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Warren addresses New England business group

Written By Unknown on Senin, 25 Februari 2013 | 23.16

BOSTON — U.S. Sen. Elizabeth Warren says she does not know at this point what can be done to prevent what she calls a "mindless across the board approach" to cutting federal spending.

The Massachusetts Democrat was asked during a breakfast meeting of business leaders in Boston on Monday about the $85 billion in automatic spending cuts scheduled to take effect Friday unless a compromise is reached in Washington.

Warren told the New England Council she believes President Barack Obama has offered a "balanced" plan that calls for revenue increases along with targeted cuts. But she said she did not know at this point whether a deal could be struck with reluctant Republicans in Congress.

Massachusetts would stand to lose millions in funding for education, medical research, defense-related work and other programs.


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Horse meat found in Ikea's Swedish meatballs

STOCKHOLM — Swedish furniture giant Ikea was drawn into Europe's widening food labeling scandal Monday as authorities said they had detected horse meat in frozen meatballs labeled as beef and pork and sold in 13 countries across the continent.

The Czech State Veterinary Administration said that horse meat was found in one-kilogram (2.2 pound) packs of frozen meatballs made in Sweden and shipped to the Czech Republic for sale in Ikea stores there. A total of 760 kilograms (1,675 pounds) of the meatballs were stopped from reaching the shelves.

Ikea spokeswoman Ylva Magnusson said meatballs from the same batch had gone out to Slovakia, Hungary, France, Britain, Portugal, the Netherlands, Belgium, Spain, Italy, Greece, Cyprus and Ireland. Magnusson said meatballs from that batch were taken off the shelves in Ikea stores in all those countries. Other shipments of meatballs were not affected, including to the U.S., even though they all come from the same Swedish supplier, Magnusson said.

"Our global recommendation is to not recall or stop selling meatballs," she said.

However, the company's Swedish branch announced on its Facebook page that it won't sell or serve any meatballs at its stores in Sweden out of concern for "potential worries among our customers."

Magnusson said Ikea saw no reason to extend that guidance globally. She said Ikea was conducting its own tests of the affected batch "to validate" the Czech results. She also said that two weeks ago Ikea tested a range of frozen food products, including meatballs, and found no traces of horse meat.

"But, of course, we take the tests that Czech authorities have done very seriously," Magnusson said. "We don't tolerate any other ingredients than those on the label."

European authorities have said the horse meat found in lasagna and other prepared dishes is a case of fraudulent labeling but does not pose a health risk.

Ikea's trademark blue-and-yellow stores typically feature a restaurant that serves traditional Swedish food, including meatballs served with boiled or mashed potatoes, gravy and lingonberry jam. Meatballs — "Kottbullar" in Swedish — are also available in the frozen foods section.

Magnusson said all of the meatballs are supplied by Gunnar Dafgard AB, a family-owned frozen foods company in southwestern Sweden. Calls to the company were not immediately returned, but it posted a brief statement on its website saying "the batch in question has been blocked and we are investigating the situation."

Sweden's food safety authority said it wasn't taking any action but was waiting for Czech authorities to specify the quantity of horsemeat detected.

"If it's less than 1 percent it could mean that they handled horsemeat at the same facility. If it's more, we assess that it's been mixed into the product," said Karin Cerenius of Sweden's National Food Agency.

European Union officials were meeting Monday to discuss tougher food labeling rules after the discovery of horse meat in a range of frozen supermarket meals such as burgers and lasagna that were supposed to contain beef or pork.

The Czech authority also announced Monday that it found horse meat in beef burgers imported from Poland during random tests of food products.

Spanish authorities, meanwhile, announced that traces of horse meat were found in a beef cannelloni product by one of the brands of Nestle, a Switzerland-based food giant.

In a statement on its website, Nestle Spain said that after carrying out tests on meat supplied to its factories in Spain it was withdrawing six "La Cocinera" products and one "Buitoni" product from store shelves.

It said it was taking the action after the traces of horse meat were found in beef bought from a supplier in central Spain. Nestle said it was taking legal action against the company, adding that the products would be replaced by ones with 100 percent beef.

Some EU member states are pressing for tougher labeling rules to regain consumer confidence.

The 27-nation bloc must agree on binding origin disclosures for food product ingredients, starting with a better labeling of meat products, German Agriculture Minister Ilse Aigner said.

"Consumers have every right to the greatest-possible transparency," she insisted.

Austria backs the German initiative; but others like Ireland say existing rules are sufficient although Europe-wide controls must be strengthened to address the problem of fraudulent labeling.

The scandal has created a split between nations like Britain which see further rules as a protectionist hindrance of free trade under the bloc's single market, and those calling for tougher regulation.

Processed food products — a business segment with traditionally low margins that often leads producers to hunt for the cheapest suppliers — often contain ingredients from multiple suppliers in different countries, who themselves at times subcontract production to others, making it hard to monitor every link in the production chain.

Standardized DNA checks with meat suppliers and more stringent labeling rules will add costs that producers will most likely hand down to consumers, making food more expensive.

The scandal began in Ireland in mid-January when the country announced the results of its first-ever DNA tests on beef products. It tested frozen beef burgers taken from store shelves and found that more than a third of brands at five supermarkets contained at least a trace of horse. The sample of one brand sold by British supermarket kingpin Tesco was more than a quarter horse.

Such discoveries have spread like wildfire across Europe as governments, supermarkets, meat traders and processors began their own DNA testing of products labeled beef and have been forced to withdraw tens of millions of products from store shelves.

More than a dozen nations have detected horse flesh in processed products such as factory-made burger patties, lasagnas, meat pies and meat-filled pastas. The investigations have been complicated by elaborate supply chains involving multiple cross-border middlemen.

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Associated Press writers Juergen Baetz in Brussels, Karel Janicek in Prague and Ciaran Giles in Madrid contributed to this report.


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Feds to probe Ford cars and SUVs for stalling

DETROIT — The National Highway Traffic Safety Administration says it will investigate problems with stalling or surging engines in nearly 725,000 Ford cars and SUVs.

The probe affects Ford Escape and Mercury Mariner SUVs and Ford Fusion and Mercury Milan sedans from the 2009 through 2011 model years.

The vehicles can unexpectedly go into "limp home mode" at reduced power, the agency said in documents posted Monday on its website. NHTSA and Ford have received almost 1,500 complaints about the problem. There were three crashes and one injury.

NHTSA began looking into the cars and SUVs after getting a request from the North Carolina Consumers Council last year. Nonprofit safety groups and consumers can petition the agency to investigate vehicle problems.

The cars and SUVs haven't been recalled, but the investigation could lead to a recall.

The Fusion and Milan are nearly identical cars with the same engines, as are the Escape and Mariner. Ford scrapped the Mercury brand in 2010.

The North Carolina organization said it received two complaints about 2009 Escapes that had been diagnosed with throttles either stuck open or closed. The group said that owners reported repeated stalling and surging.

Ford told NHTSA that vehicles made from June 22, 2009, to Oct. 15, 2009, may have faulty printed circuit boards that control the throttles. Ford and its throttle body supplier, Delphi Corp., changed the circuit board manufacturing process after Oct. 15, 2009. That resolved the problem, NHTSA said in documents posted Monday on its website.

NHTSA said it analyzed 123 complaints about the cars or SUVs going into what's known as limp mode, in which vehicle speed was limited to 20 mph or 900 engine revolutions per minute. Drivers may interpret the limp mode as stalling, even though the engines still move the vehicles, the agency said. Vehicles usually go into limp mode when computers detect an engine problem. This allows drivers to get to a safe place while protecting the engine from damage.

Power surges appear to happen when the engine revolutions fluctuate to prevent stalling during limp mode, the agency said.

But even though Ford said the throttle problem with the Escape was resolved with the manufacturing change, NHTSA still decided to investigate vehicles from the 2010 and 2011 model years. The agency says it received 59 complaints of engine stalling in 2010 and 2011 Fusions. Eighty percent of the complaints were received starting in March of 2012, showing an increasing trend, the agency said.

In addition, Ford has received 27,505 warranty claims in which the throttle bodies were repaired or replaced, NHTSA said.

Ford said Monday that it's cooperating with NHTSA on the investigation.

Its shares rose 4 cents to $12.52 in morning trading. They have traded in a 52-week range of $8.82 to $14.39.

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Markets buoyant on Italian election polls

LONDON — Markets roared ahead Monday as the momentum that has marked 2013 re-established itself amid early indications that the center-left will be able to form a government in Italy.

Early polls out of Italy show that the coalition led by Pier Luigi Bersani has claimed the most votes in the election. Bersani has promised to meet current targets and pursue more economic reforms.

If the polls are correct, then the center-left coalition should be in a position to form a government, possibly in conjunction with Mario Monti, the former technocratic premier who has been widely credited in the markets for dousing the country's debt crisis in the past year.

Andrew Wilkinson, chief economic strategist at Miller Tabak & Co., said that prospect was "probably the most market-friendly outcome."

Italian stocks, already sharply higher, pushed further ahead, to trade up 3.4 percent, while the yield on the country's 10-year bond dropped 0.21 percentage points to 4.18 percent. That is around 3 percentage points down from about a year ago, when concerns about the country's debt were at their height.

The advance wasn't just confined to Italy. Germany's DAX was up 2.2 percent at 7,831 while the CAC-40 in France was 1.7 percent higher at 3,768. The FTSE 100 index of leading British shares rose 0.7 percent to 6,380 despite last Friday's downgrade of the country's credit rating by Moody's.

The euro was buoyant too, trading 0.4 percent higher at $1.3270.

Italy's stability is hugely important for the future of the euro currency. Of the 17 European Union countries that use the euro, it has the second-highest debt burden as a proportion of its annual gross domestic product. Only Greece's is higher.

Considered to be too big to bail out, its future in the single currency bloc, at least as far as markets are concerned, is to enact economic reforms and tight budgetary controls. Monti's government was supported in the markets even though he personally saw his popularity falter amid recession and rising unemployment.

"If Italy is to stay out of the eurozone crisis permanently, decisive action to solve the country's long-standing economic problems will need to be taken quickly," said Ben May, European economist at Capital Economics.

Full results are not expected until late Monday at the earliest and it wouldn't take much movement from the opinion polls for a solid government majority to turn into a fragile one — a scenario that could trigger renewed concerns in the markets.

A convincing victory by conservative candidate Nicos Anastasiades in Cyprus' presidential election also helped ease concerns over the future of the euro. Cyprus uses the euro and has struggled to agree a bailout deal with international creditors. Anastasiades indicated he would pursue a deal soon.

U.S. stocks also opened solidly, with the Dow Jones industrial average up 0.5 percent at 14,067 soon after the open and the broader S&P 500 index up 0.5 percent to 1,523. Both indexes are near five-year highs.

It's a particularly busy week on the U.S. economic news front, which could go a long way to determining whether the Dow Jones index strikes a new record high.

Investors are awaiting a raft of data as well as remarks from Federal Reserve chairman Ben Bernanke. Last week, the minutes from the Fed's last policy meeting showed concern over the central bank's monetary stimulus, stoking jitters in the markets. Meanwhile, lawmakers in Congress are also grappling over the budget again.

Monday's rebound started in Asia, with Japanese stocks surging on reports the prime minister's pick for central bank governor will be a strong advocate of loose monetary policy aimed at reviving the moribund economy.

The Nikkei 225 surged 2.4 percent to end at 11,662.52 while the yen dropped further against the dollar after local news outlets reported that Prime Minister Shinzo Abe was preparing to nominate Haruhiko Kuroda as the next governor of the Bank of Japan.

Since the Asian session, the yen has recovered and the dollar was trading 0.3 percent lower at 94.08 yen. Earlier it had risen to 94.76 yen and near two and a half year highs.

Over the past few weeks, the yen has fallen by around 20 percent and that's helped the Nikkei gain around 30 percent.

Elsewhere in Asia, Hong Kong's Hang Seng rose 0.2 percent to close at 22,820.08 while South Korea's Kospi ended 0.5 percent lower at 2,009.52.

In mainland China, the Shanghai Composite Index climbed 0.5 percent to close at 2,325.82 and the smaller Shenzhen Composite Index ended 0.8 percent higher at 955.79.

Oil prices tracked equities higher with the benchmark New York rate up 48 cents at $93.61 a barrel.


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High-stakes trial begins for 2010 Gulf oil spill

NEW ORLEANS — A high-stakes trial started Monday to assign blame and help figure out exactly how much more BP and other companies should pay for the nation's worst offshore oil spill.

Attorney Jim Roy, who represents individuals and businesses hurt by the spill, said BP executives applied "huge financial pressure" on its drilling managers to "cut costs and rush the job" before the blowout of its Macondo well triggered an explosion that killed 11 workers and spawned the massive spill. The project was more than $50 million over budget and behind schedule at the time of the blowout, Roy said.

"BP repeatedly chose speed over safety," Roy said, quoting from a report by an expert who may testify later.

U.S. District Judge Carl Barbier said he would hear several hours of opening statements Monday and the first witness would take the stand Tuesday. Unless a settlement is reached, the judge, not a jury, ultimately will decide months from now how much more money BP PLC and its partners on the ill-fated drilling project owe for their roles in the 2010 environmental catastrophe in the Gulf of Mexico.

Roy said the spill also resulted from rig owner Transocean Ltd.'s "woeful" safety culture. He said the owner of the Deepwater Horizon rig failed to properly train its crew, calling it a "chronic problem allowed by Transocean management to go uncorrected."

"The workforce was not always aware of the hazards they were exposed to," Roy said. "They don't know what they don't know."

Transocean and BP will make its case later Monday.

BP has said it already has racked up more than $24 billion in spill-related expenses and has estimated it will pay a total of $42 billion to fully resolve its liability for the disaster that killed 11 workers and spewed millions of gallons of oil.

But the trial attorneys for the federal government, Gulf states and private plaintiffs hope to convince the judge that the company is liable for much more.

With billions of dollars on the line, the companies and their courtroom adversaries have spared no expense in preparing for a trial that could last several months. Hundreds of attorneys have worked on the case, generating roughly 90 million pages of documents, logging nearly 9,000 docket entries and taking more than 300 depositions of witnesses who could testify at trial.

"In terms of sheer dollar amounts and public attention, this is one of the most complex and massive disputes ever faced by the courts," said Fordham University law professor Howard Erichson, an expert in complex litigation.

Barbier has promised he won't let the case drag on for years as has the litigation over the 1989 Exxon Valdez spill, which still hasn't been completely resolved. He encouraged settlement talks that already have resolved billions of dollars in spill-related claims.

"Judge Barbier has managed the case actively and moved it along toward trial pretty quickly," Erichson said.

In December, Barbier gave final approval to a settlement between BP and Plaintiffs' Steering Committee lawyers representing Gulf Coast businesses and residents who claim the spill cost them money. BP estimates it will pay roughly $8.5 billion to resolve tens of thousands of these claims, but the deal doesn't have a cap.

BP resolved a Justice Department criminal probe by agreeing to plead guilty to manslaughter and other charges and pay $4 billion in criminal penalties. Transocean reached a separate settlement with the federal government, pleading guilty to a misdemeanor charge and agreeing to pay $1.4 billion in criminal and civil penalties.

But there's plenty left for the lawyers to argue about at trial, given that the federal government and Gulf states haven't resolved civil claims against the company that could be worth more than $20 billion.

One of the biggest questions facing Barbier will be to determine if BP was guilty of gross negligence. The Justice Department and private plaintiffs' attorneys have said they would prove BP did.

Under the Clean Water Act, which is designed to punish companies and prevent future spills, a polluter pays a minimum of $1,100 per barrel of spilled oil; the fines nearly quadruple for companies found guilty of grossly negligent behavior.

BP, meanwhile, argues the federal government's estimate of how much oil spewed from the well — more than 200 million gallons — is inflated by at least 20 percent. Clean Water Act penalties are based on how many barrels of oil spilled.

Barbier plans to hold the trial in at least two phases and may issue partial rulings at the end of each. The first phase, which could last three months, is designed to determine what caused the blowout and assign percentages of blame to the companies involved. The second phase will address efforts to stop the flow of oil from the well and aims to determine how much crude spilled into the Gulf.

The trial originally was scheduled to start a year ago, but Barbier postponed it to allow BP to wrap up its settlement with the Plaintiffs' Steering Committee.

The Deepwater Horizon rig blew up 50 miles off Louisiana on April 20, 2010, in an explosion that investigators blamed on time-saving, cost-cutting decisions by BP and its drilling partners in cementing the well shaft.

Following several failed attempts that introduced the American public to such industry terms as "top kill" and "junk shot," BP finally capped the well on the sea floor after more than 85 days.

By then, the well had spewed an estimated 172 million gallons of crude into the Gulf, fouling marshes and beaches, killing wildlife and closing vast areas to fishing.

Scientists warn that the spill's full effect on the Gulf food chain may not be known for years. But they have reported oil-coated coral reefs that were dying, and fish have been showing up in nets with lesions and illnesses that biologists fear could be oil-related. Oil churned up by storms could be washing up for years.

A series of government investigations has exhaustively documented the mistakes that led to the blowout, spreading the blame among the companies.

Alabama Attorney General Luther Strange said witnesses scheduled to testify at trial will reveal new information about the cause of the disaster.

"I think you're going to learn a lot, particularly about the culture that existed at BP and their priorities," Strange said.


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Cubist acquires right to buy pain treatment maker Adynxx

Cubist Pharmaceuticals Inc. of Lexington said today it has the exclusive right to acquire Adynxx, a San Francisco-based clinical stage pharmaceutical company developing a drug designed to prevent chronic pain post-surgery.

Adynxx, a privately held company, is currently in the midst of a second study of the drug, AYX1, which will assess the ability of a single administration of the drug at the time of unilateral knee arthroplasty, officials said.

"We are impressed with the pre-clinical and Phase 1 results to date of AYX1 and believe this program has the potential to become an important, new therapy that may help patients to address the significant issue of post-surgical and chronic pain," said Steven Gilman, executive vice president of research and development and chief scientific officer of Cubist. "We are pleased to continue to advance AYX1 through this mutually beneficial agreement which provides Cubist exclusive rights to acquire Adynxx in the future."

Cubist will pay Adynxx to secure the option right, pursuant to the agreement, and will fund the consideration with cash on hand, officials said. If Cubist exercises its right to acquire Adynxx, the former will make additional payments to the Adynxx stockholders.


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Sen. Warren calls automatic budget cuts ‘just plain dumb’

Sen. Warren calls automatic budget cuts 'just plain dumb'

Sen. Elizabeth Warren called the automatic cuts in federal spending slated to take effect Friday "just plain dumb," but the Bay State's newly minted, but still senior, senator said it's largely up to congressional leaders to reach a compromise.

"The sequester negotiations are mostly with the leadership," she told reporters this morning before addressing the New England Council. "We all talk, but it's not happening with every Republican reaching out to every Democrat. Right now, the White House, the leaders in the Senate and the House of Representatives are in negotiations."

Warren called the $85 billion in automatic cuts set to kick in Friday a "blunt instrument."

"We're out there trying to make clear this means children kicked out of Head Start programs. This means teachers that are potentially laid off. This means fewer air traffic controllers," she said. "It means here in Massachusetts fewer dollars going into research. That may sound way off and not really important, but that means jobs right here in Massachusetts. It means cuts in the defense industry, not smart cuts, cuts we ought to be making, getting rid of fat," she said. "It just means blunt, across-the-board cuts. It's just an irresponsible way."

Warren said she hopes congressional leaders will pick up on the president's offer to cut spending 50 percent by closing corporate loopholes, and 50 percent by making targeted cuts, including in agricultural subsidies and military spending.


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Avid Technology postpones earnings release citing ‘accounting’ issues

Avid Technology Inc. of Burlington said today it is postponing its fourth quarter 2012 earnings release and investor conference call, previously scheduled for tomorrow.

The digital audio and video technology maker said the company needs additional time "to evaluate its current and historical accounting treatment related to bug fixes, upgrades and enhancements to certain products which the company has provided to certain customers."

"The need to evaluate the accounting treatment arose during the company's normal review of its financial results for the fourth quarter and full year 2012," Avid said in a statement. "The company is working diligently to complete its evaluation, but is currently unable to estimate when the evaluation will be completed."

In July, Avid said it would lay off about 20 percent of its permanent employee base as the company "streamlines operations" and sells various product lines.


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BTI Systems raises $10M from Bain Capital Ventures, others

BTI Systems, a Canadian software company that helps content and service providers capitalize on trends in cloud services, mobility and Internet video, said today it has secured $10 million in new funding led by Bain Capital Ventures.

The third round of funding also included existing investors BDC, Covington Capital and GrowthWorks. BTI said it has raised more than $33 million since the first quarter of 2011.

The company also unveiled its newest offering today, the BTI Intelligent Cloud Connect, which enables service providers to "overcome the performance bottlenecks created by the exponential growth of inter-data center network traffic resulting from the demand for cloud services," officials said, adding the new funding is being used to scale BTI's operations and speed up the delivery of the product.

The company has also appointed Thomas Nolette as senior vice president of global operations. Nolette previously served as vice president of operations at Crossbeam Systems.

BTI added it is also expanding its presence on the West Coast with a new office in Palo Alto, Calif.


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EMD Serono’s brain tumor drug disappoints in clinical trial

EMD Serono Inc., a Rockland-based subsidiary of Merck KGaA of Germany, said today that a third trial for its investigational cancer drug cilengitide did not meet its primary endpoint in patients with newly diagnosed glioblastoma.

The trial was planned and is being conducted in partnership with the European Organization for Research and Treatment of Cancer, officials said, adding detailed trial results will be submitted for presentation at the American Society of Clinical Oncology 2013 Annual Meeting and publication in a peer-reviewed journal.

Patient safety in the trial was monitored frequently by an independent data-monitoring committee and no new or unexpected safety concerns were noted, officials said. In prior clinical studies, the most frequently reported adverse events the investigators considered to be attributed to cilengitide included nausea and fatigue.

Glioblastoma is the most common and deadliest of malignant primary brain tumors in adults.

"The results ... are disappointing, especially for people who are fighting this devastating and difficult to treat cancer. Over the coming months, we intend to analyze the data sets and ensure appropriate public disclosure of key information that will serve future scientific research related to targeted therapies in oncology," said Dr. Annalisa Jenkins, head of global drug development for Merck Serono, in a statement. "We remain committed to advancing our pipeline and developing new treatment options in oncology for patients with high medical need."


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