ULAN BATOR

A pungent odor like turpentine wafts over the hillsides north of the Mongolian capital. It comes from the sharilj, a wild plant that has taken over the scalloped landscape, a telltale sign of overgrazing since the plant is inedible for sheep and goats.

Sukhtseren Sharav has a herd of 150 goats and 100 sheep, and as they chew their way through everything else, and the sharilj spreads, he must shepherd them ever higher into the mountains to find fresh grazing land.

The lack of foraging terrain is not Mr. Sharav&S217;s only worry. The price for cashmere, the wool made from the fleece of his goats, has plunged 50 percent from last year. The price of flour, his most essential food staple, has more doubled.

These are hard times for Mongolia&S217;s cashmere industry, which provides jobs and income for a third of the country&S217;s population of 2.6 million and supplies about 20 percent of the world&S217;s market for the fluffy, feather-light fiber, prized for its warmth, delicate feel and long wear.

To compensate for low prices, herders have been increasing supply by breeding more goats &S212; a classic vicious circle. Mongolia&S217;s goat population is now approaching 20 million, the highest ever recorded.

Environmentalists and social scientists say this is destroying biodiversity and pastureland, and undermining herding livelihoods. But goats are hardier than other livestock, breed faster and can survive on sparser resources: so, the more the land is degraded, the more herders are driven to switch from cows, camels or other less destructive herds &S212; another vicious circle.

Mixed into the problem is climate change. According to Erdene-Ochir Badarch, environment officer of the World Bank, rainfall on the Mongolian steppe has become increasingly erratic, resulting in the disappearance of 600 Mongolian rivers and 700 lakes. This too may be a chicken-and-egg problem. Increasing aridity and loss of plant species may itself be contributing to the dwindling rains.

In a study funded by the World Bank, Dennis Sheehy, a rancher from Oregon with a doctorate in range management, last year measured two of Mongolia&S217;s four major ecological zones &S212; desert and forest steppe &S212; to determine changes in the composition of species compared with an earlier study made in 1997.

Mr. Sheehy found a 34 percent loss in plant species in the Gobi Desert and about a 30 percent loss in Mongolia&S217;s forest steppe.

&S220;Two conditions have created the loss in species: the proportion of goats in the herd in the last 10 to 12 years, and the areas are becoming increasingly arid,&S221; Mr. Sheehy said. &S220;The plant species that had disappeared were most palatable to all livestock, but especially to goats,&S221; he added. &S220;There are too many of them.&S221;

The problem with goats is not only what they eat. In arid regions, their sharp hooves have been accused by environmentalists of piercing the soil surface, known technically as the cryptobiotic crust, a tangle of gray-brown material composed of fungi, mosses, lichens and bacteria which helps to retain moisture. Once the crust is torn, strong northwesterly winds carry away the sand underneath in dust storms that are contributing to the spread of the desert, according to a 2003 World Bank report.

Still, large parts of Mongolia remain in good shape, notably in the eastern parts of the country, and some researchers, including Andrei Marin, a doctoral student preparing a thesis on climate-change adaptation at the Institute of Geography, part of the University of Bergen in Norway, caution against jumping to conclusions about cause and effect low fee payday loans.

Mr. Marin says the 10-year timetable for Mr. Sheehy&S217;s comparative study may be too short to measure environmental shifts, and a 25-year span would be more meaningful.

The reasons goats are proliferating are as much about nurture as nature, Mr. Marin said by telephone from Bergen. When the country shifted from a planned socialist economy to a market economy and a parliamentary democracy, it largely retreated from supporting the livestock industry, leading herders to increase the size of the goat herd to finance rising expenses, he said.

&S220;Government subsidies for transportation, boarding schools and a hay reserve have disappeared to a large extent,&S221; he said.

Adding some complexity to the debate, land degradation, as a term, lacks a precise and widely accepted definition, and environmentalists urge a note of caution when discussing it.

&S220;There are seven different ways to measure desertification in Mongolia,&S221; said Tony Whitten, a biodiversity specialist with the World Bank in East Asia and the Pacific.

Yet another layer of the problem is the dysfunctionality of Mongolia&S217;s cashmere marketing.

China is the largest buyer of Mongolia&S217;s raw and washed cashmere by far, taking an estimated two-thirds of all exports &S212; one-third legally and one-third smuggled to avoid export taxes.

Facing such a dominant buyer, Mongolian traders tend to get the short end of the bargain even in good times, accepting prices far below market value for high-quality fleeces and passing on the pain to the producers; and in the past year, times have not been good. As the global economic crisis shrank Chinese clothing exports, Chinese cashmere purchases effectively ground to a halt, just as another rain failure was pushing the herders into longer and more expensive migrations in search of grazing land.

&S220;Climate change and globalization interacted to severely curtail the adaptive capacity of the herders,&S221; Mr. Marin said.

Whatever the exact mix of causes, Mr. Sheehy says, the result is the same: a situation that poses a major risk to sustainability, with too many goats, and too much livestock in general.

The total Mongolian livestock herd numbers about 44 million animals, but Mongolia is haunted by the decimation of its herds when four successive years of summer drought, from 1999 to 2002, were followed by cold and snowy winters, killing off 9 million animals &S212; a disaster from which many smaller herders have still not recovered.

&S220;We&S217;re predicting that with any significant drought, the whole livestock pastoral system will crash,&S221; he said. &S220;Especially in central Mongolia, where there is not much resilience &S212; it is on the verge of a breakdown.&S221;

But the solution is easier envisaged than done: reduce livestock numbers, when herders are hard up for cash, and introduce modern market management to a country that has never known it.

&S220;Everyone thinks there are too many goats. But no one does anything about it,&S221; Mr. Sheehy said.

An earlier version of this article said that a study last year of Mongolian ecosystems was funded by Sony. In fact, the study was funded by the World Bank.

Special Report: Business of Green: Pastoralism Unraveling in Mongolia

DEERFIELD, Ill. – Drugstore chain Walgreen Co. said its November sales improved, but the results disappointed Wall Street and the company's shares fell in Wednesday trading.

At stores open at least a year, Walgreen said sales rose 3.9 percent. Analysts were expecting greater improvement of 6.1 percent, according to Thomson Reuters. Walgreen said pharmacy revenue was hurt by new launches of low-cost generic drugs, and sales of nonpharmacy items took a hit due to slowing demand for cough, cold and flu products, and further weakness in the economy.

At those stores, pharmacy revenue rose 5.7 percent, and sales of "front end" items like cosmetics and food grew 0.8 percent. Analysts expected pharmacy sales to rise 7.2 percent and front-end sales to rise 3.8 percent.

"The Thanksgiving weekend (was) notably softer" than a year ago, the company said.

In morning trading, Walgreen shares lost $1.68, or 4.3 percent, to $37.69.

Sales at stores open at least one year are considered a key indicator of retailer health because they shows results at older stores, leaving out revenue from newly opened locations payday advance online. Walgreen runs 7,147 drugstores around the U.S., including 517 that were opened in the last year. It also has about 500 worksite health centers, home care facilities, and specialty and mail-order pharmacies.

Walgreen opened 47 stores during the quarter, including seven that were relocated, and acquired two stores.

For November, the company's total revenue grew 8.7 percent to $5.36 billion from $4.93 billion a year ago. Pharmacy sales rose 9.7 percent. Front-end sales increased 6.1 percent.

For the first three months of fiscal 2010, Walgreen said its revenue grew 9.5 percent to $16.36 billion from $14.95 billion. That surpassed analyst expectations of $16.26 billion.

The company is scheduled to report its fiscal first-quarter results on Dec. 21. Analysts are looking for a profit of 48 cents per share, on average.

Walgreen key sales measure rises but misses goals

Hot News: Northrop Could Withdraw From Bidding on Tanker

WASHINGTON – The Securities and Exchange Commission must tighten its process for deciding which investment advisers to inspect if it is to avoid colossal breakdowns like the one that allowed Bernard Madoff's multibillion-dollar fraud to go undetected for 16 years, the agency's inspector general says.

A report released Thursday by the office of Inspector General David Kotz proposes new requirements that the SEC's inspections office examine databases and documents related to investment advisers that may be inspected.

The Office of Compliance Inspections and Examinations and the SEC's enforcement division should also establish procedures for sharing tips, complaints, disciplinary history and violations regarding investment advisers, Kotz recommends.

The IG's review found that the inspections office never undertook an exam of Madoff's investment business — which was separate from his brokerage operation — even after he was forced by the SEC in August 2006 to finally register the investment business.

The inspector general found that "failures to communicate" within the SEC led to the agency's OCIE never inspecting Madoff's investment business.

It was Kotz's second set of proposals for the OCIE in less than two months easy payday loans. In late September, he recommended that the office establish a specific process for identifying red flags and potential violations of securities laws.

Kotz has detailed how the SEC bungled five investigations of Madoff's brokerage business between June 1992 and last December, when the financier confessed to his sons that he was operating a fraudulent scheme. Top SEC officials have pledged to fix the problems and say they already have made major changes.

Madoff pleaded guilty in March to charges that his secretive investment operation was a multibillion-dollar Ponzi scheme that destroyed thousands of people's life savings and wrecked charities. He is serving a 150-year sentence in federal prison in North Carolina.

Kotz asked OCIE, the enforcement division and the division that oversees investment companies to submit a corrective action plan within 45 days to address the recommendations. The three entities, plus the office of SEC Chairman Mary Schapiro, told Kotz that they agree with his recommendations.

SEC told to improve ways it chooses probe targets

DETROIT &<51; GMAC Financial Services, the former lending arm of General Motors, replaced its chief executive on Monday as it negotiates for another round of bailout financing from the federal government.

The company&S217;s directors appointed Michael A. Carpenter, a former Citigroup executive and current GMAC director, to succeed Alvaro de Molina, who had run the company since April 2008. Mr. Carpenter said the board believed that he would be more appropriate as chief executive than Mr. de Molina, who resigned at the board&S217;s request.

GMAC, in a statement, said it had asked the Treasury Department to postpone a decision on more aid under the Troubled Asset Relief Program until the new management team had &S220;assessed the current situation and can advise the board and Treasury regarding the appropriate amount and form of such funding.&S221;

GMAC already has received $12.5 billion from the government, which now owns almost 35 percent of the company, but was expected to ask for as much as $5.6 billion more this month. This year, the Treasury told GMAC, based on the results of stress tests to evaluate its liquidity, that it must raise $11.5 billion in capital by the end of November.

GMAC, a 90-year-old auto and home lender that was converted to a bank holding company last year to qualify for bailout financing, is the only bank of the 19 subjected to the stress tests that has been unable to borrow more capital from private investors.

&S220;We don&S217;t see any need for the maximum amount of capital that Treasury was anticipating putting in,&S221; Mr. Carpenter, 62, said in an interview.

&S220;The $5.6 billion is off the table business cards design. What the exact number is, I don&S217;t know.&S221;

Mr. Carpenter, who resigned from the board of the CIT Group to focus on his new position, said the board was not pressured by regulators to request Mr. de Molina&S217;s resignation.

GMAC is now the primary lender to dealers of both G.M. and Chrysler, and it provides financing to customers of both automakers as well. It also operates Ally Bank, an online retail bank.

The company lost $5.3 billion in the first nine months of the year.

Mr. Carpenter said he wanted GMAC to provide a financial backbone to a revitalized G.M. and Chrysler and to be able to repay most, if not all, of its financial lifelines.

Initially, many of GMAC&S217;s problems were created by subprime lending at its home mortgage unit, which racked up hundreds of millions of dollars in losses. The trouble was compounded by a severe slump in auto sales and a tightening of credit markets that in late 2008 virtually eliminated GMAC as a financing source for G.M. customers.

&S220;I came to GMAC thinking that it was a short-term assignment working through a liquidity crisis,&S221; Mr. de Molina, 52, said in Monday&S217;s statement. &S220;That crisis lasted two years. With the help of government support and the incredible efforts of our team, we are now on stable footing, positioned for profitability in 2010 and beyond.&S221;

Michael J. de la Merced contributed reporting from New York.

A Change at the Top of GMAC as It Negotiates for Another Government Bailout

BEIJING, Nov. 15 (Xinhua) -- China should enhance supervision and management of the country's insurance investment, said Li Kemu, vice chairman of the China Insurance Regulatory Commission (CIRC),on Sunday.

"With insurance funds were extended into disparate fields, other than bank deposit, demand for a better supervision and risk control enhanced, said Li at the International Finance Forum held in Beijing.

By the end of September, 3.4 trillion yuan (497.8 billion U.S. dollars) of insurance funds were invested in bonds, mutual funds, and stocks markets. Bonds investment alone accounted for 50.6 percent of the total.

Jiang Dingzhi, China Banking Regulatory Commission (CBRC) Vice Chairman also highlighted the importance of establishing a "all-coverage" financial supervision system guaranteed online payday loans.

He suggested the country broaden the financial supervision and management system, which would put the mutual funds, hedge funds, and credit risks appraisal agencies under control.

The new system requires financial institutions to share information, and also cooperate to fill the supervision blanks between different financial markets, he said.

Chinese insurance regulator stresses supervision on insurance investment

NEW YORK/SAN FRANCISCO (Reuters) – Hewlett-Packard Co (HPQ.N) struck a deal to buy network equipment maker 3Com Corp (COMS.O) for &&6;2.7 billion to step up competition against Cisco Systems Inc (CSCO.O) and expand into China.

HP said it would pay &&6;7.90 per share for 3Com, or a premium of 39 percent over its Wednesday closing price on Nasdaq.

The move comes amid a flurry of acquisitions by Cisco and other technology vendors trying to broaden their product portfolios and provide a one-stop shop for computing, networking and storage equipment.

"It gives HP additional scale within the low-to-mid tier wireless and networking market. It matches up with HP&&9;s switches that compete with Cisco," said Shannon Cross at Cross Research.

3Com, which has a large presence in China, has been pushing into the large enterprise market outside that country with its H3C brand, trying to take on giants like Cisco.

The company has been an acquisition target before. In 2008, Bain Capital Partners and China&&9;s Huawei Technologies (HWT.UL) tried to buy 3Com for &&6;2.2 billion but failed to win approval from a U.S. government security panel bad credit cash loan. Huawei is a privately held company set up by a former Chinese army officer.

Analysts said that by buying 3Com, HP will be competing head to head with Cisco in the networking equipment market. Cisco recently entered the server market, where HP is strong.

"HP has started to find success competing in the communication space. It has been competing with Cisco. To that degree, this is also something in that category," said Lou Miscioscia, analyst at Brigantine Advisors.

The terms of the deal were approved by the HP and 3Com boards of directors, but needs shareholder approval. The deal is expected to close in the first half of 2010.

HP also reported preliminary quarterly profit and revenue that beat analysts&&9; expectations, and raised its outlook for fiscal 2010.

3Com shares jumped 35 percent to &&6;7.66 in after-hours trading. HP shares edged 0.4 percent lower to &&6;49.80.

(Reporting by Sinead Carew, Ritsuko Ando and Gabriel Madway; Editing by Carol Bishopric, Bernard Orr)

HP to buy 3Com for $2.7 billion

Hot News: Macys Q4 forecast disappoints; shares fall

A day after a spirited rally sent the Dow to its highest levels since the beginning of the financial crisis, Wall Street took a moment to breathe, with stocks showing little or no gains on Tuesday.

From the opening bell to the close, the enthusiasm of Monday&S217;s rally, which pushed the Dow up more than 200 points, seemed to have dissipated. The dollar remained weak, and a rush for gold slowed slightly.

At the end, the Dow Jones industrial average was up 20.03 points, or 0.2 percent, at 10,246.97. The broader Standard and Poor&S217;s 500-stock index declined less than a point to 1,093.01, and the technology-heavy Nasdaq composite index fell 2.98 points, or 0.14 percent, at 2,151.08.

The stock exchanges will be open Wednesday on Veteran&S217;s Day, but the bond markets will be closed.

Shares of financial companies, particularly regional banks, were among laggards. Zions Bancorp declined 7.66 percent, to $13.26; SunTrust fell 3.38 percent, to $20.29; and Huntington Bancshares 3.55 percent, to $3.80. Bank of America, however, rose 1.65 percent, to $16.03, after it said that its integration with Merrill Lynch would generate more savings than expected. American Express rose 1.6 percent, to $39.68, on reports that worldwide credit card spending had increased by 3 percent in October &<51; a sign that consumers might be more optimistic about spending.

The dollar, which has lost 16 percent of its value since March, continued to trade near $1.50 against the euro and fell against other currencies as well. While the dollar is considered a safe-haven investment, low interest rates have kept its yield down, and in response investors have thrown their money to Wall Street in search of higher returns. The price of gold, which in recent weeks has hit record highs nearly every day, climbed slightly, to $1,105.60 an ounce.

Even as the stock market continues an eight-month rally, there are concerns over the speed of a recovery. On Tuesday, the presidents of the Federal Reserve banks in San Francisco and Atlanta suggested that unemployment, which hit a 26-year high in October, could continue to remain high for several years. Janet Yellen, president of the Federal Reserve in San Francisco, said growth was sustainable but that it would not happen fast enough to bring down unemployment anytime soon.

&S220;High unemployment, weak job growth and paltry wage increases are a recipe for sluggish consumer spending growth and a tepid recovery,&S221; Ms no fax payday loans. Yellen told a real estate group in Phoenix.

Also on Tuesday, Senator Christopher J. Dodd, Democrat of Connecticut, who heads the Senate banking committee, released a proposal to overhaul the financial system. He called for establishing an agency to protect consumers and for giving the government more authority to break up companies that pose a threat to the stability of the system.

Oil prices settled down 38 cents, at $79.05 a barrel, as a tropical storm in the Gulf of Mexico began to subside.

Investors expect earnings reports from major retailers later this week, including Macy&S217;s, Wal-Mart and J. C. Penney. As the holiday season approaches, those results will give a snapshot of the state of consumer spending, which makes up about 70 percent of the United States economy.

Doug Roberts, chief investment strategist for ChannelCapitalResearch.com, said investors were ignoring signs that consumer spending might be weak in the coming months, given cost-cutting by companies and a steady rise in the unemployment rate.

&S220;Nobody wants to fight the rally,&S221; he said. &S220;The market is showing a natural pullback at this point, and we will probably see a consolidation phase for awhile.&S221;

In London, shares of HSBC were about 4 percent higher after the bank said its profit in the quarter ended in September was &S220;significantly ahead&S221; of a year earlier. Shares of a rival, Barclays, were down 5.1 percent after profit declined 54 percent. And the Lloyds Banking Group&S217;s shares dropped slightly after the bank announced plans to lay off an additional 5,000 workers.

Ken Mayland, president of ClearView Economics in Ohio, said Wall Street would probably continue to inch upward, with occasional downturns, as investors gunned for a strong finish to 2009.

&S220;There&S217;s a lot of money on the sidelines that has missed out on stocks being up,&S221; Mr. Mayland said. &S220;And time to the year-end is getting short.&S221;

The Treasury&S217;s 10-year note rose 4/32, to 101 8/32. The yield fell to 3.47 percent from 3.49 percent on Monday.

Following are the results of Tuesday&S217;s Treasury auction of four-week bills and 10-year notes:

Wall St. Takes a Breather And Shares Close Flat

Hot News: Possible Property Bubble Has Singapore Officials Worried

BEIJING, Nov. 8 (Xinhua) -- The output value of China's energy saving and environmental protection industry would hit 2.8 trillion yuan (412 billion U.S. dollars) by 2012, said Xie Zhenhua, deputy director of the National Development and Reform Commission on Sunday.

Those sectors have become a new economic growth point and have bright prospects in China, Xie said at the fourth China-Japan Energy-saving and Environment Protection Forum which began Sunday.

He said the government will beef up investment in the construction of resource recycling projects, which will directly boost the industry development.

He noted the government will further reform the pricing system of the resource products online payday loans.

Enterprises should also enhance innovation to break technological bottleneck notably in the development of clean coal transfer technology and pollutants treatment facilities.

China has been pushing for a national energy saving campaign to address the worsening conflicts between economic growth and environmental deterioration.

China's energy-saving, environmental protection industry has bright prospect

SAN FRANCISCO – The Gymboree Corp. on Thursday said its third-quarter sales at stores open at least a year fell 4 percent, but the children's retailer nevertheless raised its profit forecast for the period.

The figure is an important gauge of retail health, because it measures performance at existing stores, rather than newly opened ones.

Net sales for the quarter ended Oct. 31 rose 2 percent, to $265.6 million, from $261.3 million a year ago.

Analysts polled by Thomson Reuters, on average, were expecting sales for the quarter of $273 business cards.5 million

Gymboree now expects third-quarter profit between $1.10 and $1.13 per share, up from its prior forecast of between $1.05 and $1.10 per share. Analysts project a profit of $1.10 per share.

The company plans to report full third-quarter results on Nov. 18.

Gymboree shares fell $2.36, or 5.4 percent, to $41.17 in morning trading.

Gymboree 3rd-qtr sales comparison falls 4 percent

Hot News: Dow, S&P 500 open up on data optimism

(Reuters) – U.S. companies hurt by the global credit crisis are continuing to hold more cash, even as the economy begins to show signs of improvement, the Wall Street Journal said, citing its analysis of company filings.

In the second quarter, the 500 largest non-financial U.S. companies by total assets held about &&6;994 billion in cash and short-term investments, or 9.8 percent of their assets, according to the paper&&9;s analysis of corporate filings.

In contrast, the companies held &&6;846 billion, or 7.9 percent of assets, a year ago, the paper said.

The trend seems to have continued in the third quarter, despite an improving economy, the paper said faxless payday advance.

The 248 companies that have reported third-quarter results so far saw their cash holdings go up by a percentage point sequentially to 11.1 percent of assets, the paper said.

Companies such as Alcoa Inc (AA.N), Google Inc (GOOG.O), PepsiCo Inc (PEP.N) and Texas Instruments Inc (TXN.N) reported big third-quarter increases in cash holdings, the paper said.

(Reporting by Sakthi Prasad in Bangalore; Editing by Muralikumar Anantharaman)

U.S. companies holding more cash: report

LONDON (AFP) – Britain&&9;s government is to create three new high street banks from bailed out lenders Royal Bank of Scotland, Lloyds Banking Group and Northern Rock, according to media reports.

The huge shake-up comes as the government seeks to recoup taxpayers&&9; cash used to prop up the banks during the world financial crisis and increase competition.

Lloyds is 43 percent owned by the state and RBS 70 percent, while Northern Rock was nationalised outright.

The government could confirm the move, to come in by 2015, on Tuesday, reports said.

The new banks would be retail-focused, concentrating on deposits and mortagages.

RBS and Lloyds are also reportedly set to sell off some parts of their businesses, including around 300 branches for RBS low rate payday loans.

EU regulators last week approved the state aid contained in plans to break up and sell Northern Rock.

All three banks received huge government bailouts at the height of the global economic storm but regulatory authorities are concerned about such state-backed banks having an unfair advantage over those that were not helped.

The Sunday Telegraph reported that no current owner of a British retail bank would be allowed to take on the new institutions so buyers could come from the US, Australia and the Middle East.

Britain to create three new retail banks: reports

WASHINGTON (AP) &<51; A politically connected financial firm and two of its executives were indicted Thursday for what prosecutors say was a bid-rigging scheme in the municipal bond business.

The charges in the nine-count indictment filed Thursday in Manhattan federal court against CDR Financial Products are the first resulting from the Justice Department&S217;s inquiry of the municipal bonds industry. CDR, based in Beverly Hills, Calif., has also come under scrutiny for its ties to Gov. Bill Richardson of New Mexico.

The indictment accuses two CDR executives and one former executive from the firm of engaging in bid-rigging conspiracies in which CDR was hired by public entities that issue municipal bonds to act as their broker and conduct a supposedly competitive bidding process.

&S220;This case is fundamentally about collusion, the illegal rigging of a purportedly competitive bidding process,&S221; said Joseph Demarest, head of the FBI&S217;s New York office.

The result of the scam, Mr. Demarest said, was less money for the states, cities and counties that hired CDR.

CDR is also known as Rubin/Chambers, Dunhill Insurance Services Inc.

Prosecutors said that CDR&S217;s company&S217;s owner and president, David Rubin, vice president Evan Zarefksy and former chief financial officer Zevi Wolmark took part in two wire fraud schemes. The three are also charged with obstructing the Internal Revenue Service faxless pay day loans.

Because such bonds are tax-exempt, the competitive bidding process is regulated by the I.R.S.

Prosecutors said the company secretly manipulated the bidding process to enrich themselves and the bidding companies at the expense of the municipalities, the I.R.S. or both.

Under the scheme, CDR would arrange in advance which company would win a particular bid for bond business and arrange kickbacks to CDR in the form of inflated fees, authorities said.

In one 2006 state bond deal, one of the bidders agreed to pay CDR a $475,000 kickback, according to the indictment.

The municipal bond business is huge: In 2007 and 2008, about $800 billion worth of municipal bonds were issued across the country.

If convicted of the most serious charge against them, the three men face a maximum prison sentence of 20 years.

Mr. Rubin&S217;s lawyer Donald Etra said the government had &S220;no basis&S221; for the charges.

&S220;The bottom line is that David Rubin has done nothing wrong,&S221; Mr. Etra said. &S220;He&S217;s a brilliant businessman and a prominent philanthropist.&S221;

Lawyers for the other two men could not immediately be located.

3 Accused of Bid-Rigging in Municipal Bonds Sales

Filed at 2:36 a.m. ET

TOKYO, Oct 27 (Reuters) - Honda Motor Co (NYSE:HMC) , the world's seventh-biggest car maker, nearly tripled its annual profit forecasts as second-quarter earnings fell less than forecast, thanks to government stimulus schemes around the world that boosted sales.

Honda has weathered the industry turmoil, which drove two U.S. automakers to bankruptcy this year, better than many as its profitable and dominant motorcycle business cushioned the blow.

Sales by the maker of Honda Civic cars have turned up thanks to government sales incentives such as the United States' cash-for-clunkers programme. That has helped Honda and others gradually lift production levels from a nadir earlier this year.

Honda said on Tuesday its operating profit for July-September fell 56 percent to 65.54 billion yen ($712 million) from 148.85 billion yen in the second quarter last year as sales volumes fell and the yen strengthened against the dollar.

The result beat an estimate of 42 billion yen in a poll of five analysts by Thomson Reuters (NYSE:TRI) (TSX:TRI) I/B/E/S.

Net profit, which includes its earnings from the red-hot Chinese market, was 54.04 billion yen, against 123.32 billion yen last year.

For the full year to March 31, 2010, Honda nearly tripled its operating profit outlook to 190 billion yen from 70 billion yen.

The seventh biggest car maker by first-half sales also nearly tripled its net forecast to 155 billion yen from 55 billion yen absolutely free credit report.

That topped consensus forecasts from 21 brokerages for Honda's operating profit for the full year to March 2010 to hit 139 billion yen, with net profit of 113 billion yen.

Rivals Toyota Motor Corp (NYSE:TM) and Nissan Motor Co (NASDAQ:NSANY) are also expected to report improved second-quarter earnings next week, but Honda is seen making the most profit by far for the full year, partly due to its more flexible operations, fewer exports from Japan and a slim car line-up.

While market forecasts suggest earnings will continue to improve for Honda next year, auto executives are concerned about volatile currency moves and repercussions on demand when government stimulus measures around the world end.

Honda's sales in Japan, for one, have been powered by generous tax reductions on hybrids such as its new Insight model, and executives have said sales could suffer when the incentives run their course.

Shares of Honda gained 3.9 percent during the second quarter, outperforming Tokyo's transport sector subindex, which was flat.

Honda ended down 1.9 percent at 2,845 yen on Tuesday before the results were announced, against the transport sector's 1.7 percent fall.

Honda Raises Forecast as Stimulus Fuels Sales

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TOKYO (Reuters) – The Japanese government has decided to put a state-backed turnaround body in charge of the revitalisation of Japan Airlines (9205.T), the Nikkei business daily said on Sunday, underlining the government&&9;s deeper involvement in the process.

Liabilities at JAL would exceed its assets by as much as &&6;8.8 billion if Asia&&9;s largest airline by revenues were liquidated, a source with direct knowledge of the matter said on Friday, underscoring the depth of the problems facing the airline as it seeks aid from banks and the state to avoid bankruptcy.

The state body, the Enterprise Turnaround Initiative Corporation of Japan (ETIC), invests in and buys debt of companies with strained balance sheets and dispatches turnaround specialists to assist them in restructuring.

JAL is now set to slash its debt under the government&&9;s guidance and come up with a drastic restructuring scheme, the Nikkei said. The decision to put JAL under ETIC&&9;s supervision will be announced as early as this week, the paper said.

The ETIC, established earlier this month, will operate like an investment fund and will initially have the ability to procure up to 1 auto loans for people with bad credit.6 trillion yen (&&6;17 billion) in state-guaranteed funding in the current fiscal year to March 2010.

No officials at the ETIC were immediately available for comment.

A task force led by turnaround specialists, which reports to Transport Minister Seiji Maehara, has been seeking a bridge loan of about 180 billion yen and a total capital boost of 300 billion yen from both the government and the private sector, the source said.

The government, working with the ETIC, will look into a new and more in-depth turnaround scheme for the airline, while paying heed to the task force&&9;s existing plans, the Nikkei said.

JAL is headed for its fourth annual loss in five years, weighed down by roughly &&6;15 billion in debt and a bloated cost base that makes it less efficient than domestic rival All Nippon Airways Co (9202.T).

(&&6;1 = 92.04 Yen)

(Reporting by Kiyoshi Takenaka; Editing by Sugita Katyal)

Govt-backed body to oversee JAL turnaround: Nikkei

NEW YORK (Reuters) – Stocks rose on Friday as investors snapped up technology shares following upbeat broker comments on such bellwethers as Apple, offsetting a drag from natural resource shares after the dollar&&9;s rebound.

Apple Inc (AAPL.O), the iPhone and the iPod maker, jumped 0.5 percent to &&6;190.20 after it was added to UBS&&9; list of strategic stock picks.

Shares of BlackBerry devices maker Research In Motion Ltd (RIM.TO)(RIMM.O) gained 2 percent to &&6;70.08 after a Baird analyst upgraded the stock to "outperform" from "neutral," saying upcoming device launches could be a positive catalyst and the current stock price was attractive.

"Technology is one of the sectors that&&9;s still growing, and I think that&&9;s why you&&9;re seeing the strength. The valuations are still not extreme for their growth," said Alan Lancz, president of Alan B. Lancz & Associates Inc, an investment advisory firm, based in Toledo, Ohio.

"The tech balance sheets are strong, and the companies have some interesting products as far as the smartphones, and that&&9;s just incredible as far as the overseas potential."

The Dow Jones industrial average ( free credit scores.DJI) jumped 26.15 points, or 0.27 percent, to 9,813.02. The Standard & Poor&&9;s 500 Index (.SPX) rose 2.15 points, or 0.20 percent, to 1,067.63. The Nasdaq Composite Index (.IXIC) gained 8.82 points, or 0.42 percent, to 2,132.75.

The semiconductor index (.SOXX) was up 1.6 percent.

International Business Machines Corp (IBM.N) advanced 1.8 percent to &&6;124.48 and was the top boost to the Dow.

The dollar rose broadly, putting a lid on global commodity prices after Federal Reserve Chairman Ben Bernanke said that monetary policy might have to be tightened as a recovery takes hold.

The dollar&&9;s decline, which culminated in a 14-month trough against a basket of currencies on Thursday, has been one the major underpinnings of the stock market&&9;s run-up as the appetite for riskier assets grew.

The benchmark S&P 500 (.SPX) has rallied nearly 60 percent from a 12-year low of early March, and was on track to reverse a two-week losing streak.

(Reporting by Ellis Mnyandu; editing by Jeffrey Benkoe)

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