Judge asks Hostess to mediate with union

WHITE PLAINS, N.Y. (AP) -- Twinkies won't die that easily after all.
Hostess Brands Inc. and its second largest union will go into mediation to try and resolve their differences, meaning the company won't go out of business just yet. The news came Monday after Hostess moved to liquidate and sell off its assets in bankruptcy court citing a crippling strike last week.
The bankruptcy judge hearing the case said Monday that the parties haven't gone through the critical step of mediation and asked the lawyer for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union, which has been on strike since Nov. 9, to ask his client, who wasn't present, if the union would agree to participate. The judge noted that the bakery union, which represents about 30 percent of Hostess workers, went on strike after rejecting the company's latest contract offer, even though it never filed an objection to it.
"Many people, myself included, have serious questions as to the logic behind this strike," said Judge Robert Drain, who heard the case in the U.S. Bankruptcy Court in the Southern District of New York in White Plains, N.Y. "Not to have gone through that step leaves a huge question mark in this case."
Hostess and the union agreed to mediation talks, which are expected to begin the process on Tuesday.
In an interview after the hearing on Monday, CEO Gregory Rayburn said that the two parties will have to agree to contract terms within 24 hours of the Tuesday since it is costing $1 million a day in overhead costs to wind down operations. But even if a contract agreement is reached, it is not clear if all 33 Hostess plants will go back to being operational.
"We didn't think we had a runway, but the judge just created a 24-hour runway," for the two parties to come to an agreement, Rayburn said.
Hostess, weighed down by debt, management turmoil, rising labor costs and the changing tastes of America, decided on Friday that it no longer could make it through a conventional Chapter 11 bankruptcy restructuring. Instead, the company, which is based in Irving, Texas, asked the court for permission to sell assets and go out of business.
It's not the sequence of events that the maker of Twinkies, Ding Dongs and Ho Ho's envisioned when it filed for bankruptcy in January, its second Chapter 11 filing in less than a decade. The company, who said that it was saddled with costs related to its unionized workforce, had hoped to emerge with stronger financials. It brought on Rayburn as a restructuring expert and was working to renegotiate its contract with labor unions.
But Rayburn wasn't able to reach a deal with the bakery union. The company, which had been contributing $100 million a year in pension costs for workers, offered workers a new contract that would've slashed that to $25 million a year, in addition to wage cuts and a 17 percent reduction in health benefits. But the bakery union decided to strike.
By that time, the company had reached a contract agreement with its largest union, the International Brotherhood of Teamsters, which urged the bakery union to hold a secret ballot on whether to continue striking. Although many bakery workers decided to cross picket lines this week, Hostess said it wasn't enough to keep operations at normal levels.
Rayburn said that Hostess was already operating on razor thin margins and that the strike was the final blow. The company's announcement on Friday that it would move to liquidate prompted people across the country to rush to stores and stock up on their favorite Hostess treats. Many businesses reported selling out of Twinkies within hours and the spongy yellow cakes turned up for sale online for hundreds of dollars.
Even if Hostess goes out of business, its popular brands will likely find a second life after being snapped up by buyers. The company says several potential buyers have expressed interest in the brands. Although Hostess' sales have been declining in recent years, the company still does about $2.5 billion in business each year. Twinkies along brought in $68 million so far this year.

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Just Explain It: What is the Strategic Petroleum Reserve?

Eliminating America's dependency on foreign oil has been a policy goal for at least the last two U.S. Presidents.  According to the International Energy Agency, by 2020,  the U.S. will overtake Saudi Arabia as the world's number one oil producer.
However, there's still some work to do.  The United States Energy Information Administration reported that 45% of the petroleum consumed by the U.S. in 2011 was from foreign countries.   Even though the country is well on its way to becoming self reliant, there's always a chance we could hit a major bump in the road.  The good thing is we have protection.  It's called the Strategic Petroleum Reserve or S.P.R.
So here's how the S.P.R. works:
The reserve was created after the 1973 energy crisis when an Arab oil embargo halted exports to the United States.  As a result, fuel shortages caused disruptions in the U.S. economy.
The reserves are located underground in four man-made salt domes in Texas and Louisiana.  All four locations combined hold a total of 727 million barrels of oil.  The inventory is currently at 695 million barrels.  That's around 80 days of import protection.  It's the largest emergency oil supply in the world -- it's worth about $63 billion.
Only the President has the ability to tap the reserves in case of severe energy supply interruption.  It's happened three times.  Twice within the last decade.  In 2005, President Bush ordered the emergency sale of 11 million barrels when Hurricane Katrina shutdown 25 percent of domestic production.  In 2011, President Obama ordered the release of 30 million barrels to help offset disruptions caused by political upheaval in the Middle East.
Following the release order, the reserve issues a notice of sale to solicit competitive offers.  In the most recent sale involving the Obama administration, the offers resulted in contracts with 15 companies for delivery of 30.6 million barrels of oil.  To put that in context, last year the U.S. consumed almost seven billion barrels of oil — that's 19 million per day -- or about 22% of the world's consumption.

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Apple to produce line of Macs in the US next year

NEW YORK (AP) -- Apple CEO Tim Cook says the company will move production of one of its existing lines of Mac computers from China to the United States next year.
Industry watchers said the announcement is both a cunning public-relations move and a harbinger of more manufacturing jobs moving back to the U.S. as wages rise in China.
Cook made the comments in part of an interview taped for NBC's "Rock Center," but aired Thursday morning on "Today" and posted on the network's website.
In a separate interview with Bloomberg Businessweek, he said that the company will spend $100 million in 2013 to move production of the line to the U.S. from China.
"This doesn't mean that Apple will do it ourselves, but we'll be working with people and we'll be investing our money," Cook told Bloomberg.
That suggests the company could be helping one of its Taiwanese manufacturing partners, which run factories in China, to set up production lines in the U.S. devoted to Apple products. Research firm IHS iSuppli noted that both Foxconn Technology Group, which assembles iPhones, and Quanta Computer Inc., which does the same for MacBooks, already have small operations in the U.S.
Apple representatives had no comment Thursday beyond Cook's remarks.
Like most consumer electronics companies, Apple forges agreements with contract manufacturers to assemble its products overseas. However, the assembly accounts for a fraction of the cost of making a PC or smartphone. Most of the cost lies in buying chips, and many of those are made in the U.S., Cook noted in his interview with NBC.
The company and Foxconn have faced significant criticism this year over working conditions at the Chinese facilities where Apple products are assembled. The attention prompted Foxconn to raise salaries.
Cook didn't say which line of computers would be produced in the U.S. or where in the country they would be made. But he told Bloomberg that the production would include more than just final assembly. That suggests that machining of cases and printing of circuit boards could take place in the U.S.
The simplest Macs to assemble are the Mac Pro and Mac Mini desktop computers. Since they lack the built-in screens of the MacBooks and iMacs, they would likely be easier to separate from the Asian display supply chain.
Analyst Jeffrey Wu at IHS iSuppli said it's not uncommon for PC makers to build their bulkier products close to their customers to cut down on delivery times and shipping costs.
Regardless, the U.S. manufacturing line is expected to represent just a tiny piece of Apple's overall production, with sales of iPhones and iPads now dwarfing those of its computers.
Apple is latching on to a trend that could see many jobs move back to the U.S., said Hal Sirkin, a partner with The Boston Consulting Group. He noted that Lenovo Group, the Chinese company that's neck-and-neck with Hewlett-Packard Co. for the title of world's largest PC maker, announced in October that it will start making PCs and tablets in the U.S.
Chinese wages are raising 15 to 20 percent per year, Sirkin said. U.S. wages are rising much more slowly, and the country is a cheap place to hire compared to other developed countries like Germany, France and Japan, he said.
"Across a lot of industries, companies are rethinking their strategy of where the manufacturing takes place," Sirkin said.
Carl Howe, an analyst with Yankee Group, likened Apple's move to Henry Ford's famous 1914 decision to double his workers' pay, helping to build a middle class that could afford to buy cars. But Cook's goal is probably more limited: to buy goodwill from U.S. consumers, Howe said.
"Say it's State of the Union 2014. President Obama wants to talk about manufacturing. Who is he going to point to in the audience? Tim Cook, the guy who brought manufacturing back from China. And that scene is going replay over and over," Howe said. "And yeah, it may be only (public relations), but it's a lot of high-value PR."
Cook said in his interview with NBC that companies like Apple chose to produce their products in places like China, not because of the lower costs associated with it, but because the manufacturing skills required just aren't present in the U.S. anymore.
He added that the consumer electronics world has never really had a big production presence in the U.S. As a result, it's really more about starting production in the U.S. than bringing it back, he said.
But for nearly three decades Apple made its computers in the U.S. It started outsourcing production in the mid-90s, first by selling some plants to contract manufacturers, then by hiring manufacturers overseas. It assembled iMacs in Elk Grove, Calif., until 2004.
Some Macs already say they're "Assembled in USA." That's because Apple has for years performed final assembly of some units in the U.S. Those machines are usually the product of special orders placed at its online store. The last step of production may consist of mounting hard drives, memory chips and graphics cards into computer cases that are manufactured elsewhere. With Cook's announcement Thursday, the company is set to go much further in the amount of work done in the U.S.
The news comes a day after Apple posted its worst stock drop in four years, erasing $35 billion in market capitalization. Apple's stock rose $8.45, or 1.6 percent, to close at $547.24 Thursday.

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US economy adds 146K jobs, rate falls to 7.7 pct.

WASHINGTON (AP) -- The pace of U.S. hiring remained steady in November despite disruptions from Superstorm Sandy and employers' concerns about impending tax increases from the year-end "fiscal cliff."
Companies added 146,000 jobs, and the unemployment rate fell to 7.7 percent — the lowest in nearly four years — from 7.9 percent in October. The rate declined mainly because more people stopped looking for work and weren't counted as unemployed.
The government said Superstorm Sandy had only a minimal effect on the figures.
The Labor Department's report Friday was a mixed one. But on balance, it suggested that the job market is gradually improving.
November's job gains were roughly the same as the average monthly increase this year of about 150,000. Most economists are encouraged by the job growth because it's occurred even as companies have reduced investment in heavy machinery and other equipment.
"The good news is not that the labor market is improving rapidly — it isn't — but that employment growth is holding up despite all the fears over the fiscal cliff," said Nigel Gault, an economist at IHS Global Insight.
Still, Friday's report included some discouraging signs. Employers added 49,000 fewer jobs in October and September combined than the government had initially estimated.
And economists noted that the unemployment rate would have risen if the number of people working or looking for work hadn't dropped by 350,000.
The government asks about 60,000 households each month whether the adults have jobs and whether those who don't are looking for one. Those without a job who are looking for one are counted as unemployed. Those who aren't looking aren't counted as unemployed.
A separate monthly survey seeks information from 140,000 companies and government agencies that together employ about one in three nonfarm workers in the United States.
Many analysts thought Sandy would hold back job growth significantly in November because the storm forced restaurants, retailers and other businesses to close in late October and early November.
It didn't. The government noted that as long as employees worked at least one day during a pay period — two weeks for most people — its survey would have counted them as employed.
Yet there were signs that the storm disrupted economic activity in November. Construction employment dropped 20,000. And weather prevented 369,000 people from getting to work — the most for any month in nearly two years. These workers were still counted as employed.
All told, 12 million people were unemployed in November, about 230,000 fewer than the previous month. That's still many more than the 7.6 million who were out of work when the recession officially began in December 2007.
Investors appeared pleased with the report, though the market gave up some early gains. The Dow Jones industrial average was up 53 points in mid-day trading.
The number of Americans who were working part time in November but wanted full-time work declined. And a measure of discouraged workers — those who wanted a job but hadn't searched for one in the past month — rose slightly.
Those two groups, plus the 12 million unemployed, make up a broader measure that the government calls "underemployment." The underemployment rate fell to 14.4 percent in November from 14.6 percent in October. It's the lowest such rate since January 2009.
Since July, the economy has added an average of 158,000 jobs a month. That's a modest pickup from an average of 146,000 in the first six months of the year.
In November, retailers added 53,000 positions. Temporary-help companies added 18,000. Education and health care also gained 18,000.
Auto manufacturers added nearly 10,000 jobs. Still, overall manufacturing jobs fell 7,000. That was pushed down by a loss of 12,000 jobs in food manufacturing that likely reflects the layoff of workers at Hostess.
Paul Ashworth, an economist at Capital Economics, noted that hiring by private companies was actually better in October than the government first thought. The overall job figures were revised down for October because governments themselves cut about 38,000 more jobs than was first estimated.
The U.S. economy grew at a solid 2.7 percent annual rate in the July-September quarter. But many economists say growth is slowing to a 1.5 percent rate in the October-December quarter, largely because of the storm and threat of the fiscal cliff.
The storm held back consumer spending and income, which drive economic growth. Consumer spending declined in October, the government said. And work interruptions caused by Sandy reduced wages and salaries that month by about $18 billion at an annual rate.
Still, many say economic growth could accelerate next year if the fiscal cliff is avoided. The economy is also expected to get a boost from efforts to rebuild in the Northeast after the storm.

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Just Explain It: Why the Fiscal Cliff May Trigger a Recession

Lawmakers in Washington appear to be making little to no progress in avoiding the impending so-called fiscal cliff.  House Speaker John Boehner, R-Ohio, said Friday the negotiations are "almost nowhere." On Thursday Boehner rejected a proposal from the Obama administration saying that the Democrats need to "get serious about real spending cuts."
President Obama's offer continues to call for higher taxes on the wealthy and an extension of the payroll tax cut.   But Republicans say they will not agree to a plan that raises taxes.
As the country continues to head toward the fiscal cliff, this Just Explain It helps to make sense of what it is.
On December 31st, most of us would like to be thinking about a prosperous new year ahead…drinking bubbly and singing Auld Lang Syne with friends.  But there's a chance we could be singing a different tune if President Obama and Congress don't agree on measures to avoid the fiscal cliff.
First, let me explain what the fiscal cliff is.
The fiscal cliff refers to the potentially disastrous situation the U-S faces at the end of this year.  At midnight on December 31st, a number of laws are set to expire.  If the President and the Republicans don't reach an agreement before then, Americans could face broad government spending cuts and tax increases on January 1st.   The combined amount would total over 500 billion dollars. Those 500 billion dollars equal about three to four percent of the nation's entire gross domestic product.  This is what's referred to as the fiscal cliff.
If there isn't a resolution, here are the specifics of what will happen.
Taxes would go up for almost every taxpayer and many businesses. The Bush-era tax cuts, which tax relief for middle and upper-class tax payers, would be a thing of the past.  So would President Obama's payroll tax cut which added about a thousand dollars a year to the average worker's income.
Government spending would be slashed.  That means less money for most military, domestic and federal programs.  $26 billion in emergency unemployment-compensation would be gone. Medicare payments to doctors would be reduced by $11 billion. Federal programs would take the biggest hit.  They stand to lose a total of $65 billion.
If the fiscal cliff isn't avoided, some investors will be hit hard.  Those who receive qualified dividends could see the tax rate on those dividends go from 15% to almost 40% in 2013.
Many business owners believe going over the fiscal cliff will cripple the economy, triggering a deep recession.  They fear demand for their products or services will decrease because consumers will have less money to spend.  It also means that they won't be able to afford new hires or expand their businesses.   Since most Americans would be paying more in taxes, they'd be less inclined to make big purchases, like a home or a new car.
None of this is set in stone, but that's part of the problem.  Markets, businesses and people in general hate uncertainty. The fear of the unknown facing us at the beginning of next year is exactly why so many people are so worked up over the fiscal cliff.
Did you learn something? Do you have a topic you'd like explained?  Give us your feedback in the comments below or on twitter using #justexplainit.

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Book gives up-close look at Graham Greene's political writing

MIAMI (Reuters) - In 1965 British author Graham Greene arrived in the Dominican Republic fresh from neighboring Haiti where he witnessed first hand the "unique evil" of Haiti's brutal dictator, Francois "Papa Doc" Duvalier.

Greene was met at the airport by an enterprising New Zealand-born journalist, Bernard Diederich, whom he had befriended in Haiti on previous trips a few years earlier.

"As I watched Graham's tall, lean figure make its way through customs, his blue eyes cutting across the airport with a hint of suspicion, I wonder if, indeed, he had the power to change Haiti," Diederich wrote in a new book, "Seeds of Fiction, Graham Greene's Adventures in Haiti and Central America 1954-83."

"Could he bring down Duvalier? And, more to the point, would he write a book about Haiti?" Diederich said.

Greene was in the prime of his writing career and had already published another Caribbean novel, "Our Man in Havana," set in Cuba.

Greene called Papa Doc a "madman" telling Diederich that he had "never felt such pervasive fear in a country as in Haiti."

When he picked Greene up at the airport he was visibly shaking, Diederich recalled in an interview. "He had a terrible dread he wasn't going to make it out."

Greene had hidden his notes, written in tiny, almost illegible script, in a hardback Victorian novel. "I don't know why he bothered to hide them because no-one could read his notes," laughed Diederich.

For years later Greene still had nightmares about Papa Doc and his dreaded henchmen, the Tonton Macoutes, he added.

During the next week Diederich took Greene on a trip along the border with Haiti introducing him to more characters for his book, including at an insane asylum where hopelessly ill-equipped rebels were training to overthrow Duvalier.

The resulting book, "The Comedians," is considered one of Greene's masterpieces, and infuriated Papa Doc, who banned it. "It was his most political novel. He wrote it for a purpose. We were really at war with Papa Doc," said Diederich.

When a movie came out the next year, starring Elizabeth Taylor, Richard Burton and Alec Guinness, Duvalier banned that too. "Graham wrote the script. He told me it was another arrow at Papa Doc," said Diederich.

Greene's rage at Duvalier stemmed from his first visit to Haiti in 1954 during the Caribbean nation's brief heyday as a hip destination for the jet-set before the election in 1957 of Duvalier, a supposedly unassuming country doctor, who soon turned into a bloody dictator.

Greene arrived from Jamaica where he had been staying at Goldeneye, the coastal estate owned by Ian Fleming, author of the James Bond novels. In Haiti, Greene stayed with theater and film director Peter Brook who was working on a Broadway musical "House of Flowers," based on a short story by Truman Capote.

COPIOUS NOTES

Diederich, who had been living in Haiti since 1949 and owned the English-language newspaper Haiti Sun, offered to help Greene on a return trip.

"Graham fell in love with Haiti the same way it collared me," said Diederich. "He had just finished writing 'The Quiet American' and he told me Haiti reminded him of Indo-China."

Greene returned in 1956 with Catherine Walston, the love of his life, and the trio spent a lot of time together, comparing copious notes they both took as they traveled interviewing possible characters for a book. Some of that material would later show up in the pages of "The Comedians."

"The rest of our lives we were competing with notes. I was in awe of Graham and wanted to help him as well as I could and certainly learn from him," said Diederich, the author of 15 books himself.

It was the beginning of a correspondence that lasted decades. In preparing his book Diederich drew on 132 letters from Greene, as well as dozens from Greene's mistress, Yvonne Cloetta.

Throughout his career Greene was always at pains to protect his privacy and hide his methodology. He gave few interviews and the two small autobiographies he wrote were deliberately uninformative and revealed very little about him.

They got along in large part because Diederich respected Greene's privacy. "He didn't want to be recognized and liked to travel about incognito. I never stepped over the edge with him. I never pried," he said.

"He was (Greene's) guide and enabler," said writer T.D. Allman, who introduced Diederich at a Miami Book Fair International reading earlier this week. "Greene had a genius in finding people who could tell him what was going on."

Diederich and Greene remained close, getting together again in Panama in 1976 when it was under the rule of another dictator, General Omar Torrijos. Working as Time magazine's bureau chief in Mexico City, Diederich had come to know the general well, and suggested that he and Greene would hit it off. "I told him you both have the same liberal compass," said Diederich.

They did, prompting Greene to write one of his occasional non-fiction works, titled "Getting to Know the General."

Greene and the general had something else in common; both liked to drink, which Torrijos often did to excess. Greene was not one to wait for the sun to go down over the yardarm before having a tipple, said Diederich, though he never saw him inebriated.

Greene showed up for the first encounter to find Torrijos still in his pajamas so hung-over he could barely speak. He sobered up on a helicopter ride from Panama City to the island of Contadora where Greene interviewed him over rum punches on the beach under a palm tree.

"In no time at all they seemed to click. It was very animated, they talked and talked," said Diederich.

Torrijos was briefly distracted by a Colombian beauty playing in the sand, said Diederich, and disappeared with her for 30 minutes before returning to continue the conversation with beads of sweat on his brow.

"It was like a scene out of a Graham Greene novel: a Central American strongman and an Oxford-educated Briton sat beneath a coconut tree on a tropical beach philosophizing," wrote Diederich.

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Simon & Schuster launches self-publishing division

(Reuters) - Simon & Schuster launched a self-publishing division for writers on Tuesday, tapping into the growing market that has produced a handful of best-sellers outside of traditional publishing.

Simon & Schuster's new Archway Publishing division will let writers self-publish printed books and e-books for a fee. In return, the publisher will arrange for distribution and marketing and give the author a portion of sales.

"Self-publishing has become a viable and popular route to publication for many authors, and increasingly a source of content for traditional publishers," Carolyn Reidy, president and CEO of Simon & Schuster, said in a statement.

The number of titles self-published increased by 60 percent in 2011 to 211,269 books, according to publishing research and management company Bowker.

Electronic book readers like Amazon's Kindle and the online retailer's publishing service has spurred the self-publishing industry. John Locke, author of "Saving Rachel," was the first to sell more than one million self-published e-books through Amazon.

Simon & Schuster, a unit of CBS Corporation, is partnering with self-publisher Author Solutions Inc on the venture.

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Book Talk: Do you really know who lives next door?

TOKYO (Reuters) - Andrew, in a daring leap to freedom from an overbearing mother, moves in with a friend whose ramshackle house is the one blight on a gorgeous neighborhood - and promptly is attracted to his next door neighbor, the friendly Harlow.

Welcomed by a plate of homemade cookies and admiring of the picture-perfect home where she lives with her husband, Red, it is a while before Andrew starts to suspect there is something a little off about this woman, who seems just too good to be true.

"The Neighbors," Ania Ahlborn's second novel, was inspired by a battered house and a fallen-over mailbox she passed every day, making her think of a perfect house on a perfect street that in fact is "where all the darkness is."

Ahlborn, whose first book was self-published but became such a success she then picked up a conventional publishing contract, spoke with Reuters about neighbors, horror and her book.

Q: What inspired the book?

A: "I've always been pretty fascinated with serial killers, but not in the sense that I read about them and I'm like, let's see how they kill all their victims. I'm more interested in the fact that someone could be living right next door to you, and they might be the nicest person that you had ever met, but they're really not. There's something about that that really intrigues me. Of course it terrifies me, it freaks me out, but just that concept was what spurred my writing 'The Neighbors.' That, and I do have a little bit of a love affair with the atomic age and the perfect sort of Americana thing that was going on. That to me is also a little creepy. It's so perfect that it's almost plastic, it's Stepford Wives. Every time something is super cool and happy and nice, I always find something really creepy going on with it. If you meet the one person who's always happy, always smiling and always laughing, I'm going to be the person who's sitting back thinking, what's this person hiding?"

Q: How did you bring this idea to life?

A: "I knew that I wanted to have an everyman character that readers could relate to, so I put that into Andrew. He's just a regular guy. He has a lot of issues that he's dealing with, and he really is looking for that whole grass is greener on the other side concept. Then he steps into a life that he thinks is going to be great, oh look how nice these new neighbors are - they're going to give him a job, they're really sweet, they invite him to dinner. And he couldn't be happier, only it's 'oh my God, what have I gotten myself into.'

"As far as Red and Harlow go, I had to rewrite this thing three times. The concept was there, but there was something off about it. I actually started writing Harlow as a really nice old lady, kind of like your grandma, and there was something about it that just wasn't working for me. So I let her go and said, 'Do whatever you want.' I let her run with it, and figured I'd just see what happened in the next couple pages. And she turned into this really retro, cougary vixen. I thought 'whoa, we'll run with that.' I had to rewrite the whole thing. I just loved that - it just feels so wrong. A really sweet woman who ends up being almost like a dominatrix, in a way."

Q: You sound like that surprised you. Do you have that kind of experience a lot when you write?

A: "Yes. When it comes to writing, I think there's two different ways that you can approach it. You can either plot it out and do it by an outline and make the characters do what you want them to do, or you can basically let the characters carry the story and see where it goes. I like to do both techniques. Of course I want to have a beginning, middle and end where I don't feel I'm just writing and writing and writing and it's not going anywhere, because that's horribly frustrating.

"On the other hand, you always want it to be kind of organic, so it doesn't feel forced. When you allow those characters to step up to the plate and say 'here's what I would do.' You learn a lot about yourself that way. You don't know that you've got these ideas in your head, and they come out by way of these fictional characters. It can get a little bit weird, especially when you're writing horror and thrillers. You're like, 'oh my God, what's wrong with me?'"

Q: What is the function of scary stories?

A: I think that scary stories are the most truthful. I think that the honesty behind a lot of stuff that you read in horror is really what's scary. In 'The Neighbors,' one of the things that I tried to do was make Harlow as likable as possible even after I revealed the fact that she is this monster. The reason why I did that is because if your neighbor is some crazy psychopath but you don't know that, you might like that person. That in itself is terrifying because you don't know, they're so good at hiding what they are.

"I think that there's bits of humanity that come out in horror and thrillers that are really uncomfortable for us to otherwise think about. Could I relate to the monster next door? Could I care about them? Could I be the monster next door?

"That's the way that I think that horror became so popular - it really reflects who we are and who we hide. It also reflects our worst fears. We want to explore those fears and it's a safe way to explore those fears... But forget it, when I have to be alone by myself in a locked house at night, I sleep with all the lights on and the dogs in my room, where otherwise I wouldn't care if my husband was home... It's just funny how those tiny little differences make us interpret things in a totally different way. If he's here I'm fine, but if he's not a serial killer is definitely going to knock on my door and this is the last night of my life. That's just the way that our minds work. I think that horror makes us reflect on our fears, and on who we say we are - but are afraid to say we are."

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Co-author of "Three Cups of Tea" commits suicide in Oregon

PORTLAND, Oregon (Reuters) - Journalist David Oliver Relin, co-author of the controversial best-selling book "Three Cups of Tea," took his own life last month in the Columbia River town of Corbett, Oregon, east of Portland, authorities disclosed on Monday.

The cause of Relin's death on November 15 was listed as suicide by blunt force head injury, said Tom Chappelle, Multnomah County deputy medical examiner, but he declined to give further details. Relin, who lived in Portland, was 49.

Relin, a freelance journalist who wrote for several magazines, became best known for his work with Greg Mortenson on the wildly successful memoir "Three Cups of Tea," which was first published in 2006 and spent four years on the New York Times bestseller lists.

The book, which sold over 4 million copies, chronicled Mortenson's failed attempt to climb the mountain K2 in South Asia and his encounter with impoverished Pakistani villagers whom he credited with inspiring him to build schools for young girls and other humanitarian projects in the region.

However, the credibility of the book came under fire in 2011 when the CBS television news program "60 Minutes" aired an expose accusing Mortenson of fabricating or embellishing key details of his story, and using his charitable institute to promote sales of the memoir.

CBS News, for example, disputed Mortenson's account of being kidnapped in Pakistan's Waziristan region in 1996.

Mortenson later acknowledged in an interview posted on his institute's website that the book contains "discrepancies" that resulted from "omissions and compressions" done for the sake of literary expediency. But he insisted the abduction story was "pretty much" true and defended the book overall, saying, "I'm not a journalist. I don't take a lot of notes."

Relin said in a 2008 interview with a University of Oregon professor that in addition to interviewing Mortenson extensively, he conducted more than 200 interviews with people tied to Mortenson's story and traveled three times to northern Pakistan. Relin said he objected to Mortenson getting a co-author credit on the book.

Relin later wrote "Second Suns: Two Doctors and Their Amazing Quest to Restore Sight and Save Lives," which is scheduled to be released by Random House in June.

A graduate of Vassar College and the Writers' Workshop at the University of Iowa, Relin focused for two decades on reporting about social issues and their effect on children, according to an Iowa Writers biography.

In 1992, he received a University of Iowa fellowship to take a bicycle trip across the length of Vietnam and report on that country's economic reforms. The biography said he also won more than 40 national awards for work as an editor and writer, and that his stories about child soldiers were including in Amnesty International reports on the subject.

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Book Talk: At base camp on the climb to conquer corruption

LONDON (Reuters) - Frank Vogl, who co-founded the anti-corruption group Transparency International (TI) in 1993, believes campaigners have reached base camp in their fight to end the abuse of public office for private gain.

TI has offices in more than 100 countries and its annual rankings of clean government are widely used by investment analysts to help gauge political risk.

But the almost daily disclosures of rigged elections and corporate bribery across the globe shows why Vogl, a former journalist and senior World Bank official who lives in Washington, is quick to admit there is an Everest yet to climb.

Vogl spoke to Reuters about his new book "Waging War on Corruption" during a visit to London.

Q: Are you winning the fight against corruption?

A: "I don't say we're winning, but we've come a long way in 20 years. Polls around the world show that many people view corruption as their single-biggest concern. The Arab Spring showed an enormous level of frustration by ordinary people with the humiliation they suffer every day as a result of corruption and extortion, and a willingness to go out on the streets and do something about it."

Q: Is corruption a price worth paying to ensure political stability in friendly countries?

A: "In an earlier era, you could have perhaps made that case. Today, thanks to the Internet and social media ordinary citizens everywhere are far better informed than ever before. You don't secure peace and stability in a country if the broad public has no confidence in the leadership and institutions of government. Whether it's in China or Russia - or more unstable countries like Afghanistan or Iraq or Pakistan - public awareness of corruption is something governments have to address. If they run totally fraudulent elections or continue to put in place gangsters to run institutions, then over time you will have far greater instability."

Q: What lessons are to be learned from Egypt?

A: "What is difficult for Western powers, especially the United States, is to find partners in highly unstable countries. Or they stick with them for too long. President (Hosni) Mubarak is a very good example. For a long time he was important for peace and security in the Middle East. But he lost so much credibility at home that the U.S. was seen almost as a co-conspirator against the people of Egypt, which today makes it very hard for the U.S. to restore a strategic relationship with Egypt."

Q: Is corruption in business on the rise?

A: "There is no way of knowing. It's far easier to move money round the world swiftly and illicitly. But there are now more laws in place that criminalize foreign bribe-paying by corporations than ever before. There are more prosecutions and investigations. The fines being paid are higher. And the number of companies that have developed training and compliance programs to try to adhere to ant-bribery laws is greater than ever before. There is also far more media attention on the issue. And from 2014 oil and gas and mining companies in the United States will have to publicly list all their royalty payments to host governments. A similar law will come into effect in Europe. So through greater transparency you are going to start to reduce the level of illicit payments."

Q: What about the wealth amassed by officials in some African oil-producing countries?

A: "As I said, we have a long way to go. Transparency International France and another NGO asked the French courts to order the state to investigate the illicit investments that the leaders of three west African countries had in France. The French government contested this, but the investigations have gone forward. But it's incredibly difficult because the French, the British and others have very strong security interests in wanting to maintain supplies of minerals and oil and gas."

Q: So governments are saying in effect that corruption is a price worth paying?

A: "It's very short-sighted. If we can bribe people to guarantee our security of supply, others can too. If we are going to turn a blind eye to the illicit trade in diamonds, for example, it isn't going to help the stability and security of southern Africa. The fundamental debate about this in the UK is over. People ‘get it' and see where the longer-term interest lies. But a lot of defense and oil contracts are still a very murky area. And there is a lot of money being laundered that the authorities, for one reason or another, have decided not to clamp down on."

Q: Which countries stand out as winning and losing the fight against corruption?

A: "Take a country like Georgia. The fact that they recently had a contested election, which the opposition won, is a good indicator of a significant effort at reform. There are very close correlations between the levels of perceived corruption, human rights abuse, press freedom and the strength of democratic institutions. But we also see backsliding. We all rejoiced at the intentions of a new government in Kenya after President (Daniel arap) Moi. But today there's probably greater corruption in Kenya than before."

Q: The chief of staff of former Brazilian president Lula was recently jailed for corruption. How significant is that?

A: "The investment community should be paying close attention to what is happening in Brazil. You have got very important changes in public procurement and freedom-of-information laws that are making it harder to use bribes to get government contracts; you've had the prosecution and sentencing of top politicians that, five years ago, would never have happened. Why? Part of the reason is that after two decades of economic policy reform and the modernization of the economy you have an increasingly influential entrepreneurial middle class that understands that their business success is best achieved in clean markets."

Q: Has TI come under attack for its campaigning?

A: "Whether it be in Zimbabwe or Sri Lanka or Venezuela, people leading anti-corruption movements - and not just Transparency International - are facing continuous threats by the police. Our office in Sri Lanka has been bombed, the head of the office was kidnapped and there have been repeated death threats against members of staff. The level of threats has increased in many countries, including in Russia, and that is a direct result of the increasing success of these groups. If they were not successful or effective, the governments wouldn't care. We have citizens' help lines to report corruption in 55 countries. Thousands of people are lodging complaints, and that is testing many governments. Even lower-level officials are suddenly being challenged. So we're entering a much more dangerous period for the leaders of civil society."

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