Business - BusinessWeek Online

A whiff of recession smoke seems to have entered the room, and those of a pessimistic bent can already see the flicker of flames outside the window. Nouriel Roubini, an economist at New York University who was worried about a global recession in 2004, is now predicting that "the U.S. is heading toward a sharp recession by early 2007." In his view, "current economic and financial conditions in the U.S. eerily resemble those that led to the stock market crash in October, 1987."

The U.S. Congress has yet to pass the pending legislation cracking down on Internet gambling. But in the meantime, the Justice Dept. has cast a much deeper freeze over the business with its July arrest of BetOnSports Chief Executive David Carruthers. Now, under pursuit of U.S. legal authorities, European online gaming companies are scrambling to reduce their exposure in the U.S. and find new markets in Europe and Asia.

Led by China and India, Asia's superfast economies have dazzled observers for the last decade. But until recently the defining feature of most of them was corporate bigness.

It looks as if stocks have finally have shaken off the summertime blues. In the week of Aug. 14, a Mideast ceasefire and mild inflation data helped stocks climb to their highest levels since mid-May. The major indexes pieced together five straight days of gains, with the Dow Jones industrial average finishing the week up 2.6% and the tech-heavy Nasdaq composite index surging 5.1%.

Northwest Airlines just won a cut in take-home pay of as much as 40% from the last of its labor groups as the carrier restructures through bankruptcy proceedings. Management has followed up by advising these newly strapped employees on how to make ends meet. Among the company's tips: dumpster-diving.

The University of Michigan consumer sentiment index tumbled to 78.7 in the preliminary August reading, vs. 84.7 in the final July print. That's the lowest since last October in the aftermath of the hurricanes. The current economic conditions index fell to 100.8 from 103.5 in July. The economic outlook index dropped to 64.5 from 72.5. The 1-year inflation index jumped to 4.2%, from 3.2% in July.

The list of Web sites serving up an array of video services is getting longer all the time. Most are a clearinghouse for countless short clips, ranging from the humorous to informative to downright odd. Some provide tools for uploading and sharing. Others are online video stores. Some, including Google Video, are a combination of all three.

The dog days of summer are here and the economic calendar is light. The lack of economic data means that economists and investors will pay extra attention to some key housing figures that are scheduled for release.

For about a decade now, Jang Ha Sung has been on a crusade. The business professor has devoted a big chunk of his adult life to drawing attention to the gold-plated corporate corruption and insider dealing that have been defining features of South Korea's mighty corporate conglomerates, or chaebol. Jang's weapon of choice has been a very blunt instrument: shareholder lawsuits.

Sometimes it's impossible not to love what's bad for you: fudge ripple, French fries, martinis, and, yes -- even at $3.50 a gallon -- gas-guzzling mega-SUVs with looks and class to spare. Land Rover's all-new LR3 carries on the brand's noble traditions of trek-worthy technology wrapped in haute-couture luxe. Unfortunately, this truck's fuel economy is plain sinful.

The latest reports on housing and inflation invite the question: What's the Fed to do? The consumer price index (CPI) bucked the gyration in the producer price index (PPI), and posted the expected strength in July that's consistent with other price indicators. The CPI rose 0.4%, with the core up 0.2%, after respective gains of 0.2% and 0.3% in June.

It's still chaos everywhere you look at British airports, and no one is feeling the strain more than Europe's fast-growing budget airlines. Since the terrorism scare unfolded on Aug. 10, British low-cost carrier EasyJet has canceled more than 500 flights, while Europe's largest discounter, Ireland's Ryanair (NASDAQ:RYAAY - News), has grounded 270 of its 750 scheduled daily departures.

Almost one year ago, Hurricane Katrina devastated the Gulf Coast. The Category 3 storm, which made landfall on the morning of Aug. 29, 2005, generated winds of up to 175 mph, caused more than $81.2 billion in damage, killed more than 1,800 people, and displaced many thousands more, of which a large percentage have yet to return.

Base Price: $24,595 POWERTRAIN: 3.6-liter, 252-hp, 251-lb-ft V6; fwd, six-speed automatic

Economic forecasting is a hazardous art, even in our era of hyperfast computers and copious quantitative data. Still, it seems that the degree of uncertainty over the economy's trajectory is unusually deep at the moment. And that's why I think now is a good time to load up on U.S. Treasuries.

Stuart Karten and his small design team have dabbled in DNA analyzers and Bluetooth headsets, untangled problems with Belkin computer cable aesthetics, and helped companies like Adidas, Mitsubishi, and Du Pont overhaul their products and image. But even before founding Stuart, his eponymous firm, in 1984, Karten had made a name designing medical products.

Pontiac has another bona fide winner on its hands in its new G6 Convertible coupe. The '06 version came out late -- in April -- and quickly sold out, so dealers are now selling '07s. The company rightly describes the G6 convertible as "red-hot," noting that the cars spend just an average of 11 days on dealers' lots before being snapped up. That makes two best-selling new Pontiacs on the market right now. The other is the Solstice two-seater sports car (see BusinessWeek.com, 10/5/05, "Solstice: A Brawny Beauty").

The July overall consumer price index (CPI) is expected to increase 0.4%, while the core index is seen rising 0.2%. The energy aggregate is expected to jump 2% to 3%, led by a 5% surge in gasoline prices. The core aggregate has been surprisingly firm so far in 2006, with an average gain of 0.26%. Specifically, the weighty shelter component has risen 0.3% to 0.4% over the last five months, as higher rents continue to put upside pressure on this component. We see a continuation of recent trends.

In 1999, the Institute of Medicine shocked the health-care industry with its landmark report, "To Err Is Human," which highlighted the staggering human and financial costs of medical error: an estimated 44,000 to 98,000 in the U.S. dead each year as a result of medical errors, more than from motor vehicle accidents or breast cancer, costing the country between $17 billion and $29 billion in health-care costs, disability, and lost income.

Carlisle Cos. , a maker of industrial products, has a solid track record of growth, in our view, with earnings advancing at a compound annual growth rate (CAGR) of 10% over the past decade, despite that the company operates in sectors that are somewhat cyclical.

"You're what?!" "Mom, I've lined up a job in New York City -- and an apartment, too. I'll be moving out on Saturday." "Where will you be living?" "I found a great place in the Bronx!"

The Aug. 10 arrests in Britain of 24 men suspected of plotting to use liquid explosives to blow up jetliners have set off a global panic about what should and shouldn't be allowed on planes. In this climate, the duty-free industry finds itself in an unenviable position: It sells flammable fluids in airports.

The Federal Reserve finally decided to pause at its Aug. 8 monetary policy meeting. Now, investors and economists will look at economic data to determine the next move. Forecasts are all over the place, with expectations ranging from a quick resumption in rate hikes to rate cuts not too far down the road.

Pssstdo you want to know a secret? The world's richest sports franchise has no flamboyant owner pulling the strings like George Steinbrenner does for the New York Yankees. Nor is it graced, like England's Chelsea, with a Russian billionaire who throws cash to acquire players. Of all the surprises and ironies in professional soccer, one of the biggest is that global power Real Madrid is a democratically elected nonprofit association.

Competing at the highest level is not about winning. It's about preparation, courage, understanding and nurturing your people, and heart. Winning is the result.

Pull up a stool during lunch hour at Miller's Bar, a modest but popular joint a mile west of Ford Motor Co.'s boxy "Glass House" headquarters in Dearborn, Mich., and you can hear plenty of frazzled workers worried about the state of the company. A plainly decorated haunt with a dimly lit bar, it's a Dearborn institution where burgers, fries, and onion rings are the only fare and everything is served on wax paper. Forget silverware. "I like the atmosphere in here better than I like work these days," says one 20-year veteran now in Ford sales and service.

File it under the category of "be careful what you wish for." In early August at the Black Hat Conference, an annual meeting of computer security experts in Las Vegas, Microsoft Corp. (NASDAQ:MSFT - News) handed out 3,000 test copies of its new operating system, Windows Vista, and challenged attendees to help spot security glitches. A short time later, Joanna Rutkowska obliged. In a packed ballroom at Caesar's Palace , the 25-year-old Polish programming whiz delivered a devastating presentation in how to hack an earlier but similar test version of Vista. ...

After coming out of bankruptcy on Feb. 1 much leaner, United Airlines' parent, UAL (NASDAQ:UAUA - News), is drawing fresh attention for its turnaround efforts. There's also buzz of a merger with Continental Airlines . The two have talked in the past, and some pros think the effort will be rekindled. One money manager who owns UAL shares, has close ties with executives, and asked not to be named, says Continental has not given up. "The strategic fit (would) be great," he argues. A merger would make UAL-Continental tops in the U.S. ...