GUAYNABO, Puerto Rico – Miles from the Democratic Party’s machinations to decide whether she will get her votes counted in the disputed primaries of Florida and Michigan, Hillary Clinton on Saturday smiled and clapped her way through the streets and small towns of Puerto Rico.

Clinton, who trails front-runner Barack Obama by what most consider an insurmountable gap in the race for the Democratic presidential nomination, waved from a campaign truck at bystanders who gathered in the steamy afternoon heat to cheer her on.

Accompanied by loudspeakers blaring “Hillary Clinton, La Proxima Presidenta,” pounding music and trucks carrying photographers, television crews and reporters, Clinton cruised the palm tree-lined streets in towns around San Juan for hours past fruit vendors and fisherman who paused to point and smile.

Supporters honked car horns and waved banners while small children jumped up and down. One woman rushed up to Clinton and presented her with a giant bouquet of flowers.

“Si, si, si,” exclaimed Blanca Rivera, 69, standing by the side of the road in Guaynabo, when asked if she planned to vote for the New York senator in Sunday’s primary. “Si, si, si.”

Clinton is heavily favored to win Puerto Rico’s primary, although the result is not expected to make a significant dent in Obama’s lead among delegates to the party’s nominating convention.

Clinton remained well out of questioning range of reporters who might have asked her about the Democratic Party’s rules committee, meeting in Washington to decide the future of the primary results in Florida and Michigan. Clinton won both primaries, but the contests were held earlier than party rules allowed and the results were invalidated.

Click here for more Reuters 2008 political coverage.

Photo: REUTERS/Ana Martinez (Clinton appears at a rally in Puerto Rico)

Bankruptcy is better than a merger. Or that's what U.S. airlines seem to think.

Almost every U.S. legacy carrier has been through a bankruptcy at some point; many have been through Chapter 11 twice.

And things, once again, are turbulent.

After racking up $35 billion in losses and finally emerging from a five-year slump in 2006, you would think the major carriers, suffering partly due to the threat of low-cost competition, would see the sense in consolidating.

Two of them did. Delta and Northwest said in April they would merge to create the world's largest airline.

You would think more talks would follow. They did. You would think more mergers would follow. They didn't.

Merger talks between United Airlines and Continental Airlines picked up steam after the Delta-Northwest deal. Continental pulled away, and the talks died.

Then, merger talks between United Airlines and US Airways picked up steam. The airlines have now decided not to merge amid concerns about labor opposition and integration costs.

But the industry is expected to lose $7.2 billion this year. Oil prices have hit all-time highs, roughly doubling in the past year. United CEO Glenn Tilton sees the fuel bill for U.S. airlines going up by $20 billion this year. Some airlines are raising fares and charging passengers for one checked bag. Let's face it -- times are bad. In fact, times are terrible. 

Still, they refuse to consolidate. Perhaps bankruptcy is easier? In bankruptcy, they're off the hook for plane leases and labor contracts. In fact, in many ways, it's the best time for them to merge.

And, unlike the auto industry, where a bankruptcy would be brutal for sales, airlines operate just fine during Chapter 11. Air tickets don't need a warranty of any sort, and many passengers are usually unaware they are flying a bankrupt carrier when they travel.

In fact, seven small airlines have filed for bankruptcy or stopped operating in the past five months.

And that trend will continue unless the industry cuts capacity. Several airline executives have said there is too much capacity in the U.S. skies. And the "Open Skies" agreement, which eases barriers on Trans-Atlantic travel, will only increase capacity. As more foreign arilines will come into the United States, they will increase competition and lower prices.

For now, the airlines may think they can stick together and raise prices like one big, happy family. But ultimately, if oil stays where it is and consumers get more options, the airlines could once again find themselves facing the Hobson's choice: merger or bankruptcy. 

David Gray recounts his experience covering the earthquake that devastated Sichuan province, China.

The future of President Pervez Musharraf grows more opaque by the day. At its simplest level, it seems that while many people think he should step down, few want to see him forced out in a way that would divide and damage the country.

In the latest stories highlighting the currents and counter-currents swirling around the former army general, Musharraf lashed out at "rumour-mongers" for suggesting he planned to quit, while President George W. Bush telephoned him to pledge his continued backing.  Meanwhile disgraced scientist Abdul Qadeer Khan, known as the father of Pakistan's nuclear bomb, has begun speaking out against Musharraf by complaining he was unfairly made to take the rap for selling nuclear secrets.  That A.Q. Khan now feels safe to speak after four years under house arrest is seen as one of the most telling indications of the times turning against Musharraf.

Reading comments on an earlier blog about Musharraf's future got me wondering whether one could predict his next move from his past. As an Urdu-speaking "mohajir" whose family fled Delhi at partition, an outsider in Punjabi-dominated Pakistan, and also as a former commando, how would he respond to the pressure on him to quit?

There are simplistic responses to this question -- my bet would be that the usual response of an outsider and a commando would be to fight it out, if needs be by adopting the riskiest course of action. But since that question seemed too simplistic, I decided to reread what Musharraf had said about himself in his autobiography "In the Line of Fire".

My favourite lines were in the prologue: "I have confronted death and defied it several times in the past because destiny and fate have always smiled upon me," he writes. "I first avoided death as a teenager in 1961, when I was hanging upside down from the branch of a mango tree and it broke. When I hit the ground, my friends thought I was dead."

Musharraf doesn't elaborate on the mango tree episode but he does paint a picture of a man who sees himself has having always defied the odds through luck or daring. The helicopter that crashed and which he missed because he was playing bridge. Two assassination attempts. The childhood memory of his mother's tension when as a four-year-old boy he and his family fled by train from India to Pakistan.

This is a man who sees himself as a survivor, with fond memories of boys' gangs in his childhood in Ankara. "Even at that age I was very good at making strategies and planning tactics to ambush and trap other gangs," he writes -- a line that carries extra resonance as he tries to outmanoeuvre opposition politicians who want to oust him.

I personally rather liked the story about how the outbreak of the 1965 war with India allowed him to escape a looming court-martial in the army for going absent without leave. He says he rescued his reputation by fighting in the war, and winning an award for gallantry for pulling shells away from a fire before they exploded.

Whatever critics have said about this autobiography, it certainly makes you think Musharraf's next move will be far from predictable. A man who writes of his punishments in the army for "fighting, insubordination and lack of discipline" is not one to toe the line easily. And yet again, he also writes of his fondness for Turkey which must, among other places, be a possible refuge were he to step down.

The days of the eye-popping LBO may be over, but buyout shops are still raising eye-popping amounts of cash.

So far in 2008, private equity firms have raised nearly $100 billion, according to Thomson Reuters data. Buyout-focused funds have raised $65.1 billion, while others that are not focused on buyouts, such as real estate and energy funds, have raised $34 billion. In all $99.2 billion has been raised from 134 funds, Thomson Reuters data shows.

But overall acquisitions by financial sponsors are down 78 percent and global issuance of leveraged syndicated loans is down 68 percent, compared with the same period last year.

So where is the money going?

Minority stakes for one. Financial sponsors have spent $12 billion  so far this year on building up minority stakes in listed companies, up 86 percent from the same period in 2007, according to the data.

Financial services companies, which have been hit hard by the credit crunch and looking to raise funds, have attracted a lot of that cash. The volume of convertible offerings by financial issuers hit an all-time high in May with nearly $20 billion in new issues, according to the data.

The top 10 minority stake acquisitions so far this year include TPG’s $2 billion investment in Washington Mutual, KKR’s $1.25 billion in Legg Mason and WL Ross’ $750 million in Assured Guaranty.

But that still leaves a lot of unused funds with private equity firms, and they are hunting for places to deploy that money. 

"There is so much in the pipeline right now that we expect the back half of 2008 to be more active than the first half of last year," according to Robert Profusek, chair of Jones Day’s M&A practice.

Profusek expects the activity to be higher in terms of the number of transactions, though, and not necessarily in the dollar amount, as Clear Channel-like mega buyouts may not happen.

Photo credit: Reuters

I'm as surprised as anybody, but not a single item about Victoria's Secret made it into the top five postings for this blog in May!

Oh sure, everybody will have a theory on that, but personally I think it was because we didn't have a single post that even mentioned Victoria's Secret.

Apart from that, the most-visited items had absolutely nothing in common. A mango-eating contest, a dead writer's skull, a bra with a difference, and so on. See for yourselves:

5. The whole mango fandango!

4. Stupid story gets much stupider

3. Take off your blouse, babe, I need to charge my laptop!

2. Sir, that carry-on bag is too large! Sir!

1. Is that a gun in your pocket, or are you...Oh, it is?

Models from Victoria's Secret Fashion Show, 2007. REUTERS photos by Mario Anzuoni

More stuff from Oddly Enough

When Napa Valley winery Far Niente resolved to embrace solar power, it faced a big hurdle: how to install ground-mounted panels without sacrificing acres of valuable Cabernet vines.

Enter the latest solar innovation -- solar panels that can float on the water rather than being mounted on the ground.

The system, which was given the witty name "Floatovoltaic," was made by securing 1,000 solar panels on pontoons and floating them on an irrigation pond at the 100-acre Martin Sterling Vineyard, whose grapes make Cabernet Sauvignon wine.

With "Floatovoltaic," Far Niente was able to save three-quarters of an acre of vines. It removed another acre of vineyard to accomodate a land portion of the system that boasts 1,300 solar panels.

The solar system generates up to 400 kilowatts of electricity at peak times, significantly offsetting the winery's annual power usage, Far Niente said.

The installation was developed by Thompson Technology Industries Inc, installed by SPG Solar, and uses solar panels from Sharp.

Bauhaus Wang brings a human face to the devastation caused by the quake in China through his portrait of a survivor.

View this week's You Witness slideshow here.

As a rule, women are more pessimistic than men. The pattern has been among the most consistent across years of tracking U.S. consumer sentiment in the Reuters/University of Michigan survey. Since the survey began tracking gender differences in outlook in January 1978, women have shown a higher sentiment reading just twice.

Things changed this month.

The long-term trend continued in May as overall consumer sentiment dropped to a 28-year low. Yet the mood among women improved slightly whereas sentiment for men soured for a fourth consecutive month, dropping to the lowest since 1980 (second graphic above). Moods darkened for men by the biggest margin in nearly three years, since the aftermath of Hurricane Katrina.

What's behind it? One factor at play is a diverging view of personal financial situations. Women in the survey indicated their situations improved modestly this month from April, albeit from a 27-year low. For men, however, May marked the seventh straight month of worsening finances. In fact, men rated their finances in the worst shape since the survey began tracking the differences between the genders.

Dramatic photographs of previously unfound Amazon Indians have highlighted the precariousness of the few remaining "lost" tribes and the dangers they face from contact with outsiders. (Click here for a slideshow of the tribe.)

Rather than "lost", Amazon expert Thomas Lovejoy said the tribe has likely had contact with other indigenous groups over the years.

"I think there is an ethical question whether you can in the end keep them from any contact and I think the answer to that is no," Lovejoy said.

"The right answer is to have the kind of contact and change that the tribes themselves manage the pace of it."

Jose Carlos Meirelles, an official with Brazil's Indian protection agency who was on the helicopter that flew over the tribe, said they should be left alone as much as possible.

Should modern civilization attempt to contact isolated tribes?

Click here for the full story.