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A month ago, Business Week advertised a cover story essentially predicting that credit cards would be the next shoe to drop in the increasingly precarious American economy. “The party was paid for with credit cards,” read the magazines bold headline. “The hangover will be a whopper.”

The article, however, was not quite so bold. It had anecdotes about rising defaults and lower profits for the big credit card banks like JPMorgan Chase and Capital One. Consumers talked of facing suddenly higher interest rates and lower credit limits. Even bankruptcies are once again on the rise, despite the tougher bankruptcy law that the banking industry helped pass three years ago.

But the article did not really make the case that credit cards would be the next iteration in the credit crisis. The magazine pointed out that defaults were still well below the levels seen during the recessions of the early 1990s and 2001. As for what happens to consumers, wrote Business Week, “nobody really knows, since the U.S. hasnt faced a credit crunch of this magnitude in 25 years.” The article ended with a bank analyst saying, “Were in uncharted territory.” Well, yes.

I spent this week rummaging around the world of credit cards, trying to figure out if I could answer the question: Is credit card debt next? I found my own set of scary statistics, and talked to credible bears who feared the worst. And I watched, via the Web, a hearing in the U.S. Congress aimed at stopping some credit card abuses that have become rampant.

I think I have an answer, but it is one that surprised me: Credit card debt is probably not going to be the next ripple in this ongoing economic tidal wave. Which is not to say there are not problems, or that many credit card users are not going to feel pain. It is just that to a maddening degree, credit card companies actually do O.K. when the rest of us are suffering. As much as we dont like to think about it, that is when we most need the darned things and it is also when they can cause us the most trouble. It is also, I think, why Congress has chosen this particular moment to try to redress some of the industrys most egregious practices.

There are few consumer products that generate as much psychic conflict as credit cards. Americans, especially, both love and fear the fact that credit cards make it possible to buy things on the spur of the moment. Credit cards enable foolish impulse purchases, but they also make it possible to buy things on credit - furniture, television sets, refrigerators - that many people consider absolute necessities. Credit cards can help us get through crises, but they can also help create crises, if we are not careful.

Stuart Vyse, a psychology professor at Connecticut College and the author of a new book on the psychology of credit cards, says that “immediate choices are extremely powerful and difficult to resist.” He believes that credit cards have played a big role in the fact that the United States now has a negative savings rate.

Our inner conflict over credit cards has been there ever since cards first became popular in the 1960s. Church ministers used to denounce them from the pulpit as the devils plaything, yet credit card spending increased every year in the 1960s and 1970s. Back then, they were far more benign then than they are now, with high minimum payments, fairly low credit limits and interest rates that were kept low by state usury laws.

Now it is not so simple. During the past 15 years especially, credit card issuers have become among the most sophisticated businesses on earth, with proprietary research that tells them almost everything about their customers. They know how to extract the maximum profit from those customers; they have created all kinds of hidden fees, used teaser rates to draw in new customers and learned how to make money even if the customer never actually pays off the loan. They can tell from customer behavior when a borrower is becoming “higher risk” - and they have the contractual right to jack up interest rates to hedge that risk, even if the customer has not missed a payment.

Elizabeth Warren, a critic of credit cards who teaches at Harvard Law School, says that card contracts have become “a thicket of tricks and traps.”

When I called the American Bankers Association to talk about credit cards, I was told that the people I needed to talk to were all unavailable.

(02-17) 04:00 PST Anaheim —

Millions of Disneyland visitors will soon get to retrace the thoughts of others who lined up a half-century ago to see a home packed with mind-blowing gadgets expected in the future.

Disneyland’s original House of the Future, a pod-shaped, all-plastic dwelling, quickly seemed quaint and closed its doors after a decade, in 1967. Its oddities included hands-free phones, wall-size televisions and electric razors.

But Disney announced last week that it will soon open a new dwelling in Tomorrowland - this time in partnership with 21st century technology giants.

The 5,000-square-foot home, scheduled to open in May, will look like a suburban tract home outside. But inside it will feature hardware, software and touch-screen systems that could simplify everyday living.

Lights and thermostats will automatically adjust when people walk into a room. Closets will help pick out the right dress for a party. Countertops will be able to identify groceries set on them and make menu suggestions.

The $15 million Innoventions Dream Home is a collaboration of the Walt Disney Co., Microsoft Corp., Hewlett-Packard Co., softwaremaker LifeWare and home builder Taylor Morrison.

Visitors will experience the atmosphere of tomorrow by watching Disney actors playing a family of four preparing for a trip to China.

“It’s much different than a spiel that you would get at a trade show,” said Dave Miller, director of alliance development for Walt Disney Parks & Resorts. “We won’t get into the bits and the bytes. It will be about the digital lifestyle and how that lifestyle can help you.”

The actors will be in a flurry of cooking, packing and picture-taking designed to emphasize cutting-edge features in the home’s two bedrooms, living room, kitchen, dining room, study and backyard.

Much of the project will showcase a network that makes the house “smart” and follows family members from room to room - even adjusting artwork to preset personal preferences.

When a resident clicks a TV remote, for example, lights will dim, music will shut off and the shades will draw as the network realizes a movie is about to start.

The system will allow residents to transfer digital photos, videos and music among televisions and computers in different rooms at the click of a button. Other applications still in development could include touch-screen technology built into appliances, furniture and countertops, said Joe Belfiore, Microsoft’s vice president for entertainment services.

In the kitchen, for example, touchpad software on the countertop would be able to identify groceries and produce recipes and meal suggestions. Similar programs could turn a desktop into a computer screen, allowing residents to load photos, music or e-mail onto a cell phone by placing it on the desk.

Mirrors and closets could identify clothes and suggest matching outfits, complementary colors or track what apparel is at the cleaners or in the wash.

But the idea behind the house isn’t new for Microsoft - and some of the touchpad technology has already been displayed at trade shows and other venues, said Matt Rosoff, an analyst for the research group Directions on Microsoft.

Microsoft has a similar high-tech home at its Redmond, Wash., headquarters, and one at HP’s Palo Alto offices, he said. Neither is open to the public, however, and Microsoft has struggled to find a way to excite people about new products without retail stores.

“I don’t think Microsoft wants to get directly into retail, but it looks like these types of demonstrations are a way for it to get its brand in front of the public,” he said. “It’s an audience that’s there to be entertained and specifically coming to see these kinds of things.”

When it comes to aesthetics, designers decided to stray from the Jetsons-style House of the Future - an all-plastic cross design with four wing-shaped bays that appeared to float.

The new home will be made of wood and steel and finished in muted browns and beiges, said Sheryl Palmer, president and chief executive of Taylor Morrison.

“The 1950s home didn’t look like anything, anywhere. It was space-age and kind of cold,” she said. “We didn’t want the (new) home to intimidate the visitors. We want the house to be real accessible to our guests.” What the future was back then

A home in Disneyland’s Tomorrowland will show off technologies of the future. The park’s first House of the Future, built in 1957 and demolished in 1967, was supposed to envision domesticity in 1985. Here are a few of its gadgets:

– Plastic chairs and walls

– Hands-free telephone

– Wall-size TV

– Microwave oven

– Ultrasonic dishwasher

– Electric razor and toothbrush

– Intercoms with mini TV screens

– Sinks that adjusted for each user’s height

Source: Associated Press

BEIJING: Xing Houyuans advice to investors who seek her out is patient and practical: perform due diligence on any potential partner, clarify its ties to the government, and make sure you control any joint venture.

Her words would have sounded familiar to any firm trying to enter China in the 1980s and 1990s. But the nervous-looking man who had just shown Xing his proposal was Chinese, and he was looking to do business in Africa.

While Beijing has pushed aggressively to win major mining, oil and hydroelectric projects around the world, it is only now starting to pay attention to the smaller companies that supply everything from cement to explosives for these mega projects.

Xing is director of multinational business at the Chinese Academy of International Trade and Economic Cooperation, which is affiliated with Chinas Ministry of Commerce. The academy offers policy analysis, market information, due diligence reports and advice, originally for foreigners seeking to invest in China and now also for Chinese firms seeking to do business abroad.

Even though investment by small and mid-sized firms in Africa has taken off in the last six or seven years, the Chinese government only started to pay attention in 2006, when it hosted a gathering of African leaders in Beijing, Xing said.

While deals by big state firms get the most attention, smaller, private firms have been quicker to spot opportunities abroad, just as they have done inside China in the last decade. Oil, metals and telecoms are the most promising sectors in Africa, according to the Chinese Academy of Social Sciences, another government-backed research institute.

“Private companies are the most proactive in our own economy, and in many ways, the African market is suited to smaller players,” Xing said. “Small and private companies are more likely to find projects and partners that fit their capability.”

Last year, for the first time, Africa accounted for the greatest number of Chinese deals signed overseas. But the continents share of Chinas foreign investment actually shrank, to 3 percent in 2006 versus 7 percent in 2005, indicating a shift toward smaller deals.

To help these smaller businesses, the government organized a Sino-African investment conference in Beijing in December, where Xing dispensed advice to people like the executive from a small steel company in Tangshan, east of Beijing, who was looking into investing in an iron ore mine in Libya.

Beware of partners who cant deliver what they promise, Xing told the steel executive.

Other attendees ranged from the expected like bankers hoping to lend to successful projects, to the surprising. A representative from textile firm Hodo Group wanted information on mining projects in Madagascar.

China is also focusing on what it calls “development zones” in areas where Chinese investment is concentrated in Africa, where it aims to ease small and medium companies access to credit and government channels.

“We are setting up the zones to help them access resources, and find and get access to local governments, partners and projects that are suitable to their size,” Xing said.

“The governments there like it because they have an intermediary bigger than just that one company and we like it because we can keep track of our companies, especially if there is a problem.”

Keeping track of these smaller players, which are becoming the face of China in Africa, is increasingly important to maintaining Beijings effort to secure resources in Africa without exploiting its people.

While Zambias Chambishi copper mine, operated by China Nonferrous Metal Mining Group, has seen disputes over wages and safety, one of the worst accidents was not in the mine itself but at an explosives supplier, Beijing General Research Institute of Mining and Metallurgy, where an explosion killed 46 workers in 2005.

And some Chinese contractors who have won infrastructure deals with the lowest bids have come in late and well over budget because they failed to anticipate safety and labor regulations.

“In a broad sense, as Chinese companies flood into Africa, there is a big risk of disorderliness. Theres a big risk that unfavorable incidents could turn hearts and minds against China,” Xing said.

Beijing has designated Zambias Copper Belt, where the Chambishi mine has attracted a cluster of companies in service and secondary industries, as its first development zone in Africa. Chinese companies have signed deals to invest a total of $900 million in the region, according to the Zambian government.

“Its a huge and complex project and it has the potential to be disorderly. Instead we decided to make it a model for how Chinese can participate in the industrialization of Africa,” Xing said.

Sunday Times

UK tycoon Joe Lewis loses $800m
Joe Lewis, the secretive British billionaire, has lost an estimated $800m in the collapse of the American investment bank Bear Stearns. The 71-year-old currency trading tycoon, who runs his empire from the Bahamas, holds almost 10% of the bank’s shares. Bear’s shares fell 40% on Friday to $27, after it secured a 28-day credit lifeline to stave off collapse.

Terence Conran rows with ad giant Havas
The designer Sir Terence Conran is at loggerheads with the French advertising giant Havas over the right to use his name. Havas, headed by advertising magnate Vincent Bollorй, secured the rights to use the Conran Design Group (CDG) brand in 1990 during the break-up of Conran’s Storehouse group. Havas wants to increase the scale of CDG by opening overseas offices and raising its profile.

in hotel merger
The leisure group Whitbread has been holding secret talks to merge its Premier Inn budget-hotel business with the rival Travelodge chain in a move that would create a 3bn hospitality giant.

and in secret plea to Downing Street
Britain’s largest aerospace and defence groups, Rolls-Royce and BAE Systems, have asked the government to break with tradition and let them appoint a foreign chief executive. Simon Robertson, chairman of Rolls-Royce, and Dick Olver, chairman of BAE, are holding talks with Downing Street and the Ministry of Defence.

Sunday Telegraph

Goldman Sachs to reveal $3bn hit
Goldman Sachs, Wall Street’s most powerful investment bank, will this week announce asset writedowns worth about $3bn (1.5bn), its biggest jolt to date from the crisis threatening to engulf the world’s financial markets.Goldman, which has largely thrived amid the turmoil elsewhere on Wall Street, is expected to report a fall in first-quarter earnings of about 50%. The writedown will underline how the financial turbulence is now affecting even the most stellar performers.

Countrywide in a state over distressed debt
Apollo Management, the American private equity group, could be forced to pump millions of pounds of cash into Countrywide, Britain’s biggest chain of estate agents, in a bid to shore up its investment in the group.

Dubai aims new fund at the West
Dubai, the oil-rich Gulf state, has launched a new multi-billion pound as it looks to extend its reach in the global economy. The fund, which will be chaired by Sheikh Mohammed bin Rashid Al Maktoum, the emirate’s ruler, was officially created just eight days ago.

drills for oil broker Primex
Tullett Prebon, the interdealer broker headed by the City tycoon Terry Smith, will tomorrow unveil a deal to buy one of the world’s largest oil broking firms.

{I:13}

The Observer

Fears grow for ailing dollar
Pressure is mounting on the world’s central banks to take concerted action to halt the slide in the dollar before it wreaks havoc on the European and Japanese economies, write Heather Stewart and Nick Mathiason. The euro hit a record high at near $1.57 on Friday, and the dollar fell below the 100 mark against the yen for the first time since 1995.

to write off half of last year’s reserves
Shell is to slash reserve figures from last year by more than half, taking about 1.3 billion barrels of oil off its books, equivalent to about a year’s production. Chief executive Jeroen van der Veer is also expected to say that production growth will be zero or near zero until 2010 when he gives the oil giant’s annual strategy presentation tomorrow.

‘Smart meters’ scheme for UK could cost up to 20bn
Plans to install a ’smart meter’ in every UK home will cost up to 20bn, the government will announce this month, four times energy companies’ estimates. Officials and campaigners have also warned that companies will pass on the costs of their installation to consumers by hiking utility bills again.

Independent on Sunday

Wall Street fears for next Great Depression
Wall Street is bracing itself for another week of roller-coaster trading after more than $300bn (150bn) was wiped off the US equity markets on Friday following the emergency funding package put together by the Federal Reserve and JPMorgan Chase to rescue Bear Stearns.

Private equity goes to school as Sovereign wins $75m auction
UK private equity group Sovereign Capital is thought to have won the auction to buy World Class Learning Schools, an educational firm that owns the British Schools in America chain, for around $75m (37.5m).

Insurance broker woos bids for 150m sale
The Oxfordshire-based broker A-Plan Insurance is believed to be courting a raft of private equity bidders with an auction for the company expected to fetch its owners in excess of 150m.

Windfall for boss’s family
Gordon Horsfield, the outgoing chairman of power group Drax, and his children stand to make nearly 7m out of their shareholdings over the next four years.

In a world of escalating commodity prices, some companies have gained an edge by controlling their expenses and planning ahead.

And that long-range thinking has benefited their bottom line and their share prices.

Consider Flowers Foods. () The Georgia-based company makes a wide variety of fresh and frozen baked goods products such as bread, rolls and snack cakes. It sells them under brand names that include Nature’s Own, Cobblestone Mill and Bluebird.

In a report out in late January, analysts from D.A. Davidson & Co. noted Flowers “is somewhat unique in our universe of food coverage in that it is dealing proactively with the huge cost increases buffeting the food sector.

“Flowers proactively locks in coverage on nearly all of its food and energy commodity exposure for the year ahead,” the analysts continued. “And then, knowing what the number is, it proactively raises prices ahead of the year so that as we begin 2008 it will be in a position to have protected its margin.”

That type of forethought seems to have helped Flowers keep its profit healthy. Its earnings growth accelerated the past two quarters, climbing from 14% to 33% to 44%.

Its sales growth has been more modest, ranging from 7% to 8% the past four quarters.

Its pretax margin has been trending higher. It reached 7.5% for 2007, the best since it ended a string of losses in 2002.

The company’s stock nearly tripled in a little less than three years. In recent months it has found support around its 40-week moving average and may be forming a base.

to view an Excel spreadsheet of the screen below with expanded data.

Long-Term Investor Screen

Symbol Company Name EPS
Stability
Rating EPS
Rating Additional
Research
Covance Inc 2 89
L 3 Communications Hldgs 2 86
Becton Dickinson & Co 2 77
Genzyme Corp 3 89
Praxair Inc 3 86
Bard C R Inc 3 83
Amphenol Corp Cl A 4 94
Ametek Inc 4 88
Emerson Electric Co 4 87
Stericycle Inc 4 86
Northern Trust Corp 4 86
Idexx Laboratories Inc 4 81
Flir Systems Inc 5 88
General Dynamics Corp 5 85
Biogen Idec Inc 6 93
Hewlett-Packard Co 6 92
Fastenal Co 6 89
C H Robinson Worldwide 6 89
Smith International 7 94
Harsco Corp 7 92
Thermo Fisher Scientific 7 92
Blackrock Inc 9 97
Schlumberger Ltd 9 95
Honeywell Intl Inc 9 77
Halliburton Company 10 87
Exxon Mobil Corp 10 83
Gamestop Corp Cl A 11 97
Weatherford Intl Ltd 11 95
Parker-Hannifin Corp 11 88
General Cable Corp 12 99
Denbury Resources Inc 12 93
Monsanto Co 12 88
Mastercard Inc Cl A 14 97
Range Resources Corp 18 98
National Oilwell Varco 20 98

This screen excludes stocks under $25 and average daily volume less than 350,000 shares. Sorted by EPS Stability Rating and then EPS Rating. to view an Excel spreadsheet of this screen with expanded data. Your computer should have Excel 5.0 or a later version to view the spreadsheet. Data as of Thursday, March 13, 2008 1:50 p.m. Pacific time.