Carmakers Preparing For Slower Sales Growth In China

BEIJING (Reuters) – China’s massive car market may still be young, but the auto industry CEOs descending on Beijing this week will see first hand that it’s also growing up fast.

The Beijing auto show starts on Monday at a time when China’s auto market has begun softening after a decade of breakneck growth. The days when car sales could surge 46 percent in one year – as they did in 2009 – are gone, say many industry executives and analysts. Most see growth falling off to an average of 7-8 percent this decade.

Unfortunately for car makers, slower growth comes just as new entrants appear in the market and existing competitors add to their offerings.

“There are more brands and more products in China than ever before, and that’s making market conditions suddenly more competitive and tough for everyone,” said Li Shufu, chairman of Zhejiang Geely Holding Group Co. and Sweden’s Volvo, which Geely acquired in 2010.

To be sure, there is plenty of growth left. Even conservative forecasts have China’s auto market surging to 30 million vehicles a year by 2020, from last year’s 18 million. Some think volume could even reach 40 million.

But the signs of a tougher market are clear.

Local Chinese auto makers like Chongqing Changan Automobile Co. and BYD Co. have seen their once-robust profitability erode significantly, thanks to the government’s decision to scrap most of the auto purchase incentives it offered in the wake of the global economic crisis in 2008.

And some global auto makers, notably a Toyota Motor Corp. and Honda Motor Co., also have struggled to sustain high growth.

AMSTERDAM (Reuters) – The Netherlands, a core euro zone member, was drawn into Europe’s debt crisis at the weekend when the government failed to agree on budget cuts, making elections almost unavoidable and casting doubt on its support for future euro zone measures.

Prime Minister Mark Rutte, whose centre-right coalition has been in power since October 2010, said on Saturday that crucial talks on budget cuts had collapsed after his ally Geert Wilders refused to do a deal, and that new elections were inevitable.

In the short term, the government must seek support for budget cuts from the opposition parties.

But uncertainty over the makeup of a new government, and waning voter support for bailouts and austerity measures, raised questions over Dutch backing for a fiscal responsibility pact seen as crucial to helping Europe cope with its debt crisis.

The catalyst for the crisis was Wilders, who refused to agree to 14-to-16 billion euros ($18.5-$21.1 billion) of budget cuts needed to bring a bloated budget deficit under control.

Now the euro-skeptic, anti-immigration politician has threatened to fight his campaign on a European battleground.

“The Freedom Party benches are unanimously against Brussels diktats and the attack on our elderly,” Wilders tweeted on Sunday, later telling Dutch news agency ANP that Europe would be in “sharp focus” during any coming election campaign.

Wilders most recently has lobbied to jettison the euro and return to the guilder, the old Dutch currency, and he is against immigration not only of Muslims but also of Poles and other central and eastern European members of the EU – views that strike a chord with his supporters.

His Freedom Party had a pact to support Rutte’s minority government in parliament, giving it the majority to pass legislation, but after seven weeks of budget talks, Wilders suddenly backed out just when a deal appeared close.

His supporters are against budget cuts, particularly cuts in welfare, health and unemployment benefits.

“This was a package that would damage our economy over coming years and increase unemployment. And all that to meet a demand made by Brussels, accepted by the Liberals, of reaching a 3 percent deficit in 2013,” he said on Saturday.

HOUSTON (Reuters) – Chesapeake Energy Corp (NYS:CHK – News), in response to a Reuters report earlier this week, will disclose to shareholders the existence of loans its CEO Aubrey McClendon took out against his interest in thousands of wells granted to him as a corporate perk, according to a regulatory filing on Friday.

Reuters reported on Wednesday that McClendon has borrowed as much as $1.1 billion against his 2.5 percent interest in wells received as part of his compensation.

The loans, taken out over the past three years, were previously undisclosed to shareholders, analysts and academics said, raising concerns that McClendon’s personal financial deals could compromise his fiduciary duty to Chesapeake.

The company did not detail the amounts and terms of the loans, nor specific lenders, according to a preliminary proxy filing with the U.S. Securities and Exchange Commission.

Wall Street analysts who follow the company characterized the disclosure as a step in the right direction, but said more was needed.

“The increased disclosure in the proxy is a start, but it’s still disappointing that Chesapeake remains tone deaf to analyst and investors and only seems to take action once they’re called on the carpet … through a journalistic expose such as the one that came to light this week,” Mark Hanson, analyst at Morningstar said in an email sent to Reuters.

Joseph Allman, analyst at JP Morgan, said the company’s shareholders would benefit most if the company eliminated the Founders Well Participation Program (FWPP) that grants McClendon personal interest in all wells the company drills.

HANOVER, Germany (Reuters) – The global financial crisis is not over and technical innovation and investment will be key to sustaining what remains a “tortuous” recovery, Chinese Premier Wen Jiabao said on Sunday during a visit to Germany.

Wen also said China, the world’s biggest exporter and second largest economy, would press on with reforms aimed at creating better legal protection for foreign investors — a major concern for the growing number of German firms active in the country.

“Currently, the international financial crisis is not over and the global economic recovery is difficult and tortuous,” Wen said at the Hanover trade fair that was also attended by German Chancellor Angela Merkel.

More investment in the real economy and technical innovation will be the most powerful drivers of global recovery, he said.

China’s annual economic growth slowed to 8.1 percent in the first quarter of 2012 from 8.9 percent in the previous three months – the fifth consecutive quarter of slowdown.

“The reason why the global economy cannot walk out of the shadow of the (financial) crisis is also related to the lack of new growth points in the real economy,” Wen said, adding that China and Germany had fared better than most during the crisis due to their strong manufacturing bases.

“(The two countries) will surely have an ever more important role to play in innovation and development of worldwide industry,” he said.

Merkel, whose country has faced criticism over its insistence on reducing debts even during a time of poor growth in much of the developed world, said Germany wanted to strike a good balance between fiscal discipline and fostering growth.

“We must succeed with both because responsibility rests with Germany too for a sensible global economic development,” she said.

Merkel praised China’s huge stimulus package launched during the financial crisis, saying it contributed to Germany’s own export-led recovery.

Germany has also welcomed China’s pledge last week to contribute towards new funding for the International Monetary Fund that is meant to protect the global economy from the euro zone debt crisis.

The economies of China and Germany – the world’s second biggest exporter – are increasingly intertwined, with bilateral trade jumping to 130 billion euros in 2010 from 94 billion in 2009.

WASHINGTON (Reuters) – European Central Bank officials showed no sign of bending to renewed international pressure to do more to boost the euro zone’s struggling economy.

Top ECB policymakers, attending the International Monetary Fund’s spring meetings, politely but firmly rebuffed the IMF’s call that the bank should cut its policy interest rate below 1 percent and be prepared to provide more public funding to banks to reduce the risk of a new flare-up of the crisis.

“It’s a free world, we take note of this, but let me say that none of the advice of the IMF has been discussed by the Governing Council, in recent times at least,” ECB President Mario Draghi told a news conference on Friday.

And the ECB delegation to Washington had nothing to say, at least publicly, about a fresh suggestion by U.S. Treasury Secretary Timothy Geithner that the ECB had a role to play in helping European economies through tough reforms ahead.

“We think we have done our task in the last months by quite a number of standard and non-standard measures we have taken,” ECB executive board member Joerg Asmussen said on Friday on the sidelines of the IMF meetings.

He said the ball was now in the court of euro zone governments, which are trying to narrow budget deficits and undertake other reforms to restore market confidence and generate growth.

Unlike the U.S. Federal Reserve, which pursues full employment as well as low inflation, the ECB’s marching orders are to focus on keeping price growth in check, a point underscored by ECB officials several times over the weekend.

The Fed may yet provide more stimulus, on top of its near-zero interest rates and the $2.3 trillion in bonds it has already bought, even though the U.S. economy is stronger than Europe’s.

Economists polled by Reuters expect growth in the euro area to shrink by 0.4 percent in 2012 and to stay in a mild recession until the third quarter as weakness in Italy, Spain and Greece outweighs the stronger performance of regional powerhouses Germany and France.

“The stance of our monetary policy is fully appropriate,” ECB Vice President Vitor Constancio said in a speech. “It’s appropriate to the situation and the prospects that we (face) right now.”

The pressure on the ECB in Washington to do more to help growth contrasted with concerns among many policymakers from the 17-nation euro zone that their unprecedented stimulus to date could spark inflation when the region’s economies regain health.

ECB officials said they have met their responsibilities by lowering interest rates to 1 percent and providing two rounds of long-term loans to banks to prevent a credit crunch.

Bundesbank President Jens Weidmann said there was no shortcut for the ECB to restore market confidence.

“You cannot solve structural problems in the economy with instruments of monetary policy,” Weidmann said.

Martin Wolf just said something that should terrify anyone who believes the EU crisis can be navigated without default.

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The other news is Wolf expects IMF chief Christine Lagarde will get her request for at least $400 billion, which would double the fund’s lending capacity.

Wolf supports the idea of the IMF having a larger insurance fund, so countries won’t need to hold as much currency reserves but thinks it should be more global in nature.

“To put it all into Europe? That looks to me like a very dangerous game for the IMF,” he says. “They’ve made quite clearly some serious mistakes getting so involved in a political project they don’t really control.”

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In the end, Detroit Mayor Dave Bing said, he didn’t really have a choice. He had to sign off on a consent agreement with the state or the city would have fallen under the control of an emergency manager.

“It was either sign the agreement or bring in an emergency manager — those were my options,” Bing said. “So with that as my option I had no choice but to sign the agreement.”

Today is the first time Bing has spoken at length about the agreement that was approved April 4. The mayor spoke with reporters this morning via speakerphone. Bing has been at home recuperating from a March 24 colon surgery and blood clots in his lungs.

In his absence members of Bing’s administration negotiated with state officials and crafted a consent agreement that offered the city no short-term bailout cash and demanded that the city rip up tentative agreements with its 48 labor unions. Bing said he is disappointed, especially about the union contracts, and will work to mend fences with labor leaders.

“That’s a personal relationship and I’ll have to get back involved in that,” he said. “I think they’re intelligent and basically good people. We’re going to have to sit down and once again see what we can agree upon…I was very appreciative of the relationship we have established with labor, and labor is still going to play a key role in bringing this city back.”

Under the consent agreement, if new labor contracts are not approved by July 15 the city can impose terms.

Bing said he hold no animosity toward Gov. Rick Snyder or State Treasurer Andy Dillon, because “my approach was and is, try to do what’s right for the citizens of Detroit.”

“It’s about looking forward, not about looking back,” he said.

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Today, Friday, April 20 is Adolph Hitler’s birthday.

Incredibly, sixty-two years after his suicide, Hitler’s image still seems to be popping up everywhere. One would think that the legacy left by the man who personified ultimate evil would serve as an antidote to hate and extremism. A good thing, right? Not always.

Here in America, character assassination—not of Hitler—but of contemporary figures abound. Attacks from both political extremes often equate America’s top leaders from President George W. Bush to President Barack Obama—with the worst world leader of all time.

Meanwhile in Germany, this April 20th still finds neo-Nazi thugs and three-piece suit bigots still drawing inspiration from the Fuehrer.

Now from China comes an incredible attack on the Dalai Lama—the Fuehrer’s antithesis—as a “new” Hitler. A commentary on China Tibet Online, also carried by the official Xinhua News Agency, accused the exiled Tibetan leader and Nobel Peace Prize winner of “Nazi” racial policies including encouraging Tibetans to segregate themselves and planning a Holocaust against Han Chinese. This from a regime whose treatment of Tibetans, it could be argued sometimes bears a resemblance to the Nazi treatment of Poles.

Elsewhere in Asia, trendy invocations of Hitler in countries with virtually no Jews are even harder to account for. “Hitler chic” manifests itself in fashion, music, advertising campaigns, and even school competitions:

In Thailand—a Buddhist country of 64 million with less than 1,000 Jews—there was a disgraceful parade at the exclusive Catholic Sacred Heart Preparatory School in Chiang Mai led by students who gave the “Sieg Heil” salute carrying Nazi flags. Gun-toting adults proudly accompanied their children.

In Japan, the popular rock group Kishidan appeared on MTV Japan wearing SS-like uniforms. To its credit, Sony responded to criticism with a press release: “We will not broadcast, transmit, or distribute the video recording of Kishidan’s performance with the said costume and the recording will be disposed of immediately.”

Of course, there was no explanation from Kishidan as to why the garb of genociders was chosen in the first place.

In South Korea, where Hitler-themed sports bars remain popular, an advertising firm produced an ad campaign with a Nazi soldier and Hitler symbolizing the “revolutionary” moisturizing and calming effects of a skin lotion.

In India, where, of course the swastika had a religious significance long before the Nazis perversely appropriated it, there was the “Hitler Crossing Café” in Mumbai and a publisher who has a smash best-seller marketing “Mein Kampf” to grad students and aspiring business leaders as a prime example of an highly-organized mind.

Closer to the epicenter of Mideast fault lines, in Turkey, the chief rabbi of that country’s beleaguered 500 year-old Jewish community, protested a television commercial for Biomen’s “100 percent male shampoo” showing Hitler shouting in a dubbed-over Turkish voice: “If you are not wearing women’s dress, you shouldn’t be using women’s shampoo either!” At a time when Turkey’s president anti-Israel rants continue unabated it took international protests to finally force the Biomen Hitler campaign from the airwaves.

Search Google and you will be overwhelmed with new titles every year containing the word “Hitler,” including those about “the young Hitler” that flirt with sympathy for that “troubled teenager.”

Nazi-themed art is also hot. Just a few years ago, artist Tom Sachs produced for the New York Jewish Museum’s Mirroring Evil exhibition his “Giftgas Giftset” exhibit consisting of simulated poison gas canisters bearing names and logos like Chanel.

Sachs explained: “I use the iconography of the Holocaust to bring attention to fashion… Fashion is good when it helps you to look sexy but it’s bad when it makes you feel stupid or fat because you don’t have a Gucci dog bowl and your best friend has one.”

Historian Peter Novick justified such trendy art as a necessary iconoclastic corrective to conventional moral revulsion at the Holocaust: “There are more important lessons about how easily we become victimizers to be drawn from the normal behavior of normal Americans in normal times than from the SS in wartime.”

Do critics like Novick mean that the sins of Middletown, USA, have more to teach us about murderous evil than the esprit de corps of the Storm Troopers—or the videocam that Toulouse’s serial killer Mohamed Merah wore around his neck?

Leaders of our Global Village may argue that they already have too much on their plate; that Job Number 1 is to focus on the Herculean task of regaining economic momentum. But history teaches us again and again that societies rushing headlong into the future—willfully oblivious to the past—are destined for disaster.

A generation after Auschwitz, Hitler’s aura still looms large. The only stave that can finally slay Hitler’s ghost is educating the conscience of future generations. We can either confront evil or watch our grandchildren march to its totalitarian hymns.

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The country may be focused on the presidential election but former Senator Arlen Specter says Congress is the key to what happens to the U.S. economy.

“Regardless of who is elected president, if Congress is gridlocked nothing will happen in Washington,” Specter tells The Daily Ticker. And there are many issues that require Congressional attention, including the expiration of the Bush tax cuts and the $1.2 trillion in automatic spending reductions that will all take effect by year end if Congress does nothing.

Specter spent 30 years in Washington as a senator from Pennsylvania, most of them as a Republican. But after he voted for the president’s stimulus plan in 2009 — “the single most important vote of 10,000” he notes — Specter switched to the Democratic Party, setting the stage for the end of his political career. He recounts it all in his new book Life Among The Cannibals.
Specter hasn’t endorsed a candidate for the presidential election. He’s critical of Mitt Romney’s constant position shifts and says the former Massachusetts governor doesn’t have a plan to revive the economy. But Specter says President Obama hasn’t had much success with the economy either and should explain why he didn’t follow through on recommendations from the Simpson-Bowles commission to cut the deficit.

Unlike Romney, Specter supports the stimulus plans of Presidents Obama and Bush which together injected about $1.5 trillion into the economy. Those programs “saved us from a depression” says Specter. Now he says it’s up to U.S. voters to do their job come election day by choosing a Congress that will “take care of the people’s business.”

AHAHAHAHAHAhHAHA

Uh, read here:

Households in the U.S. may remain intent on repairing tattered finances by rebuilding savings for years to come as the specter of job losses and meltdown in stocks triggered by the recession lingers.

Americans are putting money away at a pace more than double that leading up to the economic slump. The saving rate has averaged 4.8 percent since June 2009, when the 18-month contraction ended, compared with 2.2 percent in the three years leading up the downturn.

“Households are going to be mired in this deleveraging environment for a few more years,” Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York, said in a telephone interview. “That’s not atypical following a financial crisis.”

Almost three years into the recovery, the world’s largest economy has yet to regain even half the 8.8 million jobs lost and $16.4 trillion in household net worth washed away as a result of the worst recession since the 1930s. While the saving rate has dropped recently, longer term the need to boost cash reserves and pay down debt may eclipse the urge to be the first on the block to drive the newest model car.

Auto Demand
Pent-up demand for automobiles helped propel a 0.8 percent gain in consumer spending in February, the biggest in seven months, according to Commerce Department data. The pickup carried over into March as figures this week showed retail sales also advanced 0.8 percent, reflecting stepped-UNNp purchases of furniture, clothes and electronics.

Stronger earnings, reflecting in part the recent pickup in sales, are boosting share prices. The Standard & Poor’s 500 Index climbed 0.4 percent to 1,382.32 at 10:03 a.m. in New York. General Electric Co. (GE), Microsoft Corp. (MSFT) and Schlumberger Ltd. reported profits that topped analysts’ estimates.

Shares were also boosted by better economic news elsewhere. A report showed German business confidence unexpectedly increased in April for a sixth month,

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Arlen Specter, the fiery former senator from Pennsylvania, has returned to the spotlight, haranguing his Beltway colleagues and giving an unvarnished view of Congress in his new book, “Life Among The Cannibals.” Specter was elected to the Senate in 1980 as a moderate Republican but switched parties in 2009 because “as the Republican party has moved farther and farther to the right, I have found myself increasingly at odds with the Republican philosophy and more in line with the philosophy of the Democratic Party,” Specter said at the time. Specter ultimately lost his seat to two-term Republican Congressman Joe Sestak in the 2010 midterm election, ending the storied career of one of the Senate’s most well-known and influential figures.

In a no-holds-barred interview with The Daily Ticker, Specter shares his views on Congress, Citizens United, the Tea Party and more.

On the current state of Congress:

America is not being governed, Specter says. Extremist members in the Republican and Democratic parties are controlling the parties, causing the gridlock that threatens to shut down the government, he notes. As a result, lawmakers are afraid to buck party lines in fear that they will be booted out of office. Specter points to longtime Connecticut Senator Joe Lieberman, who forced to run as an Independent after liberal Democrats voted against him in the state’s 2006 primary and Bob Bennett, the former Republican Senator from Utah, who was defeated in 2010 by an aggressive campaign led by the Tea Party despite being well-liked and having a fairly conservative record in Congress. Olympia Snowe, the moderate Republican senator from Maine, recently announced she was retiring from the Senate because of the increasingly partisanship environment in Washington. The Tea Party, Specter says, intends to drive out all moderates in Congress including sitting senators Dick Luger of Indiana and Orrin Hatch of Utah.

“There’s not a single moderate left in the Republican Congress,” Specter argues. “The art of politics is the art of the possible — it is accommodation. You have a very complex society with many divergent rules. Today, compromise is a dirty word in Congress. The extremists have laid down the gauntlet and they’re tougher than hell.”

On the Supreme Court:

Citizens United “was a horrendous decision,” Specter says. “The court has gone too far …it’s really out of control. It disregarded a 100-year-old precedent.”

Specter, a fervent supporter of healthcare reform, says President Obama’s Affordable Care Act is “constitutional and a legitimate exercise of congressional authority.”

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REUTERS – Days after being rebuked by shareholders, Citigroup Inc (C.N) Chief Executive Vikram Pandit and the bank’s directors have been sued by a shareholder accusing them of awarding outsized pay to top executives.

The complaint, filed Thursday in Manhattan federal court, said directors breached their fiduciary duties by awarding more than $54 million of compensation in 2011 to the executives, including $15 million to Pandit, though the bank’s performance did not necessarily justify it.

At Citigroup’s annual meeting on Tuesday, about 55 percent of shareholders participating in an advisory vote rejected Pandit’s pay package. That marked the first time that investors had rejected a compensation plan at a major U.S. bank.

That vote “has cast doubt on the board’s decision-making process, as well as the accuracy and truthfulness of its public statements,” said the complaint, brought by shareholder Stanley Moskal. “Absent this (lawsuit), the majority will of the company’s stockholders shall be rendered meaningless.”

Citigroup spokeswoman Shannon Bell said the lawsuit is without merit and that the bank will seek its dismissal, “consistent with court rulings in similar cases.”

“The board takes the shareholder vote on executive compensation very seriously and will consult with representative shareholders to better understand their concerns,” she added.

Shareholders won the right to vote on executive pay at most public companies under the 2010 Dodd-Frank Act. Many analysts remained skeptical the “say on pay” votes would matter much.

Richard Parsons, a Citigroup director retiring as chairman of the New York-based bank, called the rejection of Pandit’s pay package a “serious matter” that the board would address.

Pandit was paid a symbolic $1 in 2010 and $128,741 in 2009. He had joined Citigroup in 2007 when the bank bought his hedge fund Old Lane Partners for $800 million. Citigroup is the nation’s third-largest bank by assets.

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We’re just a few days away from the third Federal Open Market Committee meeting of the year, and the air is thick with speculation about QE3, the U.S. economy and our money.

As has been the case for some time, you would be hard-pressed to find a Fed watcher who’s calling for any real drama next week. In short, don’t expect a rate increase or clear pronouncements about future monetary injections. Do expect substantial parsing of every grammatical tweak in the central bank’s statement and ongoing talk about whether the dollar is living on borrowed time.

In all seriousness, the Fed and its actions over the past few years have been no small matter. That holds whether you view Chairman Ben Bernanke and his colleagues as saviors of the American economy, in which case you’ve supported moves aimed at bolstering the money supply, or whether you view them as destroyers of the American economy, in which case you’ve viewed their decisions as setting us on a course toward inevitable and out-of-control inflation.

Those worries about the Fed, the dollar, the U.S. and the future in general have played no tiny part in lifting investor interest in precious metals. You don’t have to be a commodities trader to know that gold and silver have been very good performers in recent years. Start with silver. Even after the decline from last year’s trip to near $50 an ounce, if you’ve owned the metal for around two years you’ve almost doubled your money. As of now, it’s about $32. Gold is off a couple hundred dollars from it’s high near $1,900 an ounce a few months ago, but it still has had an outstanding run. In the last two years you’re up about $500 and over five years by roughly $1,000.

Supporters of physical metals as legitimate currencies like to view themselves as practical. Detractors like to mock them as helmet-wearing cave dwellers. But we’re getting to the point where the dollar’s fate, as well as that of the metals, isn’t simply an academic exercise. See Utah, where Gov. Gary Herbert recently signed legislation liberalizing the use of gold and silver as currencies. When you’re talking about metals as legal tender in one of the lower 48, that’s saying something about the times in which we live.

And Utah’s not alone, potentially. CNNMoney noted a couple of months ago that more than a dozen states have lawmakers in office who are at least exploring options to the dollar. On the federal level, long-serving U.S. Rep. Ron Paul, who, yes, is still seeking the GOP nomination for president and whose image made an appearance on a silver coin a few years ago, has been one of the nation’s most visible proponents of dollar alternatives for years.

So is Utah the start of a trend? We can’t say that for sure yet, but the issue isn’t going away. Of course, neither is the Fed, and neither is the debate.

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Larry Ellison, the outspoken and brash chief executive of Oracle Corp., is always full of surprises.

This week, as one of the primary witnesses in Oracle’s (ORCL -0.46%) lawsuit against Google (GOOG +0.22%) , he might even be surprising himself. With Oracle alleging Google’s Android software infringes on its intellectual property, Ellison has become an unwitting avenger for his friend, Apple co-founder Steve Jobs.

Jobs, investors may remember, told author Walter Isaacson many things for his biography, “Steve Jobs” before he died last year. One of his more passionate diatribes was on the topic of Google, and how Android copied many features of Apple’s (AAPL -1.94%) iPhone and its iOS software. Jobs vowed he would “destroy Android, calling it a “stolen product.”

“I will spend my last dying breath, if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong,” Jobs told Isaacson. “I’m willing to go thermonuclear war on this,” he said, even if he had to use all of Apple’s cash in the process.

To date, Apple has never sued Google itself, but instead has sued some of its hardware partners, including HTC and Samsung, for infringing on Apple’s patents including those that cover multi-touch gestures, swiping, pinching and expanding and other inventions.

Ford (F) and its joint-venture partner said Thursday they will build a $760 million assembly plant in Hangzhou, bringing Ford’s investment in China since 2006 to $4.9 billion.

The Hangzhou plant, built with Changan Ford Mazda Automobile, will open in 2015 with an initial production capacity of 250,000 units.

“Now excuse me, I have a flight home to catch”

Brussels, Belgium (CNN) — The United States is prepared for “any contingency” when it comes to dealing with North Korea, Secretary of Defense Leon Panetta told CNN.

“We’re within an inch of war almost every day in that part of the world, and we just have to be very careful about what we say and what we do,” Panetta said Wednesday on “The Situation Room with Wolf Blitzer.”

During a wide-ranging interview at NATO headquarters in Brussels, Panetta and Secretary of State Hillary Clinton talked about Syria, the Secret Service and North Korea. The two were in Belgium for meetings to prepare for a NATO summit in Chicago next month.

Panetta’s assessment of North Korea followed last week’s launch by Pyongyang of a long-range rocket. Despite the failure of the launch — with the rocket breaking apart 81 seconds after liftoff, it drew condemnation from the United States and countries in the region.

When asked whether the threat posed by North Korea kept him awake at night, Panetta said: “Unfortunately these days, there’s a hell of a lot that keeps me awake. But that’s one that tops the list.”

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The finance chief for a small city in northern Illinois has been arrested and charged with stealing more than $30 million from the city coffers and using the money to sustain a luxurious lifestyle.

MyFoxChicago reports that Rita Crundwell, 58, the comptroller of Dixon, is accused of using city funds to finance her horse farm and buy expensive items ranging from tractor-trailer trucks to a motor home to jewelry.

She held the position as comptroller since the early 1980s, in the boyhood home of former President Ronald Reagan. The federal complaint against her alleges that she embezzled more than $3.2 million just since last fall. That’s on top of a salary of $80,000.

She allegedly bought a $2.1 million motor home, in addition to several trucks that cost as much as $147,000, according to the report.

Dixon Mayor James Burke called the allegations a “traumatic event” for the city.

According to a criminal complaint, the siphoning of city funds went undetected for years until another staffer filling in as vacation relief became suspicious and discovered a secret bank account. How an enormous sum — it dwarfed the city’s current annual budget of roughly $8 million to $9 million — could be stolen and escape the notice of a yearly audit left many puzzled.

A Chicago-based corruption watchdog, the Better Government Association, called it a wakeup call for state and local officials to put in place better safeguards, especially in smaller towns that lack rigorous oversight.

“Tens of billions of our tax dollars flow through 7,000 plus units of government in Illinois every year. And we can only watch a few of them,” said the association’s president, Andy Shaw. “Most of them don’t have inspector generals. Most of them don’t have auditor generals. Most of them don’t have watchdog groups looking closely. … It’s ripe for ripoffs.”

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The widening investigation into questionable spending by General Services Administration official Jeff Neely and other alleged abuses within the agency suggests Neely’s wife was also living large on taxpayer money — with perks including vacations, catered parties and even a free parking spot.

Some of the most specific details about Deb Neely’s involvement have emerged over the past few days of congressional hearings, following the April 2 inspector general’s report about an $823,000 Las Vegas conference organized by her husband.

GSA inspector general Brian Miller said Wednesday during a Senate hearing on GSA that Neely’s wife had a dedicated parking space at an agency facility in California.

“Even today, we found out that the wife of the regional commissioner (Neely) had a parking space throughout the year of 2012 at the federal building,” he said.

Sources familiar with the investigation later confirmed to Fox News that Deb Neely was afforded the parking spot at the San Francisco office.

Other records indicate that Neely’s wife “personally handled party arrangements, directed the actions of federal employees and ordered thousands of dollars of food at taxpayer expense,” Rep. Elijah Cummings, D-Md., said Monday during a House oversight hearing.

He also said Neely’s wife once reportedly impersonated a federal employee so she could join her husband at a private sector conference.

“The impression conveyed by these documents is that Mr. Neely and his wife believed they were some sort of agency royalty who used taxpayer funds to bankroll their lavish lifestyle,” said Cummings, ranking member of the House Committee on Oversight and Government Reform.

Investigations also uncovered what appears to be an e-mail from Neely to his wife in which he talks about taking her on an official, 17-day trip to Hawaii and Guam as a possible “birthday present.”

She wrote back: “Its yo birthday … We gonna pawty like iz yo birthday!”

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Since becoming secretary of Defense in July, Leon Panetta has flown home to spend time at his walnut farm in Monterey, Calif. 27 times, according to the Pentagon.

Panetta is required by post-9/11 department rules to travel on a military plane with communications equipment, which Defense officials have estimated costs something on the order of $32,000 for each round trip to Monterey and back. The rules require Panetta to compensate the taxpayers for the cost of a commercial plane ticket: about $630.

Of course, $630 wouldn’t get Panetta a private ride on a jet that leaves and returns at times of his choosing, but the secretary says he has no choice.

It’s harder to make that argument, though, when you are the one calling for deep cuts in Defense spending and also issue the orders that cause a soldier making $20,000 a year to uproot his family to the other side of the country or separate from them entirely. Privates shipped to Ft. Bliss don’t get to spend their weekends at home.

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The National Institutes of Health has spent millions of dollars over the past decade to fund the construction of an HIV-prevention website that, among other sexually explicit features, includes a graphic image of homosexual sex and a Space Invaders-style interactive game that uses a penis-shaped blaster to shoot down gay epithets.

The grant money went to a team of researchers at the University of Minnesota that created a site called Sexpulse. The goal was to draw in what are termed MISM — or “men who use the Internet to seek sex with men” — in order to educate them and ultimately reduce their risk of contracting HIV.

But the site used unorthodox methods to get subjects’ attention and keep them interested. The site includes pornographic images of homosexual sex as well as naked and scantily clad men. It includes several risqué interactive features, like the Space Invaders-style arcade game.

The conservative Traditional Values Coalition, which flagged the government-backed research and described it as “gay porn,” complains the website and studies are a multimillion-dollar waste.

“We can’t spend money on this. America is broke,” coalition President Andrea Lafferty said. “People are losing their homes, they’re losing their jobs … and what we’re doing is we’re funding year after year these cockamamie grants by people at NIH.”

NIH records show the government started awarding grants to the Minnesota team beginning in 2001, renewing them almost every year since then. The 2012 grant was valued at more than $680,000; in total, NIH has awarded more than $5 million to the team. The researchers started developing the Sexpulse site in 2005 and continue to work on the project — the project leader told FoxNews.com that total funding through 2015 is expected to top $7 million.

The values coalition, which frequently complains about NIH spending, is drawing attention to the Sexpulse grants as Congress renews a heated debate over government waste in the wake of the General Services Administration scandal. In that case, an internal report found the agency spent more than $820,000 on a Las Vegas retreat.

“This is a lot more money,” Lafferty noted of the NIH funding.