August 2009

Tokyo Voters Seek Change in Japanese Election, Favor Opposition Over LDP

August 28, 2009

By Sachiko Sakamaki Aug. 29 (Bloomberg) — Tokyo voters like Yoshitaka Sakata have run out of patience with the ruling Liberal Democratic Party , which bodes well for the opposition Democratic Party of Japan’s chances in tomorrow’s parliamentary election. “I want a change in government,” Sakata, 38, a kitchen- facility salesman, said while watching DPJ leader Yukio Hatoyama at an Aug. 25 rally in Tokyo. “It’s half expectation and half gamble, but I don’t see any hope that the LDP can improve the situation any longer.” Hatoyama spoke before a crowd of about 1,500 people at the rally on behalf of first-time candidate Takako Ebata , 49, who is running against former LDP Defense Minister Yuriko Koike . Prime Minister Taro Aso ’s party is trailing in the polls nationally as well as in Japan’s biggest city. The LDP, which has governed Japan for all but 10 months since 1955, has struggled to overcome Aso’s plummeting approval ratings. The world’s second-largest economy last quarter emerged from its worst recession since World War II and still faces record unemployment and welfare costs that account for a quarter of this year’s 88.5 trillion yen ($944 billion) budget. Polls show the DPJ leading the ruling party in Tokyo. Only three LDP candidates are favored to win their races in the city, compared with 17 DPJ hopefuls, the Yomiuri newspaper said on Aug. 21, citing its own polls. Up For Grabs There are 42 seats up for grabs in the city; 25 from single constituencies and 17 determined by proportional representation. Four years ago, DPJ Vice-President Naoto Kan was the only party member to win a single-seat constituency in Tokyo, when then- premier Junichiro Koizumi led the LDP to a landslide victory. Koizumi stepped down a year later and Aso, who took office in September 2008, is the fourth prime minister since the last lower house election. Now, Koike, a Koizumi protege, is one of his “children” who may be defeated as their standard-bearer retires. Voters at the Aug. 25 rally cheered Hatoyama, shouting “prime minister, hang in there” and taking pictures with their cell phones. The DPJ is fielding a record 330 candidates nationwide, of whom 164 are new, compared with the LDP’s 326. The average age of LDP candidates is 55.5 years old, while that of the DPJ is 49.3 years old. Desire for change is strong even among LDP supporters. Noboru Morita, a 65-year-old retiree, said he’ll vote for Ebata even though he’ll cast a separate ballot for the LDP in the proportional representation as he’s done for many years. Japanese cast two votes: one for a single-seat constituency and one for a party’s proportional representation, and parties can put favored candidates who lose in their constituencies into proportional seats. “I’ve been supporting the LDP, but Prime Minister Aso is an embarrassment,” Morita said. “We need a change.” To contact the reporter on this story: Sachiko Sakamaki in Tokyo at Ssakamaki1@bloomberg.net .

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Hacker Gonzalez to Admit Guilt in Credit Card Theft, Forfeit $1.65 Million

August 28, 2009

By Patricia Hurtado and Linda Sandler Aug. 29 (Bloomberg) — Albert Gonzalez, the computer hacker charged with stealing 130 million credit and debit card numbers, will plead guilty to previous data-theft charges in New York and Massachusetts and forfeit assets, U.S. prosecutors said. Gonzalez faces 15 years to 25 years in prison, authorities said in a Massachusetts court filing yesterday. The sentences imposed in Massachusetts will run concurrently with any handed out in New Jersey, where Gonzalez was charged this month with stealing the credit card numbers, and New York, they said. Federal prosecutors in Boston charged Gonzalez and others with stealing credit and debit card numbers from companies including TJX Cos. , BJ’s Wholesale Club Inc. , OfficeMax Inc. , Barnes & Noble Inc. and Sports Authority Inc. The hackers scouted potential victims on a list of Fortune 500 companies and then visited retail stores to identify the payment processing systems and their vulnerabilities, prosecutors said. Gonzalez agreed to forfeit more than $1.65 million in U.S. currency, a condominium in Miami, a blue 2006 BMW automobile, IBM and Toshiba laptop computers and related equipment, a Glock 27 firearm, a Nokia cell phone, a Tiffany diamond ring and three Rolex watches, according to the filing. Gonzalez, who is in federal custody in Brooklyn, New York, was indicted last year by federal grand juries in Massachusetts and New York for data breaches at companies. He was a federal informant after his arrest in New Jersey by the U.S. Secret Service in 2003 in a case involving hackers known as the Shadowcrew, the U.S. Attorney’s Office in Boston said in a statement after indicting him on Aug. 5, 2008. Informant The Secret Service later discovered that Gonzalez, who was working as an informant for it, was criminally involved in the case, federal officials said last year. In the Shadowcrew case, the Secret Service arrested 21 people in the U.S. in October 2004 for their role in one of the largest online centers for trafficking in stolen credit and bank card numbers. Gonzalez wasn’t indicted in that case. Gonzalez and the two hackers were charged in Newark earlier this month with two counts of conspiracy in a scheme to sell data they stole using computers in New Jersey, California, Illinois, Latvia, Ukraine and the Netherlands, according to the indictment. He faces as many as 35 years in prison in the new case. ‘Accepted Responsibility’ “As evidenced from the plea agreement, Albert has accepted responsibility for his actions and looks forward to a resolution of these cases,” said George Farkas, a lawyer who is representing Gonzalez. Gonzalez was scheduled to go to trial Sept. 14 in federal court in Central Islip, N.Y., before U.S. District Judge Sandra Feuerstein . Among the charges is operating a fraud scheme from April through September in 2007, including hacking into computers at the corporate headquarters of Dave & Buster’s Inc. , a restaurant chain, and stealing debit and credit card numbers. In the new case, the hackers used software known as malware and so-called injection strings to attack the computers and steal data, prosecutors said. They installed “sniffer” programs to capture data “on a real-time basis” as it moved through the computer networks and used instant messaging services to advise each other on how to navigate the systems, according to the indictment. They also programmed malware to evade detection by anti-virus software and erase files that might detect its presence, prosecutors said. The Massachusetts case is U.S. v. Albert Gonzalez, 08-CR-10223, U.S. District Court, District of Massachusetts (Boston). The New York case is U.S. v. Yastremskiy, 08-CR-00160, U.S. District Court, Eastern District of New York (Central Islip). To contact the reporters on this story: Patricia Hurtado in New York State Supreme Court in Manhattan at pathurtado@bloomberg.net ; Linda Sandler in New York at lsandler@bloomberg.net .

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China Merchants Bank Quarterly Profit Drops 41% as Loan Margins Contract

August 28, 2009

By Bloomberg News Aug. 29 (Bloomberg) — China Merchants Bank Co., the nation’s fifth-biggest by market value, posted its third consecutive quarter of declining profits as loan margins contracted and it set aside additional funds for loan defaults. Net income fell 41 percent to 4.1 billion yuan ($600 million) in the second quarter, from 6.93 billion yuan a year earlier, based on figures released by the Shenzhen-based company today. That fell short of the 5.1 billion yuan average estimate of six analysts in a Bloomberg survey. President Ma Weihua , who introduced the nation’s first credit card and helped boost profit sevenfold since 2004, faces more challenges during an economic slowdown because of the bank’s focus on loans to home buyers and smaller firms. The profit decline was the steepest among China’s six largest publicly traded banks . The results reflect the biggest margin contraction among the six Hong Kong-listed Chinese banks and weaker fee income, Credit Suisse AG analysts Sherry Lin and Daisy Wu wrote in a report on Aug. 14. “With the recent rebound in the Chinese property market and increasing signs of stabilization in the U.S. economy, we believe there is more upside risk to forward earnings estimates” for Merchants Bank, the analysts said. Shares of Merchants Bank fell 1.5 percent to close at HK$17.44 in Hong Kong trading before earnings were released. The stock has gained 58 percent this year, compared with a 40 percent increase in the benchmark Hang Seng Index . Half-Year Results Second-quarter profit was derived by subtracting net income for the first quarter from the first-half figure reported to the Hong Kong stock exchange yesterday. In the first half, Merchants Bank’s profit fell 38 percent to 8.3 billion yuan. Net interest income, or revenue from lending minus interest paid on deposits, fell 23 percent to 18.6 billion yuan in the first six months. Fee and commission income fell 1.2 percent to 4.04 billion yuan. Chinese banks advanced a record $1.1 trillion of new loans in the first half, almost equivalent to India’s gross domestic product last year. A surge in credit supply and re-pricing of loans after the central bank’s five rate cuts in the final four months of last year eroded the profitability of that lending. Merchants Bank’s net interest margin, a measure of lending profitability, narrowed to 2.14 percent, 137 basis points lower than a year earlier. A basis point is 0.01 percentage point. The bank said earlier this month it plans to raise as much as 18 billion yuan in a rights offer to shore up capital that has been drained by acquisitions and credit expansion. Merchants Bank’s capital adequacy ratio fell to 10.63 percent as of June 30, the lowest among the Hong Kong-listed Chinese banks. For Related News and Information: Top financial stories: FTOP Stories on China Banks: TNI CHINA BNK Relative value comparison: 3968 HK RVC Earnings Summary: 3968 HK ERN

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Treasuries Post Weekly Gain as Sustainability of U.S. Recovery Questioned

August 28, 2009

By Susanne Walker Aug. 29 (Bloomberg) — Treasuries rose, led by shorter- maturity debt, as investors snapped up a record-tying $109 billion in notes amid skepticism about the strength of the U.S. economic recovery and the value of higher-yielding assets. Yields on 2-, 5- and 7-year notes fell as demand increased at auctions of each of the securities this week from a class of investors that includes foreign central banks. A government report on Sept. 4 will show the U.S. economy lost jobs for a 20th consecutive month and the unemployment rate climbed to 9.5 percent in August, according to Bloomberg News surveys. “The bond market is reflecting that the recovery process is going to be long and slow,” said David Glocke , who manages $65 billion of Treasuries at Vanguard Group Inc. in Valley Forge, Pennsylvania. “Yields are reflecting that the market is anticipating interest rates will remain low for an extended time and the recovery will be slow.” Two-year note yields declined seven basis points to 1.02 percent yesterday from 1.09 percent on Aug. 21. Five-year note yields fell 12 basis points to 2.45 percent, while yields on seven-year securities dropped 12 basis points to 3.09 percent. The yield on the benchmark 10-year note fell 12 basis points on the week, or 0.12 percentage point to 3.45 percent, according to BGCantor Market Data. The price of the 3.625 percent security maturing in August 2019 rose 1 point, or $10 per $1,000 face amount, to 101 15/32. Bonds benefited as stocks fluctuated all week amid concern that the 52 percent increase in the Standard & Poor’s 500 Index since March 9 is justified by expectations for corporate profits and economic growth. ‘Legitimate Concerns’ “People have legitimate concerns about how sustainable the growth is going to be,” said William O’Donnell, U.S. government bond strategist at RBS Securities Inc. in Stamford, Connecticut, one of 18 primary dealers that are required to bid on Treasury auctions. “We continue to see very good investor support even with low yield levels in the last few weeks.” The U.S. sold $42 billion of two-year notes on Aug. 25, $39 billion of debt maturing in five years on Aug. 26 and $28 billion of seven-year securities on Aug. 27. The total amounts equaled the record sizes for those securities sold in July. Indirect bidders, the class of investors that includes foreign central banks, bought 49.4 percent of the notes at the two-year auction. They bought 33 percent of the securities in July at the last sale, the least since April. They purchased 56.4 percent of the notes at the five-year auction, compared with 36.7 percent of the securities in July. ‘Out The Curve’ That class bought 61.2 percent of the notes at the seven- year auction, compared with an average of 43.7 percent of the securities at the last six sales. “Foreigners have been moving further out the curve as they get more and more comfortable with the inflation outlook,” Carl Lantz , an interest-rate strategist in New York at primary dealer Credit Suisse Group AG, said Aug. 26. The difference between rates on 10-year notes and Treasury Inflation Protected Securities, which reflects the outlook among traders for consumer prices, narrowed to 1.71 percentage points yesterday from 1.90 on Aug. 21. The spread has averaged 2.20 percentage points for the past five years. Projections for the consumer price index show a contraction to 0.7 percent this year, rising to 1.4 percent next year and 1.5 percent in 2011, Christina Romer , White House chief economist, said in Washington Aug. 25. Once Stimulus Ends U.S. unemployment will surge to 10 percent this year and the budget deficit will widen to $1.5 trillion next year, reflecting a “deeper recession” than previously expected, the Office of Management and Budget said Aug. 25. Economists forecast the U.S. will emerge from the worst recession since the 1930s, with the economy in the third quarter expanding at a 2.2 percent annual rate, according to the median estimate in an August survey by Bloomberg News. “Guys are moving into this market on backups,” Thomas Tucci , head of U.S. government bond trading at primary dealer RBC Capital Markets New York. “People going forward do believe that there is a bounce in the economy but they don’t know if it’s going to be long lived once the stimulus ends.” U.S. gross domestic product shrank at a 1 percent annual rate from April to June, unchanged from what was reported for the quarter last month, the Commerce Department said Aug. 27. Analysts in a Bloomberg survey forecast a 1.5 percent drop. Employment Report A report Aug. 27 showed that fewer Americans filed claims for unemployment benefits last week, reinforcing evidence that the labor-market rout may be easing. Initial jobless claims dropped to 570,000 from a revised 580,000 the previous week, the Labor Department said. The U.S. lost 225,000 jobs this month, down from a drop of 247,000 in July, according to a Bloomberg survey of economists. Treasury 10-year yields climbed the most in a week since 2003 for the week ended Aug. 7 after the Labor Department said the economy lost 247,000 jobs in July, fewer than the 325,000 forecast in a Bloomberg News survey. Home sales increased 9.6 percent, the most since February 2005, to a 433,000 annual pace, figures from the Commerce Department showed Aug. 26 in Washington. “The real story is that we have bottomed,” Glocke of Vanguard said. “On a trend basis, it’s looking positive, but we’re at abysmal levels still.” To contact the reporter on this story: Susanne Walker in New York at swalker33@bloomberg.net

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U.S. Regulators Shut Down Three Failing Banks, Pushing 2009 Toll to 84

August 28, 2009

By Dakin Campbell Aug. 29 (Bloomberg) — Regulators closed banks in California , Maryland and Minnesota yesterday, pushing U.S. bank failures to 84 this year amid continuing fallout from the worst economic crisis since the Great Depression. The Federal Deposit Insurance Corp. was named receiver for Affinity Bank of Ventura, California, Bradford Bank of Baltimore and Mainstreet Bank of Lake Forest, Minnesota, after yesterday’s closings, the FDIC said. Assets of $1.9 billion and deposits of $1.7 billion from the three banks were turned over to new lenders at a total cost of about $446 million to the FDIC’s deposit insurance fund, according to agency statements. Regulators have closed banks at the fastest pace in 17 years and more are likely as losses mount from soured real- estate debt. A total of 416 banks with combined assets of $299.8 billion failed the FDIC’s grading system for asset quality, liquidity and earnings in the second quarter, the most since June 1994, the regulator said in a report Aug. 27. Pacific Western Bank of San Diego will assume the deposits of Affinity Bank, the FDIC said. Affinity, with $1 billion in assets and $922 million in deposits, had 10 branches. Two, based in San Mateo and San Francisco, will open today as Pacific Western branches; the rest will open Aug. 31 under new ownership, according to the FDIC. The regulator agreed to share losses on $934 million of the assets. Central Bank of Stillwater, Minnesota, assumed $434 million in deposits at Mainstreet Bank, the FDIC said. Central Bank will pay a premium to purchase Mainstreet’s $459 million in assets, with the FDIC sharing losses on about $268 million. Mainstreet’s eight branches will open today as Central offices. Buffett Stake Manufacturers & Traders Trust Co. of Buffalo, New York, took over the deposits of Bradford Bank , the FDIC said. M&T, whose parent counts billionaire investor Warren Buffett among its biggest shareholders, is buying Bradford’s $383 million of deposits and $452 million in assets. The FDIC is sharing losses on $338 million of assets in the deal, the regulator said. Bradford is the second Maryland-based bank acquired this year by M&T, which bought Baltimore-based Provident Bankshares Corp. in May. M&T picked up $5.1 billion in deposits and $6.3 billion assets in the Provident deal, according to a company filing. The FDIC insures deposits at 8,195 institutions with roughly $13.5 trillion in assets and reimburses customers for deposits of up to $250,000 per account when a bank fails. The surge in failures has depleted the Washington-based regulator’s deposit insurance fund, which fell to $10.4 billion at the end of June from $13 billion in the previous quarter, the agency said. The total was the lowest since 1993. Added Assessment FDIC Chairman Sheila Bair said in an Aug. 5 Bloomberg Television interview that the agency will likely levy another fee this year to replenish the deposit insurance fund. The agency has already raised $5.6 billion through an added assessment and has the authority to levy two more before the end of the year. The collapses of Bradford and Mainstreet brought down lenders with roots reaching back more than a century, according to their Web sites, a departure in a banking crisis that has seen failures concentrated among newer companies. The FDIC yesterday moved to address that trend, extending to seven years from three years the time new banks must maintain higher capital levels and face more frequent examinations. The agency has brokered the 6th and 11th largest bank failures in U.S. history this year in Birmingham, Alabama-based Colonial BancGroup Inc. and Austin, Texas-based Guaranty Financial Group Inc. To contact the reporters on this story: Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

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Ford Said to Work to Bridge Gap With UAW as Union Resists New Concessions

August 28, 2009

By Keith Naughton and John Lippert

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Ex-publisher of Philly newspapers working comme il faut for …

August 28, 2009

… a California private – equity unflappable in an auction despite the company’s assets as it moves to arise from bankruptcy recourse. has agreed to retail two of its Colorado newspapers and a Texas newspaper despite undisclosed terms. …

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How The Profit-Hungry "Medical-IndustrIal Complex" Hurts Health Care (VIDEO)

August 28, 2009

“Bill Moyers Journal” aired a new documentary on its show Friday about how the “medical-industrial complex” affects America’s health care. Based on the book “Money-Driven Medicine” by Maggie Mahar, the film looks at why our health care costs are so high and yet the care is so often lacking. Mahar, who has reported on health care for years, explains the situation as follows: What I learned, during those years, is that in our health care system, profits often trump patients. A great many people are selling and selling hard. By law, for-profit corporations are supposed to put their shareholders’ interests first: this means that they must strive to maximize profits. And this goes a long way toward explaining why U.S. healthcare is so expensive. Watch a clip from the film below. See the whole thing at Bill Moyers Journal .

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Best of the blogs | Missouri program helps prevent home …

August 28, 2009

Help for homeowners Missouri homeowners seeking to refinance their mortgages to avoid foreclosure may qualify for a new state program that helps pay closing costs for second mortgages. The Missouri Housing Development Commission is …

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Video: Still Flying Despite Recession

August 28, 2009

Analysis and discussion with the CEO of JetBlue Dave Barger. He says he remains on track to report a profit this year despite tremendous headway and he is well-positioned to pick some of the pieces that remain from an industry shattered by the recession. (For The Record)

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Music major, partner look for right pitches

August 28, 2009

very focused on the downside,â? Mr. Nortman says in an e-mail. â??If we can purchase assets at distressed pricing, then our risk/downside is that much more protected.â? The two partners, whose families have known each other for decades,

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Senator Ted Kennedy Remembered as Big-Hearted, Passionate Public Servant

August 28, 2009

By Tom Moroney Aug. 28 (Bloomberg) — Senator Edward Kennedy was remembered as a big-hearted man with a passion for public service and helping other people at a memorial service at the John F. Kennedy Presidential Library and Museum in Boston. “Teddy was a man who lived for others,” said Senator Chris Dodd of Connecticut. “He was a champion for countless people who otherwise might not have had one, and he never quit on them, never gave up on the belief that we could make tomorrow a better day. Never.” Kennedy, 77, died Aug. 25 after a 15-month battle with brain cancer. His funeral will be held tomorrow at Our Lady of Perpetual Help Basilica in Boston. President Barack Obama , vacationing this week on the Massachusetts island of Martha’s Vineyard, is scheduled to speak. Kennedy’s nephew, Joseph P. Kennedy II , a former congressman and the son of the late New York Senator Robert Kennedy , said his uncle had to look after “one very, very large family” after the assassinations of Joseph’s father and President Kennedy. “For so many of us, we just needed someone to hang on to, and Teddy was always there to hang on to,” his nephew said. “He had such a big heart and he shared that heart with all of us.” Arizona Senator John McCain , last year’s Republican presidential nominee, said that when he and Kennedy worked together on an immigration bill, “he was the best ally you could have.” ‘The Long View’ “He was the most reliable, the most prepared, and the most persistent member of the Senate,” McCain said. “He took the long view. He never gave up.” The memorial service’s list of speakers also included Vice President Joe Biden and Kennedy’s Senate colleague Orrin Hatch . Niece Caroline Kennedy and Boston Mayor Tom Menino also were scheduled to speak. After the funeral tomorrow, the senator will be buried at Arlington National Cemetery outside Washington near his two brothers — President Kennedy, assassinated in 1963, and Robert Kennedy, killed by a gunman in 1968. “John Fitzgerald Kennedy inspired our America; Robert Kennedy challenged our America; and Teddy changed our America,” said Dodd, who took over shepherding a health-care overhaul bill through Kennedy’s committee during the senator’s illness. Dodd made the crowd laugh by recalling that after he underwent prostate surgery a few weeks ago, Kennedy called him, saying in a booming voice, “between going through prostate cancer surgery and doing town hall meetings, you made the right choice!” 33,000 Mourners Yesterday and today, more than 33,000 mourners filed past Kennedy’s flag-draped casket at the library in Boston. His widow, Victoria , and other family members greeted visitors before the doors to the library, overlooking the Atlantic Ocean, closed at 3 p.m. Boston time. She spoke briefly to reporters at the museum last night, thanking people for turning out to support her husband. In remarks carried on CNN, she said the sight of people lining the streets was “deeply, deeply moving for all of us.” Thousands of people waited alongside roads and on overpasses yesterday to glimpse the black hearse bearing Kennedy’s body from his home in Hyannis Port. Before arriving at the museum, the motorcade toured Boston, the city Kennedy’s grandfather John F. Fitzgerald once served as mayor. Among the locations the motorcade passed were the federal building named for his brother John, the office where he served as a Suffolk County Assistant District Attorney and the church where his mother, Rose, was baptized. ‘Deeply Moving’ Cardinal Sean P. O’Malley will preside over tomorrow’s funeral in his role as Archbishop of Boston and will lead the final prayers of commendation. Obama’s eulogy is “obviously going to be very personal,” White House spokesman Bill Burton told reporters yesterday in Oak Bluffs. Kennedy represented one of the last generational links to Franklin D. Roosevelt’s New Deal, said former Massachusetts Lieutenant Governor Thomas P. O’Neill III, who is the son of former U.S. House Speaker Thomas P. “Tip” O’Neill Jr. “The ideals of the New Deal must stay in place,” O’Neill said yesterday. “People must understand the contribution he and my father made. They believed in a government of helping people.” “They were really the last of the great Irish-American stories,” O’Neill said. “The Irish-Americans have made it, and now it is their obligation to look behind to anyone left behind.” To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net ; Sree Vidya Bhaktavatsalam in Boston at sbhaktavatsa@bloomberg.net

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Foxwoods Casino Owner Seeking `Mutually Beneficial’ Restructuring of Debt

August 28, 2009

By Beth Jinks Aug. 28 (Bloomberg) — The owner of the Foxwoods Resort Casino said it’s seeking “a mutually beneficial” solution to the proposed restructuring of at least $1.45 billion of debt, backing away from earlier reported comments suggesting lenders may go unpaid. “Like any other restructuring, the tribe is looking at all its options and there’s no plan at this time,” a spokesman for the Mashantucket Western Pequot Tribal Nation said today. “Through the process, the tribe will be pursuing a mutually beneficial resolution with its banks and bondholders. We’ve always had a favorable relationship with our lenders and we look forward to working with them on a solution that works for all.” Michael Thomas , the Mashantucket Pequot Tribal Council leader who is seeking re-election as chairman, told tribal members they would be paid before banks or bondholders, the Day newspaper of New London, Connecticut, reported on Aug. 26. The paper cited an e-mail from Thomas sent to members. New London is about 14 miles from Foxwoods, which is located on tribal land in the southeastern Connecticut town of Ledyard. That same day, the Foxwoods owner announced the proposed restructuring and said it had hired Miller Buckfire & Co. , a New York investment bank, and the law firm Weil, Gotshal & Manges LLP as advisers. The news prompted Moody’s and Standard & Poor’s to cut their ratings on the tribe’s debt by four notches. A default be the biggest to date by any tribal casino company. MGM Grand Hotel Foxwoods, among the largest casinos in the U.S. by gambling space, has lost business to the recession and competition from new casinos and racetracks with slot machine-style video-lottery terminals in nearby states. Slot revenue fell 13 percent in July, the casino said on Aug. 14. It has three hotels and six casinos with more than 7,200 slots and 380 table games. The Mashantucket Pequots, described as native Algonquins, receive income from the earnings. Mashantucket opened a casino and hotel under the MGM Grand brand in May 2008, just as the recession began to hurt gambling revenue. “They borrowed a fair amount of capital to build the MGM Grand and the MGM Grand didn’t come close to what they were hoping for in returns on investment,” said Dennis Farrell , a debt analyst at Wells Fargo Securities LLC in Charlotte, North Carolina. “With the weakness in the overall market when they have amortizing debt coming due, they need to handle that and they’re obviously going to have a difficult time.” Malaysian Ties Mashantucket has a $700 million revolver loan due in July 2010, $500 million in 8.5 percent bonds that mature in 2015 and $250 million of 5.912 percent bonds due in 2021, according to data compiled by Bloomberg. It also owes money to Kien Huat, a Malaysian investment company owned by the family that controls the Genting Bhd. Group. Kien Huat initially helped finance Foxwoods and holds a loan with about $21.2 million principal remaining that requires the tribe to pay it a portion of casino revenue. The tribe also owed $685.2 million in special revenue obligations and $375.1 million in subordinated special revenue obligations as of June 30, 2007, according to prospectus documents from the tribe’s most recent bond sale. Native American casinos on tribal land don’t pay federal income tax. They usually pay a slot-machine tax to the state government. In Connecticut, tribes pay the state 25 percent of their slot winnings, and no taxes on table betting or other revenue. To contact the reporter on this story: Beth Jinks in New York at bjinks1@bloomberg.net

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Asian Stocks Post Weekly Gain as Strong Earnings Boost Hopes for Recovery

August 28, 2009

By Shani Raja Aug. 29 (Bloomberg) — Asian stocks advanced for the second time in three weeks as companies reported higher-than-estimated profit and U.S. economic reports spurred confidence the global economy is strengthening. Harvey Norman Holdings Ltd. surged 21 percent in Sydney after profit beat analyst estimates. Westfield Group , which operates 55 U.S. shopping malls, gained 9.2 percent as a gauge of American home prices advanced. Casio Computer Co., the maker of Exilim cameras and G-Shock watches, surged 9.1 percent on merger speculation. BOC Hong Kong (Holdings) Ltd. led the region’s banks higher as the threat of loan losses receded. “People are generally happy that things are improving,” said Tim Schroeders , who helps manage about $1 billion at Pengana Capital Ltd. in Melbourne. “It’s now a question of how strong that is going to be. We’re probably still going to get the occasional rogue figure from time to time.” The MSCI Asia Pacific Index gained 3.0 percent this week to 113.94, taking the gauge’s rally since hitting an almost six- year low on March 9 to 61.4 percent. In Sydney, the S&P/ASX 200 Index climbed 0.9 percent in the week after Australian business investment unexpectedly rose in the second quarter. Japan’s Nikkei 225 Stock Average gained 2.9 percent to 10,534.14 as a report showed the nation’s exports fell less than expected. The country holds parliamentary elections on Aug. 30, which the opposition Democratic Party of Japan is expected to win by a landslide, newspaper polls show. Government Stimulus Government stimulus spending has contributed to a revival of corporate profits and economic growth, helping sustain the MSCI Asia Pacific Index’s rally. Companies included in the benchmark currently trade at an average 24 times estimated earnings , up from as low as 9 times in October, according to data compiled by Bloomberg. Harvey Norman , Australia’s largest furniture and electrical retailer, surged 21 percent. A decline of 40 percent in the company’s net income for the year ended June 30 beat the average of six analyst estimates compiled by Bloomberg. Woolworths Ltd., Australia’s biggest retailer, advanced 3 percent to A$28.30, as full-year profit rose 13 percent to beat the average of 11 analyst estimates compiled by Bloomberg. Air China Ltd., the country’s biggest international carrier, surged 9.3 percent to 8.22 yuan in Shanghai after first-half net income doubled. Risk Appetite “Risk appetite has recovered from the depths that we had in March and people are looking at fundamentals,” said Prasad Patkar , who helps manage about $1.1 billion at Platypus Asset Management in Sydney. “Confidence is there for the right reasons. Economies are stabilizing and things are starting to normalize.” Westfield Group rose 9.2 percent to A$12.50 in Sydney, while James Hardie Industries NV , the largest supplier of siding to U.S. homes, added 4.8 percent to A$7. The S&P/Case-Shiller U.S. home- price index declined 15.4 percent in June from a year earlier, less than estimated by economists, while the Conference Board’s consumer- confidence index climbed in August for the first time in three months. Asian stocks also rallied this week after the National Association of Realtors said existing home purchases in the U.S. jumped in July by the most since the tallies began in 1999 and U.S. Federal Reserve Chairman Ben S. Bernanke said the global economy was “beginning to emerge” from recession. “The housing and confidence reports cemented evidence that the U.S. economy is recovering,” said Hiroichi Nishi , an equities manager at Tokyo-based Nikko Cordial Securities Inc. Home Purchases In Australia, capital spending gained 3.3 percent in the three months through June from the first quarter, the Bureau of Statistics said on Aug. 27, whereas the median estimate of 14 economists surveyed by Bloomberg was for a 5 percent decrease. A Japanese government report this week showed the country’s exports fell 36.5 percent in July from a year earlier, less than some economists predicted. Casio Computer surged 9.1 percent to 919 yen in Tokyo after the Yomiuri newspaper reported the company may merge its mobile phone business with NEC Corp. and Hitachi Ltd. BOC Hong Kong, the city’s second-largest publicly traded bank by market value, climbed 7.4 percent to HK$16. National Australia Bank Ltd., the nation’s largest by market value, gained 8.3 percent to A$27.81, while Shinsei Bank Ltd., the Japanese lender backed by U.S. investor Christopher Flowers , jumped 9.3 percent to 164 yen. To contact the reporter on this story: Shani Raja in Sydney at sraja4@bloomberg.net .

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PetroChina Joins Sinopec, Cnooc in Reporting Higher Profit on Fuel Prices

August 28, 2009

By Bloomberg News Aug. 29 (Bloomberg) — PetroChina Co., the world’s most valuable company, posted profit that beat analysts’ estimates on record earnings from oil refining after the government raised fuel prices and China’s economic recovery spurred demand. Second-quarter net income rose 26 percent to 31.5 billion yuan ($4.6 billion), derived by subtracting earnings for January to March from first-half figures announced in Hong Kong yesterday. The Beijing-based oil producer and refiner joins China Petroleum & Chemical Corp., known as Sinopec, in reporting higher profit. The gains contrast with earnings declines at Exxon Mobil Corp. and Royal Dutch Shell Plc after the global recession cut U.S. and European consumption. PetroChina, Sinopec and Cnooc Ltd., the nation’s biggest oil companies, this week pledged to step up acquisitions of energy reserves and refineries overseas to take advantage of lower valuations after oil prices slumped. “The global crisis hasn’t bottomed out yet and there are still assets with attractive valuations,” Jiang Xinmin , a deputy director of energy market research at the National Development and Reform Commission, China’s top economic planner, said by telephone from Beijing yesterday. “Domestic fuel demand will likely rebound with the economic recovery, potentially boosting sales at the nation’s oil producers.” China’s economic growth accelerated to 7.9 percent in the second quarter from a 6.1 percent pace in the first three months that was the slowest in almost a decade. The world’s second- largest energy user processed a record volume of crude oil in July as industrial production climbed almost 11 percent. PetroChina Shares Shares in PetroChina , which overtook Exxon as the world’s biggest company by market value in May, fell 0.2 percent to HK$8.81 in Hong Kong before the results announcement. The stock, which has climbed about 30 percent this year, lagged behind the 42 percent increase in Sinopec and Cnooc Ltd.’s 43 percent gain. China has raised prices of fuels such as gasoline and diesel by as much as 25 percent this year under a new pricing system that tracks crude oil costs and ensures refiners a profit. The policy change helped Sinopec end four years of refining losses and prompted PetroChina to boost investments in oil processing. PetroChina plans to ramp up output of crude oil and fuels and expects to acquire more overseas refineries after completing its purchase of Singapore Petroleum Co., President Zhou Jiping said today. The oil producer announced a takeover of Singapore Petroleum at an estimated cost of about $2.2 billion in May. Record Refining The Beijing-based company’s operating profit at its refining unit reached a record 17.2 billion yuan in the first six months, Zhou said. PetroChina expects second-half refining margins to maintain stable growth and wants to boost its share in the country’s refining capacity to more than 40 percent. First-half profit fell 7.2 percent to 50.5 billion yuan, according to a statement to the Hong Kong stock exchange. The company restated its net income for the year-earlier period to 54.4 billion yuan. Mao Zefeng , the company’s spokesman, confirmed the second-quarter profit of 31.5 billion yuan calculated by subtracting January-to-March profit from six-month earnings reported today. “In the second half, the result will be better than the first half,” Shi Yan , an analyst with UOB-Kay Hian Ltd., said by telephone yesterday. “Every time Beijing raises domestic prices in line with global benchmarks, it’s positive for PetroChina.” Oil Prices Oil futures in New York more than doubled to $72 a barrel from a low of $33.55 a barrel on Feb. 12 on speculation the global economy is recovering and fuel consumption may rise. They remain about 50 percent below the record $147.27 reached in July 2008. Recovering oil prices helped Cnooc, China’s biggest offshore oil producer, post a higher first-half profit than analysts expected. Net income fell 55 percent to 12.4 billion yuan, beating estimates for a profit of 11.5 billion yuan. Sinopec’s first-half profit rose more than fourfold to 33.2 billion yuan. Profit at Exxon, based in Irving, Texas, tumbled 66 percent in the second quarter to $3.95 billion, while Shell’s net income slumped 67 percent to $3.8 billion. Lower commodity prices have prompted Chinese energy companies led by PetroChina and its parent to acquire overseas assets. Breakthroughs PetroChina seeks “breakthroughs” in overseas acquisitions in the second half by taking advantage of “favorable opportunities,” according to a presentation at the earnings briefing in Hong Kong today. Cnooc said this week it will step up exploration and acquisitions to increase reserves and meet demand in the country. China National Petroleum Corp., which has an 86.7 percent stake in PetroChina, proposed offering $13 billion to $14.5 billion for a controlling stake in Repsol YPF SA’s Argentine unit, three people familiar with the matter said last month. On the potential bid for YPF stake, Zhou, who is also vice president at parent CNPC, said the company has “nothing to disclose at the moment.” CNPC will consider buying South American assets if “opportunities meet its needs,” he said. Chinese companies have spent at least $13 billion acquiring oil assets overseas since December, including purchases in Singapore, Syria and Kazakhstan. The world’s second-biggest energy-consuming nation is securing supplies after crude prices fell and imports jumped fivefold in the last decade. PetroChina will maintain double-digit growth in domestic natural-gas output in the coming years to meet China’s rising demand for the cleaner-burning fuel, the company said. The oil producer will buy the contractual rights for a natural gas block in Turkmenistan from its parent company for $1.19 billion, the company said in a separate statement yesterday. To contact the Bloomberg News staff on this story: Wang Ying in Hong Kong at wang30@bloomberg.net ;

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GM Expects Auto Industry Sales to Rise to 12.1 Million Vehicles Next Year

August 28, 2009

By Katie Merx Aug. 28 (Bloomberg) — General Motors Co. , the largest U.S. automaker, said it expects the industry’s sales to rise 15 percent to 12.1 million next year as government stimulus programs help restore consumer confidence. GM forecasts U.S. deliveries of 10.5 million this year before the increase, Brent Dewar , head of the Chevrolet brand, told reporters today in Novi, Michigan. Klaus-Peter Martin, a spokesman, provided the percentage estimate. Sales in 2008 totaled 13.2 million cars and light trucks. “All of the global stimulus programs have had the impact of moving inventory and building consumer confidence,” Dewar said. The U.S. government’s “cash for clunkers” program boosted purchases this month, he said. Even with payback expected in September because the offer pulled some sales forward, GM expects continued improvement, Dewar said. A stronger U.S. market would help GM Chief Executive Officer Fritz Henderson , who is under pressure to increase domestic market share and return the company to profitability. GM exited bankruptcy with U.S. aid on July 10. The federal government’s $3 billion auto incentive program produced almost 700,000 sales, the Transportation Department said on Aug. 26. New-vehicle buyers got credits of as much as $4,500 for trading in older, less fuel-efficient models. Dewar talked to dealers in Novi today, as GM managers meet with the retailers to talk about sales expectations as the Detroit-based company prepares to cut back to four brands from eight and trim more than 2,000 outlets. GM is selling its Hummer, Saturn and Saab brands and discontinuing Pontiac. The automaker plans to focus on Chevrolet, Cadillac, Buick and GMC. The company is asking dealers to invest in their franchises and order more vehicles and is providing training on how to sell small vehicles profitably and with more features, Dewar said. GM also told dealers it’s working on an initiative to try and retain the 3 million customers of the brands and models the automaker is discontinuing, said Susan Docherty , the head of Buick, Pontiac and GMC. She was also at the Novi meeting. The company expects to have only 16,000 Pontiac vehicles remaining for sale by Sept. 1, Docherty said. To contact the reporter on this story: Katie Merx in Southfield, Michigan, at kmerx@bloomberg.net

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Video: Ted Kennedy’s Legacy

August 28, 2009

The third longest serving senator in American history, the late senator involves in many major domestic and foreign policy issues over these crucial decades. (Political Capital)

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Video: Bernanke’s Second Term

August 28, 2009

The reason why President Obama nominates Ben Bernanke is to keep the current team in place. (Political Capital)

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Video: Minnesota On Health Care

August 28, 2009

Analysis and discussion with Republican Governor Tim Pawlenty. He says Minnesota is a model for the nation and he looks at what he can do to offer a better direction. (Political Capital)

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Video: SEC’s Reputation Restoration

August 28, 2009

Analysis and discussion with the SEC Chairman Mary Schapiro. She says the American public needs an SEC that is aggressive on enforcement to ensure that the playing field is level for them to participate in the market. (Venture)

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Paramount Lodging Advisors and Hardisty Baxter Form Distressed Hospitality Services Group

August 28, 2009

over $1 billion in successful REO workouts of complex hotel and resort assets for institutional owners, PARAMOUNTâ?¢ adds real depth in large complicated hospitality solutions to its already broad range of services. Together they offer the

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Video: Worth Magazine Reinvents

August 28, 2009

A new magazine is out in the market today in paper form. (Taking Stock)

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Video: Invest In Stocks On Sale

August 28, 2009

Analysis and discussion with John Buckingham of Al Frank Asset Management. He says he does not like to pay full price for anything and he is a value player on the hunt for bruised and beaten down stocks that have a bright future. (Taking Stock)

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Video: Cash Is A Clunker

August 28, 2009

Analysis and discussion with the Chief Investment Officer of Advisors Capital Management Chuck Lieberman. He says investors who get out of the plunging market go to cash and they do not anticipate the market would rebound so sharply. (Taking Stock)

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Video: Leverage Rises On Wall Street

August 28, 2009

Banks boost lending to buyers of high-yield loans as well as mortgage bonds. (Taking Stock)

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Video: U.S. Stock Market Plunges

August 28, 2009

Stocks fall as investors unload some of the shares that they buy to protect their portfolios. (Taking Stock)

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S&P: Corporate defaults on pace to quadruple in 2009 compared with '08

August 28, 2009

NEW YORK – The number of global corporations defaulting on debt obligations is running nearly four times the pace of last year, Standard&Poor's said Friday. The ratings agency said the year-to-date tally of defaults this week reached 211 after Tishman

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Nelson Davis: Blah, Blah, Blah, It’s A Business

August 28, 2009

The passing of 60-Minutes creator, Don Hewitt, reminded me of the very useful role that broadcast media has played, and should play, in our lives. Mr. Hewitt’s creation helped shape how Americans received accurate information about important issues and stories. Monday morning office debates around the country were often fueled by what appeared on 60-Minutes the night before. Though I never met Don Hewitt, I imagine that he must have often cringed at what became the sloppily broad definition of broadcast news. Every TV and radio broadcaster who presents something labeled news would benefit from learning what he had to teach about storytelling, fact checking, and fairness. There has been a lot of talk in Washington in the past year about reviving the Fairness Doctrine, which would radically affect today’s world of talk radio. That Federal Communications Commission guideline for broadcasters was struck down in 1987 and had required that stations provide free air time for responses to any controversial opinions that were broadcast. Its loss helped create a whole new category of business by providing an opportunity for a kind of flatly partisan talk radio programming that had not previously existed. Talk personalities, such as Rush Limbaugh, gained traction on America’s airwaves because they could rant about people in the public eye without regard to too many underlying facts or a sense of fairness in public discourse. This new business created a raft of so called right-wing talk personalities and probably became a lifeline for scores of failing am radio stations. The business of radio talk shows is, of course, based on attracting a crowd large enough to result in a substantial audience rating. Owing more to P.T. Barnum-style hucksterism than a deep exploration of ideas, the programs operate on the principle that the best way to draw a crowd is to create an emotionally stirring, conflict fueled spectacle. Think of the World Wrestling Federation or Ringling Brothers Circus as the business model. If it was just about truth, accuracy, and useful discussion, most talk radio shows would be unsuccessfully brief! Current talk radio does seem to provide immediacy and a high degree of emotionalism that is rare on television or in magazines. Pew researchers found in 2004 that 17% of the public regularly listens to talk radio. This audience is mostly male, middle-aged and conservative. Among those who regularly listen to talk radio, 41% are Republican and 28% are Democrats. Furthermore, 45% describe themselves as conservatives, compared with 18% who say they are liberal. In the United States, talk radio is dominated by right-leaning political commentators: according to Talkstreamlive.com, the top five programs are those of Rush Limbaugh, Michael Savage, Glenn Beck, Laura Ingraham, Sean Hannity, and George Noory. Others include Neal Boortz, , Jim Quinn, Bill Cunningham, Mark Levin, Dennis Miller and Melanie Morgan. Noory has developed what I think is the most interesting niche; his late night program exploring paranormal phenomena. Many of the most popular talkers label themselves as conservatives without fully defining what that really means. Let me say that I’ve worked in broadcasting (both radio and TV) all of my adult life, and I must confess that outside of religion, size of government issues, and banging the gong about deficit spending, the real difference between conservatives and liberals still eludes me. On talk radio there are lots of references to one group or the other not caring deeply enough about our country or being always on the wrong side of the important issues. Rule number one for current talk radio success seems to be to demonize a person, his or her belief system, or an entire political party. If you want to create a heated spectacle, have someone passionately articulate a position opposite to the feelings of most of the people in the room, then pass the microphone around. Just look at video from the current round of Town Hall meetings on health care in America. When I first heard Limbaugh in the days when his ratings were at their peak, Bill Clinton was president, and it was easy to see that he supplied wonderful grist for the Limbaugh talk radio mill. My innate sense of Libra fairness was offended, and I’d usually punch another radio button after a few minutes of the bombast. Even with daily eruptions over health care reform today, references to Bill Clinton are still frequent. There must be some unanimous feelings of “who was that strange man” about George W. Bush because Hannity, Limbaugh, and Levin hardly ever mention him. Remember, it is a business built on entertainment and showmanship where you must have a good and colorful foil as the object of your wit and partisanship. When we elected a Republican president and congress some years ago, I wondered who would become the “Whipping Boy” or girl for the conservative talk hosts. Most of us would now agree that the George W. Bush administration was generally judged to be a failure, and that presented a strange new challenge to people who ruled the talk show roost. They had to spin things a bit differently because it wasn’t clear who was wearing the white hats and who had donned the black fedoras. My theories about recent ratings declines for many politically charged talk shows are simple. Americans are passionate about many things, but most people have some sense of fairness and eventually distance themselves from anyone who indulges in what seems to be an unfair fight every day on public airwaves. Another thought is that the rise of Internet Radio has siphoned off some listeners who didn’t have that option five years ago. Also, there are now some stations that carry programming that is categorized with the liberal label from Air America. That network hasn’t achieved anywhere near the success of the top conservative hosts. I think it’s because when you are talking to people who agree with you, there are no fireworks in the town square to draw a crowd. We are facing some monumental issues as a country, and people are beginning to recognize that real solutions lie beyond traditional right-left politics and have to be seen in the realm of right and wrong, good and bad. The eventual fate of the unwieldy health care legislation is an example. It is neither liberals nor conservatives that carry the only key to our salvation. The Fairness Doctrine is probably not destined to return anytime soon, and the talkers will continue to bluster on behalf of one camp or the other. The hosts, their syndicators and, the station owners are after all in “the business of show,” not the business of finding the best practices for useful public discourse in America or developing an action plan that will save the country from those awful predictions and schisms they’ve built their businesses on.

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REITs Brookfield and Marathon File for IPOs

August 28, 2009

ReutersTwo real estate investment trusts filed for initial public offerings on Friday, bringing to eight the number of applications since early July by REITs created by real estate companies seeking to take

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Dan Silverstein: Growing Businesses in African Soil

August 28, 2009

This is the first in a series of comments I will make about agricultural development in the developing world. The buzz these days about sub-Saharan Africa is that it’s becoming cool to care what happens there. Out of a hodgepodge of dictators, civil wars, droughts, and corruption, is emerging one democratically elected government after the other. Peace treaties, sometimes tenuous, are breaking out all over. Trade missions abound from western countries, each holding the promise of new capital investments. And, to cap off this new cache, we now have an American president using his bully pulpit to inject life into a dramatic policy shift that could infuse the continent with billions of US dollars for training, equipment, guidance, seeds, fertilizer, and access to markets: Agricultural development. The importance of agriculture in the evolution of Africa’s economy cannot be overstated. With so much energy expended by Africans simply trying to feed themselves to keep from starving there is precious little time or energy for economic development. When you sap the strength of a people struggling to stay alive it’s difficult to think in terms of economic expansion. Obama’s Dramatic Announcement At the G-8 meeting in July at L’Aquila, Italy President Obama committed $3.5 billion over three years — subject to Congressional approval — to renew American leadership in the effort to end global hunger and poverty. Here is a link to his statement: http://www.whitehouse.gov/the_press_office/Food-Security-Investing-in-Agricultural-Development-to-Reduce-Hunger-and-Poverty/ . It shook up aid organizations worldwide because this marked a shift from public policy that had existed since the 1980s when western governments decided it would be better to create jobs in urban areas and let people buy food than to keep spending money to help them grow their own food. This policy proved disastrously misguided. The effect was people starving in the cities without either jobs or food exacerbated by people starving in the countryside because of the collapse in developmental agricultural aid. Clearly there’s a lot of news these days and this policy change only adds to the clutter. But so little attention has been paid to it that the risk is high of the moment passing into history without creating the political will necessary to insure its funding. The implications are mind boggling. Failure to execute Obama’s $3.5 billion pledge will jeopardize the lives of hundreds of millions of Africans. Emergency Aid versus Developmental Aid On the socially responsible side is concern for the lives of these people who exist at “the base of the pyramid” (BOP). There are agencies and NGOs which deal with that problem every minute of every day. The UN World Food Programme, for instance, delivers 90% of its food to people who will die by tomorrow if they aren’t fed today. But that is emergency aid and what the president’s initiative addresses is developmental aid. Emergency aid takes on a life of its own in the minds of well-meaning people who contribute to disaster relief out a sense of humanity. Developmental aid depends on completely different impulses and exists as the result of a dramatically different skill set. Emergency aid is simple: Victims of a tsunami need food, clothing and medical supplies now, so well meaning people reach deep and feel good when they see aid workers rushing pallets of relief supplies to the disaster site. Developmental aid has to work its way through Congressional committees and then, with the dollars that survive in competition with every other worthy cause that passes through Congress, it takes years to build out the programs before measuring results. Developmental aid requires political will that has to transcend election cycles; emergency aid funded today can be delivered tomorrow. Who says we’re all connected to the poor? But, there is a dirty little secret about developmental aid that is considered unseemly to discuss in polite society. We can make money off these people. We can prosper by making them self-sufficient. If we only elevate the BOP to a level of self-sufficiency by providing them with better seeds and training that produce greater yields, we can re-allocate that next $3.5 billion to our own infrastructure, schools and hospitals. But, even better than that, if we can just get them and their countrymen a bit higher on the socio-economic ladder we can sell them our stuff. People who don’t have to spend all of their time making food to stay alive become more productive in other ways that create disposable income. They start to demand things like education, health care, shoes, and more sophisticated farm equipment. We can supply all those needs. Certainly we will have to compete with every other country in the world but, who is better at Yankee ingenuity than Yankees? Looking out for Number One Entrepreneurship is as American as Alexander Hamilton. We love nothing better in business than to shift paradigms, to embrace risk as though it were the palm of Adam Smith’s invisible hand. It’s in our own self-interest to jump start agricultural development with the goal of creating markets for ourselves. Public/private partnerships should be crawling all over this opportunity, but barely a word has been written outside of the trade papers. I’m going to change that.

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Blackstone’s Schwarzman Selling Hamptons New York House for $7.2 Million

August 28, 2009
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P&G Adds `Where to Buy’ Web-Purchase Feature in Europe After U.S. Success

August 28, 2009

By Carol Wolf Aug. 28 (Bloomberg) — Procter & Gamble Co. is adding links to its European Web sites that let shoppers purchase products directly through retailers after the program helped boost online sales in the U.S. The feature, called “Where to Buy,” will appear next to P&G products on company-sponsored Web sites, said Joe Quinn, 50, head of global ecommerce for P&G, in an Aug. 26 telephone interview. Clicking on the icon sends shoppers to a retailer’s Web site for purchase, he said. P&G, the world’s largest consumer products company, began installing Where to Buy in July 2008 for U.S. goods such as Olay face cream and Pampers diapers, Quinn said. About 80 percent of the U.S. business is complete. Online sales have increased at least 10 percent in the region, in part from the feature, he said, declining to provide specific figures. “The uptick in sales is enough that we are rolling it out to all of our brands globally,” he said. “There is a direct correlation to sales once you put in the convenience.” P&G, based in Cincinnati, advanced 10 cents to $53.16 at 2:27 p.m. in New York Stock Exchange composite trading. Before today, the shares had declined 14 percent this year. ‘Brand Museum’ Retailers such as Wal-Mart Stores Inc. , the world’s largest retailer, and Walgreen Co. , the second-largest U.S. drugstore chain, are removing product lines from shelves as they streamline inventory and make more space for their own brands, said Burt Flickinger , managing director at New York-based Strategic Research Group, a consumer industry consulting company. “As retailers pull products off their shelves, selling online can keep some brands from ending up in some sort of P&G brand museum,” he said. “P&G has neglected some of its secondary brands in favor of the top seller but in many cases some of those secondary brands have a nice following.” P&G brands such as Camay soap, Luvs diapers, Ivory detergent and Biz stain remover aren’t popular enough for some retailers to keep the items on the shelf, he said. Walmart is revamping its product assortment based on demand and customer surveys, said John Simley , a spokesman for the Bentonville, Arkansas-based company. That means some products may no longer be offered on store shelves if the numbers don’t justify it, he said. Those products may be available online. Tiffani Washington, a spokeswoman for Deerfield, Illinois- based Walgreen, confirmed the retailer is pulling some less- popular product lines off shelves. Online Sales In the U.S., P&G’s Web sites have links to buy products from walgreens.com, walmart.com, and Amazon.com , the world’s largest online retailer, among others. Before the Where to Buy feature, consumers would have to search the Web sites of various retailers to find the products they wanted, Quinn said. Quinn said industry research shows about 5 percent of P&G’s sales could eventually come from the Web. He declined to provide details or say whether that research is accurate. P&G currently gets about $500 million, or less than 1 percent, of sales online, Chief Executive Officer Robert McDonald said on a conference call Aug. 5. Online retail sales for all industries may rise to $229.1 billion by 2013 from an estimated $156.1 billion this year, according to Forrester Research Inc., which studies technology trends. P&G has already started the Where to Buy feature in the U.K for the Braun, Olay and Oral-B brands through Tesco Plc , Boots.com and Amazon.co.uk. Braun and Oral-B products are also available online in Germany, Quinn said. More products will be available, “as fast as we can roll it out,” he said. “It’s just a matter of being able to work out the technology linkages with our retailers.” To contact the reporter on this story: Carol Wolf in Washington at cwolf@bloomberg.net

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Portugal Accepts Two Guantanamo Detainees as U.S. Seeks to Close Facility

August 28, 2009

By Justin Blum Aug. 28 (Bloomberg) — Two Syrian nationals were transferred from the Guantanamo Bay prison in Cuba to Portugal as part of the Obama administration’s effort to relocate detainees. The U.S. declined to make public the names of the detainees. The government of Portugal asked that the identities remain secret for security and privacy reasons, said Dean Boyd , a spokesman for the Justice Department, which announced the transfers today. President Barack Obama promised to close the Guantanamo detention facility for terror suspects by January. A U.S. government task force has been reviewing the detainees to determine which ones should be transferred, tried or held indefinitely. About 226 detainees remain at the Cuba facility. The State Department has been trying to find countries to accept those deemed eligible for transfer. Boyd declined to say whether the two detainees are being set free or will be held in Portugal, referring questions to the country’s government. A phone recording after normal business hours said the Embassy of Portugal in Washington was closed. “We would not have proceeded with the transfers if the United States or Portugal had any security-related concerns that were not adequately addressed,” Boyd said in an e-mail. “The United States has coordinated with the government of Portugal to ensure these transfers take place under appropriate security measures and will continue to consult with the government of Portugal regarding these detainees,” he said. To contact the reporter on this story: Justin Blum in Washington at jblum4@bloomberg.net

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BGC Faces $500 Million Claim for Hiring 52 Brokers From Competitor Tullett

August 28, 2009

By Shannon Harrington Aug. 28 (Bloomberg) — BGC Partners Inc., a New York-based firm that matches trades between banks, said it has hired more than 50 brokers from rival Tullett Prebon Plc in New York. Tullett is seeking about $500 million in damages from BGC andthe employees through a complaint filed with the Financial Industry Regulatory Authority on Aug. 25, according to a regulatory filing from BGC today. To contact the reporter on this story: Shannon D. Harrington in New York at sharrington6@bloomberg.net

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U.S. Stocks Decline as Dollar, Crude Oil Advance; Merck, McDonald’s Fall

August 28, 2009

By Matt Townsend Aug. 28 (Bloomberg) — The Standard & Poor’s 500 Index fell for the first time in four days as drugmakers and sellers of consumer goods dropped. The dollar rose against the euro, and oil advanced. Treasuries were little changed. Merck & Co., McDonald’s Corp. and AT&T Inc. declined as the S&P 500 Index pared earlier gains. Intel Corp . said third- quarter sales will be more than it previously forecast. The dollar gained against the euro on increased demand for safety after stocks dropped. Crude rose as much as 1.4 percent. “We are at somewhat of a crossroads in the market,” said William Cunningham, head of fixed-income and credit research at State Street Corp. in Boston. “The picture is pretty clear that this won’t be a strong recovery this year; the real question is whether the economy will slip back into the abyss, and the market is reflecting that uncertainty.” The S&P 500 lost 0.2 percent to 1,028.93 at 4 p.m. in New York, trimming its second straight weekly gain to 0.3 percent. The Dow Jones Industrial Average fell 0.4 percent to 9,544.20 in its first drop since Aug. 17. The dollar gained 0.3 percent to $1.4303 per euro. Crude rose 0.3 percent to $72.74 a barrel. The yield on the 10-year note decreased less than one basis point to 3.45 percent. ‘Playing Offense’ Makers of telephone equipment and drugs and suppliers of household goods failed to keep pace with the S&P 500 as it rebounded from a 12-year low on March 9, according to data compiled by Bloomberg. They also trailed the benchmark gauge for U.S. equities as it doubled between 2002 and 2007, with so- called consumer-staples providers climbing 40 percent and drugmakers increasing by 41 percent. “People are perhaps considering shifting from playing defense to playing offense,” said Lawrence Creatura , a money manager at Federated Clover Investment Advisors, which oversees $2 billion in Rochester, New York. “The offensive playbook says sell staples, sell safety, sell large-caps generically.” The dollar gained against the euro for the fourth time this week as stocks declined. The greenback also strengthened against the Canadian dollar, yen and pound. “Stops again!” said Alan Ruskin , head of international foreign-exchange strategy in North America at RBS Securities Inc. in Stamford, Conn. “This time short-term players playing short on the dollar are getting stopped out.” Dollar Versus Euro Traders typically place so-called stop losses at key levels to protect themselves when a bet moves in the opposite direction. The U.S. currency rose from near the lowest level this year against the Swiss franc and strengthened versus the Brazilian real and Canadian dollar. Today saw a reverse of the greenback’s drop against the euro at 2:05 p.m. yesterday, also triggered by stop losses. The dollar’s advance versus the 16-nation currency accelerated at 2:19 p.m. in New York today as trading volume fell after investors in London began a three-day holiday weekend, according to Scott Ainsbury , who helps manage about $9 billion in assets in New York at FX Concepts Inc., a hedge fund. Crude oil gained for a second day after U.S. consumer confidence beat forecasts, a sign that the economy is recovering from the worst recession since World War II. The Reuters/University of Michigan final index of consumer sentiment this month dipped to 65.7, better than forecast, from 66 in July. A preliminary reading for August was 63.2. Raw Materials Gain The Reuters/Jeffries CRB Index , a gauge of 19 raw materials and commodities, also advanced for a second day, rising 0.5 percent, as copper, silver, aluminum and gold all gained at least 1 percent. Treasuries gained this week after investors snapped up a record-tying $109 billion of government notes amid skepticism about the sustainability of the economic recovery and the rising value of higher-yielding assets. Yields on benchmark 10-year notes declined for a third consecutive week. Prices on U.S. debt were little changed today. “Auctions this week went fairly well even with yields toward the lower end of their ranges,” said Christopher Sullivan, who oversees $1.5 billion as chief investment officer at United Nations Federal Credit Union in New York. “We are unlikely to get much movement in the market until we see significant information about the underlying economy and know more about the Fed’s response.” Federal Reserve policy makers next meet on Sept. 23. To contact the reporter on this story: Matt Townsend in New York at mtownsend9@bloomberg.net .

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Jennifer Schwab: Made in Japan, Made in China, Made in Korea — Is Solar the Car Industry’s Act Two?

August 28, 2009

We believe that the best way for America to get out of this mess is by becoming the world’s leader in renewable energy, green products and jobs.

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Dan Dorfman: Go-Go Garz Gambling on a Go-Go Market

August 28, 2009

With more than 2,500 hedge funds going belly up over the past three years, in the process decimating investors with many billions of dollars in losses, the last thing the investment community needs — or wants to hear about — is another hedge fund. Indicative of this disenchantment, investors have been dumping them like crazy, evident by a whopping $26.2 billion worth of hedge fund investments that were redeemed in July alone. Further, with these funds still holding huge assets (more than $1.5 trillion) in the face of lots of worries about the vigor of next year’s widely anticipated economic recovery, the redemption process hardly seems over. Stock market guru Elaine Garzarelli, or Go-Go Garz as she’s known in some Wall Street quarters, doesn’t go along with the pessimists. Nor does she buy the idea that the investor’s once hot romance with hedge funds is on the rocks. In fact, she’s so convinced it isn’t that come next month, she will unveil her own hedge fund, the Sector Analysis Fund, whose goal is to generate positive returns in a bear market. Initial investment is $500,000. Back in the 1980s and early 1990s, Garzarelli wowed Wall Street with a series of uncanny on-the-money market calls, predominantly bullish, which is what earned her the nickname Go-Go. Wall Street at the time hung on here every word. She is currently skipper of Garzarelli Capital, a New York advisory firm which doles out market advice to more than 100 institutional investors with assets in excess of $1 trillion. That Go-Go reference continues to be quite appropriate as Garzarelli is once again bullish as the dickens. Though reluctant to talk about her hedge fund, Garzarelli had no reluctance to discuss her latest thinking and the advice she’s dispelling to her institutional clients. All told, Garzarelli tracks 13 indicators, such as economic activity, valuations and monetary policy. As of now, 12 of them are flashing bullish readings. The lone holdout is the sentiment indicator, which shows too many bullish investment advisors. For Garzarelli to be bullish, more than 65% of her indicators must throw off favorable readings. Currently, 83% of them are doing just that, which means, Garzarelli tells me, “I’m very bullish.” Much of her sunny posture is also linked to an outbreak of economic thunder. For example, the Index of Leading Economic Indicators has risen 4 consecutive months, suggesting, Garzarelli says, that the recession has probably ended. Some other factors supporting this view, she notes, are rising home sales, low inflation and a sharp rise in consumer net worth due a combination of climbing home and equity prices. Yet another plus: the economy is picking up around the world. Garzarelli notes 9 countries reported second-quarter GDP growth, 5 of them double-digit. To Garzarelli, it all adds to a peppier U.S. economy, with her models suggesting 3% GDP growth in the second half of 2009 and more than a 4% rise in all of 2010. Her outlook for next year’s earnings: up 25% or more. It all suggests, she says, that fair value for the S&P 500 is 1,300, versus its current level of 1028. As far as stock prices go, Garzarelli sees them ballooning about 25% over the next 6 to 12 months. Importantly, she sees minimal risk from current levels even though the market has ballooned more than 50% from its March lows. At worst, she sees periodic sideways corrections of say 4% to 7% as stock prices steadily work their way higher. “The risk-reward here highly favors the investor,” she says. Where are the best places to put your equity money to work? Garzarelli strongly favors exchange-traded funds that focus on 4 industry sectors that cater to areas she expects will outpace her projected 4% GDP growth next year. They are: Financials (ETF symbol, XLF): This group, down about 60% from its all-time high, versus a 35% decline in the S&P 500, is expected to recover nicely due to increased business and consumer spending. Industrials (XLI): Down around 41% from its all-time high, this sector is seen reaping the benefits from the recovery in global economies, solid infrastructure spending abroad and exports to Asian and other developing economies. Homebuilding (XHB): Off 65% from its peak, this group is recovering due to record low mortgage rates, a growing 20-29 population, which is creating robust new home formations, favorable housing affordability trends and rising consumer confidence. Semiconductors (USD): This ETF is down 71% from its all-time high, but the industry has a lot going for it. North American semi equipment orders have increased 43% and the New York Federal Reserve tech survey shows multiple months of gains. In addition, tech is expected to be the fastest growing part of the 2010 economy, aided by strong foreign economic and export demand. Our Go-Go would-be hedge fund manager also has high hopes for the consumer discretionary sector (XLY) because of the replacement demand cycle and new household formations. Likewise, the higher savings rate in July suggests more available funds to purchase goods. Yet other plusses are gains in consumer confidence and consumer wealth (up 6% since the housing and stock market bottoms). Go- Garz’s wrapup: “It’s just the wrong time to be a wimp.” Write to Dan Dorfman at Dandordan@aol.com

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Stephen Viscusi: 10 "Bulletproof Your Relationship Tips" for the Unemployed

August 28, 2009

Are you unemployed, but your wife, husband, girlfriend or boyfriend, or other family members are not? Are your parents driving you crazy with the questions, and every night your mate comes home wondering what you were doing all day while they were carrying the load for the whole family? Are these questions familiar? How many resumes did you send out today? Did you call so and so? How about going back on the search engines? Why is the house such a mess if you are home all day? Did you at least pick up the dry cleaning? I bet you feel demoralized, helpless, frustrated, embarrassed and just plain pissed. Of course you are depressed, but depressed is not an excuse. Depression is an appropriate emotion for hard times, and should not be a surprise. It’s probably the only legitimate emotion you should be aware of. Being depressed means you’re normal. Accept the depression, but move beyond it. In 2009, you have a plethora of ways to deal with the depression–psycho-pharmaceutical, yoga, talk therapy, group therapy and exercise. Whatever you have to do, lose the depression. It’s like an anvil around your neck getting in the way of you getting a job. Yet half of you know you are lucky, because in general, when someone’s hounding you about your job hunt, it really means they love you. And let’s face it, they are still financially supporting you, so you are more or less beholden to them. As your unemployment benefits come close to running out, the pressure is worse on both of you. I have a friend who is unemployed, a man, whose wife is still working. He fits in that group who have it among the hardest, the over-55 white male. He has tried everything. He makes his wife breakfast in the morning, fetches the groceries, and is looking for work all day. Outwardly his mate is supportive, but subconsciously resentment grows. It’s just human nature. So I have created my “Top Ten Bulletproof Your Relationship Tips for the Unemployed” to keep your family, spouses and partners at bay until you find a job. These tips are based on my HarperCollins bestseller, Bulletproof Your Job: 4 Simple Strategies to Ride Out the Hard Times and Come Out on Top at Work . (Had you bought the book already schmuck, you would have kept your job while everyone else around you dropped like flies. But never mind that.) These tips are a bit tongue-in-cheek, and a little smoke and mirrors, too, but they’re for real and they do work. Stephen Viscusi Top Ten Ways to Keep your Love One’s Off Your Back, While Unemployed 1. Always get up, out of bed, and dressed before your partner. Never “sleep in” while they are getting ready for work. Instead, you get your butt out of bed and get to work making coffee and a tasty breakfast if you have to. 2. Do not put on gym clothes, sweat suits, or stay in your robe. “Look” like you are going to look for work “Looking the part” is part of the charade, I mean, technique. 3. Ask “What would you like for dinner?” It shows your willingness to contribute. 4. If you have IM, do not leave it on all day so that your partner can see you are on the computer all day. Beyond the fact that the texting is distracting you for your full-time job getting a job, it’s a subconscious and annoying reminder to them that you are sitting on the computer all day doing what exactly? 5. If you have children, it is very important that they see you going on interviews and dressed like you are going on an interview. When they get home from school, let them see you in “work dress,” as if you went on an interview, not in the workout clothes you wore to the gym. They don’t need to know there isn’t any Santa Claus and they don’t need to know that you’re not actually interviewing every day, either. 6. Perfect the art of “looking like you are looking for a job” at all times. 7. Do not tell your partner about any social activities you planned during the day while they are toiling at a job. Come on. They are barely holding on themselves in order to support you, and the family. They don’t need to hear about a lunch you had with an old fired colleague, or a spinning class you took, or what was happening on Oprah that day. 8. Do not always be home when your mate gets home. Even if it means waiting in the nearby park or grocery store, so that there is the perception that you are not always home. 9. Tell and more importantly show them about every rejection letter and phone call you have received to elicit sympathy and show you are making an effort. Leave the rejection letters out on the dining table, and keep any messages of rejection on the answering machine so they can hear them, too. 10. Finally, my Stephen Viscusi # 1 way to shut up that loved one, family member, spouse or partner, who is making you feel so guilty about being out of work, (and this suggestion works best if you are over 35 years of age) is to apply for–and get–a job, at Starbuck’s, Wendy’s, Burger King, McDonald’s, or Wal-Mart. Nothing shuts up a nagging partner and says to them, “I love you” more quickly than a grown person taking a minimum wage job and wearing a uniform made from synthetic fibers. You’re always welcome to write me with your career dilemmas, and I’ll answer you on this column. Follow me on Twitter @ Workplace Guru and add me on Facebook or email me at: stephen@viscusi.com. Disclaimer: The scenarios and events portrayed in this article are products of the author’s imagination. Stephen Viscusi. All rights reserved. Article can be duplicated in part of full without author’s permission.

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UPDATE 1-Two more REITs file for IPOs

August 28, 2009

* Brookfield Realty seeks to raise up to $500 mln * Marathon Real Estate trust seeks up to $300 mln NEW YORK, Aug 28 (Reuters) – Two real estate investment trusts filed for initial public offerings on Friday, bringing to eight the number

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S&P: Corporate defaults surging this year

August 28, 2009

NEW YORK – The number of global corporations defaulting on debt obligations is running nearly four times the pace of last year, Standard & Poor's said Friday. The ratings agency said the year-to-date tally of defaults this week reached 211

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Tom Wolfe: The Rich Have Feelings Too – Vanity Fair

August 28, 2009

Do the rich have feelings too? In the latest issue of Vanity Fair, Tom Wolfe, who famously chronicled the buyout kings of the 1980s in The Bonfire Of The Vanities , seems to suggest the rich do, in fact feel emotions — but only after they’ve been forced to fly coach. Wolfe assumes the voice of a commodities trader who laments the loss of his company’s prized private jets. Rhapsodizing about pre-Bailout era, the narrator salutes his CEO Robert J. McCorkle (“Corky”), who led offsites that were, well, memorable: “One of the sweetest sounds in the world was Corky making the rounds up here on the executive floor, saying in his laid-back voice, “I feel like boffing some bimbos in the Caribbean. Anybody like to come along?” In typical Wolfeian fashion, the narrator’s prone to wide-ranging references. Nietzche’s “tarantulas” make an appearance, as do the former CEOs of the Big Three automakers. Here’s more from Wolfe: “At the risk of sounding condescending, we should point out that ordinary people haven’t the faintest conception of the strain we had to endure daily. How many ordinary people have ever done anything remotely like betting $7.4 billion–bango!–just so!–that the price of energy will rise sharply 14 months from a certain date?” It almost tugs on your heart strings. But not quite…Read the entire piece at Vanity Fair. Get HuffPost Business On Facebook and Twitter !

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Video: At The Movies

August 28, 2009

Preview of This Weekend’s Openings – “The Final Destination,” “September Issue,” and “Taking Woodstock” (Bloomberg News)

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Video: More Perspective – Luxury Retail "Dead in the Water"

August 28, 2009

Analysis and Discussion with Howard Davidowitz (Bloomberg News)

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Steve Parker: Weekend radio shows – NASCAR’s racism rears head … again; Clunker program over

August 28, 2009

Join us LIVE Saturday and Sunday at 5pm Pacific time on www.TalkRadioOne.com for our exclusive LIVE motoring and motorsports talk shows! Steve Parker’s The Car Nut Show Saturday starting at 5pm Pacific www.TalkRadioOne.com The Clunker Program is officially over some but local dealers are continuing the plan with their own rules — Steve covers what you need to know about these new systems to save money! And when will the car-makers themselves start their own ‘cash-for-guzzler’ plans to keep sales strong? What happens to car sales now that ‘clunkers’ are just that once again — clunkers? And Steve gives his “Sixty-Second Road Tests” of some of the many 2009 and 2010 cars he’s driven recently. Plus all your calls! Be sure to join-in the conversation: The call-in number is: 213-341-4353. Steve Parker’s World Racing Roundup Sunday starting at 5pm www.TalkRadioOne.com Wendell Scott, NASCAR’s first well-known African-American racer, has been left-out of the first group of five ‘NASCAR Legends’ slated for inclusion in the NASCAR Hall of Fame due to open soon in Charlotte, NC. … Does this only add to the perception that at heart NASCAR remains a racist, sexist sport? Richard Pryor played Scott in the 1977 feature film “Greased Lighting.” Danica Patrick says she’s staying in IndyCar and Formula 1 is truly offering some of the most competitive and exciting racing in the world. Award-winning radio and TV motorsports host and ex-IndyCar racer Kurt Hansen joins us as he does every month-or-so to talk racin’. Plus your calls and emails! The call-in number is: 213-341-4353. Podcasts of the shows are available one hour after the live shows’ conclusions. That’s this Saturday and Sunday at 5pm USA Pacific time on www.TalkRadioOne.com

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Paramount and Hardisty Baxter Form Distressed Hospitality Services Group

August 28, 2009

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Paramount and Hardisty Baxter create distressed hospitality services group

August 28, 2009

Hotel brokerage and advisory firm Paramount Lodging Advisors has merged with hospitality real estate services firm Hardisty Baxter to open Paramount’s new Southern California office. Together, the company will offer real estate services for owners,

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Thomas Kochan: Learning from Down Under: Where Labor Policy is Center Stage

August 28, 2009

Those of us from the U.S. who attended the just concluded World Congress of the International Industrial Relations Association in Sydney, Australia experienced a rare treat and learned firsthand how out of sync are America’s efforts to modernize labor and employment policies with what is happening here and around the world. We visited a country in which the last federal election turned on labor policy, where work and employment issues are viewed as a central part of economic policy, and where the newly elected government enacted a major reform and modernization of labor and employment policy within a year of taking office. Just imagine the following scene from the opening session of the World Congress. Deputy Prime Minister Julia Gillard (the number two official in the government) not only came to give a warm welcome to the 900 delegates. She gave a highly substantive speech reviewing the new legislation that she personally had help shape and negotiate through Parliament. The new law called the “Fair Work Act” is impressive for its comprehensiveness and for its focus. While the centerpiece provisions establish procedures supporting collective bargaining (including new procedures governing union recognition and good faith bargaining), it also covers minimum employment standards, work and family leave, the right to request flexibility to care for young children, and provides options for negotiating and enforcing individual employment contracts that exceed the standards negotiated in collective agreements. As the name of the bill implies, the focus is on restoring fairness in employment relations after the previous government had undone essentially all labor standards and used individual employment agreements to undermine provisions negotiated collectively. The new policy also supports the flexibility needed in modern employment practice and seeks to reestablish the historic connection between increasing productivity and increasing standards of living. But Ms. Gillard did more than just review the contents of the new policy. She delivered a clear message to the business and labor leaders attending the Congress and others who would read about her speech: the legislation is only the first step. Now its time for business, labor, and government leaders to get to work on building the workplace culture and relationships needed to make this legislative framework pay off for workers, employers, and the economy by finding “new ways to train, reward, consult and work cooperatively together.” So what lessons do we take away for the U.S.? First, rather than treat labor policy as simply “special interest” politics best kept separate from economic policy making, integrate it with other policy initiatives aimed at forging a sustainable economic recovery. Rather than leave labor law reform to closed door back room horse trading among Senators to get the votes needed to pass a new law, lead a public debate over how to restore fairness in workplace and employment relations. This is the mandate of Vice President Biden’s Middle Class Task Force. Put it to this task. Second, rather than separate reforms over labor law from other efforts to strengthen and modernize employment standards, treat these as they are in the modern workplace, namely part of an integrated system. While the U.S. policy process tends to take up issues one at a time, positioning the current labor law debate as one part of a broader updating of wage and hour, safety and health, work and family, and labor market policies would signal that the Administration understands the close interconnections across these issues and would give business, labor, women’s and community groups a broader shared agenda to work on together. Third, recognize that to make any new workplace legislation realize its objectives, business and labor do need to work together with government leaders to rebuild a culture of mutual respect and engagement of front-line employees and managers. The evidence is clear – front-line, knowledge-driven workplaces are both more productive and better places to work. So make mutual respect and workforce engagement a central part of the objectives of any piece of labor and employment legislation. Give the Secretary of Labor the responsibility and resources needed to get labor and management working together for the common good. Finally, it did not go unnoticed that the Deputy Prime Minister, the president of the major labor union federation, and the chief executive of the most influential business group in Australia are all women. Maybe that has something to do with the level of civility, substantive dialogue, and mutual respect that was apparent when leaders from these different groups discussed their interests and views on policy and practice in the sessions and informal gatherings. Our friends down under have set a benchmark for the U.S. to meet. We don’t usually look beyond our boarders for lessons on domestic policy, but Australia has recognized and addressed employment relations as central to economic vitality. Other nations as diverse as France, Brazil, Denmark, and Korea are following Australia’s lead in modernizing key aspects of their employment relations systems through debates that build widespread public awareness of the connection between employment relations and economic vitality. We can and must adapt this central lesson to the U.S. if we are to achieve a sustainable economic recovery and build an employment relations system attuned to the needs of the 21st century workforce and economy. The American Delegation Henry and Sue Bass, Merrimack Films Janice Bellace, University of Pennsylvania Peter Berg, Michigan State University Richard Block, Michigan State University John Budd, University of Minnesota Bonnie and Robert Castrey, Arbitrators Paul Clark, Penn State University Alex Colvin, Cornell University Joel Cutcher Gershenfeld, University of Illinois Matthew Finkin, University of Illinois Lonnie Golden, Penn State University Raphael Gomez, University of Toronto Harry Katz, Cornell University Bruce Kaufman, Georgia State University Thomas Kochan, Massachusetts Institute of Technology Anil Verma, University of Toronto Hoyt Wheeler, University of South Carolina

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Video: Inside Look – Regulating Derivatives

August 28, 2009

Regulation’s Effect on Wall Street – Analysis and Discussion with Michael McCarty of Differential Investment Partners (Bloomberg News)

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Detroit Overrun With Lazy Journalists Looking For Trite Depictions Of Poverty

August 28, 2009

Detroit. If you are like most Americans, you haz a sad about Detroit. You ponder Detroit and you think of the hard times that have befallen the auto industry, and how the grinding economic downturn falls so heavily on a community that was already a blighted hellscape of Devil’s Night fires , and incompetent professional football franchises . You reflect on the way the city’s seminal garage rockers are always punching each other in the face , and how even the white people have got to rap-battle their way to middle-class respectability . And if you are like most Americans, you probably think Detroit is the capital of Michigan. It’s not. That’s Lansing. But even as the economic downturn intensifies in Detroit , and Michigan at large, is the coverage of Detroit’s downturn matching it, or is it growing more shallow? In a must-read piece for Vice Magazine , Thomas Morton ably argues the latter : The problem is it’s reached the point where the potential for popularity or “stickiness” or whatever you’re supposed to call it now is driving the coverage more than any sort of newsworthiness of the subject. There’s a total gold-rush mentality about the D right now, and all the excitement has led to some real lapses in basic journalistic ethics and judgment. Like the French filmmaker who came to Detroit to shoot a documentary about all the deer and pheasants and other wildlife that have been returning to the city. After several days without seeing a wild one he had to be talked out of renting a trained fox to run through the streets for the camera. Or the Dutch crew who decided to go explore the old project tower where Smokey Robinson grew up and promptly got jacked for their thousands of dollars’ worth of equipment. The flip side is a simultaneous influx of reporters who don’t want anything to do with the city but feel compelled by the times to get a Detroit story under their belts, like it’s the journalistic version of cutting a grunge record. And, in Morton’s opinion, if Detroit has any single sector that’s booming, it’s playing host as the epicenter for a nation of journalists-turned-poverty tourists. Morton talks with James Griffoen, who is said to be a frequently sought out urban “sherpa” for journalists looking for a quick dose of “ruin porn.” According to Griffoen, the typical visiting newsperson never lets the facts get in the way of a good story: The city’s second-most-overused blight shot is of the mile-long ruins of the Packard Auto Plant in East Detroit. “This is the visiting reporters’ favorite thing to see,” [Griffoen] said. “The people all come here to shoot the story of the auto industry and they love this shot because they can be like, ‘See that? That’s where they made the cars,’ and then forget to add the footnote that the plant’s been closed since 1956.” In the past month alone, the plant’s been used by the New York Times, the British Daily Mirror, and the Polish Auto Motor as a visual for stories it has no concrete connection to other than occupying the same city. The Packard also shows up twice in the same Time photo spread from December, although the second picture is just captioned with the street address to make it look like their photographer visited more than three sites. The whole piece is abundant in its descriptions of shallow journos carefully ignoring any of the city’s successes and photographers who learn how to crop their images just so, to maximize the depiction of dereliction. Luckily, the locals are getting it right: For all the lazy shit the outside media has been pulling with Detroit, reporters in the city have actually been getting shit done. The Detroit Free Press won a Pulitzer last year for digging up over 10,000 text messages that led to the former mayor’s resignation and arrest. [Detroit News' Charlie] LeDuff has been harassing Councilwoman Conyers in the News to great effect while keeping a close eye on the “eccentric vagrant” beat. Having your hometown overrun by a bunch of smug assholes with their reductive analogies and clever little pat phrases while the paper you work for can’t afford to keep the lights on would be enough to send most folks groveling back to New York. PLEASE READ: SOMETHING, SOMETHING, SOMETHING, DETROIT [Vice]

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Viral Ad Battle Vol. 2: Brad Pitt, Alice Cooper And Interns (VIDEOS, VOTE)

August 28, 2009

In our second installment Viral Ad Battle we’ve got Brad Pitt feeding a sumo wrestler, Alice Cooper discussing TV warranties, and more musically talented interns . In the first installment , Nike’s “Good Day” spot featuring Ice Cube and Robert Rodriguez was the clear favorite of HuffPost readers. Which brand will win this round? Check out our VIDEOS and pick your favorite below. And, as always, if you’ve got some other great candidates, let us know in the comments section. Get HuffPost Business On Facebook and Twitter !

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