Washed It!

Newsweek, a 77-year-old magazine that once helped set the national news agenda, is linking its future with a startup website just two years in the making.

Three months after agreeing to buy the money-losing weekly for just $1, audio equipment magnate Sidney Harman has completed on-again, off-again negotiations to merge it with The Daily Beast.

It is not just a marriage between old and new media. Harman will also be getting as an editor for Newsweek Tina Brown, who led both Vanity Fair and The New Yorker before deciding to give Web publishing a try.

Brown said in a posting Thursday on The Daily Beast that the deal was settled Tuesday evening “with a coffee-mug toast between all parties.”

It will create a joint venture called The Newsweek Daily Beast Company. Brown, who was a co-founder of The Daily Beast, will be editor-in-chief.

Harman and Barry Diller, who backs The Daily Beast through his media conglomerate, IAC/InterActiveCorp., will serve as directors on the venture’s board.

Neither side disclosed how they will split up revenue that the company generates.

Although Newsweek has faced a steady decline in both readership and advertising revenue, print magazines still generally take in far more money than their Web-only counterparts.

Even so, the latest tie-up is just one of several instances lately in which Web and print publications have decided they can do better teaming up than remaining apart.

Another struggling but still prominent magazine, Forbes, bought out a Web operation called True/Slant over the summer. Like The Daily Beast, the site was also run by a print veteran, Lewis Dvorkin, who is now remaking Forbes as a more Web-centric company.

Even the staid New York Times is beginning to partner with local startups to expand its coverage at a time of shrinking resources, most recently striking a deal with the nonprofit Texas Tribune.

In the case of The Daily Beast and Newsweek, Brown wrote that it will give her site “the versatility of being able to develop ideas and investigations that require a different narrative pace suited to the medium of print.”

She added that “for Newsweek, The Daily Beast is a thriving front line of breaking news and commentary that will raise the profile of the magazine’s bylines and quicken the pace of a great magazine’s revival.”

Newsweek is certainly in need of a turnaround. The Washington Post Co., which had owned the weekly since 1961, put it up for sale back in May, conceding that it did not see a way to make the magazine profitable. It racked up $30 million in losses in 2009 and is on track to lose more money this year.

Since news of the sale, some of its most prominent talent, including columnist Fareed Zakaria and senior Washington correspondent Howard Fineman, have defected to other publications.

Brown pointed out some of The Daily Beast’s own brand-name contributors, who may be able to help shore up the magazine’s ranks. They include Howard Kurtz, The Washington Post’s former media columnist, and Peter Beinart, who came from The New Republic.

Harman, the 92-year-old founder of audio equipment company Harman International Industries Inc., said in a statement, “In an admittedly challenging time, this merger provides the ideal combination of established journalism authority and bright, bristling website savvy.”
Daily Beast, Newsweek reach deal to join

After a survey of U.S. troops and their families, a Pentagon study group has concluded that the military can lift the ban on gays serving openly in uniform with only minimal and isolated incidents of risk to current war efforts, the Washington Post reported Wednesday.

The newspaper quoted two people familiar with a draft of the study, which is to be completed for Defense Secretary Robert Gates by Dec. 1., but with an uncertain public release date.

More than 70% of respondents to a survey sent to active-duty and reserve troops over the summer said the effect of repealing the military’s “don’t ask, don’t tell” policy on gays and lesbians in uniform would be positive, mixed or nonexistent, the sources told the newspaper.

The newspaper said the survey results have led the report’s authors to conclude that objections to openly gay colleagues would drop once troops were able to live and serve alongside them.

The long, detailed and nuanced report will almost certainly be used by opponents and supporters of repeal legislation to bolster their positions in what is likely to be a heated and partisan congressional debate. And it is expected to reveal challenges the services could face in overturning the long-held policy, including overcoming fierce opposition in some parts of the force — primarily in the Army and Marine Corps — even if they represent a minority.

The Marine Corps commandant, Gen. James Amos, last week said that with forces fighting in Afghanistan and still deployed in Iraq, now was the wrong time to lift the ban.

“This is not a social thing. This is combat effectiveness,” Amos said.

That brought a mild rebuke from Joint Chiefs of Staff Chairman Mike Mullen, who said he was surprised that Amos had spoken publicly. He said the heads of the military services had committed to “look at the data and then make our recommendations privately.”

The Post said Gates, Mullen and uniformed and civilian leaders of the four military branches received copies of the draft report late last week.

The document totaled about 370 pages and is divided into two sections, the newspaper said. The first section explores whether repealing “don’t ask, don’t tell” would harm unit readiness or morale. The second part of the report presents a plan for ending enforcement of the ban. It is not meant to serve as the military’s official instruction manual on the issue but could be used if military leaders agreed, one of the sources told the newspaper.

Among other questions, the survey asked whether having an openly gay person in a unit would have an effect in an intense combat situation. Although a majority of respondents signaled no strong objections, a significant minority is opposed to serving alongside openly gay troops. About 40% of the Marine Corps is concerned about lifting the ban, according to one of the people familiar with the report, the Post said.

Pentagon spokeswoman Cynthia Smith said that of the 400,000 surveys sent randomly to troops, 115,052 responded. An additional 150,000 surveys were sent to spouses with 44,266 completed. Defense officials have said they were pleased with the response rate and believed it was enough to get an accurate sampling of the force.

President Obama has vowed to end the policy. A Democratic proposal to repeal the 1993 law already has passed the House as part of a broader defense policy bill that includes such popular provisions as a pay raise for the troops. But that same legislation sank in the Senate under Republican objections just weeks before the Nov. 2 elections.

Senate Majority Leader Harry Reid (D-Nev.) has promised another vote by year’s end, although the political dynamics in this lame-duck session haven’t changed much. Gates has asked Congress to act before January, but Senate Democrats still hold a shaky majority and they are unlikely to give in to Republican demands for a protracted debate.

A Republican gay rights group, the Log Cabin Republicans, has challenged the constitutionality of the policy in court. The Obama administration on Wednesday urged the Supreme Court to keep the “don’t ask, don’t tell” policy in place while a federal appeals court considers the issue.

The administration filed court papers in defense of an appeals court order that allowed “don’t ask, don’t tell” to go back into effect after a federal judge declared it unconstitutional and barred its enforcement. The U.S. 9th Circuit Court of Appeals in San Francisco is reviewing the administration’s appeal.

The Log Cabin Republicans asked the Supreme Court to step into the case to reverse the appeals court decision that has allowed “don’t ask, don’t tell” to remain in effect despite the order by U.S. District Judge Virginia Phillips.

Among several recommendations, the Pentagon report urges an end to the military ban on sodomy between consenting adults, regardless of what Congress or the federal courts might do about “don’t ask, don’t tell,” the source told the Post.

The report also concludes that gay troops should not be put into a special class for equal employment or discrimination purposes, that person said. The recommendation is based on feedback the study group obtained from gay troops and same-sex partners who said they do not want a special classification, according to the source.

The report recommends few, if any, changes to policy covering military housing and benefits because the military must abide by the federal Defense of Marriage Act, which does not recognize same-sex marriage.
Pentagon draft study shows low risk to ending ‘don’t ask’ policy

They’re called “floating cities,” massive cruise ships that resemble skyscrapers and offer all the amenities of high-end resorts — spas and casinos, Broadway shows and amusement parks, fine dining and luxury shopping.

But the Carnival Splendor also offers a cautionary tale about just how vulnerable these mega-ships can be. Left powerless by an engine fire shortly after embarking on a seven-day cruise to the Mexican Riviera, the Splendor is expected to be towed into port in San Diego late Thursday. If the ship cannot make sufficient speed under tow, it is possible it will be taken to Ensenada, company officials said.

An early morning fire in the generator compartment Monday knocked out several of the ship’s operating systems and left the nearly 4,500 passengers and crew members without air conditioning, hot food and telephone service. Even the flush toilets were down for a while.

With communications largely cut off, it’s unclear what kind of hardship passengers have had to endure. But Carnival Chief Executive Gerry Cahill acknowledged in a statement that passengers were dealing with an “extremely trying situation.”

“Conditions on board the ship are very challenging, and we sincerely apologize for the discomfort and inconvenience our guests are currently enduring,” he said.

The “gourmet delicacies” of the “Manhattan chic” Pinnacle Steakhouse were replaced by 70,000 pounds of bread, canned milk and other emergency supplies, which were flown from the North Island Naval Air Station at Coronado to the U.S. aircraft carrier Ronald Reagan and then helicoptered out to the Splendor, stranded 160 miles southwest of San Diego. The company is paying the military for the food and supplies, officials said.

“There are significant risks as these ships get bigger and bigger,” said Kendall Carver, president of International Cruise Victims. “This one held over 4,000 people. The new ones owned by Royal Caribbean hold over 6,000 passengers and 2,000 crew members, over 8,000 people. A fire on a ship like that would be disastrous.”

The Carnival Splendor experienced its problems relatively close to several major ports, making rescue possible in only a few days.

“If it was hundreds of miles out, and you had a fire that wasn’t suppressed, and you had rough weather, you’d have a complete disaster,” said Jim Walker, a Miami-based attorney who specializes in cruise line litigation.

Although the $40-billion cruise ship industry — and its vessels — has been growing, it has been dogged in the last decade with controversies over passenger health and safety. Carver helped start International Cruise Victims after his daughter, Merrian, disappeared while on an Alaskan cruise in 2004.

The organization has pushed for stiffer laws regulating the cruise ship industry; just four months ago, President Obama signed into law tougher new rules for reporting crimes at sea, improving ship safety and training staff to collect evidence of crimes. The changes will go into effect in 2012.

But the new law makes only passing mention of fire safety issues, even though “the most serious event that can happen on a cruise ship is a main space fire, which is what happened on the Splendor,” said Mark Gaouette, former director of security for Princess Cruises and author of the recently released “Cruising for Trouble.”

On a Navy ship, Gaouette notes, every person has a fire-fighting role, and the crew is trained constantly in how to respond to a fire. On a cruise ship, “two-thirds to three-quarters of the population are passengers. They become problems and liabilities in a major fire. They have to be shepherded to safe areas.”

Statistics are hard to come by for incidents on cruise ships, but Gaouette said the website cruisebruise.com lists eight major fires on cruise ships in the last five years, compared with just three in the previous seven years.

“As cruise ships become larger and their number increases on the high seas,” he said, “the threat of fire and other risks to passengers will increase proportionally.”

On the Splendor at 6:30 a.m. Monday, the 3,299 passengers were evacuated from their cabins and told to go to the ship’s upper deck. They were later allowed to return. By afternoon, the U.S. Coast Guard had dispatched three cutters and an HC-130 Hercules helicopter to the ship’s aid. The Mexican navy sent aircraft and a 140-foot patrol boat.

The Coast Guard has remained in contact with the ship throughout the ordeal, officials said. Whether the ship goes to San Diego or Ensenada, the company has promised to transport passengers back to Long Beach.

Miami-based Carnival Cruise Lines has promised a full refund for passengers and a complimentary future cruise equal to the amount paid for this voyage, which was scheduled to visit Puerto Vallarta, Mazatlan and Cabo San Lucas. The company, which along with its brands has 98 ships worldwide, announced that the Nov. 14 seven-day cruise from Long Beach to the same ports has been canceled.

“The safety of our passengers and crew is our top priority, and we are working to get our guests home as quickly as possible,” said Cahill of Carnival Cruise Lines. Carnival Corp. reported revenues of $13.2 billion in 2009.

A spokeswoman for the Cruise Lines International Assn. did not respond to requests for comment. The organization’s website says the U.S. Coast Guard calls cruising “one of the safest modes of transportation, and the industry is constantly striving to improve its safety procedures. Over the past two decades, an estimated 90 million passengers safely enjoyed a cruise vacation.”

But that is little comfort to Lynnette Hudson, whose father died of smoke inhalation during a fire on the Star Princess, which is operated by Carnival, in 2006. It was his first cruise, she testified to Congress, and he was celebrating his 72nd birthday.

Hudson pushed for the more stringent standards that were signed into law this summer and is still fighting for stiffer laws. “I think if there’s a major fire on a cruise ship, they’re not prepared,” she said in an interview. “They don’t have sufficient training.”

maria.laganga@latimes.com

tony.perry@latimes.com

Times staff writer Richard Marosi contributed to this report.

Stranded cruise ship offers lesson in huge vessels’ vulnerabilities

The Buddha and bamboo shoots are gone.

In their place is an empty home — except for the metal detector — that until recently was the site of one of half a dozen marijuana dispensaries that opened up in the last year in tiny Sunset Beach.

The dispensary, West County Patient Collective Assn., packed up and left this summer, saying it had been strung along by the county in getting a conditional use permit to sell medicinal marijuana. The collective’s volunteers saw the case as one of selective discrimination, but residents and officials viewed the association as an example of unwelcome businesses taking advantage of a lack of laws governing marijuana dispensaries in unincorporated areas of Orange County.

John Griggs, who headed the collective, said he had believed it would be welcome in Sunset Beach, a coastal enclave adjacent to Huntington Beach.

“Because it’s unincorporated and the county had nothing on their books and it gave us a legal way to open up,” he said.

On Tuesday, the Orange County Board of Supervisors rejected a temporary moratorium on permits for marijuana collectives or cooperatives in unincorporated areas. The ban will be reconsidered in November, but not until after the state election, in which California voters will decide whether to legalize the nonmedical use and possession of marijuana.

Supervisor Janet Nguyen said residents of Midway City, a small unincorporated community surrounded by Westminster, have also noticed dispensaries opening up, some near schools.

Many of the county’s 34 cities have restricted such operations, leading collectives to look to the relatively small amount of unincorporated territory.

“We do face this issue in our small areas, and we don’t know about it until there are complaints,” she said at Tuesday’s board meeting.

The moratorium, billed as urgent, was intended to give the county time to assess what the consequences will be if Proposition 19 passes. Approval of the initiative could require the county to reassess what little regulation is currently in place.

Dispensaries aren’t explicitly allowed or forbidden under county code, but are required to get use permits because they are seen as having moderate to high potential for adverse effects on the surrounding community, according to a memorandum sent out by the county chief executive’s office in July.

Currently there are 11 non-permitted marijuana storefronts in unincorporated areas, according to the county. One dispensary is applying for a permit from the planning department.

Dispensaries in the county’s cities are subject to local laws, but those in unincorporated areas seem to have existed in regulation gray zones. The county does not issue general business licenses. There are certain types of businesses that the Sheriff’s Department licenses, including escort services and public baths, but marijuana collectives are not among them.

The department has been investigating marijuana dispensaries for two years and recently served a warrant at one in Sunset Beach. But deputies look only for violations of state health and safety laws not county regulations, said Lt. Adam Powell, who heads the department’s narcotics unit.

Supervisors John Moorlach and Shawn Nelson rejected the idea that the need for a moratorium was urgent since the county has never approved a dispensary permit.

Supervisor Patricia Bates said the moratorium would send a message to dispensaries not to open until the county figured out its regulation policy.

In Sunset Beach it’s not clear how many dispensaries are still in business.

At the location of the former West County collective, a man who was recently working on the building said another dispensary was opening up and at least two others in the area were still operating as of last week.

For some, it is an example of what could happen if regulation of dispensaries remains vague.

“We didn’t need a concentration of them,” said Greg Griffin, president of the Sunset Beach Community Assn. “I didn’t think we needed six dispensaries.”

raja.abdulrahim@latimes.com
Orange County pot dispensaries exist in gray zone

WASHINGTON — Overcoming months of gridlock, the Senate approved a small-business bill on Thursday that handed President Obama an election-year victory but showed just how difficult it had become for lawmakers to agree on the best way to help the sluggish economy and create jobs.

The measure passed by a 61-38 vote, with just two Republicans crossing party lines to support the bill, which would create a $30-billion small-business lending fund and provide $12 billion in tax breaks to help companies invest and hire. The bill now heads to the House, where it is expected to pass swiftly.

Yet the months-long impasse over the bill to aid small businesses, which have been hard hit during the economic downturn and are championed by both parties as engines of the recovery, highlights the partisan divisions before the fall midterm election.

“It tells you the depth of the gridlock and dysfunction that unfortunately has gripped the Congress,” said Sen. Evan Bayh (D- Ind.). “Hopefully, some of that will abate after the election.”

The bill enjoyed bipartisan support at the outset, but the addition of the $30-billion small-business lending fund to give credit-starved firms access to capital created insurmountable partisan divisions.
Republicans quickly opposed the lending fund as a “mini-TARP” — reminding voters of the unpopular Troubled Assets Relief Program that was the cornerstone of the 2008 federal bank bailout.

Republicans filibustered in July, demanding the chance to offer more amendments — including those unrelated to the legislation. Democrats shelved the bill as the debate dragged on and other legislation took priority.

Those expected to champion the bill from the business community — the U.S. Chamber of Commerce and the National Federation of Independent Businesses — instead focused on using the legislation as a vehicle to overturn an onerous business reporting requirement in the new healthcare law.

“All of a sudden it became a partisan exercise again,” said Sen. Orrin Hatch (R- Utah). “It’s amazing to me how difficult it is to work together around here, even when we want to. It’s almost like an arrogance of power: We’re going to teach those Republicans.”

Republican Sen. George LeMieux of Florida and Sen. George Voinovich of Ohio, neither of whom are seeking re-election, joined 57 Democrats and two independents to pass the measure.

The House passed a version of the bill earlier this year, and at one point over the summer, frustrated House lawmakers walked across the Capitol to stage a quiet sit-in at the Senate chamber to protest the delays on this and other jobs bills.

“While I am grateful for this progress, it should not have taken this long to pass this bill,” Obama said on the eve of Senate action. He has promised to sign the legislation quickly.

The bill offers $12 billion in tax breaks to businesses to encourage investment, entrepreneurship and hiring.

Businesses also would be able to write off more of their costs of buying equipment or making shop improvements. Those who are self-employed could deduct healthcare costs from the self-employment tax. The bill would also continue to waive Small Business Administration loan fees that had been cut as part of the 2009 recovery package.

The $15-billion cost of the bill is offset by closing tax loopholes and increasing tax-reporting requirements and penalties.

Democrats estimate the legislation could create 500,000 jobs.

Amendments earlier in the week sought to lift a much-criticized healthcare tax reporting requirement that both Democrats and Republicans agree needs to be fixed. But the amendments failed as senators could not agree on a way to recoup the $17 billion in revenue that would be lost by doing away with the provision.

Republicans also made two procedural moves on Thursday to attach tax credits for research and development and biodiesel development, but both were rejected.

lmascaro@tribune.com
Senate approves Obama’s small-business aid package

A New Zealand air force plane made a rare wintertime landing on an ice runway in Antarctica on a mercy mission Tuesday to evacuate an American worker in serious medical condition, officials said.

Blizzard conditions eased to allow the Orion aircraft with three medical staff aboard to land at the U.S. McMurdo Station science base on the north Antarctic coast before refueling and returning on a seven-hour flight back to Christchurch, New Zealand.

An initial rescue bid on Sunday was forced to turn back because of blizzards. Temperatures at the base have been about minus 32 degrees Fahrenheit in recent days.

Air force spokesman Squadron Leader Kavae Tamariki said the plane landed around midday during a brief period of daylight and clear weather, and spent about an hour and a half on the ground before taking off with the patient.

“It’s going fine so far,” Tamariki told The Associated Press. He said the patient was stable and would be admitted to a hospital in Christchurch after the plane arrived.

The man’s identity, exact condition and occupation have not been disclosed. He works for the U.S. company Raytheon, which provides support services — such as supplies, transportation and accommodation — for the U.S. National Science Foundation at McMurdo.

“The medical advice is to get him out of there as soon as possible for hospital care,” said Raytheon Polar Services New Zealand operations manager, Kerry Chuck.

The U.S. has more than 500 staff that spend the bleak winter — from October through March — at McMurdo each year. Flights are usually only made during the summer months, when most scientists are ferried in and out of the station. Icebreaker ships are used to bring in fuel.

A few winter evacuations of sick workers have been undertaken from Antarctica, including a dramatic midwinter flight in 1999, with blazing fuel barrels to light the runway, to pick up a U.S. woman doctor at a South Pole station who contracted breast cancer.

Last September, an American working at McMurdo Station who suffered cardiac problems was evacuated to New Zealand by air force plane in a serious but stable condition.

A broad range of scientific research is conducted at the station, including studies of the Antarctic sea and its marine life, the annual fight for survival of the world’s largest penguin colonies, and the depletion of the ozone layer.
New Zealand air force evacuates American from Antarctic base

Meg Whitman’s record-breaking spending in the race for governor has enabled her campaign to blanket California with more TV ads and mailers than any other in state history, while also tapping new technologies to further broaden her reach.

With nine weeks left until election day, Whitman has donated $104 million of her own money to the campaign, more than any other candidate in California history and within striking distance of the national record for a non-presidential contest, the $109 million spent by businessman Michael Bloomberg to secure a third term as mayor of New York City.

Those donations have allowed her to target her campaign mailings to the smallest subsets of voters and sort out which television shows are popular among independent voters. (It turns out they are big fans of “Bones,” the crime show rife with romantic tension, on which Whitman has aired ads.)

Dozens of outside consultants and a paid staff the size of some presidential campaigns run an operation that seems to be the living embodiment of Whitman’s book title: “The Power of Many.” After record amounts spent on television advertising, mail and ground organization, there has even been enough money left over to sponsor a youth soccer team.

“She has the money to do everything,” said Garry South, a Democratic consultant who ran Gray Davis‘ campaigns for governor, “and she is doing everything.”

The heart of the race is still to come, yet Whitman’s personal donations already represent more than twice the amount Arnold Schwarzenegger spent in the last gubernatorial election from all sources of money.

Her campaign spent $25 million on television over the summer, more than what Schwarzenegger spent on TV in his yearlong reelection effort. By the beginning of July, she had spent $7.5 million sending mail to voters, almost double Schwarzenegger’s 2006 tally and a figure that does not count the more recent flurry of mail against her November rival, Democrat Jerry Brown.

Overall, she has nearly tripled the previous California record of personal donations to a campaign, set in 1998 by Democratic businessman and gubernatorial candidate Al Checchi.

Still, for all the spending, polls show Whitman and Brown in a competitive race. Although her campaign points to the millions of dollars organized labor is pouring into the contest on Brown’s behalf, that spending pales in comparison to Whitman’s.

Whitman campaign officials say her personal donations were needed to introduce the former EBay chief and first-time candidate to California voters, to whom she was a mystery a year ago.

“We’re doing things much more aggressively than they’ve ever been done before,” said spokesman Tucker Bounds. “The frequency of the activity and the size of the political organization is an enormous investment, but we believe it will pay off on election day.”

In its ability to do more of everything, Whitman’s campaign most resembles that of President Obama, who was able to translate his immense fundraising operation into a deep use of traditional campaign tactics and a broad reach into new ones, including those harnessing the Internet for his political benefit.

Much attention has been drawn to Whitman’s television outlay, but her spending in less-visible political arenas is eye-opening as well.

Through June, Whitman had spent more than $1.2 million on polling and research, dolling out nearly $227,000 to two firms in June alone.

Democratic consultant Darry Sragow said a typical candidate might spend $300,000 on polling in the primary and a like sum in the general election. Whitman’s figures suggest a sharply different strategy than anything seen before.

“They know as much as anybody could know about the mind-set of the California electorate,” he said.

Allan Hoffenblum, a former Republican consultant who runs the Target Book, a nonpartisan compendium of political races, said Whitman was “doing stuff that is on the level of what an incumbent president would be doing running for reelection.”

Whitman’s research contributes to a detailed voter file that identifies voters by their issue interests and then targets them through an aggressive direct-mail program. Whitman’s mail effort, and her simultaneous television barrage, was devastating to her primary election rival, Steve Poizner. His campaign estimates she sent as many as 20 mailers to Republican homes in the last month of the campaign.

Whitman is now unloading on Brown, releasing ads and mail pieces almost weekly. According to the Brown campaign, Whitman’s ads showed up at least 170,000 times in state media markets from the primary through third week of August, even as multiple mailers were arriving at selected voters’ homes.

Whitman demonstrates the power of her money

Sales of previously owned homes plunged 27.2% nationally in July — fallout from the expiration of a popular federal tax credit that had fueled the market for much of the year.

The big drop, which was worse than what many analysts had expected, sent stock markets tumbling Tuesday morning as investors feared a double dip in housing. The blue-chip Dow Jones industrial average fell more than 1%, as did the S&P 500, a broader measure of stocks.

The National Assn. of Realtors said that the seasonally adjusted annual rate of sales was 3.83 million units in July, a drop from the downwardly revised 5.26-million-unit rate in June and a 25.5% drop from the 5.14-million-unit level in July 2009.

It was the lowest sales level since 1999. The sales rate for single-family homes — which accounted for the bulk of sales — was at its lowest level since May 1995.

The July plunge was the third consecutive monthly decline following the April 30 expiration of the tax credit, which offered up to $8,000 for certain buyers. The credit was extended and expanded by Congress last year to help prop up the housing market.

“From our vantage point, the first-time home-buyers credit pulled forward demand — by definition this is what stimulus measures achieve — however the issue this time is that there was so little demand to be pulled forward, the credit has left no demand for the summer,” Dan Greenhaus, chief economic strategist for Miller Tabak + Co., wrote in a research note Tuesday morning. “The result is exactly what we’re seeing: a near, if not outright, collapse in housing.”

Total housing inventory jumped 2.5% at the end of July to 3.98 million homes available for sale, representing a 12.5-month supply at the current pace, up from an 8.9-month supply in June. Raw unsold inventory is still 12.9% below the 4.58 million in July 2008.

alejandro.lazo@latimes.com
Sales of existing U.S. homes fall 27%

Three bomb blasts killed 34 people Monday in northwest Pakistan, authorities said. Though no one claimed responsibility for the attacks, they came at a time when government officials have been warning that Islamic militants might try to exploit the strain that this summer’s catastrophic floods have put on the country’s military and government by unleashing a new wave of violence.

One of the attacks occurred in South Waziristan, a tribal area along the Afghan border long regarded as a stronghold for the Pakistani Taliban. A teenage suicide bomber appeared at a mosque in the town of Wana where 200 worshippers were praying and detonated explosives strapped to his body, witnesses said. The blast killed 25 people and injured 36 others, hospital officials said.

Among the dead was Maulana Noor Muhammad, a former lawmaker and head of the Islamic school where the mosque was located. He had just finished translating verses from the Koran when the blast occurred. Muhammad was a member of the Jamiat Ulema-e-Islam (Fazlur Rehman) party, which historically has been sympathetic to the Taliban movement.

“I saw a teenager who shook hands with Maulana Noor Muhammad before detonating the explosives,” said Ayub Wazir, a worshipper who survived the blast.

The motive of the attack was unclear. At times, violence in the tribal areas occurs between rival tribal and militant factions.

A second attack occurred in the Kurram tribal district when a remote-controlled bomb exploded in a school where tribal elders had been meeting. The blast, which occurred in the village of Parachamkani, killed six people and injured seven others, authorities said.

The third attack occurred early in the evening on the outskirts of northwest Pakistan’s largest city, Peshawar. A bomb planted in a push cart exploded in the town of Mattani, killing three people and injuring six others, police said. Dilawar Khan, head of a local anti-Taliban militia, said his militia was the target of the attack. Two of the dead belonged to the militia.

In both South Waziristan and Kurram, Pakistani troops have launched offensives over the last year to flush out Taliban militants and reestablish governmental control over the regions. Despite the offensives, pockets of militants remain active in many parts of the tribal areas.

Last week, Mian Iftikhar Hussain, information minister for northwest Pakistan’s Khyber-Pakhtunkhwa province, warned that militants had been regrouping in the tribal areas to take advantage of a time when the state has had to deploy thousands of Pakistani soldiers and police to cope with the ongoing flood crisis, which has killed more than 1,600 people and submerged vast swathes of the country.

In the tribal district of North Waziristan, two U.S. drone missile strikes killed 12 people and injured 15 others, intelligence sources said.

One of the missiles targeted Dandy Darpakhel, an area known as a stronghold of the Haqqani network, a wing of the Afghan Taliban. Among the seven killed were four women, the sources said. The other strike killed five people in the village of Derga Mandai, sources said.

alex.rodriguez@latimes.com

Special correspondent Ali reported from Peshawar and staff writer Rodriguez from Islamabad.
34 killed in Pakistan; bombings occur in Taliban stronghold areas

Islamic militants are exploiting the strain this summer’s monsoon floods placed on the military and government by regrouping their forces in northwest Pakistan, provincial officials warned Thursday.

Sen. John Kerry, who is in Islamabad, also expressed concern about a strengthening insurgency as he announced that the United States would ramp up its flood relief package to $150 million.

As the crisis nears its fourth week, officials in Islamabad and Washington are increasingly worried that Taliban militants and other Islamic extremist groups will take advantage of a disaster that has forced 60,000 Pakistani troops into flood relief work and diverted police resources across the country.