TRUNG SON, Vietnam &<51; It seemed as if this village in northern Vietnam had struck gold when a Chinese and a Japanese company arrived to jointly build a coal-fired power plant. Thousands of jobs would start flowing in, or so the residents hoped.

This is the eighth in a series of articles examining stresses and strains of China?s emergence as a global power.

A Chinese worker at a power plant construction site in Vietnam. China, famous for its export of cheap goods, is increasingly known around the world for shipping out cheap labor. More Photos »

Four years later, the Haiphong Thermal Power Plant is nearing completion. But only a few hundred Vietnamese ever got jobs. Most of the workers were Chinese, about 1,500 at the peak. Hundreds of them are still here, toiling by day on the dusty construction site and cloistered at night in dingy dormitories.

&S220;The Chinese workers overwhelm the Vietnamese workers here,&S221; said Nguyen Thai Bang, 29, a Vietnamese electrician.

China, famous for its export of cheap goods, is increasingly known for shipping out cheap labor. These global migrants often work in factories or on Chinese-run construction and engineering projects, though the range of jobs is astonishing: from planting flowers in the Netherlands to doing secretarial tasks in Singapore to herding cows in Mongolia &<51; even delivering newspapers in the Middle East.

But a backlash against them has grown. Across Asia and Africa, episodes of protest and violence against Chinese workers have flared. Vietnam and India are among the nations that have moved to impose new labor rules for foreign companies and restrict the number of Chinese workers allowed to enter, straining relations with Beijing.

In Vietnam, dissidents and intellectuals are using the issue of Chinese labor to challenge the ruling Communist Party. A lawyer sued Prime Minister Nguyen Tan Dung over his approval of a Chinese bauxite mining project, and the National Assembly is questioning top officials over Chinese contracts, unusual moves in this authoritarian state.

Chinese workers continue to follow China&S217;s state-owned construction companies as they win bids abroad to build power plants, factories, railroads, highways, subway lines and stadiums. From January to October 2009, Chinese companies completed $58 billion of projects, a 33 percent increase over the same period in 2008, according to the Chinese Ministry of Commerce.

From Angola to Uzbekistan, Iran to Indonesia, some 740,000 Chinese workers were abroad at the end of 2008, with 58 percent sent out last year alone, the Commerce Ministry said. The number going abroad this year is on track to roughly match that rate. The workers are hired in China, either directly by Chinese enterprises or by Chinese labor agencies that place the workers; there are 500 operational licensed agencies and many illegal ones.

Chinese executives say that Chinese workers are not always less expensive, but that they tend to be more skilled and easier to manage than local workers. &S220;Whether you&S217;re talking about the social benefits or economic benefits to the countries receiving the workers, the countries have had very good things to say about the Chinese workers and their skills,&S221; said Diao Chunhe, director of the China International Contractors Association, a government organization in Beijing.

But in some countries, local residents accuse the Chinese of stealing jobs, staying on illegally and isolating themselves by building bubble worlds that replicate life in China.

&S220;There are entire Chinese villages now,&S221; said Pham Chi Lan, former executive vice president of the Vietnam Chamber of Commerce and Industry. &S220;We&S217;ve never seen such a practice on projects done by companies from other countries.&S221;

At this construction site northeast of the port city of Haiphong, an entire Chinese world has sprung up: four walled dormitory compounds, restaurants with Chinese signs advertising dumplings and fried rice, currency exchanges, so-called massage parlors &<51; even a sign on the site itself that says &S220;Guangxi Road,&S221; referring to the province that most of the workers call home.

One night, eight workers in blue uniforms sat in a cramped restaurant that had been opened by a man from Guangxi at the request of the project&S217;s main subcontractor, Guangxi Power Construction Company. Their faces were flushed from drinking Chinese rice wine. &S220;I was sent here, and I&S217;m fulfilling my patriotic duty,&S221; said Lin Dengji, 52.

Such scenes can set off anxieties in Vietnam, which prides itself on resisting Chinese domination, starting with its break from Chinese rule in the 10th century. The countries fought a border war in 1979 and are still engaged in a sovereignty dispute in the South China Sea.

Xiyun Yang contributed reporting from Beijing, and Sun Huan contributed research from Beijing.

Uneasy Engagement: China’s Export of Labor Faces Scorn

WASHINGTON – Regulators on Friday shut down two big California banks, as well as banks in Alabama, Florida, Georgia, Michigan and Illinois, bringing to 140 the number of U.S. banks brought down this year by the weak economy and mounting loan defaults.

The Federal Deposit Insurance Corp. took over all seven.

Regulators shuttered First Federal Bank of California, based in Santa Monica, with $6.1 billion in assets and $4.5 billion in deposits, as was as Imperial Capital Bank of La Jolla, Calif., with about $4 billion in assets and $2.8 billion in deposits.

California was one of the states hardest hit by the real estate market meltdown and many banks there have suffered under the weight of soured mortgage loans. First Federal and Imperial Capital bring to 17 the number of California banks to fail this year.

Also closing their doors Friday were Atlanta-based RockBridge Commercial Bank, with $294 million in assets and $291.7 million in deposits; and New South Federal Savings Bank, based in Irondale, Ala., with $1.5 billion in assets and $1.2 billion in deposits.

Citizens State Bank of New Baltimore, Mich., with $168.6 million in assets and $157.1 million in deposits, was shut down, along with Peoples First Community Bank of Panama City, Fla., with $1.8 billion in assets and $1.7 billion in deposits.

Regulators also closed Independent Bankers' Bank, based in Springfield, Ill. — a sort of wholesale bank that provided services to 450 client banks in four states — with $585.5 million in assets and $511.5 million in deposits.

OneWest Bank of Pasadena, Calif., agreed to buy all of the deposits and essentially all of the assets of First Federal Bank. All 39 of its branches will reopen on Saturday as branches of OneWest.

Los Angeles-based City National Bank agreed to assume all of Imperial Capital's deposits, as well as $3.3 billion of the failed bank's assets. The FDIC will retain the remaining assets for a later sale. All nine branches of Imperial Capital will reopen Monday as City National Bank branches.

Beal Bank, based in Plano, Texas, agreed to assume the assets and deposits of New South Federal Savings Bank, which only had one branch. Hancock Bank, based in Gulfport, Miss., agreed to assume the deposits and about $1.6 billion of the loans and other assets of Peoples First Community Bank. The FDIC will retain the rest for eventual sale.

The FDIC was unable to find a buyer for RockBridge Commercial Bank, so checks covering insured accounts will be mailed to retail depositors, the agency said.

For Independent Bankers' Bank, the FDIC set up a temporary "bridge bank," which the agency will operate as it continues to seek a buyer. The FDIC also set up a "bridge bank" for Citizens State Bank, which will continue to operate for about 45 days to allow customers access to their deposits and open accounts at other banks. It will be operated by Huntington National Bank of Columbus, Ohio, under a contract with the FDIC.

The FDIC estimates the failure of First Federal Bank of California will cost the deposit insurance fund $146.3 million and Imperial Capital's closing is expected to cost the fund $619.2 million.

The failure of Citizens State Bank will cost $76.6 million; the failure of New South Federal Savings Bank is expected to cost $212.3 million; that of Peoples First Community Bank $556.7 million; Independent Bankers' Bank, $68.4 million; and RockBridge Commercial Bank, $124.2 million.

RockBridge Commercial had about $2.1 million in deposits that exceeded the $250,000 per-account insured limit, an estimate likely to change after more information is gathered from customers, the agency said.

Depositors with funds that exceed the insured limits become essentially creditors of the failed bank. They will eventually recover some of their money, but the amount can range from 40 cents on the dollar up to the full amount. Recovery can take months.

RockBridge Commercial is the 25th Georgia-based bank to fail this year, more than in any other state. Independent Bankers' Bank was the 21st bank in Illinois to fail and Peoples First Community Bank was the 14th bank in Florida.

As the economy has slumped, with unemployment rising, home prices tumbling and loan defaults soaring, bank failures have accelerated around the country.

The 140 bank failures are the most in a year since 1992 at the height of the savings-and-loan crisis. They have cost the government-backed deposit insurance fund — which has fallen into the red — more than $30 billion so far this year. The failures compare with 25 last year and three in 2007.

The FDIC expects the cost of bank failures to grow to about $100 billion over the next four years.

Banks have been especially hard hit by failed real estate loans, both residential and commercial.

If the economic recovery falters, defaults on the high-risk loans could spike. Nearly $500 billion in commercial real estate loans are expected to come due annually over the next few years.

Last week, the Obama administration extended until next October the $700 billion financial bailout program, saying the fund was still needed to prevent further turmoil in the banking system. Treasury Secretary Timothy Geithner said extending the rescue program also will help homeowners struggling to avoid losing homes to foreclosure and small businesses having trouble getting loans.

__

AP Business Writer Sara Lepro contributed to this report from New York.

Regulators shutter 2 big Calif. banks, 5 others

Shares rose on Wednesday as a benign reading on consumer inflation eases concerns the Federal Reserve will be forced to raise interest rates.

The government said that consumer pricesexcluding food and energy were flat in November, signaling that inflation was not working its way into the economy.

The report comes as Fed policymakers wrap up a two-day meeting on interest rates. Investors expect the Fed will hold rates near zero until well into next year.

At early afternoon, the Dow Jones industrial average was up 31 points. The Standard &&8; Poor&S217;s 500-stock index was up 6.57 points, while the Nasdaq rose 14.83 points.

On Tuesday, stocks fell for the first time in five days and Treasuries slipped after a jump in wholesale prices led to speculation that the Fed would be would be forced to raise interest rates sooner than expected.

Jim Herrick, director of equity trading at Baird &&8; Company in Milwaukee, said the latest inflation report reinforced expectations that policymakers would not increase rates until the second half of next year.

He said the report is likely to reassure many investors that it was O.K. to remain on the sidelines until the end of what had been a strong year for the market.

&S220;Some investors have pretty much closed up their books,&S221; Herrick said. &S220;They&S217;re not making any new bets.&S221;

Meanwhile, bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 3.57 percent from 3.60 percent late Tuesday.

A drop in the dollar from a two-month high pushed up commodity prices. Gold rose, while crude oil rose $2.16 to $72.85 a barrel in New York trading.

The Intel Corporation was the biggest decliner among the 30 stocks that make up the Dow industrials after the Federal Trade Commission accused the chipmaker in a lawsuit of using tactics to snuff out competition. Intel fell 35 cents, or 1.8 percent, to $19.45.

Separately, the European Union dropped antitrust charges against Microsoft after the company agreed to give users of the Windows operating system a choice of up to 12 other Web browsers. Microsoft rose 36 cents, or 1.2 percent, to $30.37.

Overseas, Japan&S217;s Nikkei stock average rose 0.9 percent. In afternoon trading, Britain&S217;s FTSE 100 rose 0.3 percent, Germany&S217;s DAX index jumped 1.2 percent, and France&S217;s CAC-40 advanced 0.8 percent.

Wall Street Rises as Inflation Worries Ease

Easing concerns about debt problems overseas nudged major stock indexes to new highs for the year.

The market climbed on Monday after the news that Abu Dhabi had extended $10 billion to nearby Dubai to help the emirate make debt payments. Analysts have been concerned since last month that a cash crisis in Dubai could have repercussions in global credit markets.

In addition, Exxon Mobil said it would acquire XTO Energy to help it tap into the growing supply of natural gas &<51; a move that could signal more deals in the energy industry.

A drop in shares of Exxon held the Dow Jones industrial average to more modest gains than other indexes. The Dow added 29.55 points, or 0.28 percent, to close at 10,501.05. The broader Standard &&8; Poor&S217;s 500-stock index rose 7.7 points, or 0.7 percent, to 1,114.11, while the Nasdaq composite gained 21.79 points, or nearly 1 percent, to end at 2,212.10.

Financial stocks rose after Citigroup said it would repay the $20 billion it received last year from the government&S217;s financial rescue program. The government also will sell its 34 percent stake in the company. The news came just days after Bank of America repaid the $45 billion in bailout money it owed taxpayers.

The day&S217;s advance was orderly and signaled that traders remained cautious, as they have for weeks. A big run in stocks that began in March has slowed in the last month as investors look to lock in some of their gains from 2009 and determine how to position themselves for the new year. The S.&&8; P. 500 index is up 1.7 percent so far this month, after a 5.7 percent gain in November and a 64.7 percent jump since early March.

&S220;Most people, for the most part, have wrapped up the year,&S221; said Blaze Tankersley, chief market strategist at the brokerage Bay Crest Partners.

The dollar weakened, helping to lift most commodities prices. Commodities are priced in dollars and become cheaper for foreign buyers when the United States currency falls.

Gold rose, while oil fell 36 cents to settle at $69.51 a barrel on the New York Mercantile Exchange.

The yield on the benchmark 10-year Treasury note was flat on Monday at 3.55 percent.

Analysts said stocks were likely to drift as investors awaited comments about the economy and interest rates from the Federal Reserve, which wraps up its last policy meeting of the year on Wednesday.

Investors expect the central bank to keep its benchmark interest rate at a historic low level of near zero. But there is some concern that rates could rise sooner than previously thought as the economy improves.

&S220;People simply want to know if we are going to keep this low-interest-rate environment,&S221; said Michael Feser, president of Zecco Trading in Pasadena, Calif. &S220;That has really been fuel for this market.&S221;

The following are the results of Monday&S217;s Treasury auction of three- and six-month bills:

Shares Rise as Dubai Bailout Eases Debt Concerns

BAGHDAD &<51; During an auction of Iraq&S217;s best undeveloped oil fields that concluded Saturday, Baghdad awarded international companies development rights to seven fields that within a few years could nearly double the country&S217;s oil production.

Hussein al-Shahristani, Iraq's oil minister, at the microphone, presided over the bidding for oil field development contracts.

The revenues from production would be critical to helping this oil-dependent country rebuild from the war, but significant obstacles remain to the development of the fields, including continuing violence.

While ExxonMobil and other American-based oil companies registered for the auction, none came away with a development deal on Friday or Saturday. But both ExxonMobil and California-based Occidental Petroleum are part of groups that have recently won oil field deals in Iraq.

After a week during which bombings killed more than 100 people in a single day in Baghdad, the government seized on the auction &<51; conducted under intense security &<51; as an unmitigated success that would be felt for generations.

&S220;Now the Iraqi people can be assured of their future, the futures of their sons and the futures of their grandsons,&S221; said Hussain al-Shahristani, Iraq&S217;s oil minister, who was embattled before the auction for failing to significantly increase the country&S217;s oil production levels, which stands at 2.5 million barrels a day.

Though oil companies have shied away from Iraq because of violence, corruption and the lack of a national oil law guaranteeing that deals would survive changes in government, many of the world&S217;s largest oil firms competed aggressively in the two-day public auction. Two deals were reached Friday, and the rest on Saturday.

The corporations that won represented a diverse group of nations, including Angola, Malaysia, Turkey and China. They were vying for 20-year service contracts that will pay them a fee for each barrel they produce above a government-set baseline.

Despite what are expected to be slim profit margins for the companies, the auction&S217;s biggest winners appeared to be Petronas, a state-owned Malaysian company that was part of three separate consortiums that won the rights to three fields; Sonangol, an Angolan company that will develop two fields; and Lukoil, the Russian oil company, which won the rights to part of the West Qurna field in southern Iraq, the most sought prize of the auction.

In the years since the invasion, Lukoil officials lobbied first the Americans and then the Iraqi government for permission to develop West Qurna, given that the company had signed a contract for the field in 1997 with Saddam Hussein, who later annulled the deal.

Mr. Shahristani said the deals reached at the auction, combined with other recent oil field development deals, put the country on track to increase its oil output from its current level of 2.5 million barrels a day to 12 million barrels a day by 2016, which would surpass Saudi Arabia&S217;s current production.

But that does not account for major hitches in development that could be brought on by technical troubles with the fields, violence and political instability.

The auction, the second since the 2003 United States-led invasion, is likely to be the last for some time, with national elections scheduled for March and political wrangling expected to follow them.

Also on Saturday, Jawad al-Bolani, the minister of the interior, told Parliament during a closed session that his ministry &<51; which includes the Iraqi national police &<51; had received information about terrorism operations planned for last Tuesday, when more than 120 people were killed during a series of coordinated bombings in Baghdad, according to two members of Parliament who attended the session.

Mr. Bolani could not be reached Saturday evening for comment.

The lawmakers, Adel Beck Barwari and Hassan Uthman, said Mr. Bolani told the members that as his officers tried to intercept three vehicles believed to be driven by suicide bombers, the drivers detonated their explosives.

Mr. Barwari said Mr. Bolani reported that the drivers apparently did not reach their intended targets but killed the officers in the explosion.

Duraid Adnan, Sa&S217;ad al-Izzi and Omar al-Jawoshy contributed reporting from Baghdad, and Andrew E. Kramer from Moscow.

Iraq Auctions Development Rights to Oil Fields

MEMPHIS, Tenn. – FedEx Corp. on Monday raised its forecast of earnings for the November quarter, citing stronger-than-expected growth in international priority and ground shipments.

The package-delivery company said it expected to report profit of $1.10 per share, down 30 percent from a year ago, when it earned $1.58 per share. The company had forecast earnings between 65 cents and 95 cents per share in the fiscal second quarter ended Nov. 30.

Chief Financial Officer Alan B. Graf Jr. said year-over-year growth in U.S. overnight express and international priority services increased each month during the quarter, helped by inventory restocking. He said demand for international services improved particularly in Asia and Latin America.

FedEx, with headquarters in Memphis, is scheduled to report second-quarter financial results and update its earnings outlook on Dec. 17.

Shares fell 41 cents to $87.52 in regular trading, then jumped $4.05, or 4.6 percent, to $91.33 in the first few minutes of extended trading.

FedEx says earnings will top previous guidance

AFTER months of playing pretend, the Treasury Department conceded last week that the Home Affordable Modification Program, its plan to aid troubled homeowners by changing the terms of their mortgages, was a dud. The 10-month-old program is going nowhere, the Treasury said, because big institutions charged with implementing it are dragging their feet.

&S220;The banks are not doing a good enough job,&S221; said Michael S. Barr, assistant Treasury secretary for financial institutions, in an article published last Sunday in The New York Times.

After the government spent hundreds of billions of dollars bailing out banks, the Obama administration rolled out the $75 billion loan modification plan to show its support for beleaguered homeowners. But if the proof of the pudding is in the eating, homeowners are going hungry.

A stalled loan modification plan might not be worrisome if the foreclosure crisis were abating. Yet at the end of September, a record 14.4 percent of borrowers were either in foreclosure or delinquent on their mortgages, the Mortgage Bankers Association reported.

It&S217;s time for the government to acknowledge the flaws in its program and create one that might actually succeed. Only then will the supply of homes for sale, and the pressure on prices associated with that overhang, be reduced.

The Treasury program has decided to tackle the delinquent mortgage problem by reducing the interest rate on eligible borrowers&S217; loans to a level that makes monthly payments affordable. But how it calculates affordability is one of the program&S217;s major flaws &<51; at least that&S217;s the view of Laurie Goodman, senior managing director at Amherst Securities Group and head of mortgage strategy at the firm.

Her research shows, for instance, that 70 percent of modifications involving only interest rate cuts, rather than reductions in the principal borrowers owe, have failed after 12 months. The Treasury program is likely to have similar outcomes.

According to government investigators, the average monthly mortgage payment for a borrower under early plan modifications fell by 34 percent. Assessing for possible success under these terms, Ms. Goodman analyzed past redefault rates on modifications that cut payments by 34 percent. She found that 65 percent of borrowers fell back into delinquency.

The terms of loan modifications also make them especially failure-prone because the government calculates &S220;affordability&S221; (how much mortgage debt a borrower can actually manage) in a highly unusual way &<51; raising serious questions for the housing market over all and for the program&S217;s effectiveness for borrowers.

Moreover, investors in first liens, like pension funds and mutual funds, also get beaten up in this process.

For example, in devising what it considers an affordable mortgage payment, the program doesn&S217;t account for all of a borrower&S217;s debts &<51; the first mortgage, second lien, credit card debt and automobile payments. Instead, it calculates affordability using only the borrower&S217;s first mortgage payment, insurance and property taxes.

As a result, what may look like an affordable mortgage payment under the Treasury plan quickly becomes onerous when other debt is added. While the government may ignore a borrower&S217;s second lien and revolving credit obligations, you can be sure the creditors that extended those loans will not. Redefaults seem a likely result.

Another flaw in the program, Ms. Goodman said, is its failure to consider how much equity, or negative equity for that matter, the borrower has on a property. She said that while many analysts contend that unemployment is the major predictor of mortgage defaults, her research shows that negative equity, when a borrower owes more on the home than it is worth, is actually the driving force.

Ms. Goodman recently compared the experiences of prime mortgage borrowers living in areas with an 8 percent unemployment rate. Those with at least 20 percent equity in their properties were falling two payments behind for the first time at a rate of only 0.22 percent a month. But the same 60-day delinquency rate for those who owed at least 120 percent of the value of their homes was 1.46 percent a month.

&S220;We have kicked the problem down the road through modifications that don&S217;t work,&S221; Ms. Goodman said in an interview last week. &S220;You have to address the second liens and ultimately have some type of principal write-down program so borrowers can re-equify.&S221;

Unfortunately, there is a $442 billion reason that wiping out second liens is not high on the government&S217;s agenda: that is the amount of second mortgages and home equity lines of credit on the balance sheets of Bank of America, Wells Fargo, JPMorgan Chase and Citigroup.

These banks &<51; the very same companies the Treasury is urging to modify loans that they service &<51; have zero interest in writing down second liens they hold because it would mean further damage to their balance sheets.

Say a troubled borrower has a first mortgage owned by a pension fund in a securitization trust and a second lien held by the bank that services the loans. The servicer is happy to modify the first mortgage under the Treasury program because the pension fund holding that loan takes the biggest hit while the second lien is untouched. This hurts the investor who holds the first mortgage and the borrower, who must pay off the second lien, which typically has a significantly higher interest rate.

The result? Yet another conflict of interest enriching financial companies while impoverishing investors and consumers.

AN interesting data point: when banks do own all the mortgages on a property they seem to see the merit in principal reduction modifications. Studying second-quarter government data, the most recent available, Ms. Goodman found that when banks owned the loans, 30.5 percent of modifications reduced principal balances.

When they service someone else&S217;s loan or hold a second lien on the property, they rarely allow principal reductions.

Of course, cries of moral hazard will erupt if borrowers get large cuts in their principal balances. Rightly so. Why should those who took on too much debt to buy too much house get rescued when those who were prudent go unrewarded?

But doing nothing also has hazards, the most obvious being continuing foreclosures, which nobody wants, and further declines in real estate prices that will hurt homeowners as well as investors.

Fair Game: Why Treasury Needs a Plan B for Mortgages

WASHINGTON (AFP) – Federal Reserve chairman Ben Bernanke on Thursday admitted "mistakes" leading up to the economic crisis but argued the central bank&&9;s independence should not be limited in financial system reforms.

Bernanke defended his record at a stormy Senate Banking Committee hearing on his confirmation for a second term as chairman, but also spoke to the need for reforms that would avert future crises without compromising the Fed&&9;s independence from politics on monetary policy.

"There were mistakes made all around," Bernanke said when asked if he would change what the Fed had done.

For bank regulations, he said "We should have done more. We should have required more capital, more liquidity. We should have required tougher risk management controls."

Bernanke&&9;s hearing opened after one senator used a prerogative in the Senate to place a "hold" on the nomination, which could delay his confirmation, and other lawmakers offered blunt criticism of the powerful Fed chief.

Profile of Bernanke "I did not anticipate a crisis of this magnitude and severity," Bernanke told that panel.

"But given that it happened, many of the banks... were not adequately prepared in terms of their reserves, in terms of their liquidity. That is a mistake we won&&9;t make again."

Bernanke said the crisis calls for "strengthening regulation and strengthening supervision" in a way to "provide a more holistic macro-prudential approach so that we&&9;re not reliant on each individual regulator in their own narrow sphere."

But Bernanke warned senators about placing too much political oversight on the Fed, particularly on its role in setting monetary policy.

"Monetary policy, by its very nature, has to look ahead over a longer period of time," he said.

"There is a very, very strong finding... which shows that countries that have independent central banks, that make monetary policy without political intervention, have lower inflation, lower interest rates and better performance than those in which the central bank is subject to considerable political control."

Bernanke faced unusually harsh criticism from some lawmakers frustrated over the deep economic slump and angry about bailouts of big financial firms.

Senator Jim Bunning, a longtime Bernanke critic, told Bernanke: "Your Fed has become the creature from Jekyll Island."

"From monetary policy to regulation, consumer protection, transparency and independence, your time as Fed chairman has been a failure," Bunning said.

"I will do everything I can to stop your nomination and drag out this process as long as I can. We must put an end to your and the Fed&&9;s failure."

The hearing opened after independent Senator Bernie Sanders, who is not a member of the panel, asked for Bernanke&&9;s nomination to be on hold.

"The American people want a new direction on Wall Street and at the Fed. They do not want as chairman someone who has been part of the problem," he said.

The powerful central bank chief is nonetheless expected to win approval from the Banking Committee and the full Senate.

The action by the independent Sanders means the Senate may need 60 votes instead of a simple majority of 51 votes.

Bernanke also heard praise from the committee chairman, Senator Chris Dodd.

"Under your leadership, Mr. Chairman, the Federal Reserve has taken extraordinary actions to right the economy," Dodd said in his opening statement.

"These efforts have played, in my view, a very significant role in arresting the financial crisis, and financial markets have begun to recover. For that, Mr. Chairman, you and the Federal Reserve deserve, in my view, praise for your acumen and gratitude (for preventing) a far worse outcome that we might have otherwise seen."

Bernanke admits mistakes, says Fed should stay independent

WASHINGTON &<51; The Environmental Protection Agency said Monday that it would probably increase the amount of ethanol that gasoline retailers could blend into ordinary fuel, to 15 percent, if tests established that the blend would not damage cars.

A blog about energy, the environment and the bottom line.

The maximum ethanol blend is now 10 percent, except for cars specially equipped to handle higher blends. The agency said it was likely to approve the increase to 15 percent next summer, perhaps for use only in cars of the 2001 model year and later.

This raises the possibility that gasoline retailers might need to carry different ethanol blends in different pumps, and that drivers with older cars might have to be careful about which blend they buy.

The E.P.A. was responding to a petition from ethanol manufacturers, who have complained that unless a higher blending level is approved, within two years they will not have a big enough market to absorb their production.

A coalition of environmentalists, oil refiners, grocery industry representatives and the makers of power equipment has vowed to fight the change, and the auto industry has also expressed concern.

In a letter to Growth Energy, an ethanol trade association that filed the request for a higher blend in March, the E.P.A. said that &S220;our engineering assessment to date indicates that the robust fuel, engine and emissions control systems on newer vehicles (likely 2001 and newer model years) will likely be able to accommodate higher ethanol blends, such as E15.&S221; But the agency added that it would wait for the Energy Department to test a dozen vehicles, a task that should be completed in May.

The decision drew mixed reviews. At Growth Energy, Wesley K. Clark, a retired general who is co-chairman of the organization, said the reply was &S220;basically a positive answer,&S221; and sent a signal to his industry to invest in more plants, including some advanced plants that would make ethanol from corn cobs, wood chips and other nonfood sources.

Congress ordered increased use of ethanol in energy bills that passed in 2005 and 2007, but the plan has not worked as backers had hoped. Millions of &S220;flex fuel&S221; cars are on the road that can use ethanol blends as high as 85 percent, but fewer than 2 percent of service stations sell blends above 10 percent. Adjusted for its lower energy content, E85, as the higher blend is known, is more expensive than gasoline, and motorists thus have little reason to use it.

The automakers&S217; trade association praised the E.P.A.&S217;s decision to wait for more test data, but expressed some concern about the idea that gas stations would begin selling fuel that might be good for younger cars and bad for older ones. A system based on model year &S220;would create a tremendous likelihood of consumer confusion and misfueling,&S221; said Charles Territo, a spokesman for the Alliance of Automobile Manufacturers.

Kris Kiser, executive vice president of the Outdoor Power Equipment Institute, said that high ethanol blends could force the clutch on a chain saw to engage, and spin the chain, when the user thought it was in neutral, and that such blends could cause leaks and fires in equipment held in the hand or carried on the back. Mat Dunn, legislative director of the National Marine Manufacturers Association, said such blends could make boats break down far from shore. &S220;We cannot just pull over and call AAA,&S221; he said.

And Bill Holbrook, a spokesman for the National Petrochemical and Refiners Association, said some of his group&S217;s members were already being sued on the basis that their 10 percent ethanol blends had damaged engines.

But another ethanol producers&S217; group, the Renewable Fuels Association, argued against any delay in approving higher blends. Ethanol backers intend to ask Congress to supplant the E.P.A.&S217;s decision-making and simply require a higher blend.

E.P.A. Says It Expects to Raise Amount of Ethanol Allowed in Fuel Blends to 15%

LONDON -- French drugmaker Sanofi-Aventis said Monday that the European Commission has granted marketing authorization for Multaq in all 27 European member states. Multaq is indicated in adult clinically stable patients with a history of, or current non-permanent atrial fibrillation (AF) to prevent recurrence of AF or to lower ventricular rate.

Sanofi-Aventis Gets EU Approval For Multaq

TEL AVIV -- ING , the Amsterdam financial-services giant, set the terms for the rights issue it announced Oct. 26. The company said in a statement on Friday that it will issue 1.77 billion shares at 4.24 euros each. Holders will receive rights to buy six new BDRs for every seven they hold. The BDRs closed on Euronext Amsterdam and Euronext Brussels at 8.92 euros ($13.32) on Nov. 26. Holders of American depositary shares also will have the same 6-for-7 purchase opportunity; the ADSs closed on Wednesday on Wall Street at $12.15. "This rights issue is a critical component of the measures we announced to regain our independence and to chart a clear course forward," Chief Executive Jan Hommen said. ING has said that it plans to use the funds to buy half the core Tier 1 securities the Dutch state holds and to ease the impact on capital of additional payments the company must make to the government. To gain approval for its restructuring plan submitted to the European Commission, ING will be making certain payments to the Netherlands government with a net present value of 1.3 billion euros. The company will book that figure as a one-time pretax charge in fourth-quarter 2009. Goldman Sachs, ING Bank and J.P. Morgan are running the books for the rights offering.

ING Sets Terms For 1.77-bln-share Rights Issue

WASHINGTON – Fannie Mae says it won't consider offers from investors to buy its foreclosed properties until they have been on the market for 15 days.

During that period, Fannie Mae will only consider bids from buyers who intend to live in the homes, or those using public housing funds. Fannie Mae says the First Look initiative announced Tuesday applies to more than 72,000 properties nationwide.

For buyers using money from public entities such as the Department of Housing and Urban Development, Fannie Mae also will waive deposits, allow buyers to renegotiate after an appraisal, and receive up to 45 days rather than a typical 30 days for closing.

Fannie Mae: No investors for 15 days

The sale of existing homes far exceeded expectations last month, surging to the highest level in 2.5 years as first-time buyers rushed to take advantage of an expiring tax credit.

The National Association of Realtors said Monday that sales rose 10.1 percent to a seasonally adjusted annual rate of 6.1 million in October, from a downwardly revised pace of 5.54 million in September. Sales were expected to show a 1.4 percent increase.

It was the highest sales level since February 2007. Sales, which were nearly 24 percent above last year&S217;s level, had been expected to rise to an annual pace of 5.65 million, according to economists surveyed by Thomson Reuters.

The median sales price was $173,100 down 7.1 percent from a year earlier, and off 1.6 percent from September.

October Home Sales Far Exceeded Expectations

The particles that ferry cholesterol through the bloodstream are popularly known as &S220;bad&S221; or &S220;good&S221;: bad if they deposit cholesterol on vessel walls, potentially clogging them; good if they carry the cholesterol on to the liver for excretion.

Now scientists have created tiny particles in the laboratory that mimic those good carriers, scooping up the cholesterol before it can grow into dangerous deposits of plaque. The surfaces of these new particles are coated with fats and proteins so they can bind tightly with the sticky cholesterol to transport it through the bloodstream.

The particles may someday be important in treating cardiovascular disease, said Dr. Andre Nel, chief of the division of nanomedicine and director of the Center for Environmental Implications of Nanotechnology at the University of California, Los Angeles.

&S220;Researchers have endowed these artificial particles with the same properties as natural particles that circulate in the blood,&S221; called high-density lipoproteins, or HDL, he said. The artificial carriers can clean up sites where plaques can otherwise rupture, leading to strokes and heart attacks.

The particles may be useful not only in cardiovascular therapy, but also in diagnosis. The researchers have put gold and other metal cores at the center of the particles, Dr. Nel said, so that they show up well in medical imaging. Such imaging could be used, for example, to monitor plaques as they build up in blood vessels.

At the Chicago campus of Northwestern University, artificial HDL nanoparticles have been designed by Dr. C. Shad Thaxton, an assistant professor in the urology department, and Chad A. Mirkin, a professor and director of the International Institute for Nanotechnology at the university&S217;s Evanston campus They have founded a company, AuraSense, to commercialize the technology.

The Northwestern researchers replaced the fatty core found in natural HDL with gold nanoparticles, Dr. Mirkin said. &S220;The gold core serves as a scaffold for attaching molecules that are the same as those on the surface of naturally occurring HDL,&S221; he said. &S220;We have demonstrated that our synthetic version of HDL binds cholesterol very tightly, not only in the laboratory, but in animals.&S221;

The group has done a pilot study in animals and will soon begin a larger study, also involving animals, Dr. Thaxton said

At the Mount Sinai School of Medicine in Manhattan, Willem J. M. Mulder, an assistant professor of radiology and gene and cell medicine, and his research group have developed HDL-like nanoparticles intended primarily for imaging and diagnosis. The particles have centers of gold or other materials, Dr. Mulder said, depending on the type of imaging to be used.

&S220;One of our interests is in the imaging of the biological processes in atherosclerosis,&S221; the hardening of the arteries caused by plaques, he said.

Gold nanocrystals show up well in one type of imaging, called computed tomography, he said, and iron oxide nanocrystals work well with magnetic resonance imaging.

The research of the Northwestern and Mount Sinai groups may one day benefit people who develop deposits of atherosclerotic plaque, said Dr. Gregory M. Lanza, a professor of medicine at the School of Medicine at Washington University in St. Louis.

&S220;Both of these groups have shown that this HDL mimic can adsorb cholesterol,&S221; he said. One day, the particles like those created by the groups may be included in therapies for heart disease, he said. &S220;They may become part of good anti-atherosclerosis management, along with diet, nonsmoking and statins,&S221; drugs that interfere with the synthesis of cholesterol.

BUT for that to happen, cautioned Dr. Nel at U.C.L.A., more study will be needed. &S220;We will have to find out what happens when the gold nanoparticles accumulate in the body,&S221; he said. &S220;This is a problem for treatment of chronic diseases where you administer materials over a long time.&S221;

Vincent M. Rotello, a professor of chemistry at the University of Massachusetts, Amherst, who does nanoparticle research, agreed. &S220;Right now, nanoparticles are great for diagnostic and acute therapeutics,&S221; he said, but issues lie ahead that must be solved before the particles can be prescribed.

&S220;Gold is nontoxic,&S221; he said. &S220;But it does build up. We don&S217;t know what the effects of the buildup might be.&S221; Smaller particles are excreted, he said. But larger particles may accumulate in the liver. Dr. William O&S217;Neill, executive dean for clinical affairs at the Miller School of Medicine at the University of Miami, welcomed the artificial particles.

&S220;If we can prove they don&S217;t have side effects, we could give them as a drug, causing plaque in the coronary arteries to shrink,&S221; he said. &S220;It could revolutionize cardiology.&S221;

E-mail: novelties@nytimes.com.

Novelties: From the Lab, a New Weapon Against Cholesterol

NEW YORK – A private forecast of economic activity over the next six months edged up less than expected in October, signaling slow growth next year.

The Conference Board says its index of leading economic indicators rose 0.3 percent last month. Economists polled by Thomson Reuters had expected an 0.5 percent gain.

The index climbed 1 percent in September.

The Conference Board forecasts economic activity by measuring current jobless aid claims, stock prices, consumer expectations, building permits for private homes, the money supply and other data.

Leading economic indicators signal slow growth