Ant" Spilotro, the Chicago mob's man in Las Vegas and the inspiration for the Joe Pesci character in the movie "Casino."

Frank Calabrese Sr., 70, a portly loan shark who allegedly doubled as a hit man, was blamed for seven. His own brother testified he strangled victims with a rope and cut their throats to make sure they were dead.

Joseph "Joey the Clown" Lombardo, 78, wa! s blamed for the September 1974 murder of businessman Daniel S! eifert, a federal witness who was hunted down and shot by masked men with his wife and child nearby.

The jury said it was hopelessly deadlocked on the responsibility for eight other murders — including one prosecutors blame on a fourth defendant, Paul Schiro, 70, a convicted member of a jewel theft ring.

The fifth man convicted of racketeering conspiracy, retired Chicago policeman Anthony Doyle, was not accused of involvement in the murders.

Calabrese attorney Joseph Lopez left court grumbling that Hollywood mob movies have made such cases harder to win. But he noted that the 10-week trial was extraordinary.

"Let's face it, you'll never see a case like this again probably in the history of Chicago," Lopez said. He called the aging defendants "the last of the Mohicans — Instead of going to Shady Acres retirement home, they're going to federal prison."

Lombardo attorney Rick Halprin said his client would most likely have gone away for lif! e even if he hadn't been tied to a murder. Racketeering conspiracy alone carries a maximum of 20 years and Lombardo was convicted in a previous labor racketeering case.

"This isn't as significant as it would have been if he were 40 years old," Halprin said.

On hand were a number of the victims' relatives. Ellen Ortiz, whose husband Richard was gunned down in July 1983, said she had been "hoping and praying" for the day Calabrese would be held responsible.

"Now he can rest in peace after 24 years," she said of her husband.

Joe Seifert, whose father was killed while planning to testify against Lombardo in a labor racketeering case, said the results of the trial were good but not completely satisfying.

"He's had a lot of time free," Seifert said.

A sixth defendant, Frank Schweihs, was due to stand trial in the case but was excused to be taken to a New York hospital for cancer treatments.

Much of the trial has been shrouded in se! crecy. The jurors were anonymous, their names protected to gua! rd again st possible pressure or reprisals.

The government's star witness was Nicholas Calabrese, brother of the defendant. Nicholas admitted that he was a hit man for the mob and only began to cooperate with the FBI after a bloody glove left at the scene of a murder was found to contain his DNA.

He was promised that prosecutors would not seek the death penalty in exchange for his testimony.

Still to come is the case of a federal deputy marshal, John Ambrose, who is charged with leaking information to the mob concerning Nicholas Calabrese's trips to Chicago to testify before a federal grand jury. Ambrose has pleaded not guilty to the charge.

———

The murders for which the jury blamed Calabrese, Lombardo and Marcello are the following:

FRANK CALABRESE SR.:

— AUGUST 1970: Michael "Hambone" Albergo, a mob loan shark, is killed in Chicago. His remains were never found, but before he disappeared he reportedly declared! , "If I have to go to jail, I'm not going alone."

— JULY 2, 1980: Reputed mob enforcer William Dauber and his wife, Charlotte, are killed in Will County, Ill.

— JUNE 24, 1981: Michael Cagnoni is killed in DuPage County, Ill. A government witness testified that Cagnoni was delivering cash to mob figures before he was murdered.

— JULY 23, 1983: Richard D. Ortiz and Arthur Morawski are killed in Cicero, Ill. Prosecutors allege Ortiz had committed a murder not authorized by the Outfit, but his friend Morawski was not an intended target.

— SEPT. 14, 1986: John Fecarotta, a loan shark and former union official, is killed in Chicago, allegedly over an internal mob feud. Calabrese's brother, Nicholas Calabrese, is linked to the crime by DNA found on a bloody glove and agrees to testify for the government to avoid the death penalty.

JOSEPH LOMBARDO:

— SEPT. 27, 1974: Daniel Seifert is killed outside his Bensenvi! lle, Ill., business. Seifert was planning to testify in federa! l invest igation of the $1 billion Teamsters Central States Pension Fund.

JAMES MARCELLO:

— JUNE 14, 1986: Tony "The Ant" Spilotro, the Chicago mob's man in Las Vegas, and his brother Michael Spilotro are killed in DuPage County, Ill. Tony Spilotro allegedly angered mob bosses by pocketing money from side deals and having an affair with the wife of a mob associate.

Source: http://ap.yorknewstimes.com/stories/us/20070928/203656857.shtml
About Home Based Business

Patient may lose his home over a blister

Mills called The Virginian-Pilot after reading a story earlier this month on how nonprofit hospitals with charity care programs sometimes take low-income patients to court for nonpayment. He thought immediately of his friend and wondered if there was a way to help him.

Chesapeake Regional Medical Center officials said Roberts failed to provide adequate documentation of his income in 2001, when he incurred much of the debt.

"In all cases, it is our policy to work diligently to help our patients qualify for financial assistance when they are eligible or negotiate a reasonable payment schedule with them," hospital spokeswoman Joan Stanus said in a written statement. "However, we need the necessary financial documentation in order to provide this assistance."

Though Roberts gave permission to hospital officials to talk about his care and finances, Chesapeake hos! pital officials declined to comment beyond that written statement.

Earlier this summer, Henry Brown, a consultant who was serving as the Chesapeake health system's interim chief financial officer, spoke about charity care and collections. He said the Chesapeake system provided free care to patients who made less than 200 percent of the federal poverty level. In 2007, the federal poverty level for a single person is $10,210.

Beyond that income level, charity care is decided on a case-by-case basis and part of the determination was on the catastrophic nature of the debt, Brown said. Conceivably, he said, even someone with a good income could qualify if the debt was overwhelming. If at any point in the process the system finds out it has gone after someone who really does qualify, he said, "we take it back from the collections agency."

"We have a great hospital here," Brown said. "We live that concept of caring."

Roberts, 49, wouldn't argue - at le! ast on the caregiver side. He credits the people at Chesapeake! General with saving his life, particularly a priest who came to him late in the night on March 14, 2002.

It had been a long haul for Roberts. He first noticed the small blister in February 2001 and had it treated, but the infection developed. Roberts said his daily treatments at Chesapeake General started around April 2001.

Roberts, who used to be a florist, said he was unemployed and uninsured at the time. He said Medicaid started covering his care on Dec. 1, 2001. But while his health insurance woes had ended, his health took a downward spiral when he contracted an antibiotic-resistant infection on his foot.

"It was consuming an inch of flesh a day," Roberts said. If it continued, he was told, it would kill him. He said he refused to give permission to do the amputation, preferring to just die.

"The only thing that changed my mind was an old minister, a Catholic priest," Roberts said.

The priest reminded Roberts of his gifts as a musician. He pl! ayed the piano for 40 years, sometimes professionally, and still plays for his church. By rejecting treatment and hastening his own death, the priest told Roberts, "you're throwing away the talent God gave you."

Roberts told the priest to ask a nurse to bring him the permission papers, and on the morning of March 15, 2002, his 44th birthday, his right leg was amputated just below the knee.

That surgery was covered by Medicaid, but the foot treatments in 2001 were not. The bills felt like "a bag of cinder blocks on your shoulders," he said.

Roberts said he met regularly with Chesapeake hospital officials "who tried their best to come up with a monthly payment plan," but he said they agreed after looking at his bank statements that he didn't have enough money.

Roberts' records of what his actual income was in 2001 are spotty. He said that he no longer made any money after his floral shop went out of business and that he stopped filing income tax ! returns around 1998.

But Roberts provided The Pilot wi! th recor ds documenting that when Chesapeake General Hospital took him to court his income was just more than $6,000 from Social Security disability benefits. He cannot work, he said, because that would make him ineligible for health care benefits.

Roberts said that at the January 2006 hearing in Chesapeake Circuit Court he asked the judge, "Are these people going to take away my house?"

"You could have heard a pin drop," Roberts said.

According to Roberts, the lawyer for the Chesapeake Hospital Authority said it didn't do that kind of thing.

Hospital officials declined to say this week whether they were considering erasing the debt and removing the threat to Roberts' house. They also would not say how they determined the 18 percent interest rate charged on the unpaid bill.

In 2005, state Del. Bob Purkey, R-Virginia Beach, sponsored a bill that would have capped interest rates on unpaid medical bills for indigent patients at an annual rate of 4 per! cent.

"The hospitals fought it tooth and nail and would not let it pass," Purkey said Wednesday.

Roberts' health is failing. The house where he lives with his 15-year-old dog, Dusty, is cluttered; he hasn't been able to keep it clean. He apologizes that it doesn't look "nice" like it should.

Contemplating a life free of the hospital debt, Roberts said, "That would give me the freedom to be able to go into an assisted living situation, a perpetual care situation.... This is just a major source of worry and depression for me."

Source: http://content.hamptonroads.com/story.cfm?story=133420&ran=103979&lid=homePO
Home Business Articles Blog

Home Sales Tumble to 7-Year Low

Sales of new homes dropped 8.3 percent in August from July, the Commerce Department reported Thursday, driving down sales to a seasonally adjusted annual rate of 795,000. That was the lowest level since June 2000.

"This is just hideous," said Ian Shepherdson, chief economist at High Frequency Economics.

The home sales report came on the same day that the government reported a relatively brisk business growth rate in revised figures for the second quarter. But the 3.8 percent pace was less than previously estimated and it occurred before the credit crisis and its repercussions across the broad spectrum of the economy had taken hold.

Home prices tanked.

The median sales price in August fell by 7.5 percent from a year earlier to $225,700. That was the biggest drop in percentage terms in nearly 37 years. The median price is the middle point at which half sell for more and half for less. The average sales price dropped by 8 percent in August from a! year earlier to $292,000. That was the biggest decline in 17 years.

Sales fell in the South and the West in August compared with July. Sales, however, rose in the Northeast and Midwest.

The new-homes sales report, combined with other recent economic reports showing a sharp drop in demand for big-ticket manufactured goods in August, suggested the economy lost momentum as it headed into the fall.

On Wall Street, though, stocks rose. The Dow Jones industrial average gained 34.79 points to close at 13,912.94. Investors found a silver lining in the weak home-sales report. They believed it would increase the odds of a rate cut by the Federal Reserve next month, and thus investors bid stock prices higher.

Another report issued by Commerce showed the economy staged a rebound in the spring before a credit crisis raised new fears about longer-term business health.

The economy's 3.8 percent growth rate in the April-to-June quarter was the strongest ! showing in just over a year. The new reading was slightly less! robust than a previous estimate of a 4 percent growth rate. Nonetheless, it still marked a substantial improvement over the feeble 0.6 percent growth rate registered in the prior quarter.

Gross domestic product is the value of all goods and services produced within the United States and is considered the best barometer of the country's economic health.

The increase in the rate of growth, though, is likely to be fleeting. The deepening housing slump and a painful credit crunch since the spring have darkened the mood of individuals and businesses alike. That has led analysts to predict that economic growth has slowed considerably in the quarter that ends Sunday.

The weakness in housing points "to yet another hefty drag on GDP growth ... during the third quarter and it shows no signs of letting up anytime soon," said Michael Gregory, managing director and senior economist at BMO Capital Markets Economics.

The National Association for Business Economics beli! eves growth in the third quarter _ the period from July through September _ slowed to a pace of around 2.4 percent. It predicts the growth rate in the final three months of this year will be around 2.5 percent. Others think growth will turn out to be weaker than those projections.

Fears that the troubled housing market and credit problems could short-circuit the six-year-old economic expansion have shaken Wall Street. The biggest worry is that people and businesses will cut back on their spending and investment, throwing the economy into a tailspin.

Former Federal Reserve chief Alan Greenspan, in an interview with The Associated Press last week, said the odds of a recession are now higher than one-in-three but are still under 50 percent.

To help protect the economy from the ill effects of the housing slump and credit crunch, the Federal Reserve last week slashed a key interest rate. The hope is that lower rates will induce more spending and investment a! nd thus energize overall economic activity. Analysts believe a! nother r ate cut will come in late October.

Critical to the economy's outlook is the health of the jobs market.

In another report, fewer people signed up for unemployment benefits last week, raising hopes that the recent weakness in the jobs market won't be long lasting.

The second-quarter's bounce-back came even amid the continuing strain of a housing slump. Builders slashed spending on housing projects by 11.8 percent, on an annualized basis, in the spring.

Other businesses, though, boosted investment and spending in the second quarter on such things as equipment and software, and construction of new plants and office buildings.

Company profits also gained ground. One measure showed that after-tax profits rose 5.2 percent in the second quarter, up from a 1.5 percent gain in the first quarter.

But the credit crunch, which took a turn for the worse in the third quarter, could put pressure on companies and lessen their appetite to invest. Sale! s of big-ticket manufactured goods plunged in August.

The free flow of credit is important to the smooth functioning of the national economy. If credit becomes too difficult to get, it can put a damper on peoples' ability to buy big-ticket items such as homes, cars and appliances. And it can crimp businesses' capital investment and hiring.

The worst housing slump in 16 years is being painfully felt. Higher interest rates squeezed homeowners, especially "subprime" borrowers with blemished credit or low incomes. Foreclosures set records and late payments spiked. Lenders were forced out of business. Hedge funds and other investors in subprime-related mortgage securities got clobbered.

All that has caused stocks on Wall Street to careen wildly in the past few months.

On the Net:

New-homes sales _ http://www.census.gov/const/newressales.pdf

GDP _ http://www.bea.gov/

A service of the Associated Press(AP)

So! urce: http://www.rapidcityjournal.com/articles/2007/09/27/ap/business/d8ru30480.txt