WASHINGTON, Sept. 15 (Xinhua) -- Inventories held by U.S. businesses on shelves and back-lots fell for the 12th straight month in July, the longest stretch in seven years, the Commerce Department reported Tuesday.

U.S. business inventories declined by 1 percent in July, slightly larger than the 0.9 percent drop economists expected. Compared with a year ago, the July inventories dropped 11.8 percent.

According to data released by the department, the July weakness in inventories was led by a decrease of 2.1 percent in stockpiles held by wholesalers. Meanwhile, manufacturers' inventories declined 1.2 percent in July.

The drop in inventories and a slight rise in business sales pushed the inventory-to-sales-ratio, a figure to measure how long it would take to deplete stocks at the current sales pace, down to 1 cash advance no fax.36 from 1.38 in June.

Usually, falling inventories are seen as a sign of lack of confidence in future demand or as a result of an unexpected increase in sales. Analysts look at the inventories-to-sales ratio to determine how to interpret the data.

The longest stretch in seven years of declines in business inventories came as companies struggled to cope with the prolonged recession, which started in December 2007. Special Report: Global Financial Crisis

U.S. businesses inventories drop for 12th straight month in July

As countries begin emerging from the global financial crisis, France is proposing to measure progress in a new way - one that includes happiness and well being, as well as traditional economic benchmarks.US Nobel Prize-winning economist Joseph Stiglitz (R) and French Finance Minister Christine Lagarde after meeting French President Nicolas Sarkozy in Paris, 14 Sep 2009By standard measures, the world has certainly been going through some tough times. But do these indicators capture all facets of progress? According to French President Nicolas Sarkozy, the answer is 'no.'Mr. Sarkozy announced France will begin including less tangible indicators, like happiness and well being, into its measurements of economic progress.The French President said the current crisis does not just give the international community the freedom to imagine another economic model, it obliges the world to do so. We do not have the choice, he said.Mr. Sarkozy's remarks coincided with the publication of a new report by two Nobel economists, Joseph Stiglitz and Armatya Sen, that looks at non-traditional ways at measuring social progress. The report was commissioned by the French government fast cash without a hassle.The report recommends shifting the ways policymakers look at progress from what economists call gross domestic product, or GDP, which is a general measure of goods and services produced in a country. The new indicators also would include non-material 'wealth', like access to education and health care.France is not the first country to look at the non-material aspects of progress. The Himalayan kingdom of Bhutan emphasizes a concept it calls 'gross national happiness,' rather than GDP. Bhutan's main research center collects a wide variety of data to measure this, including things like psychological well being, good governance, ecological diversity and living standards.In France, Mr. Sarkozy says focusing too much on gross domestic product as the main measure of prosperity contributed to the financial crisis. He wants other countries to follow France's example in looking at less materialistic indicators of progress.

France Wants Happiness Included in Progress Measures

FRANKFURT &S212; The electric car is at the starting line, and the gun is about to sound. The only question marks now are whether the technology &S212; and the market &S212; are ready.

After years of talk and prototypes, some automobile manufacturers believe they have reached the moment when the electric vehicle is poised to become more than just a science experiment.

The French company Renault will unveil a lineup at the Frankfurt motor show this week including a purely electric sedan, without a backup internal combustion engine, that it says will be in showrooms by 2011.

General Motors, the American titan that recently emerged from bankruptcy protection, is touting as one of its comeback cars the Chevrolet Volt, an electric vehicle with a backup gasoline-run generator for longer trips.

BMW will be unveiling the Vision EfficientDynamics, a plug-in diesel-electric supercar concept. And Volkswagen is furthering the development of its Up! concept with an electric version.

&S220;This is not a false dawn,&S221; said Paul Scott, vice president and co-founder of Plug In America, a group that has long accusing automakers of moving too slowly on electric cars. &S220;This is the real thing.&S221;

Not everyone is so optimistic, however, about whether all-electric cars are ready for the masses, or vice versa, given issues like limited range and additional costs. Two prominent skeptics are Audi, the German luxury carmaker, which is pushing &S220;clean diesel&S221; engines, and Toyota, maker of the trail-blazing Prius hybrid, which is working on a hydrogen-based fuel cell technology that would obviate the need for heavy batteries.

But the advocates are forging ahead unbowed, arguing that public fascination with electric cars can be made profitable &S212; soon.

&S220;Once we put the cars on the road and can have customers test-drive the cars, we are quite convinced that we will transform this interest into a clear market,&S221; said Thierry Koskas, the director of Renault&S217;s electric vehicle program.

Renault&S217;s French competitor, PSA Peugeot Citro&>35;n, sold 10,000 electric cars between 1995 and 2005, mainly in the form of the Peugeot 106, a compact car. That faded away amid waning interest and a European phase-out of cadmium, a key ingredient in the car&S217;s batteries. But even Peugeot is now back, having signed a deal with Mitsubishi last week to sell electric cars in Europe by the end of 2010.

A larger issue may be where the industry leads consumer expectations with displays like the one in Frankfurt, analysts said.

One possibility is that electric vehicles capture the public imagination in much the way that hybrids &S212; the Toyota Prius being the most important &S212; have done in the past few years.

A less fortunate outcome for automakers would be for ambitious rollout schedules to give way to delays that feed consumer cynicism.

&S220;It could be that some manufacturers are awakening expectations that they cannot fulfill in a reasonable time frame,&S221; said Willi Diez, director of the Institute for Automotive Research in N&>52;rtingen-Geislingen, near Stuttgart.

Preparations for the Frankfurt show have proved that traditional engines have by no means ceded the field. No one has seemed more intent on voicing that view than Johan de Nysschen, president of Audi of America.

In an interview with Lawrence Ulrich, an auto blogger for the Web portal MSN, Mr. Nysschen trashed the Chevrolet Volt as &S220;a car for idiots.&S221; He argued that the $40,000 base price at which G payday loan.M. had hinted smacked of fantasy or, at the least, a narrow appeal to the most environmentally committed.

&S220;No one is going to pay a $15,000 premium for a car that competes with&S221; conventional sedans that cost around $25,000, he told Mr. Ulrich. &S220;So there are not enough idiots who will buy it.&S221;

Renault, however, sees its cars as a &S220;rational choice&S221; for getting around town. &S220;We don&S217;t just want people to buy an electric vehicle because it&S217;s fashionable,&S221; Mr. Koskas said.

In Frankfurt, Renault is introducing a lineup of all-electric cars that do without a &S220;range extender,&S221; which is a combustion engine that turns an electricity generator when the battery&S217;s charge is depleted.

(The Volt will have a range extender. In the Prius, the range extender is an entire gasoline powertrain alongside the electrics.)

Since the vast majority of Europeans drive less than 100 kilometers, or 62 miles, a day, or less than the range of a single battery charge, Renault reasons that it can start selling cars before an elaborate infrastructure for charging them is in place. At the same time, Renault is aiming to create just such an infrastructure with a pilot project in Israel in partnership with Better Place, an American start-up.

Renault&S217;s cars are scheduled to go on sale by 2011 in some countries in Europe and possibly Asia, but not in the United States, Mr. Koskas said.

Nissan, the Japanese automaker that Renault controls, is planning to introduce the Leaf, an electric sedan, in late 2010 in Japan, the United States and Europe. (It will share many components with Renault vehicles.)

Renault is not disclosing the cost of its vehicles, but Mr. Koskas argued that consumers would be willing to separate the cost of a car from its operating costs. If Renault and Nissan can price the car close to the cost of a conventional vehicle, this thinking goes, consumers will accept costs of electricity and battery rental.

&S220;You will be competitive or better off than you would be if you pay for gasoline for your normal car,&S221; Mr. Koskas said.

For skeptics like Mr. Nysschen, though, the question of competitiveness is skewed by governments around the world that are throwing money at electric vehicles. The Volt and others, he said in a follow-up statement, exist by the grace of &S220;taxpayer-funded subsidies.&S221;

In fact, Renault&S217;s plug-in project in Israel will depend on tax incentives. The Volt&S217;s attractiveness will rest in part on a $7,500 U.S. government tax credit for purchasers of electric vehicles. And France is offering almost exactly the same amount.

Mr. Koskas counters that the subsidies should be considered part of the start-up phase and should fade away as scale is achieved.

&S220;We will not need this to last forever,&S221; he said. &S220;We are in an industry that depends very much on volumes.&S221;

Indeed, some critics of electric vehicles are already hedging their bets.

Mr. Nysschen&S217;s company, Audi, created a new Web site, electricityuntamed.com, which is counting down to the opening of the Frankfurt auto show Tuesday. There, said a representative, Esther Bahne, Audi would unveil a prototype of its very own electric car. And Toyota would unveil its own Prius Plug-In, scheduled for full release in 2012.

To Hopeful Makers, the Electric Car’s Time Is Here

Hot News: BIS says clearing derivatives not enough to cut risks

THERE is broad agreement that Alan Greenspan, the former Fed chairman, was wrong to have believed that market forces alone would insulate society from excessive financial risk. But Mr. Greenspan was wrong for reasons very different from those offered by his most vocal critics.

Those critics fault Mr. Greenspan for having overestimated the strength of competitive forces, a point he essentially conceded in Congressional testimony last fall. But the financial crisis was not caused by a shortfall in competition. On the contrary, it was fueled by competition&S217;s growing strength.

Adam Smith&S217;s theory of the invisible hand, which says that market forces harness self-serving behavior for the common good, assumes that markets are competitive, and most markets have in fact become more competitive over time. Today, if an opportunity exists anywhere in the world, information-age entrepreneurs can seize it more quickly than ever.

The invisible hand, however, requires not just strong competition but also two other preconditions. The economic models that spawned Mr. Greenspan&S217;s former optimism simply assume those conditions, despite compelling evidence of their absence.

First, those models assume that rewards depend only on absolute performance, but in the real world, payoffs are often tightly linked to relative performance. When a valuable new piece of information becomes available to the investment community, for example, the lion&S217;s share of the gain goes to whoever trades on it first. For an individual firm like Goldman Sachs, it is thus completely rational to invest millions of dollars in computer systems that can execute stock trades even a few seconds faster than others. But rivals inevitably respond with similar investments. Taken together, these expenditures are wasteful in the same way that military arms races are.

A second problematic assumption of standard economic models is that people are properly attentive to all relevant costs and benefits, even those that are uncertain, or that occur in the distant future. In fact, most people focus on penalties and rewards that are both immediate and certain. Delayed or uncertain payoffs often get short shrift.

Given the conditions under which human nervous systems evolved, these aspects of our behavior are unsurprising. Because immediate threats to survival were pervasive, those who didn&S217;t seize short-term advantage often didn&S217;t survive.

Such nervous systems provide an erratic guidance system for the invisible hand. Consider, for example, the difference between actual investor responses to the housing bubble and those predicted by standard economic models.

When house prices are rising steadily, mortgage loans are safe, but relatively low-yielding, investments. During the recent bubble, unregulated wealth managers created mortgage-backed securities that enabled investors to magnify their returns through financial leverage &<51; that is, by enabling them to invest money borrowed from others.

Many experienced analysts had warned for years that those derivative securities were vastly overpriced, but Mr bad credit payday loans. Greenspan assumed that prudent concerns about the future would prevent investors from taking foolish risks. Real investors faced a tough choice: continue earning high returns from mortgage-backed securities, or move their money to safer vehicles and watch their friends and neighbors pass them by.

Wealth managers faced a tough choice of their own, since they knew that many customers would desert them if they failed to offer the higher-paying, but riskier, investments. Managers also knew that if markets turned against them, penalties would be limited by the fact that almost everyone had been following the same strategy. The resulting collapse was all but inevitable.

Memories are short. Immediately after a severe flood, most people are reluctant to build on a flood plain. But land on flood plains is cheaper, and the prospect of short-term advantage quickly lures many to abandon their caution. That is why many jurisdictions adopt strict regulations against building on flood plains.

The same logic dictates regulation to limit the damage caused by financial bubbles. The list of financial practices that merit regulatory scrutiny is long. But the most important first step is to limit leverage. Existing regulations prohibit banks from leveraging their investments by more than 10 to 1. Other financial institutions, however, are exempt from such regulation. Before the bubble burst, much higher leverage ratios became common in those institutions, which were aggressively marketing mortgage-backed securities. That loophole cries out to be closed.

Is it practical to limit leverage in a global capital market? If other countries don&S217;t take similar steps, Americans could simply move their money abroad. But we could limit the leverage of the domestic financial institutions that provide the capital on which American businesses and consumers depend. If American investors wanted to achieve greater leverage abroad, they would have to do it with money borrowed elsewhere. Such a restriction would be enough to deprive asset bubbles of the fuel they require to threaten stability.

Of course, periodic asset bubbles occurred even when markets were less competitive. But people in earlier times were less aware of the high returns being earned by highly leveraged investors. Relaxed regulation and increased competition now confront investors with temptations that growing numbers of them are ill-equipped to resist.

Alan Greenspan&S217;s erstwhile faith in the invisible hand notwithstanding, it was never reasonable to have expected market forces to protect society from the consequences of this risky behavior.

Robert H. Frank, an economist at Cornell University, is also co-director of the Paduano Seminar in Business Ethics at the Stern School of Business at New York University.

Economic View: Flaw in Free Markets: Humans

Investors pushed up stocks Thursday on Wall Street after a drop in weekly unemployment claims and an upbeat forecast from Procter &&8; Gamble.

The Labor Department&S217;s report that jobless claims fell more than expected to 550,000 last week provided a new dose of optimism about the economy and helped the stock market advance for a fifth straight day.

P.&&8;G.&S217;s prediction that sales will rebound this fall also improved the mood on Wall Street. The company&S217;s stock rose more than 4 percent.

Investors still found room for worry, however. The agricultural company Monsanto warned that its 2009 earnings would come in at the low end of its forecast and said it would cut more jobs than previously announced.

The Dow Jones industrial average rose 80.26 points, or 0.8 perecnt, to 9,627.48.

The broader S.&&8;.P. 500-stock index gained 10 payday loan lenders.77 points, or 1 percent, to close at 1,044,14, and the Nasdaq composite index rose 23.63 points, or 1.1 percent, to 2084.02.

Overseas, Japan&S217;s Nikkei stock average rose 2 percent, Britain&S217;s FTSE 100 fell 0.3 percent, Germany&S217;s DAX index was up 0.4 percent, and France&S217;s CAC-40 was flat.

In other corporate news Thursday, Corning and General Mills both provided improved earnings outlooks.

Corning, a specialty glass maker, said it expected third-quarter sales volume to be higher than previously forecast. General Mills said its fiscal first-quarter earnings per share topped the food maker&S217;s expectations, helped by margin improvement and growth of its food brands.

U.S. Stocks Rise After Jobs Report

SAN FRANCISCO &<51; Motorola introduced the first of a new generation of smartphones Thursday that it hopes will reverse its plummeting cellphone sales.

The phone, called the Cliq, is meant for young people obsessed with social networks. Instead of the traditional menu of features, the Cliq&S217;s home screen is an ever-changing mosaic of e-mail, Twitter tweets and status updates, superimposed over photos of the people sending those messages.

&S220;It&S217;s alive,&S221; said Sanjay Jha, the co-chief executive of Motorola, who was hired a year ago from Qualcomm to revive its cellphone business. &S220;Think of it like the text bubbles in cartoons, with new information pushed to you all the time.&S221;

The Cliq will be available through T-Mobile in the United States in the fall. The price has not been announced, but analysts expect a $100 price tag. The phone has a 3.1-inch touch screen and a slide-out keyboard. Motorola is expected to introduce a second, more expensive smartphone in a few weeks that will work on the Verizon network.

Both phones are based on Google&S217;s Android operating system, but Motorola has substantially modified the Google software to make its phone stand out from the dozen or so other Android phones that are expected to be introduced before the holiday sales season. While phone users will be able to download and use any of the growing list of applications for the Android system, the look of Motorola&S217;s phones and the way they operate will be different from other handsets using the operating system.

&S220;I get the question all the time, &S216;How are you going to differentiate on Android?&S217;&<60;&S221; Mr. Jha said. &S220;Android is open and flexible, so we can build on top of it.&S221;

Indeed, much of what Mr. Jha said makes the Cliq special is not in the phone at all, but in an Internet-based service called Motoblur that integrates all of a user&S217;s e-mail and social networking accounts totally free credit score.

Mr. Jha said that the Cliq represented the turning point for Motorola. It is not meant to be like the iPhone, one handset with a few variations that will lure tens of millions of buyers. Rather it is the first of dozens of handsets, built from the same underlying Android software and Motoblur service, that will have different features to appeal to all sorts of customer groups around the world.

&S220;This is one product, but we have changed the way we do business,&S221; Mr. Jha said.

Users can simply enter their account information for these services, and the phone numbers, photos and other information from their friends will be automatically downloaded into the phone&S217;s address book. Motoblur also keeps copies of any other contact information that the user enters, so that it can be moved automatically onto a new phone, provided the phone is made by Motorola.

Some of the early Android handsets were tied instead to Google&S217;s e-mail and other online services.

Tero Kuittinen, an analyst with MKM Partners, said that most other smartphone makers were also building services to integrate messages from different services. The first was the Palm Pre.

&S220;Message integration hasn&S217;t been enough to turn the Pre into a big hit when it was the only phone that had it,&S221; he said.

Mr. Kuittinen said that Motorola faced very stiff competition in the smartphone market, with dozens of models available from most every manufacturer.

While the top end of the market is dominated by Research In Motion&S217;s BlackBerry and Apple&S217;s iPhone, Motorola is competing in the very crowded lower-price tier.

&S220;The challenge for Motorola is to win back customers they have lost in the last two years,&S221; he said.

Motorola Phone Focuses on Social Networks

HONG KONG (Reuters) – Asian stocks rose on Thursday as hopes for global economic recovery prompted investors to shift into riskier assets, while oil found support above &&6;71 a barrel following OPEC&&9;s decision to keep output steady.

The investor shift kept the U.S. dollar on the defensive. It hit its weakest value in almost a year on Wednesday and was holding just above that level on Thursday.

As South Korea and New Zealand kept interest rates at record lows, Asian share markets were underpinned by a 0.5 percent gain in the Dow Jones industrial average (.DJI) and the Federal Reserve&&9;s Beige Book survey, which showed the U.S. economy was stabilizing although many key sectors remained weak.

That buoyed sentiment in Japan where the Nikkei index (.N225) gained 1.4 percent even though machinery orders&&9; data pointed to weak capital spending in the world&&9;s No. 2 economy.

The MSCI index of Asia Pacific stocks traded outside Japan (.MIAPJ0000PUS) firmed 0.8 by late morning.

South Korea&&9;s KOSPI index (.KS11) increased 1.4 percent, helped by shipping and shipbuilding companies. Hanjin Shipping (000700.KS) and Hyundai Heavy Industries (009540.KS) rose 4.3 percent and 3.7 percent respectively after a rise in the Baltic Dry Index (.BADI), a key freight indicator.

The Korean won and Korean September treasury-bond futures fell sharply after the Bank of Korea said it would maintain its current easy monetary stance. However, its comments reinforced market expectations it would be one of the first country&&9;s globally to start raising rates, possibly before the end of the year.

"The BOK is probably among the most hawkish banks in the world right now and it might be one of the first central banks to hike interest rates," said Frederic Neumann, Asia economist at HSBC in Hong Kong.

"There is always a risk of being the first mover because it has immediate exchange rate implications. I think to some degree that constrains the ability to hike early and aggressively instant payday loans completely online."

DOLLAR DEFENSIVE

In Australia, a sharp fall in employment in August put pressure on the Aussie dollar but share prices edged up 0.5 percent with energy stocks Woodside Petroleum (WPL.AX) and Santos (STO.AX) gaining 1 percent off the back of firm oil prices.

Oil was quoted at &&6;71.88 a barrel, up more than 40 cents from Wednesday&&9;s closing level. It reached as high as &&6;72.52 after OPEC agreed in Vienna to maintain current output and after the American Petroleum Institute reported a sharp fall in crude stocks.

Growing confidence the worst is over for the global economy continued to push investors into riskier assets, keeping the U.S. dollar under pressure. It dropped to its lowest level in nearly a year on Wednesday against a basket of currencies (.DXY) and was holding just above those levels on Thursday.

Gold prices are benefiting from dollar weakness. Spot gold was trading at &&6;991.7 per ounce by 10:47 p.m. EDT, after topping &&6;1,000 on Wednesday.

New Zealand kept interest rates at a record low 2.5 percent but indicated it was less inclined to cut again.

However, the kiwi dollar fell after Governor Alan Bollard told Reuters that the currency, which hit a one-year high on Wednesday, was overvalued and that markets were premature in pricing in higher rates from early 2010.

China&&9;s Shanghai index (.SSEC) fell 1 percent. Recent volatility in China&&9;s shares has made fund managers cautious about buying, a Reuters poll shows.

Hong Kong&&9;s Hang Seng Index (.HSI) took its cue from Wall Street, rather than China, and was up 1.4 percent.

Taiwan&&9;s benchmark TAIEX index (.TWII) reached a 14-month intraday high after the government named a new cabinet, raising hopes a financial services agreement with China can be signed soon.

Asian stocks rise, oil supported after OPEC

Hot News: AIDS Activists Issue Grades to Drug Companies

After decades of marriage, Terry and Debbie Buchen learned to work through various marital issues. Then something new came between them &<51; his cellphone.

Mr. Buchen, 62, couldn&S217;t put it down while driving. The first time he sent e-mail messages from behind the wheel, he drove his BMW S.U.V. into a ditch on a deserted stretch of road. He was alone and driving slowly, and he wasn&S217;t injured. Still, the incident was &S220;very scary,&S221; his wife said.

Mr. Buchen knew he had a to make a choice between his habit and marital bliss.

&S220;I chose my wife,&S221; he said. But then Mr. Buchen, an agronomist for golf courses, asked for a compromise: he asked her to drive when they were together so he could stay connected with clients. That didn&S217;t fly. &S220;If looks could kill,&S221; he said.

For all the conversations about distracted driving playing out in statehouses and on talk shows, the most heated discussions, and the ones with the most lasting impact, may be happening between family members and friends.

Such disputes are an extension of a longstanding source of tension &<51; sometimes light, other times more antagonistic &<51; between drivers and their self-appointed watchdogs. It&S217;s just that now, the backseat driver is going after the BlackBerry.

These critics say such devices not only put lives at risk, but also steal attention from passengers hoping for some quality catch-up time. The multitaskers counter that, in their view, social and work demands override the increased crash risks.

Safety advocates who favor outlawing multitasking behind the wheel say the new generation of backseat hawks may be playing a crucial role in changing the culture &<51; much as they did in helping enforce seatbelt laws &<51; in a way these advocates say laws alone may not be able to.

In a survey conducted earlier this year of 2,501 people, the AAA Foundation for Highway Safety found that 48 percent of people worry about a friend or family member driving unsafely. Of those people, 19 percent said the cause of their concern was multitasking behind the wheel.

Some drivers say that the second-guessing is unnecessary because of their ability to handle driving and other tasks.

&S220;I barely even look at my phone when I text,&S221; said Sarah Edwards, 29, a customer service representative in Cleveland.

Her close friend, Amy Macauley, 32, isn&S217;t convinced. &S220;We&S217;ve talked about this,&S221; Ms. Macauley said. &S220;I&S217;ve cited vague statistics about how dangerous it is, but she doesn&S217;t pay attention.&S221;

She brings a particular sensitivity to the discussion. Her sister and the husband of a close friend died from crash injuries, and her brother-in-law was seriously injured in a car accident.

&S220;I know things can change in an instant when someone is behind the wheel,&S221; Ms. Macauley said. To her, talking on the phone or texting while driving, unless it&S217;s an emergency, is &S220;completely gross.&S221;

People like Ms. Macauley are finding more ammunition to argue their side.

Studies show that people who talk on the phone while driving face a four times greater crash risk than those who do not. The risk is considerably higher for motorists who text.

The federal government estimates that at any given time about 11 percent of drivers, or about two million people, are talking on a cellphone.

Many of them are likely doing so alone. Up to 85 percent of drivers have no passenger with them in the car, estimates the Virginia Tech Transportation Institute quick guaranteed personal loans.

But when an adult passenger is present, the Transportation Institute found, he or she can enhance safety &<51; and reduce crash risk by up to 50 percent &<51; perhaps by acting as a second set of eyes on the road, or encouraging safer behavior.

That means that a friend or family member cajoling a motorist to put down the phone can provide a safety advantage, as long as the disagreement itself doesn&S217;t escalate to the point where it becomes its own distraction.

&S220;An emotional, heated argument probably isn&S217;t good, but that&S217;s just my opinion,&S221; said Charlie Klauer, senior research associate at the Transportation Institute.

For all the evidence about the dangers of distracted driving, multitaskers say there are powerful forces &<51; both social and economic &<51; that make it hard to put their devices down.

A 2008 poll taken by Nationwide Insurance of 1,500 motorists found that 48 percent of people who multitask behind the wheel do so because they feel an urgent need to address an issue pertaining to school or work; 33 percent said they felt pressure to stay connected socially.

That lure may entice some people more than others. An emerging body of science suggests that there are some people who are more likely to be drawn to multitasking &<51; behind the wheel or otherwise &<51; because of the way their brains are wired.

Clifford Nass, a co-director of an automotive research laboratory at Stanford University, said some researchers have labeled such heavy multitaskers as &S220;explorers&S221; because they enjoy the constant hunt for information &<51; whether it pertains to work, entertainment or social life.

Vic Gideon, 48, a hospital executive from Cleveland, says he feels the call of his device for social and work purposes, even when behind the wheel and even when his family, including his four children, are in the car.

&S220;Even if I&S217;m going 60 miles an hour, I feel the need to check it,&S221; said Mr. Gideon, referring to his phone. &S220;It might be spam, a wrong number, whatever. But who cares? My cell vibrates. I respond.&S221;

Mr. Gideon said it had created tension. &S220;My wife tells me I don&S217;t know how to drive,&S221; he said. &S220;And then, of course, not only do I not know how to drive, but I don&S217;t know how to drive safely. I believe I&S217;m being careful.&S221;

The Nationwide Insurance poll found that both men and women are avid multitaskers. About 85 percent of female drivers said they multitasked, compared with 78 percent of male drivers.

Grace Andrews, 49, a corporate consultant in Melrose, Mass., is the one taking heat in her family. Her husband, Joe Nardone, 44, and her son, Colby Andrews, 12, despise her incessant use of the phone, which she concedes can be over-the-top.

&S220;I honestly do laugh at myself all the time,&S221; says Ms. Andrews. &S220;Is it really possible that I am talking on the phone, e-mailing and driving with my knees simultaneously?&S221;

Her husband and son tell her that she cares more about the phone than she cares about them, and that she&S217;s putting herself and others at risk.

&S220;I could never imagine that we would get to this stage &<51; that this is the stuff we would fight about,&S221; she said.

Joan Raymond contributed reporting.

Driven to Distraction: Backseat Drivers Are Now Nagging the Multitasker

LONDON &<51; Determined to become a global food and confectionery giant, Kraft Foods said Monday that it would pursue a $16.7 billion takeover of Cadbury, the British chocolate maker, even after Cadbury rejected that offer as too low.

Shares of Cadbury soared 41 percent in the day&S217;s trading in London, and above the offer price, indicating that investors expected a higher bid from Kraft or a proposal from a rival candy company like Nestl&>33; or Hershey. Some analysts said Cadbury could be worth as much as 43 percent more than Kraft offered.

Combining Kraft, which makes Oreo cookies, Toblerone chocolates and Ritz crackers, with Cadbury&S217;s Trident gum and Dairy Milk chocolates would create a giant with $50 billion in yearly revenue, spanning the world from the United States and Mexico to Britain and India.

Analysts said that confectionery companies tend to trade at higher values, so adding the chocolate and gum business could enhance Kraft&S217;s allure with investors. But Cadbury said that it had reviewed Kraft&S217;s proposal, which was made public on Monday, and had rejected it because it &S220;fundamentally undervalues the group and its prospects.&S221;

Kraft&S217;s chief executive, Irene B. Rosenfeld, has a deep background in food and beverages, and turned around the chips business at PepsiCo before joining Kraft in 2006.

Nelson W. Peltz and his activist firm, Trian Fund Management, own a stake in Kraft and have nudged it to sell certain assets and bolster the stock price in the past. Mr. Peltz also owns a 3 percent stake in Cadbury and pushed successfully to split off its beverage unit, now known as the Dr Pepper Snapple Group.

Mr. Peltz declined to comment on Kraft&S217;s proposal.

A takeover of Cadbury would help Kraft, the biggest food conglomerate in North America, compete with its larger rival, Nestl&>33;. Cadbury would strengthen Kraft&S217;s market share in Britain and open India, where Cadbury is among the most popular chocolate brands.

It would also expand Kraft&S217;s gum business and give it a global distribution network. Nestl&>33; lacks a gum business and is struggling with declining sales as recession-plagued consumers turn away from its bottled water and ice cream.

Analysts have flagged Cadbury as a potential acquisition for Kraft for several years, but such speculation cooled when Kraft acquired the biscuits and cereal snack unit of France&S217;s Danone in 2007.

Cadbury and Kraft have been doing relatively well in recent months. Cadbury said in February that its confectionery business had proved &S220;resilient&S221; despite price increases because of higher commodity costs. Kraft has benefited from rising sales of its convenience foods, like DiGiorno frozen pizza and Oscar Mayer sandwich meats, as consumers eat more meals at home.

Among Cadbury&S217;s biggest attractions is its chewing gum business, especially in Latin America and Europe, which expanded in 2003 with the acquisition of Adams Confectionery to include Trident and Bubbas bubble gum. Competition then heated up when Mars acquired Wrigley.

For months, Hershey had been mulling a bid for Cadbury, and it has hired JPMorgan Chase as an adviser, according to people briefed on the matter. Some analysts speculated about a possible joint bid by Nestl&>33; and Hershey, allowing Nestl&>33; to take Cadbury&S217;s gum business to compete with Mars with Hershey taking over the chocolate operation.

A Nestl&>33; representative declined to comment and pointed to a statement Monday by Paul Bulcke, the chief executive, that Nestl&>33; had no plans for major acquisitions in 2009 and 2010 no fax cash loans.

The takeover bid could not have come at a worse time for Cadbury&S217;s chief executive, Todd Stitzer. The company is halfway through its plan to increase operating profit margins to about 15 percent in 2011, from about 10 percent in 2007. Cadbury&S217;s shares have risen about 33 percent since it spun off its Dr Pepper beverage unit in 2008.

The company, whose roots can be traced to 1824 when John Cadbury opened a shop in Birmingham, England, to sell tea, coffee and, later, cocoa beverages, is not expected to give in easily. It said that it was &S220;confident in Cadbury&S217;s stand-alone strategy and growth prospects as a result of its strong brands, unique category and geographic scope.&S221;

Speaking in a conference call on Monday, Ms. Rosenfeld of Kraft disagreed. &S220;Cadbury has limited opportunity as a stand-alone entity in this increasingly competitive environment,&S221; she said, adding that Kraft &S220;feels quite confident with the proposal&S221; and &S220;looks forward to continuing the dialogue.&S221; Kraft had not contacted Cadbury investors directly, she said.

Ms. Rosenfeld met Cadbury&S217;s chairman, Roger Carr, on Aug. 28 to discuss a possible combination, Kraft said in a statement. An exchange of letters followed, but after Cadbury rejected Kraft&S217;s proposal, Ms. Rosenfeld decided to make the offer public to encourage further discussions.

Under the proposal, Cadbury shareholders would get &<63;3, or $4.92, in cash and 0.2589 in Kraft Foods shares for each Cadbury share. Kraft said the offer valued the company at &<63;7.45, or $12.22, a share, a premium of 31 percent over Cadbury&S217;s closing price of &<63;5.68 on Friday. In London, shares rose to &<63;7.83 on Monday.

Jeremy Batstone-Carr, an analyst at Charles Stanley in London, called the proposal &S220;somewhat opportunistic&S221; and said &S220;Kraft will need to up its offer to have any serious chance of success, perhaps to 800 pence in cash or higher.&S221;

A report by Sanford C. Bernstein said Kraft was right to go after Cadbury but valued the British company at &<63;8.55 to &<63;10.7 a share, based on Wrigley&S217;s acquisition of Mars in 2008.

A takeover would result in an annual pretax cost savings of $625 million in marketing spending, procurement and research and development, Kraft said in a statement. It would result in higher earnings per share, after all transaction-related costs were included, in the second year, Kraft said.

Kraft said it would finance the deal through debt and was prepared to offer Cadbury shareholders the opportunity to elect, subject to availability, the part they would receive in cash and in new Kraft Foods shares.

Christopher Growe, a food company analyst with Stifel Nicolaus, applauded the Kraft team. &S220;Irene has done a great job transforming this company and bringing Kraft to a point where they could build this bigger business,&S221; he said. &S220;I don&S217;t think Kraft was ready for a transaction of this size a year ago.&S221;

Lazard is acting as lead financial adviser to Kraft. Centerview Partners, Citigroup and Deutsche Bank are other financial advisers, with Citigroup and Deutsche Bank acting as corporate brokers, providing financing. Cadbury&S217;s advisers are UBS, Goldman Sachs and Morgan Stanley.

Michael J. de la Merced, William Neuman and Andrew Ross Sorkin contributed reporting from New York, and David Jolly from Paris.

Rebuff by Cadbury Doesn’t Deter Kraft

SAN DIEGO &<51; The inside of computers has been Intel&S217;s territory, as the world&S217;s biggest maker of microprocessors reminds consumers with its &S220;Intel Inside&S221; campaign.

The cellphone&S217;s guts have been the domain of Qualcomm. As the cellphone becomes more like a computer and the computer more like a cellphone, it was inevitable that the two chip makers would clash.

Intel wants to get inside smartphones, and Qualcomm, one of the largest suppliers of chips for wireless phones, wants to get into small notebook computers.

&S220;Intel is trying to come down from the computer and bring their software ecosystem along,&S221; said Qualcomm&S217;s chief executive, Paul E. Jacobs. &S220;We&S217;re trying to go up from the phone and build the software ecosystem.&S221;

Qualcomm, which sells about 22 percent of all chips used in wireless devices including the iPhone, BlackBerry Storm and T-Mobile G1, believes it has never been better situated in its 24-year history to break into the market for computing devices.

PCs are evolving into tablet PCs and small laptops, essentially big smartphones that are always on, always connected to the Internet, with all-day battery life &<51; in short, very much like a large iPhone or BlackBerry. Qualcomm calls these devices smartbooks because the design resembles a large smartphone.

Mr. Jacobs sees his company at the center of an industry that is driving the most cutting-edge innovations, as seen in devices like the iPhone and BlackBerry Storm.

&S220;That energy is now coming out of the phone industry,&S221; Mr. Jacobs said. &S220;The PC became so standardized that the degree of innovation was not the same as what you see in the phone space.&S221;

Intel, whose revenue is approximately triple Qualcomm&S217;s, disagrees. &S220;As mobile devices become smarter with PC-like performance, computer and Internet capabilities, this is Intel&S217;s strength,&S221; an Intel spokeswoman, Suzy Ramirez, said.

Qualcomm is counting on its Snapdragon chip to power these devices. Developed by a team of former I.B.M. engineers who worked on the PowerPC microprocessor, it is the first chip of its kind to reach a speed of 1 gigahertz, a significant milestone for ARM, a processor design renowned for using so little power the device&S217;s battery can last all day.

Snapdragon is already being used by Toshiba in its ultra-thin TG01 smartphone that is being sold in Europe. More devices using Snapdragon are expected later this year, Mr free business cards. Jacobs says.

Hardware alone will not win the battle, however. Qualcomm has been working with Google, which developed the Android operating system for cellphones. The fruit of this partnership was T-Mobile&S217;s G1 phone, the first smartphone using Android and a Qualcomm chip.

&S220;There was a lot engineering back and forth,&S221; Mr. Jacobs said. &S220;The thing that we&S217;re doing now is helping them scale. Because they have a relatively small team focused on evolving the operating system.&S221;

What may prove more significant than Android is software that Google will bring out next year: the Chrome operating system, which is intended for larger, computerlike devices to challenge laptops running Windows.

Qualcomm is betting that Google becomes a major operating software company.

&S220;They&S217;re onto what the future of computing is,&S221; said Bill Davidson, Qualcomm&S217;s senior vice president for global marketing and investor relations. &S220;It&S217;s about taking advantage of the computational power that already exists within the Internet.&S221;

He went on: &S220;The whole push for Chrome is to have the much thinner, lighter, smaller client so that you don&S217;t need as much memory to run this big honking OS,&S221; he said, referring to Microsoft&S217;s Windows operating software.

The Qualcomm chip will be designed to work with Chrome to move some of the computing functions off the device to fast computers based in data centers, a model the industry calls cloud computing.

&S220;I think a hybrid model is the model that will work best, where there are certain applications that are downloaded on the device and they live there,&S221; Mr. Jacobs said. &S220;And other ones that are coming up and down through the cloud. We&S217;ll support both.&S221;

It is not going to be a cakewalk to displace the most potent partnership &<51; Microsoft and Intel &<51; in the history of the personal computer.

&S220;One of the key issues is brand,&S221; said Matthew Wilkins, principal analyst for compute platforms research, at the market researcher iSuppli. &S220;Google Chrome OS, Android and ARM are not traditionally seen in PC retail stores. Therefore they will be competing against established and recognized brands: Intel, Microsoft and Windows.&S221;

Intel and Qualcomm Eye Each Other’s Terrain

CHRISTOPHER STEINER was once the happy driver of a sport utility vehicle. Mr. Steiner, the author of &S220;$20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better,&S221; makes this confession early in his book: &S220;I drove an old Toyota 4Runner all over the country for a decade &<51; running the odometer past 240,000 miles &<51; and I loved it.&S221;

Therefore, he is far from gleeful when he describes how many S.U.V. owners decided to ditch their beloved big cars when gasoline hit $4 a gallon in 2008. Then, of course, gas prices returned to more affordable levels. Did those owners act too hastily?

No, says Mr. Steiner, a staff writer at Forbes and a civil engineer. We could all end up forsaking our fossil-fuel vehicles in the near future, he says, because of what he calls the dwindling supply and burgeoning demand for gasoline. He says that &S220;Texas- and Saudi Arabia-style gushers&S221; are a thing of the past, and he points to the booming economies of countries like India and China, which will enable hundreds of millions of new drivers to hit the highways.

Ultimately, he contends, these forces will drive the price of fuel far beyond $4 a gallon. In each successive chapter of the book, he describes how an additional $2 price increase might affect us. But will prices climb to the alarming level he suggests in the title?

The author doesn&S217;t go that far. He describes &S220;$20 Per Gallon&S221; as &S220;a thought experiment on the what-ifs of high gas prices focusing on tangible changes rather than abstract ones.&S221;

In short, Mr. Steiner has written a book full of fanciful predictions, some of which should probably be taken seriously, though certainly not all of them. Here are just a few: $8 gasoline will doom most United States airlines. When gas reaches $10 a gallon, Disney World will close. At $12, suburbanites will no longer be able to afford McMansions or their long commutes. And, at $14, it will be too expensive for Wal-Mart to gas up the truck fleet that moves goods around the country.

Mr. Steiner asserts that good would come from such a future. He writes that it would force us to upgrade our public transportation systems, renovate our cities, get around more on foot and eat more locally grown food. Someday, Mr. Steiner assures us, we might even enjoy the rarefied life of Bill, a fictitious 27-year-old whom he imagines as a beneficiary of this energy-market upheaval. Bill, who has what sounds like a fairly lucrative job at a company that designs tidal power stations, lives in a solar-paneled apartment building in the Park Slope section of Brooklyn.

Bill hasn&S217;t traveled by plane in years. Instead, he zips around on ultrafast trains. He can be in Montreal in two hours. He doesn&S217;t even need an electric car &<51; he travels by subway in New York payday loans.

Every aspect of Bill&S217;s life &<51; even his workout garb &<51; reflects the shift to alternative energy sources.

&S220;Bill&S217;s running shoes have natural rubber bottoms &<51; as in tree rubber &<51; since the composite petrol-based materials that used to be made from petroleum and were so common in the past&S217;s sneakers are all but forgotten,&S221; Mr. Steiner writes.

Yes, but how do we move from our smoggy, fossil-fuel-dependent existence to Bill&S217;s pristine utopia? The book acknowledges that the transition will be difficult, but glosses over just how painful it could be for the losers in this new, green economy (assuming that gasoline really becomes so unaffordable).

Mr. Steiner writes that high gas prices will force suburbanites to move into cities where they don&S217;t need cars. That may bring a renaissance in rust-belt cities like Cleveland or St. Louis. But cities like New York are already crowded, so what happens when suburbanites from the far reaches of New Jersey descend on Brooklyn? One can only assume that rent will become as unaffordable as gasoline, forcing many people to stay behind in the exurbs in their drafty McMansions.

They may not have many shopping choices, either. The author argues that expensive gas will create vacant suburban strip malls &<51; like one he visits in Coshocton, Ohio, that has been transformed into a graffiti-encrusted vision of suburban decay by the shuttering of a Wal-Mart.

The author writes that such huge abandoned stores will &S220;dot the exurbian and rural landscape from coast to coast&S221; when gas reaches $14 a gallon.

MR. STEINER thinks that this development will lead to a rejuvenation of small towns. But if it&S217;s too expensive for Wal-Mart to get diapers on the shelves, how will the mom-and-pop grocery on Main Street do it? You can&S217;t get everything at the local farm.

The book&S217;s arguments are sometimes overstated in hyperbolic prose. In the chapter about the end of the airline industry as we know it, it says that some companies will be &S220;permanently torpedoed&S221; by high gas prices. It warns that a &S220;giant herd of people&S221; will lose their jobs. And it says that our grandchildren will &S220;undoubtedly gawp in awe&S221; when we recount our childhood trips to Disneyland. Well, that&S217;s something to look forward to in our old age.

But it will be cold comfort. If Mr. Steiner is correct about the future of gas prices, many people will disagree with his premise that their lives are better. And even he may miss the days when he cruised around in his Toyota 4Runner. It sounds as if he already does.

Off the Shelf: Visions of an Energy-Starved World

(Reuters) – U.S. stock index futures pointed to a higher open on Wall Street on Friday, ahead of eagerly-awaited monthly U.S. jobs data and unemployment rate.

At 5:29 a.m. EDT, futures for the S&P 500 were up 0.44 percent, Dow Jones futures were up 0.41 percent and Nasdaq 100 futures were up 0.34 percent.

Investors were bracing for monthly U.S. payrolls figures and unemployment rate, due at 8:30 a.m. EDT, for further clues on the health of the U.S. economy.

U.S. employers are expected to have eliminated 225,000 jobs last month, according to the median forecast of 81 economists polled by Reuters, down from 247,000 in July, while the unemployment rate is forecast to have inched up to 9.5 percent from 9.4 percent.

Dallas Federal Reserve Bank President Richard Fisher on Thursday said the United States should have a "good snap-back" from recession in the final months of 2009, but that future growth could be a "slow crawl."

"You could have a stout third-quarter (GDP) number," Fisher told reporters after a speech at the University of California in Santa Barbara.

IMF Managing Director Dominique Strauss-Kahn said on Friday the global economy is emerging from a deep downturn, but the recovery will be sluggish and unwinding stimulus measures too soon could derail an upswing. Speaking at a Bundesbank conference in Berlin, Strauss-Kahn expressed concern about the risks of a rise in unemployment, which he said could lead to a decline in potential growth and social consequences which were "even more worrisome bad credit cash loans."

Oil ticked up above &&6;68 a barrel in relatively thin dealing, while gold hovered a hair below &&6;1,000 an ounce on Friday, consolidating the biggest two-day gain since March after a mix of inflation anxiety, a retreat from risk assets and a technical break stoked renewed investor interest.

European stocks (.FTEU3) were up 1 percent in morning trade, halting a four-day losing run, led by banking and mining shares such as Rio Tinto (RIO.L) and Banco Santander (SAN.MC).

Japan&&9;s Nikkei average (.N225) fell 0.3 percent to hit its lowest close in five weeks on Friday, with investors&&9; reluctance to buy ahead of key U.S. jobs data outweighing short-covering on better-than-expected U.S. sales figures.

U.S. shares gained ground Thursday, halting a four-day losing streak, after stronger-than-expected retail sales data eased recent worries about the pace of the economic recovery.

The Dow Jones industrial average (.DJI) was up 63.94 points, or 0.69 percent, at 9,344.61. The Standard & Poor&&9;s 500 Index (.SPX) was up 8.49 points, or 0.85 percent, at 1,003.24. The Nasdaq Composite Index (.IXIC) was up 16.13 points, or 0.82 percent, at 1,983.20.

(Reporting by Blaise Robinson; Editing by Mike Nesbit)

Stock futures signal gains; eyes on jobs data

Hot News: G20 to pledge stimulus until economic recovery assured

HOUSTON &<51; BP announced on Wednesday the discovery of what it characterized as a giant oil field several miles under the Gulf of Mexico, but it may take years to assess how much crude can actually be recovered.

The discovery should have no immediate effect on world oil or gasoline prices because it could take three years or more to begin extracting oil. Because the oil is so deep underwater and difficult to extract, the price of oil will need to be above $70 a barrel to make drilling profitable, energy analysts said.

Nevertheless, the discovery was another indication that the deep waters of the Gulf of Mexico are probably the most promising area in United States-controlled territory to bolster domestic oil production. The rise in gulf production in recent years, in large part because of BP&S217;s deep-water giant Thunder Horse field, has stabilized domestic production after almost two decades of yearly declines.

&S220;This is big,&S221; said Chris Ruppel, a senior energy analyst at Execution L.L.C., a London investment bank. &S220;It says we&S217;re seeing that improved technology is unlocking resources that were before either undiscovered or too costly to exploit because of economics.&S221;

The discovery, called the Tiber well, is about 250 miles southeast of Houston at a depth of more than 35,000 feet &<51; greater than the height of Mount Everest &<51; and well below the gulf floor.

It is part of a new frontier of exploration where oil companies are spending billions of dollars to find oil on the bottom of seas off the shores of Brazil and West Africa and boring through miles of rock, salt and packed sands.

The discoveries have been made possible by leaps in development of offshore drilling technology, computers and three-dimensional imaging that can pinpoint where the best reserves lie, and advanced mooring equipment to stabilize platforms in deep waters. BP officials say the oil and gas in the field is extremely hot and under intense pressure, requiring advanced well heads with thick steel and heavy insulation.

BP declined to estimate the size of the new reserve, but a company executive said that it could be bigger than the three billion barrels of oil equivalent, combining oil and gas stocks, thought to be in the recently discovered Kaskida field nearby. As the largest oil and gas producer in the gulf, BP produces 400,000 barrels a day. It has reserves of 18 billion barrels of oil equivalent in reserves globally free instant credit report.

Energy analysts say recovery rates can range widely, but that at least one billion barrels could be recoverable.

Fadel Gheit, a senior oil and gas analyst at Oppenheimer &&8; Company, said the new find means BP is &S220;gaining momentum over the rest of the guys&S221; in the gulf, and would reduce production costs in the adjacent Kaskida field since equipment could be shared in the two fields. He added, &S220;The gulf is where the action is and will remain the oil future for the United States.&S221;

BP said the well would be one of the deepest ever drilled by an oil company. The company will operate the well with a 62 percent interest. Petrobras and ConocoPhillips have also invested in the project.

&S220;The information we have gathered thus far is encouraging,&S221; a BP spokesman, Daren Beaudo, said, adding that one well has already been drilled in the area. &S220;But appraisal work will be required before we know the field&S217;s size and determine how it should be developed. It&S217;s the next wave of development of the ultra-deep-water Gulf of Mexico.&S221;

The Tiber well, along with the Kaskida discovery in 2006, &S220;support the continuing growth of our deep-water Gulf of Mexico business into the second half of the next decade,&S221; Andy Inglis, BP&S217;s chief executive for exploration and production, said in a statement.

The Gulf of Mexico accounts for about a quarter of the nation&S217;s oil production, and that percentage could rise even though many shallow-water wells are tapping out.

But the gulf is also a treacherous place to rely on oil because of hurricanes, which have been particularly fierce in recent years. Last year, the hurricanes Gustav and Ike shut down wells, damaged pipelines and forced companies to evacuate workers from production platforms for weeks, for an estimated loss of 63 million barrels of production.

Deep-water drilling in the gulf has produced some major challenges and delays. BP&S217;s Thunder Horse platform, the biggest in the gulf, which produces 300,000 barrels a day, was first drilled in 1999 but did not begin to produce for a decade because of a series of engineering problems.

BP Finds Giant Oil Field Deep in Gulf of Mexico

Commercial lenders long for the days of &S220;3-6-3&S221;. That&S217;s when bankers could borrow at 3 percent, lend at 6 percent and tee off on the golf course by 3 p.m. Now banks are trying to return to this pleasingly simple business model. Their first-half results show how hard it is.

British lenders, for instance. All of their net interest margins &<51; the difference between what they pay for funds and what they earn on loans &<51; slumped in the first half of 2009. The country&S217;s biggest bank, Royal Bank of Scotland, reported its net interest margin dropped from 2.1 percentage points to 1.7.

But it&S217;s not just a British problem. While the net interest margins of several large United States lenders improved slightly in the second quarter, a number of smaller banks, like United Western Bancorp and Pacific State Bancorp, experienced sharp year-over-year declines. Even Asian lenders like the Industrial Commercial Bank of China reported falling net interest margins.

The problem lies with low official interest rates. This hits banks&S217; liability spreads, the margin between base rates and the interest they pay on customer deposits. During the boom, liability spreads were where banks made their money. In Britain, base rates were about 4 percent and depositors received tiny returns, typically less than 0.5 percent. In the United States, the federal funds rate was 5.25 percent in 2006, while depositors earned about 2 percent.

On the other side of the balance sheet, boom-time margins on lending were held back by competition. The so-called asset spread, the margin between base rate and the rate charged on customer borrowing, was thin. In other words, 3-6-3 looked more like 0-5-3.

Now the opposite is true. Banks cannot cut deposit interest rates below zero, so plunging base rates have savaged liability spreads. True, lenders are repricing loans upward to account for the real risks of lending. But demand for credit is subdued.

This won&S217;t stay the same forever. Rising base rates will restore spreads on customer deposits, and asset spreads should stay high. But pressure from regulators to replace hot wholesale financing with more stable deposits will mean banks have to offer higher interest rates. Competition could erode the benefit of wider liability spreads. A return to the world of &S220;3-6-3&S221; could be some way off.

Fantastic Skeptics

Walt Disney has long inspired impressionable youngsters no fax cash advance. The entertainment company may now give some imaginative ideas to acquisitive chief executives. It didn&S217;t take any Spidey sense to think that the superhero creator Marvel would make a good fit with the Magic Kingdom. But the purchase&S217;s very logic just might spawn imitators.

The credit crisis has left the mergers and acquisitions market a wasteland, inhabited almost entirely by defensive and desperate deals. Even leftovers from better times, like Volkswagen&S217;s long courtship of Porsche, have failed to prevent merger activity from declining to almost Lilliputian dimensions.

The $4 billion Marvel purchase, along with the $5.5 billion oil industry purchase of BJ Services by Baker Hughes announced on the same day, suggests some rain may be falling in the deal makers&S217; desert as confidence in the equity and credit markets reaches boardrooms. True, three years ago, both transactions would have been dwarfed by bigger leveraged buyouts. But they rank in this year&S217;s top 10.

Stronger financial markets are apt to make other sellers feel more Hulkish and buyers less mousy. In a wobbly economy, companies may think about buying growth through acquisition. And with the Standard &&8; Poor&S217;s 500 index trading at a healthy 19 times estimated earnings, takeover targets may find the premiums on offer quite palatable.

When deal-making picks up, the first transactions are usually bargains. But the market recovery was too sharp for that. So it looks like the ride has sped on to sensible, if expensive, purchases. The Marvel acquisition requires something close to heroic profits to pay off for Disney&S217;s owners.

Disney investors didn&S217;t get caught up in the action &<51; they sold. The share price decline may be healthy. When merger momentum really gets going, companies splash out for takeovers that make little sense to anyone except the investment bankers involved. If Disney&S217;s deal confidence spreads, so too should shareholder skepticism. Otherwise fantasy figures could wind up costing real money.

GEORGE HAY and JEFFREY GOLDFARB

For more independent financial commentary and analysis, visit www.breakingviews.com.

Breakingviews.com: Thin Rate Spread Par for the Course

(Reuters) – EBay has signed a definitive agreement to sell Skype in a deal valuing the communications business at &&6;2.75 billion.

Here are the highlights. eBay:

* Says to receive approximately &&6;1.9 billion in cash; retain approximately 35 percent stake.

* Says buyer is investor group led by Silver Lake.

* Says buyer is investor group includes Index Ventures, Andreessen Horowitz, Canada Pension Plan investment board.

* Says transaction not subject to financing condition, expected to close in the fourth quarter of 2009 same day payday loans.

* Says is expected to get about &&6;1.9 billion cash upon completion of sale, note from buyer in principal amount of &&6;125 million.

* Says buyer will control an approximately 65 percent stake.

EBay to sell Skype for $2.75 billion