July 2010

Video: Siemens’s Loescher Sees Profit `Solidly Above’ Last Year

July 29, 2010

July 29 (Bloomberg) — Siemens AG Chief Executive Officer Peter Loescher talks about the company’s third-quarter profit and outlook for full-year earnings. Europe’s largest engineering company raised its outlook after quarterly income rose 40 percent, beating analysts’ estimates. Loescher speaks from Munich with Maryam Nemazee on Bloomberg Television’s “Countdown.”

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Video: Siemens’s Loescher Sees Profit `Solidly Above’ Last Year

July 29, 2010

July 29 (Bloomberg) — Siemens AG Chief Executive Officer Peter Loescher talks about the company’s third-quarter profit and outlook for full-year earnings. Europe’s largest engineering company raised its outlook after quarterly income rose 40 percent, beating analysts’ estimates. Loescher speaks from Munich with Maryam Nemazee on Bloomberg Television’s “Countdown.”

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Video: Siemens’s Loescher Sees Profit `Solidly Above’ Last Year

July 29, 2010

July 29 (Bloomberg) — Siemens AG Chief Executive Officer Peter Loescher talks about the company’s third-quarter profit and outlook for full-year earnings. Europe’s largest engineering company raised its outlook after quarterly income rose 40 percent, beating analysts’ estimates. Loescher speaks from Munich with Maryam Nemazee on Bloomberg Television’s “Countdown.”

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Carlos Slim Buys Fifth Avenue Townhouse For $44 Million

July 28, 2010

Carlos Slim has made himself the envy of all New Yorkers. The Mexican billionaire just purchased the only private mansion left on Fifth Avenue for $44 million. Last month, Slim bought an 11-story office building at 417 Fifth Avenue for a cool $140 million. Slim bought his new sprawling townhouse from ex-taxi driver turned billionaire real estate tycoon Tamir Sapir. In 2006, Sapir bought the Townhouse for $40 million.

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Video: Metro Opens First U.K. Consumer Bank Since 19th Century: Video

July 28, 2010

July 29 (Bloomberg) — Bloomberg’s Poppy Trowbridge reports on today’s opening of Metro Bank in London, the first new consumer bank in more than a century.¶¶ Metro is attempting to win clients from the U.K.’s biggest banks by opening for longer hours seven days a week and providing faster, better quality customer service than rivals. (Source: Bloomberg)

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Video: Metro Opens First U.K. Consumer Bank Since 19th Century: Video

July 28, 2010

July 29 (Bloomberg) — Bloomberg’s Poppy Trowbridge reports on today’s opening of Metro Bank in London, the first new consumer bank in more than a century.¶¶ Metro is attempting to win clients from the U.K.’s biggest banks by opening for longer hours seven days a week and providing faster, better quality customer service than rivals. (Source: Bloomberg)

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Video: Metro Opens First U.K. Consumer Bank Since 19th Century: Video

July 28, 2010

July 29 (Bloomberg) — Bloomberg’s Poppy Trowbridge reports on today’s opening of Metro Bank in London, the first new consumer bank in more than a century.¶¶ Metro is attempting to win clients from the U.K.’s biggest banks by opening for longer hours seven days a week and providing faster, better quality customer service than rivals. (Source: Bloomberg)

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Video: Macquarie’s Kurtz Likes China Minsheng, Bank of China: Video

July 28, 2010

July 29 (Bloomberg) — Michael Kurtz, head of China research at Macquarie Group Ltd., talks with Bloomberg’s Haslinda Amin about his investment strategy for China stocks. Kurtz, speaking in Hong Kong, also discusses the outlook for China’s economy, central bank monetary policy and real estate market. (Source: Bloomberg)

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Regulatory Reform: What Impact Will It Have On Commercial Real Estate?

July 28, 2010

The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama last week, is a cornerstone of Congress and the Administration’s financial regulatory reform agenda, creating the most sweeping changes in U.S. financial…

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Candy Spelling: Have I Learned To Twitter for Nothing?

July 28, 2010

I’ve never been sure how to conjugate the verb, but do know that I tweet, I can twit, I do twitter, I have twitted, sometimes I twittled while signing in to Twitter and I will twitomorrow. On second thought, I think I’ve twitched while twitting, too. Wait, that brings up the more-complicated question if Twitter is even a verb. Isn’t it a person, place or thing, making it a noun? All these brain-twisting exercises might be for nothing. I saw a story on thewrap.com that was headlined, ” Annenberg Study: 0% Would Pay for Twitter .” I know Wallis Annenberg (and knew her father, Walter, and stepmother, Lenore), and my money was on the fact that none of them had Twittered or tweeted or twit, especially since Twitter came about long after Walter and Lenore would have noticed, let alone asked 1,981 people if they’d pay for it. It turned out that the Twitter question about paying was just the icing on the cake of a survey by the USC Annenberg School for Communication about America’s digital future. The bottom line was that more people are Internet reliant, but that there was “strong negative reaction to paying for online services.” Forty-nine percent of those surveyed said they used free micro-blogs such as Twitter. And, yes, zero percent said they would be willing to pay for Twitter. My first thought was to dump my Twitter stock, and then I realized they still haven’t found a way to generate enough revenue to take the company public. Ooops, I thought, Facebook is free, too. Wait. They don’t issue stock either. Those guys probably knew what the Annenberg School is reporting. Jeff Bezos at amazon.com went the other way. At least his business sold something; but, still, from 1995 to 2002, he confidently assured the press and the shareholders that it was all right not to make a profit. I did buy that stock and stuck with him for a long time. Thanks, Jeff. People will pay for books and DVDs and portable readers. Will people pay for something they’ve received for free? Will they choose a paid service or product or program when there are so many free ones available? Doesn’t this sound like the broadcast TV versus cable argument and the satellite radio discussion? The entire Annenberg study was fascinating, touching on all kinds of subjects about what we believe, where we go and what matters online. Yet, I still can’t believe that not one Twitter user would pay for it. What would happen to all the hours people spend on Twitter if it became a pay service? What if each of them contributed an hour a week to public service? How about if they helped Betty White with whatever charity she’s helping these days. (We know she’s not Tweeting.) Start charging, Twitter. Maybe you can re-shape society to have people cook meals for others rather than just telling everyone what they ate for lunch. And, yes, in the interest of full disclosure, I do Tweet, Twit and Twitter. I’d probably pay, too, just to stay in the club.

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Retail Leasing Continues to Strengthen, But Investment Activity Remains Sluggish

July 28, 2010

Retailers, consumers and the general economy are clearly better off than they were a year ago — and that’s translating into an increase in leasing acyivity and overall occupancy together with a deceleration in rent declines for retail property owners…

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Veterans Funding Passes With Overwhelming Majority As Republicans Abandon Tough Talk On Voting Against Spending

July 28, 2010

WASHINGTON — House Republicans who have spent months demanding spending cuts blanched Wednesday at their first opportunity to actually make them, instead joining Democrats in treating a bill to pay for veterans programs in 2011 as politically sacrosanct in an election year. The veterans measure is the first of a dozen spending bills for the upcoming 2011 budget year to come up for a vote. Democrats, meanwhile, were doing some ducking and weaving of their own to avoid time-consuming floor debates and politically difficult votes on other measures. It’s of little surprise that Democrats picked the Veterans Affairs bill as the first in the appropriations pile to bring to a vote. It passed by a 411-6 vote. Only a handful of others are likely to get as far before the November election, even though all 12 are supposed to pass both the House and Senate and be signed by the president before Oct. 1. Last year at this time, the House had passed all 12 bills. House Minority Leader John Boehner, R-Ohio, offered the only amendments to cut the veterans bill but withdrew them as soon as Democrats started making political hay out of them. Boehner wanted to cut the Veterans Affairs Department’s rapidly growing policy office as well as its congressional lobbying operation and skim $45 million from the VA’s $3.3 billion request for computer systems, which the agency itself admits was too high. Still, Democrats howled. “I couldn’t believe it. You’re coming into an election and you’re taking money away from veterans,” said Veterans Committee Chairman Bob Filner, D-Calif. “I guess that’s their definition of supporting the troops.” A spokesman for Boehner said the GOP leader withdrew the amendments so that other Republicans could have a chance to offer theirs. But Boehner only did so after Democrats made it plain they were eager to award him votes and go on the attack. Veterans programs are hardly hurting. The VA’s so-called discretionary budget – the portion adopted by Congress each year – has risen 70 percent over the last five years and would receive a 7 percent boost for next year. Lawmakers say such increases are required by the large number of wounded veterans from Iraq and Afghanistan. Republicans instead offered various ideas to increase veterans spending, including proposals for renewable energy projects at VA hospitals, health care for women veterans, and a paralympics sports program for disabled veterans. By contrast, Republicans had lots of ideas for cutting transportation and housing programs in anticipation of a floor debate on Thursday, including cuts to Amtrak, the Washington-area Metro system, and across-the-board cuts to agencies. “Wait until tomorrow,” Boehner said. Republicans also complained about a $701 million border measure that passed shortly afterwards. They argued that $500 million for 1,200 additional border patrol agents and for other steps to try to control the U.S.-Mexico border wasn’t paid for with cuts to other programs. Still, Republicans didn’t force a roll call vote that would have put GOP lawmakers on record against the measure. It instead passed by voice vote, along with a $129 million measure to speed processing of patent applications. The underlying $77 billion veterans measure is the easiest for Congress to pass each year because of the popularity of the programs and the high regard that the public holds for the military. This year’s bill includes money to reduce a backlog in processing health claims, additional funding for community health centers and big increases to treat conditions such as post-traumatic stress disorder, depression and traumatic brain injury. On the other side of the Capitol, the notoriously balky Senate has made it plain it doesn’t have much time to burn on routine spending bills. As a result, House Democratic leaders appear to have little enthusiasm for taking difficult votes and taking weeks of debate to pass bills that the Senate doesn’t have time for. The Senate Appropriations panel has approved half the bills, but it doesn’t appear that the full chamber will debate any until mid-September at the earliest. “We’re trying to move some of them and see what the Senate does,” said House Appropriations Chairman David Obey, D-Wis. “The Senate seems to be moving on a different track than we are, but at least they’re moving.” The once-bipartisan House committee have become bitterly polarized as Republicans have sought to force Democrats to cast politically difficult votes. For example, Obey postponed debate and action on the bill to pay for homeland security programs after Republicans signaled they would offer amendments to block the Obama administration’s attempts to nullify Arizona’s controversial immigration law. A federal judge on Wednesday put the most significant portions of the Arizona law on hold.

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Video: Pesek Discusses Sony’s Impact on Japanese `Psyche’: Video

July 28, 2010

July 29 (Bloomberg) — Bloomberg’s William Pesek speaks from Tokyo with Bloomberg’s Susan Li about Sony Corp., which releases financial results today. Pesek also discusses Sony’s chief executive officer Howard Stringer and changes in Japanese corporate culture. (William Pesek is a Bloomberg News columnist. The opinions expressed are his own. Source: Bloomberg)

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Video: UBS’s Kupferberg Expects `Solid Growth’ for Visa: Video

July 28, 2010

July 29 (Bloomberg) — Jason Kupferberg, an analyst at UBS AG, talks with Bloomberg’s Susan Li about Visa Inc.’s financial results and outlook. Visa, the world’s biggest payments network, posted a fiscal third-quarter profit that exceeded most Wall Street estimates for a 10th straight quarter as more consumers paid with plastic. Kupferberg, speaking from New York, also discusses the Federal Reserve’s new debit-card regulations aimed at Visa and No. 2 network MasterCard Inc. (Source: Bloomberg)

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Divisions Emerge Among Republicans Over Elizabeth Warren

July 28, 2010

A growing divide has emerged among Republicans over the possible nomination of Elizabeth Warren to head the new agency designed to protect borrowers from predatory lenders. Leading Senate Republicans like Minority Whip Jon Kyl (Ariz.) and former Banking Committee Chairman Richard Shelby of Alabama oppose the noted consumer advocate and bailout watchdog, raising questions about her tenure atop the Congressional Oversight Panel and her past academic research into bankruptcy. But some of their colleagues have praised Warren for her work and her intelligence, fought efforts to water down the agency she may lead, and even introduced bills to give her more power to protect taxpayers. And although Shelby and others raise the specter of Warren, a Harvard Law professor, running an agency they say is intent on choking off credit and hurting the economy in the process, two of Warren’s Republican colleagues on the bailout panel said Wednesday that while they “do not share many of Professor Warren’s views and opposed the creation of the [Consumer Financial Protection Bureau]” they have found her “collegial… professional [and]… quite willing to modify her views if presented with well-reasoned cogent arguments.” The two Republicans, Kenneth Troske and J. Mark McWatters — one picked by Senate Minority Leader Mitch McConnell (Ky.), the other by House Minority Leader John Boehner (Ohio) — added in their statement that the panel has been critical of Democrats and Republicans alike, and that “it takes courage to publicly question the decisions made by members of your own party.” Republican statements of support for Warren’s work aren’t yea votes, of course, but they poke some gaping holes in the theory, advanced by Senate Banking Committee Chairman Christopher Dodd (D-Conn.) as recently as Tuesday , that lockstep GOP opposition would inevitably shut down a Senate attempt to appoint her. “It’s not all that clear how Chairman Dodd has been doing his math,” said one consumer advocate intimately involved in the effort to get the financial reform bill through Congress. During a Senate hearing last week with Warren and other bailout watchdogs, Sen. Chuck Grassley (R-Iowa) complimented them on their work, and said they had “brought more transparency and accountability to the activities of [the] Treasury [Department].” “In short, you have kept Treasury honest, a critical service with so much taxpayer money at stake,” Grassley added. Last Thursday, GOP Sens. John Thune (S.D.) and Bob Corker (Tenn.) cited Warren while arguing against the Obama administration’s proposed $30 billion for small banks. The stated purpose of the proposal is to ease credit for small businesses; Warren’s panel said the plan “looks uncomfortably similar to TARP.” “Elizabeth Warren is a smart person,” Corker said on the Senate floor. “There are things I agree with her on, and there are things I disagree with her on. But on that point, I absolutely agree.” Republicans outside the Senate have also come to Warren’s defense. Charles Fried, a former solicitor general under Ronald Reagan who supported the Supreme Court nominations of John Roberts and Samuel Alito, told the New Republic that he supported Warren for the consumer position. “I support capitalism, and I don’t like thieves. And the people who got us into this mess are thieves, or there are a lot of thieves among them,” Fried, one of Warren’s colleagues at Harvard Law School, told TNR. Bank regulator Sheila Bair, the Republican Chair of the Federal Deposit Insurance Corporation, told Bloomberg Television earlier this month that Warren “certainly has all the qualifications and credentials for that job.” Those statements are just the latest in a series of Republican statements praising Warren. In March of last year, Grassley singled out Warren for her work protecting taxpayers. “I want to especially mention Professor Warren,” the Iowa Republican said last March 31 . “So many times over the last decade and a half, you and I have been on opposite sides of a very important issue and we are probably still on opposite sides of that issue, but you’re really boring in on this and I want to tell you that I really appreciate your work,” he said in reference to her oversight activities. “And I appreciate your opposition on that other issue more because of the hard work you’re doing on this.” In April 2009, Sen. Olympia Snowe (R-Maine) praised Warren and her panel’s “yeoman efforts” on watching over Treasury, and introduced a bill to give her subpoena power because of the panel’s difficulties in securing answers from Treasury. Both Snowe and Grassley also voted against a provision this past May that would have gutted the new consumer agency which President Obama signed into law last week. But Warren continues to be dogged by questions of confirmability, despite White House Press Secretary Robert Gibbs’s Monday statement that Warren is “very confirmable.” Some consumer advocates suggest that the source of those questions may be attributable not to Republicans, but to Senate Democrats wary of angering their allies in the financial services industry. Lenders fear a Warren-led agency with the power to regulate consumer credit products like mortgages and credit cards because they worry she could be too aggressive in protecting consumers from dubious lending practices, cutting off key profit sources. A vote for Warren would be seen as a vote against lenders. A vote against her would be seen as a vote against families. It’s a lose-lose, one consumer advocate noted. READ Troske’s and McWatters’s full statement: “Although we do not share many of Professor Warren’s views and opposed the creation of the CFPB, we have found our dealings with her to be collegial and professional. We often debate a wide variety of issues with Professor Warren and have found her quite willing to modify her views if presented with well-reasoned cogent arguments. For example, as the Panel undertook its investigations on the ‘investment’ of TARP funds in GMAC and AIG, we raised a number of specific concerns with Professor Warren and the other members of the Panel. She was presented with a clear choice — accept Treasury’s tepid analysis or conduct a rigorous de novo review. She — without hesitation — chose the latter and the Panel produced what we believe is the definitive analysis of the GMAC and AIG misadventures. Although Treasury has not welcomed the Panel’s reports on GMAC and AIG — not to mention its continuing criticism of the Home Affordable Modification Program — any lesser undertaking by the Panel would have run contrary to its Congressional mandate and ill-served the taxpayers who stand to lose tens of billions of dollars of TARP funded public resources. It is important to note that the Panel has been critical of policies and decisions implemented by Democrats and Republicans alike. There is great virtue in that, because, while it is easy to question the decisions made by members of the other political party, it takes courage to publicly question the decisions made by members of your own party.” ************************* Shahien Nasiripour is the business reporter for the Huffington Post. You can send him an e-mail ; bookmark his page ; subscribe to his RSS feed ; follow him on Twitter ; friend him on Facebook ; become a fan ; and/or get e-mail alerts when he reports the latest news. He can be reached at 646-274-2455.

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Robert Reich: The Final Lesson of BP

July 28, 2010

BP is starting over. It just named a new American president and its finances are looking up. BP’s second-quarter report showed surprisingly strong revenues of $75.9 billion, beating Wall Street’s estimates. (This includes a $32.2 billion writedown along with the $20 billion liability fund that the Obama Administration wanted.) The company has started to sell $30 billion of its assets to ensure it has all the money it needs to pay any liability claims. No wonder several Wall Street analysts are suggesting BP stock as a terrific buy. It doesn’t seem to matter BP was responsible for the worst environmental disaster in American history. Consumers worldwide — including Americans — continue to slurp up its oil. But wait a minute. If BP emerges from this debacle fatter and happier than anyone imagined a few months ago, whatever happened to the idea of corporate accountability? Does this mean any giant corporation can wreak havoc and then get back to business as usual? Corporations aren’t people. They have no brains, no consciences, no capacity for intent or guilt. Every one of their moveable parts can be replaced, just like BP’s former CEO Tony Hayward was replaced. Corporate accountability and responsibility are meaningless concepts. Corporations exist for only one purpose: to make money. If we want corporations to act differently, we have to force them to do so through laws that are fully enforced and through penalties higher than the economic benefits of thwarting the laws. Here’s the real outrage: In the wake of the BP spill, essentially no laws have been changed — not even a ridiculously low cap on damages private parties can collect from oil companies. Senate Republican leaders said Wednesday they wouldn’t support a bill retroactively removing the liability cap; and not even Democrats Mary Landrieu (D-La) and Mark Begich (D-Alaska) will support it. Why isn’t Congress doing more — not only removing the cap on civil liability but also raising the level of penalties oil companies have to pay for violating safety and environmental regulations, permanently prohibiting deep-water drilling, and enacting a carbon tax? Because of Big Oil’s political clout. The same anthropomorphic fallacy that accords human attributes to giant corporations like BP distorts clear thinking about how to limit their political influence. Consider the grotesque Supreme Court decision earlier this year in Citizens United v. Federal Election Commission , which gave corporations the status of people with First Amendment rights to spend unlimited amounts of money on political ads. Citizens United ranks right up there with Bush v. Gore and Dred Scott as the most brainless and irresponsible Supreme Court decisions in history. In March, the District of Columbia Court of Appeals decided that in light of Citizens United , there was no longer any basis for limiting contributions to so-called independent committees set up to support or oppose particular candidates. (Such committees are known as 527′s, after a loophole clause in the campaign finance laws.) The old contribution limit was $69,900 every two years. Now even that’s gone. And the Federal Elections Commission has just interpreted these two court decisions to mean corporations, not just individuals, can now give unlimited amounts of money to 527′s. To top it off, Tuesday the Senate failed (by only a few votes) to pass the “Disclose Act,” that would have forced corporate sponsors of campaign ads to reveal themselves and not hide behind innocuous sounding names like “Americans for America.” The bill also would have prohibited campaign ads run by U.S. subsidiaries of foreign companies. (Think BP.) Now all the limits are gone and the gloves are completely off. Even BP, incorporated in the UK, is officially free influence American politics to its heart’s content. The will of the American people is being subordinated to the demands of giant money-making machines called global corporations that can now spend or threaten to spend unlimited amounts of money in support of any politician willing to help them make more and against any who might cause them to make less. This is the final lesson of BP. What should you do? As with the loophole-ridden finance reform law, and the new health law that richly rewards Big Pharma — get angry, not cynical. Commit to getting big money out of politics, even if it takes us years. This post originally appeared at RobertReich.org .

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CONNECT Board Promotes Camille Sobrian to President; Approves Series of Strategic Initiatives

July 28, 2010

The CONNECT Board of Directors Announces the Promotion of Camille Sobrian to President, and Approves New Strategic Initiatives to Influence Federal Innovation Policy and to Attract Early Stage Investment Capital for San Diego Innovation Start Ups

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Video: Andrew Keene Says `About Time’ for `Correction’ in Gold: Video

July 28, 2010

July 28 (Bloomberg) — Independent trader Andrew Keene and Scott Redler, chief strategist at T3 Capital Management, talk about the outlook for stocks, gold and shares of Apple Inc. Keene and Redler speak with Matt Miller, Carol Masser, Adam Johnson and Dominic Chu on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: Blue Phoenix’s Licata Likes Hess, Sees Asset Sales at BP: Video

July 28, 2010

July 28 (Bloomberg) — John Licata, chief commodity strategist at Blue Phoenix Inc., discusses his investment strategy in Hess Corp. and BP Plc. Licata talks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Video: Ameriprise’s Joy Recommends Caterpillar, Intel, JPMorgan: Video

July 28, 2010

July 28 (Bloomberg) — David Joy, chief market strategist at Ameriprise Financial Inc.’s Columbia Management, talks about his investment strategy and the outlook for the U.S. economy. Joy speaks with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

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Dan Lesser: Want Economic Growth and Jobs? Then Let the Bush Tax Cuts Expire

July 28, 2010

This fall Congress will be considering whether to extend the Bush Administration’s tax cuts for families earning more than $250,000. Proponents of extending these tax cuts for the wealthy, which are scheduled to expire this year, argue that allowing the tax cuts to expire will place an enormous strain on the economy and result in higher unemployment. The non-partisan Congressional Budget Office (CBO) has evaluated this claim and come to the conclusion that it is without merit . To the contrary, extending the Bush tax cuts for the wealthy will do far less to grow the economy and produce jobs than any alternative use of these funds. Extending the Bush tax cuts for the wealthy enacted in 2001 and 2003 would reduce the federal government’s revenues by approximately $40 billion in 2011. The CBO compared this tax expenditure with ten other potential uses for this money, including such things as extending unemployment insurance benefits, providing a jobs tax credit, or giving fiscal relief to the states. The CBO found that, dollar for dollar, every single one of these ten alternatives would grow the economy more and produce more jobs than extending the Bush tax cuts for the wealthy. In most instances, they would produce many times more economic growth and jobs. In particular, the CBO found that, at the same cost as extending the Bush tax cuts for the wealthy: • A temporary jobs tax credit that reduced a firm’s payroll taxes on new hires would generate three times more economic growth and create four to six times more jobs. • State fiscal relief would generate three to four times more economic growth and create two to three times more jobs. • Extending unemployment insurance benefits, such as the extension approved by Congress last week , would generate five times more economic growth and four to six times more jobs. Why do all of these alternatives spur so much more economic growth and create so many more jobs than extending the Bush tax cuts for the wealthy? The answer is simple. When the economy is weak, spending is needed to stimulate it. But wealthy people, given an extra dollar in income, are much more likely to save it than spend it. This simple principle explains why extending the Bush tax cuts for the wealthy is the worst alternative available if the policy goal is to stimulate the economy and create jobs. In the long term, after the current economic crisis has passed and further stimulus of the economy is no longer needed, the revenue gained by allowing the Bush tax cuts for the wealthy to expire should be dedicated to reducing our nation’s unsustainable budget deficit. This would be only fitting since the mammoth loss of revenue resulting from the Bush tax cuts for the wealthy is what created huge budget deficits in the first place. This blog is based on Chuck Marr’s article, “Letting High-Income Tax Cuts Expire is Proper Response to Nation’s Short- and Long-Term Challenges,” Center on Budget and Policy Priorities, July 26, 2010.

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Upper Big Branch Mine Reopening Planned Despite Ongoing Investigations

July 28, 2010

CHARLESTON, W.Va. — Massey Energy plans to resume extracting coal by constructing a new entrance to its Upper Big Branch mine within months, despite continuing investigations of the explosion that killed 29 men there in April, the company’s chief executive said Wednesday. Massey also wants government permission to restart two sections in the far southern reaches of the Raleigh County mine, CEO Don Blankenship said during a conference call with analysts. That area was untouched by the blast and Blankenship estimated it could produce 600,000 tons annually. “We have the permits from an environmental viewpoint that are necessary to do that and we are going to activate that effort,” Blankenship said. “Absent the government stopping us for some unknown reason, which I don’t know what that would be, then I suspect that we will be able to access the reserve with that facility in the next five to six months.” The federal Mine Safety and Health Administration took control of the mine April 5 and won’t allow production in active areas until it cancels that order, spokeswoman Amy Louviere said. “We would probably allow new entries to be driven provided they were not connected into UBB.” Massey has struggled to replace the high-priced metallurgical coal produced at Upper Big Branch. So-called coking coal is a key ingredient in steel. Shipments fell 1 million tons short of expectations in the second quarter, despite adding shifts and opening new sections in existing metallurgical mines. Massey lost $88.7 million, or 88 cents per share, in the quarter. The results include $128.9 million in pretax charges tied to the explosion. Massey estimates legal fees for the blast will total up to $8 million per quarter. The company also expects higher capital expenditures to replace equipment and to open new mines. Investigators suspect a combination of methane and coal dust caused the explosion, though they only began searching for clues underground in June. Massey believes that search is nearly done. “I think we’re drawing closer to having a conclusion and probably will within a couple months,” Blankenship said. Massey has been floating a theory that a crack in the mine floor opened unexpectedly and flooded the mine with such a vast quantity of methane that it overwhelmed ventilation equipment and sensors designed to shut off mining equipment before gas hits explosive levels. MSHA and other regulators have discounted Massey’s theory. Richmond, Va.-based Massey operates mines in West Virginia, Kentucky and Virginia.

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Big Health Insurers Top Quarterly Earnings Forecasts, Even Without More Customers

July 28, 2010

The three largest commercial health insurers all beat Wall Street expectations for second-quarter earnings. Other big insurers like Cigna Corp. and Humana Inc. have yet to report results. Here are the net income and health insurance enrollment totals for UnitedHealth Group Inc., WellPoint Inc. and Aetna Inc. and how they compare to the 2009 second quarter: _ UnitedHealth: profit, $1.12 billion (up 31 percent); enrollment, 32.5 million (up 1 percent) _ WellPoint: profit, $772.4 million (up 4 percent); enrollment, 33.5 million (down 2 percent) _ Aetna: profit, $491 million (up 42 percent); enrollment, 18.6 million (down 2 percent) ___ Source: Company filings

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Video: Moran Wants Google to Spend $10 Billion on Stock Buyback: Video

July 28, 2010

July 28 (Bloomberg) — Clayton Moran, an analyst at Benchmark Co., talks about potential plans by Google Inc. for the $30.1 billion of cash on its balance sheet. Google, owner of the world’s most popular Web search engine, tops a list compiled by Bloomberg of large companies best positioned to pay a first-time dividend, based on such measures as sales growth and return on equity and assets. Moran speaks with Bloomberg’s Carol Massar and Matt Miller on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Video: S&P 500 Declines for Second Day on Concern Over Recovery: Video

July 28, 2010

July 28 (Bloomberg) — Bloomberg’s Courtney Donohoe reports on the performance of the U.S. equity market today. U.S. stocks fell, sending the Standard & Poor’s 500 Index lower for a second day, after orders or durable goods unexpectedly decreased and the Federal Reserve said economic growth slowed in some areas. Bloomberg’s Pimm Fox also speaks. (Source: Bloomberg)

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Reggie Middleton: A New Spin on Bank Fraud: Banks Defrauding Their Investors, Auditors and Regulators, Which Also Helps Delinquent Mortgagees

July 28, 2010

Last week, I made clear to my readers and subscribers that the bank malaise is not over, despite what may appear to be encouraging moves by the executive staff. Housing prices are still on their way down, save temporary blips from government bubble blowing and the outright concealment of non-performing assets by banks, see Anecdotal Evidence That Banks Are Hiding Depressed High End Real Estate. Now, many may see this as consipiracty theory, which is why I always included hard analysis behind my posts. After a Careful Review of JP Morgan’s Earnings Release, I Must Ask – “What the Hell Are Those Boys Over at JP Morgan Thinking????” The boys over there at the “Morgan’ appear to be partying like it was 1999, releasing all types of reserves and provisions (which coincidentally padded a very weak earnings quarter) as if I didn’t make it “Very Clear In March, US Housing Has a Way to Fall”: Well, here is some additional evidence which shows how banks are producing those positive sloping credit metrics… They are fudging the delinquency reporting. Reference this note from a fellow BoomBustBlogger: Hello Reggie, I’m a big fan of your blog and greatly appreciate your diligent efforts in effectively educating your readers while exposing the the biggest heist ever perpetrated on the American Public by Wall Street.

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Joseph Stiglitz: Banks ‘Gutted’ Almost Every Meaningful Provision In The Financial Reform Bill

July 28, 2010

Joseph Stiglitz is a Nobel laureate, a former chief economist of the World Bank and he chaired Bill Clinton’s presidential council of economic advisors. His latest book, ‘Freefall’, is a worrying critique of the root causes of the Global Financial Crisis, and despite President Obama’s recent banking reforms, he says it could happen again. He’s also predicting another US economic slowdown.

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Video: Gaffney Says Corporate Bond Market Is `Very Attractive’: Video

July 28, 2010

July 29 (Bloomberg) — Kathleen Gaffney, co-manager of the Loomis Sayles Bond Fund, discusses investment opportunities in corporate bonds. Gaffney speaks with Matt Miller and Carol Massar on Bloomberg Television’s “Street Smart.” (Source: Bloomberg)

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Andrea Kovach: Payday Lenders Beware: Financial Reform Law Promotes Alternative Small Dollar Loans

July 28, 2010

This year is providing a growing opportunity for mainstream financial institutions to offer affordable small-dollar loans while proving to be a difficult one for predatory lenders. First, Illinois passed legislation closing a gaping loophole in payday lending regulation. Now, the Dodd-Frank Wall Street Reform and Consumer Protection Act , signed into law by President Obama on July 21st, has the potential to significantly increase the number of affordable small-dollar loans available to consumers. Title XII of the Act “encourage[s] initiatives for financial products and services that are appropriate and accessible for millions of Americans who are not fully incorporated into the financial mainstream.” Specifically, the Act will incentivize financial institutions to offer low-cost, small-dollar loans that serve as safe alternatives to payday loans. Rather than regulating high-cost payday lenders, the Dodd-Frank Act seeks to provide financial incentives to institutions to offer more competitively priced small-dollar loan products through loan loss reserve funds, technical assistance funding, and other programs and grants to promote financial access and education. The Act authorizes the Secretary of the Treasury to establish grants to eligible entities to provide low-cost small-dollar loans. In this case, eligible entities include any federally insured depository institution , state, local or tribal government entities, community development financial institutions (CDFI) and 501(c)3 organizations. In order to receive a grant, the loan provider must offer financial literacy and educational opportunities to each small-dollar loan consumer. The Act also includes several provisions that are exclusive to CDFIs. A CDFI is a financial institution that expands the availability of credit, investment capital, and financial services in economically distressed communities. The new legislation allows for the creation of loan loss reserve funds in order to help defray the costs of any defaults. Concerns regarding defaults are one of the primary obstacles cited by bankers who have expressed interest in starting a small-dollar loan program. However, after offering small-dollar loans for two years, the charge-off ratios were in line with industry standards for unsecured loans to individuals and charge-off rates compared favorably with credit cards . In order to qualify for the grant, the CDFI must offer a small-dollar loan program that offers loan amounts of $2,500 or less, to be repaid in installments with no pre-payment penalties, as well as any other requirements established by the fund administrator. Not all payday loan alternatives are created equal. Therefore, it is necessary to define the parameters of the eligible loan programs in a way that creates products that are truly safe , reasonable, appropriate, and accessible for consumers. One tool to help create a consumer-friendly product is the template proposed in the FDIC’s Small-Dollar Loan Pilot Program . According to the FDIC, the essential elements of safe, affordable and feasible product design include: • Loan amount of $2,500 or less; • Term of 90 days or more; • APR of 36% including fees; • Streamlined underwriting with proof of identity and income; • Credit report (but not necessarily score) to determine loan amount and repayment ability. This two-year pilot program, completed in the fourth quarter of 2009, included 28 participating banks that made more than 34,400 small-dollar loans with a principal balance of over $40 million, all with an APR of 36% or below, including any fees. Three banks headquartered in Illinois participated in the FDIC study: Community Bank – Wheaton/Glen Ellyn, Lake Forest Bank & Trust , and State Bank of Countryside. Lake Forest Bank was able to earn a small profit on the loans and intends to develop long-term relationships with performing borrowers. Losses on their small-dollar loan product were no higher than those on other consumer loans. Lake Forest Bank reported one of the most successful changes made to its program was reducing the minimum loan amount to $250 to accommodate borrowers who did not need large amounts of credit. Also on the state level, the Illinois Asset Building Group (IABG), a diverse statewide coalition invested in building the stability and strength of Illinois communities through increased asset ownership and asset protection, is working to promote alternative small-dollar loans in Illinois. For more information, see the IABG brief Alternative Small-Dollar Loans in Illinois: Creating Sound Financial Products Through Regulation and Innovation. With 2010 just half over, there are even more changes on the horizon for the alternative small dollar loan landscape. This article was coauthored by Hannah Weinberger-Divack, a VISTA working at the Shriver Center.

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Extending Bush Tax Cuts WON’T Create Jobs, Says Leading Economist

July 28, 2010

As Congress debates whether to extend Bush-era tax cuts for the wealthiest Americans at least one prominent U.S. economist has already cast his negative vote. “Not all budgetary dollars are created equal,” said Alan Blinder, professor and co-director of Princeton University’s Center for Economic Policy Studies, in a conference Wednesday morning. “Some have a lot of bang for the buck, and some have very little. The GDP increase per dollar of budgetary cost is in the range of 1.6, 1.7 for things like food stamps and unemployment benefits, and in the range of .35 for extending the Bush tax cuts. We could get some substantial job creation by simply reprogramming the $75 billion that would be saved over the next two years by not extending the upper-bracket Bush tax cuts and spending it instead on unemployment benefits, food stamps, and the like.” Blinder’s economic advice supports the tax policy of President Obama and the Democrats, who would like to maintain tax cuts for 95 percent of Americans, while letting the cuts for those with incomes above $250,000 expire. Letting the tax cuts lapse is projected to trim approximately $675 billion from the deficit over 10 years, according to the Center for Budget and Policy Priorities . The GOP, by contrast, is aiming to extend the Bush tax cuts across the board, and has tried to block the billions in deficit spending to extend benefits to the long-term unemployed. Blinder said that extending tax cuts for the wealthiest Americans would only exacerbate an ever-increasing income gap. “One of the objections a lot of us raised back in 2001 when the Bush cuts were originally enacted was that they were…adding further post-tax income inequality to an economy that was already producing a lot of pre-tax inequality,” he said. “I still feel that way. On the other hand, unemployment benefits and food stamps tend to go to people with much much lower incomes [who] need it a lot more, and you get substantially more GDP boost and job creation than if the same amount of money were spent extending tax cuts at the top.” After the U.S. has dug itself out of this recession, Blinder said, Congress should then make it a priority to start digging the country out of debt. “What we really need in terms of fiscal policy is one step to the left and then multiple steps to the right. I think there’s a strong case for some fiscal stimulus, and the extension of unemployment benefits is just a perfect piece of that broader policy. But a commitment to deficit reduction down the line would be just what the doctor ordered.”

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Dr. Rachel Ehrenfeld: Dubai: The Golden Mirage

July 28, 2010

The ongoing ordeal of a U.S. businessman who has been rotting in a Dubai jail for more than two years, deprived of his civil rights, should serve as a warning to Americans and Westerners alike doing business with Dubai, a constituent monarchy of United Arab Emirates (UAE). Shahin, a U.S. citizen, is just one of many foreigners who make up 80-95% of Dubai’s 2.3 million residents. Until his arrest, Shahin was CEO of Deyaar Realty, once Dubai’s second largest real estate developer, which, like Dubai’s entire real-estate sector, was hit hard by the global economic recession. Shahin was arrested without warrant or indictment in March 2008. Sources familiar with the case reported that he was held incommunicado for over two weeks, while his house and office were ransacked and his documents confiscated. He was deprived of food, water, sleep and access to a toilet for days. The brutality inflicted on Shahin caused his poor health to worsen, requiring him to undergo two major surgeries. After thirteen months he was charged with bribery, fraud and embezzlement Shahin was forced to sign documents he did not understand, because of threats that his wife will be jailed and his children will be sent to a shelter. When finally “released” on bail, Shahin was promptly rearrested on newly trumped-up charges and still languishes in jail. Meanwhile, the Dubai government and its autocratic ruling family have ignored entreaties by the State Department, the U.S. Ambassador and members of Congress to discuss Shahin’s plight. A letter from Senator Sherrord Brown (D-OH) to UAE’s Ambassador asking him to intervene to ensure Shahin’s health and safety while in prison remains unanswered nearly two years since it was delivered. Shahin’s Kafkaesque detention is not unusual in Dubai, where a growing number of foreigners are being subjected to the country’s arcane Islamic legal codes and stripped of Western consideration for civil and human rights. The U.S. Department of State 2009 Human Rights Report for U.A.E., states: “while the constitution prohibits arbitrary arrest and detention… there were reports that the government held persons in official custody without charge or a preliminary judicial hearing…[and] There were also reports of prison guard brutality.” Moreover, the report notes: “court decisions remained subject to review by the political leadership.” Other victimized foreigners are Canadians Karen and Daniel Andrews. The husband, Daniel, a senior executive at a multinational company, was lured to Dubai in 2005 by the promise of “paradise in the desert.” They had a rude awaking when they lost everything. In a sobering account in The Independent , in April 2009, on “The Dark Side of Dubai,” Karen noted, “The thing you have to understand about Dubai is — nothing is what it seems. Nothing. This isn’t a city, it’s a con-job. They lure you in telling you it’s one thing — a modern kind of place — but beneath the surface it’s a medieval dictatorship.” These accounts are far from revealing the full array of substantive and procedural violations of due process and of basic decency Dubai has perpetrated on Shahin, the Andrews, and many other foreigners. Lured by the glitzy façade, Westerners have not been contemplating the Emirate’s lack of transparency and its growing abuse of foreigners. The number of foreign businessmen detained in Dubai is unknown, as the local authorities do not release such information. But media reports from Europe, the U.S., and other countries that supply the bankers, businessmen, engineers and others who labor to further Dubai’s riches, reveal that such arrests have spiked since the Emirate’s economic bubble burst in 2008. Foreigners should be especially wary, as Dubai’s banking and economy are still on the decline, contrary to repeated assurances from local officials. The UAE is now wallowing in a staggering debt of $109.3 billion. On June 3, Moody’s downgraded Dubai’s Central Bank foreign and local currency rating, “reflecting the weakening of the Bank’s strength as a result of the ongoing credit issues surrounding the Dubai corporate sector,” noting the decline “in earning capability” for the Bank and all its Dubai-based competitors. Still, Dubai’s Western trappings and its well-crafted façade of the golden city in the desert continue to lure foreigners. But like every Arabian Desert mirage, many wake up with a mouthful of sand, and their life in shambles.

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Katy Welter: To Be a Banker Is to Be in Heaven

July 28, 2010

As a kid, I knew a boy whose father was a carpenter. The boy learned how to use a circular saw at an alarmingly young age, and he and his father built a magnificent tree house that earned the envy of the grade school. Another friend’s dad was an FBI agent. The son never really knew what his father did, which ensured that the dad was perceived to be important, but the son didn’t learn a trade. My father was a banker. He ran a community bank in Valparaiso, Indiana for thirty years until the bank was sold against my dad’s and my every effort to prevent the sale . I began answering the bank’s switchboard at age 5. I couldn’t really read yet, so I memorized twenty or so extension numbers for the most frequently requested employees and departments. I passed off the phone to the operator–my first of many bank supervisors–when I didn’t recognize a name. At 9, I was filing paperwork for various departments, and at 15 I became a teller. I still remember when my dad tried to convince me that “Congress did a good thing today.” It was 1999 and Congress had just passed the now-vilified Gramm-Leach Bliley Act (GLBA). GLBA (pronounced glee-bah) freed commercial banks to engage in non-banking financial activities, such as insurance sales and stock brokering. I was seventeen years old. By the time the bank was sold, I had worked in and heard my dad’s philosophy about nearly every aspect of banking, from IT to Trust and Roosevelt to Reagan. Banking came as naturally to me as carpentry to my classmate. It got in my blood. It’s easy to suppose that I was raised with a sense of entitlement about the bank. But that wasn’t the case. I learned that the bank existed because of its employees and customers–not its shareholders. And that the money in the bank did not belong to us. We were its custodians. We mediated between the savers and the borrowers in an act of financial alchemy I now know to be called the “multiplier effect.” The process, as we’ve all learned, is more treacherous than a circular saw and as mysterious as the FBI. But I grew up with it, and came to understand and appreciate the magic of collecting one hundred deposits in order to provide one loan, which generates more deposits and loans, and so on. Upon my college graduation, my dad gave me a strange-looking picture I had made when I was nine years old. I’d drawn a large grey cat in a shirt and tie (presumably an illustration of my father, modeled after our family cat), wearing a familiar bank pin on his lapel. The cat stands in his office and next to a yellow couch sprinkled with dollar signs. Above the couch, I drew a brown wooden frame around the declaration, “To Be a Banker is To Be in Heaven!” I knew my place in the world earlier than most. After years of working at–and then trying to stave off the sale of–the bank, completion of law school, and finally, an exhaustive (but ultimately withdrawn) pursuit to form a de novo (new) bank, I find myself playing a new role in the world of community banking–as an advocate. From here on out, I’ll be blogging regularly about community banking issues–legislation, current events, publications, and generally about what community banks are and do and why they’re an essential and overlooked part of our economy. I stumbled upon this opportunity after becoming enamored with the Move Your Money campaign, which was co-founded by Arianna Huffington. I hope to support that campaign by explaining just what makes a community bank unique, useful, and deserving of your money. “To Be a Banker Is to Be in Heaven” still hangs on the wall of my home office as a reminder of the peace of mind I enjoyed for so long about the vocation. But now I can’t help but wince when I consider the philosophy. It was always odd and maybe absurd, but now it just seems tasteless. To be a banker is to be an embarrassment. But it doesn’t have to be. In this forum, I hope to show the world that there are banks where your money is safe, your fees are reasonable, and the service is friendly and competent. I bet there’s one in your community.

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Video: Frank Aquila Discusses Corporate Spending, U.S. Economy: Video

July 28, 2010

July 28 (Bloomberg) — Frank Aquila, partner at Sullivan & Cromwell LLP, talks with Bloomberg’s Lori Rothman about the outlook for corporate spending and the U.S. economy. Aquila is also a featured columnist in Bloomberg Businessweek. (Source: Bloomberg)

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Michael Tasner: Five Guerrilla Marketing Weapons That Helped Increase My Business Without Spending Any Money

July 28, 2010

The end of 2009 and into 2010 was proving to be a very difficult year for my company, Taz Solutions, Inc. a web marketing, strategy, PR and design firm. I discovered that the old ways of doing business were just not working in the “new economy. ” I was used to charging $5000 or more a month on retainer without anyone batting an eye as they saw the massive value we provided. This, however, seemed to turn overnight. $5000 a month turned into $3000 which turned into $2000. Rather than simply lowering the prices, I knew I needed to think outside the box. I decided to turn to the most well known marketing brand in history — Guerrilla Marketing. I’ve been familiar with Guerrilla Marketing for years, but I had never really fully utilized its power. The whole essence behind Guerrilla Marketing is using time, energy and imagination rather then money, which was simply perfect as I was strapped for cash! Instead of just reading some more of the materials, I decided to take some massive action — I fly out to Orlando and spent several days with Jay Conrad Levinson to become a Guerrilla Marketing Master Trainer. They were so impressed with my style and commitment, they made me the Chief Marketing Officer for their whole company! Check them out! When I started delving deeper into the concepts of Guerrilla Marketing, I found that there were over 200 Guerrilla Marketing weapons that I could put into action. Rather then test out all 200, I tested about 30 of them. The following are my top five favorites that produced the best return. 1) Designated Guerrilla To keep our strategies organized and streamlined, I decided to make one person at my company the designated guerrilla. This person was responsible for the marketing calendar, and making sure that the Guerrilla Marketing weapons we were putting into place were being done correctly and tracked to the nth degree. 2) Extra Value I’ve never been a fan of dropping prices, especially since I never compete on price. Therefore, in order to make sure we started winning more deals, we began increasing the amount of value provided for clients. Here are some examples of what our clients now receive: a client-only event once a year (educational in nature), access to our training portal, and even a virtual assistant for ten hours a week at no cost. 3) Testimonials I had testimonials all over the place, but I wasn’t leveraging them. I also discovered that using video testimonials, as opposed to just text, worked much better. Rather then just letting the testimonials sit dormant on the web site; I integrated them into the marketing materials as well as the sales process. This took the social proof factor up to a whole new level. 4) Authoring a Book A book is the best possible business card you can ever have. It took a lot more work than I expected, but the results have proven to be invaluable. 5) Free Public Talks My favorite Guerrilla Marketing weapon is free public talks. I contacted various chamber of commerce organizations as well as some local business groups and offered to come and speak on various topics relating to web marketing, monetizing social media and web 3.0 marketing. They were thrilled because they were used to paying speakers, and I was happy because I was able to practice education-based marketing and contribute to the local business community. I did not even have to “pitch” my business to the crowd, which would have been a little tacky. People simply came up to me afterwards asking for my business card. If you’re looking to generate some business without spending a lot of money, Guerrilla Marketing has worked wonders for me and my businesses. © 2010 Michael Tasner, author of Marketing in the Moment: The Practical Guide to Using Web 3.0 Marketing to Reach Your Customers First

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Sam Shrauger: Direct Monetization of Digital Content: Not if, But How

July 28, 2010

When it comes to online and digital distribution of goods, I’m often confronted with the question of whether consumers are willing to pay for content. It surprises me, on many fronts, that such a question persists — yet it does. The reason, I believe, is that we’re in a transitional period during which the old view that all content on the internet should be free directly confronts the reality that the internet is now the biggest mainstream medium for content delivery. Consumers are therefore expected pay for the value they enjoy via this channel, just as they have in every other channel through which they’ve historically accessed content. In fact, I think it’s fair to say that if anything, the web has allowed even greater creation of value for content by dramatically enhancing ease of access, simplicity and sharing. Take the recent Netflix Relativity deal and Hulu Plus offering for instance. If anything, the internet has enabled an entirely new class of business models and content distribution methods that help us meet consumer needs more effectively than ever before. It might then be reasonably expected that consumers should be asked to, and be willing to, pay for this added value and the benefits it brings to their lives. As content of all types migrates into the cloud and moves to digital distribution, I am always struck by the recurring concept that all this content may, or should be, free. The fact is that consumers are already paying for content — whether in the form of movies, books, premium TV channels, and newspaper and magazine subscriptions — and they are doing so frequently and happily. Additionally, many in the industry are skeptical of digital goods because they are a zero marginal cost good, however most software models are zero or near-zero marginal costs and have been for awhile. In both cases consumers pay for content, not because it has been monopolized and they are lacking for alternatives, but because they value it. Just because a new form of distribution has emerged in the form of the Internet, does this then imply that consumers’ propensity to pay for value will simply evaporate? I think the answer is an emphatic “No!” The real question is not whether consumers will pay for content, but how will creative content providers package and distribute their products to create value in an emerging multi-channel, digital world. I would argue that, regardless of the type of content (books, news, video, music, gaming, etc.), the internet’s ubiquity has actually created more opportunity than threat for creating engaging experiences that can be monetized as effectively, if not more so, than via typical distribution models. Prior to the Internet’s emergence, literally every content value chain was characterized by high barriers to entry and the need for massive scale in both the creation of content and its distribution. Now, however, the shift to digital production and ubiquitous digital distribution are allowing content providers to not only much more easily and cost-effectively distribute on the global scale but also to have the liberty to unbundle and repackage content in an infinite variety that allow for much better tailoring to the needs and profiles of content consumers, in turn increasing number of ways that content can and will be monetized. Yes, there is no doubt this is disruptive to existing providers and value chains. But, with disruption comes the opportunity for innovation, and there are as many liberating aspects of the shift to internet-distribution of content as there are threats. Now, it is up to content providers to embrace the opportunities afforded by the internet and continue experimenting with unique, immersive content experiences. In so doing, content providers can let consumers reveal their preferences for how they will consume content in ways that are best for them and profitable for the provider. The key for all involved will be to take a flexible and agile approach to testing, learning and adapting business models and monetization strategies to better understand consumers’ content consumption behaviors and preferences as they themselves learn what works best for them in an emerging digital world. At PayPal, we believe there is no one solution for how content monetization will occur. Instead, we recognize that there are likely hundreds, if not thousands of answers to this question. Our focus is on providing a single, global payment system that has the flexibility that content providers of any type need to monetize in whatever fashion is most appropriate for their users and profitable for their businesses. Whether this is via subscriptions, micropayments, usage-based billing, one-time purchases or a combination of all of the above, we believe that consumers must be able to pay quickly and easily, and content providers must be able to accept and process payments efficiently in order to operate profitably. The challenge now is for content providers to figure out how exactly that is done for their specific business and users, but we know it can and will be done, and we intend to be there as partners in answering the question “How will content be monetized?”

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Fisher Communications Names Brian McHale VP Technology

July 28, 2010

SEATTLE, WA–(Marketwire – July 28, 2010) –  Fisher Communications, Inc. ( NASDAQ : FSCI ), a leader in local media innovation, announced today that Brian McHale has been hired as the company’s VP of Technology, responsible for enterprise-wide Engineering and Information Technology. 

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Damien Hoffman: OMG! These 5 CEOs Are So Hot Right Now

July 28, 2010

Wall Street and Silicon Valley always need something hot. Although unemployment is high and optimism resembles the scenes at the start of an anti-depressant commercial , we have found five CEOs who are building companies which haven’t stopped to notice the recession… 1) Dennis Crowley — CEO Foursquare Foursquare is a location-based social networking website, involving an application for mobile devices and a game intended for registered users. Through mobile websites, text messaging or device-specific applications, people are able to update their location and connect with friends, while earning rewards for their online activity. The company is “so hot right now” because it is in the process of adding on a new promotion. Barbie, the iconic fashion doll manufactured by Mattel (NYSE: MAT), will be used by Foursquare to advertise location-based scavenger hunts. Text, photo and video clues for the hunts will be provided by Barbie through the use of Twitter. This promotion, officially happening on July 20th, 2010 is an example of how Mattel has been able to expand into the digital and social media world of the 21st century. An American Internet entrepreneur, Dennis Crowley graduated in 1998 with a B.A. from the S.I. Newhouse School of Public Communications at Syracuse University, and also in 2004 with a Master’s degree from New York University’s Interactive Telecommunications Program. While attending NYU, he co-founded Dodgeball, a location-based social networking service used by mobile devices. Four years after Dodgeball was acquired by Google (Nasdaq: GOOG) in 2005, Crowley developed Foursquare as a second version of the original Dodgeball service. In 2005, MIT’s Technology Review magazine named him one of the “Top 35 Innovators Under 35.” His work has been followed by major news organizations, such as MTV (NYSE: VIA-B), NBC (NYSE: GE), Newsweek , The New York Times (NYSE: NYT), Slashdot, Time Magazine , The Wall Street Journal (NYSE: NWSA) and Wired . Currently, Crowley is an Adjunct Professor for NYU’s Interactive Telecommunications Program. 2) Andrew Mason — CEO Groupon Groupon is an electronic commerce website, offering a single type of product for sale at a discounted rate every 24 hours. These daily deals, made possible through collective buying power, feature what is best to buy, do, eat and see in over 50 cities throughout the United States and Canada. The company is “so hot right now” because of its May 2010 acquisition of MyCityDeal, a European website offering similar services. The collaboration has made the newly formed Groupon MyCityDeal the largest group buying site in the world, active in 18 countries and 140 cities, reaching the US, Canada, UK, France, Italy, Spain, Germany, Austria, Switzerland, Belgium, Sweden, Poland, The Netherlands, Denmark, Ireland, Finland and Turkey. Currently, its staff consists of over 900 employees, working around the globe. Growing up in a suburb of Pittsburgh, Andrew Mason showed a talent for creative organizing. At 15 years old, he started Bagel Express, a delivery service done on Saturday mornings. After graduating in 2003 from Northwestern University with a degree in music, he worked in web design under Chicago serial entrepreneur Eric Lefkofsky. In September 2006, Mason left his employment to accept a scholarship to the University of Chicago’s Harris School of Public Policy. In pursuit of a business idea, he began to work on creating a web-based platform, organizing collective action based on a tipping point. Learning of the project, Lefkofsky offered to supply $1 million in funding. Mason accepted his offer, and dropped out of school to develop The Point, a web platform launched in November 2007. With some modification, he followed the basic premise of The Point to create Groupon, which debuted in November 2008. 3) Tony Hsieh — CEO Zappos Zappos is an online retailer, selling shoes, handbags and purses, eyewear, watches and accessories, apparel, and electronic devices and media, such as DVDs. Through RSS feeds, Zappos publishes information about the latest products and styles, with each product having an image of the latest styles, a description of what is advertised, and a link leading to the product webpage. The company is “so hot right now” because it was acquired in November 2009 by Amazon (Nasdaq: AMZN) for a reported $1.2 billion. In an all-stock deal, Zappos investors and other shareholders exchanged their shares for approximately 10 million Amazon shares. This acquisition will allow Amazon to aggressively expand into the sale of apparel, and benefit from a fiercely loyal customer base. The son of Taiwanese immigrants, Tony Hsieh graduated in 1995 from Harvard University with a B.A. in Computer Science. During the first year after graduation, he worked as a Software Engineer at Oracle (Nasdaq: ORCL), a provider of business software and hardware systems. In 1996, Hsieh co-founded Link Exchange (Internet advertising network), for which he served on the Board of Directors, was responsible for some of the company’s major technologies, and sold to Microsoft (Nasdaq: MSFT) in 1999 for $265 million. After the sale of Link Exchange, he got originally involved with Zappos, working as an advisor and investor. In 2000, he joined the company as CEO. 4) Mark Pincus — CEO Zynga Zynga is an online network of gaming applications, offering a variety of games that are found on many social networks and websites. Users are able to invite friends to play with them, and chat while playing. The company is “so hot right now” because of its developing partnership with Google, which is due to launch its new brand Google Games later this year. Google has recently invested $100-$200 million of venture capital in Zynga, after having raised $500 million. With the upcoming partnership, Zynga will become the cornerstone of Google Games, giving it a solid base to build on, made up of social games and users. The joining of these two powerful companies could change the future of online gaming. Before his career as an entrepreneur, Mark Pincus worked in venture capital and financial services. He graduated with a B.S. in Economics from the Wharton School of the University of Pennsylvania, and with an MBA from Harvard Business School. After graduation from Harvard, he worked from 1993-1994 as a manager of corporate development at Tele-Communications, Inc., now AT&T Cable (NYSE: T). From 1994-1995, Pincus served as Vice President of Columbia Capital, leading investments in new media and software startups. In 1995, he launched his first company, a web-based push technology service named Freeloader, Inc. His second company, a provider for service and support automation software known as Support.com, was started in August 1997, and went public in July 2000. In 2003, Pincus founded his third company, Tribe.net, a social network partnering with major local newspapers, backed by The Washington Post (NYSE: WPO), Knight Ridder Digital, and Mayfield Fund. Pincus founded Zynga in 2007, and currently serves as its CEO and Chief Product Officer. 5) Jeremy Stoppelman — CEO Yelp Yelp is a web site that advertises listings, ratings, and reviews of local businesses through an online community, giving consumers the opportunity to share their opinions and business owners the chance to give contact information. Through Yelp, people find help in choosing where to eat, drink, shop, relax and play, at no cost to use (other than certain advertising features on the site). The company is “so hot right now” because of its June 2010 integration with OpenTable, a feature that allows any logged-in Yelp user to make a restaurant reservation directly from a review page. In the form of a pop-up, this option is linked to many business listings already on Yelp. Currently offering Dining Reward Points, OpenTable accepts reservations for almost 11,000 restaurants, all located within the United States. Interested in entrepreneurship, Jeremy Stoppelman graduated from the University of Illinois with a B.S. in computer engineering, and attended Harvard Business School. From 1999-2000, he worked as a Software Engineer for Excite@Home (provider of broadband Internet access), designing and implementing various website features. Stoppelman was with Paypal (Internet alternative for payment and money transfer) from 2000-2003, holding various positions in engineering and engineering management, ultimately making Vice President. After joining an incubator for a summer internship, he was reunited with colleague Russel Simmons, and teamed up with him to create a community around local information. Yelp was co-founded in 2004, with Stoppelman as CEO. Think some other CEOs are OMG Hot!, let us know in the comments below…

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Steve Parker: GM Sets Volt Price While Toyota Delays US-Built Prius

July 28, 2010

There was big electric vehicle and hybrid news Tuesday, as General Motors stuck by their guns, but Toyota seems to be acknowledging that they expect sales of all their cars, including Prius, to slow for quite some time. First, GM has announced the their “extended range hybrid EV” low emission/high mileage Chevrolet Volt will sell for $41,000 when it is introduced later this year –and that’s just the base price. We can be certain that in the great car dealer tradition, there will be a good amount of options available for the car (dealers make a lot of money on those extras and car-makers like to keep their dealers happy). That $41K tab is in somewhat stark contrast to Nissan’s recent announcement that their Leaf EV will cost under $33,000. That’s an amount which, with federal, state and local incentives, might see its true base price drop to as low as near $25,500 after those credits are applied (the incentive amount all depends what state and municipality you’re living in). Former GM vice-chairman Bob Lutz introduces the first version of the Volt to be presented to the public at the Detroit Auto Show So a base Volt, even given a buyer being able to take advantage of the full $7,500 federal incentive, and let’s say $1,500 from the state and, perhaps, county or even city, will still tip the money scales at a price very near $32,000. And that’s near the base price of Leaf before any incentives are applied. But GM, apart from Volt’s high technology, edgy styling and oh-my-gosh interior, will be depending on one main thing to draw buyers to Volt from less-expensive “pure electrics” (like Leaf and Mitsubishi’s i-MiEV), and it’s called “range anxiety.” It’s a new term in the auto world, but it means just what it says: people driving cars which use any fuel other than gasoline worry about how far they can go without running out of that fuel. Volt’s gee-whiz interior, gauges and controls should impress buyers Here’s where Volt starts to sound like a great idea: While Nissan predicts a 100-mile range per charge-up for Leaf, GM says their car will have a range of around 600 miles per gasoline tankful, that gasoline powering an engine which keeps Volt’s battery charged. Volt will also have the ability to charge its battery by plugging into an electric outlet, so it appears an owner would have a tough time running out of range in Volt. Most car-makers plan on their initial EVs being second or third commuter-type cars. And because the average American’s round-trip work commute is said to be 40 miles or under, a 100-mile range should allay any range anxiety. But Volt, at its price, size and features, is clearly being aimed at buyers as a primary family car. That $32K which an incentivized base-level Volt may actually cost, is right smack dab in the middle of the biggest part of the marketplace, where Taurus and Camry and Accord are located. GM first called Volt an “extended-range hybrid” because Volt has a small on-board gasoline engine which is used to keep Volt’s battery charged. Because there is no direct connection between the gasoline engine and the electric drivetrain, GM decided they could legitimately call Volt an electric vehicle. It seems they’ve gotten their way even though in many minds the issue is still somewhat confused. GM has seen the media pick up on the EV claim (probably because “extended-range hybrid” is long and hard to explain in articles), making their EV claim, so far, successful. Volt, which, with its small gasoline engine and electric motor and drivetrain, seems more-or-less an interim vehicle until GM comes up with their own pure EV and we’d love to see that product. Now that we know more about Volt’s price, it makes it easier to see where GM is aiming this new car and gives the competition some fodder when it comes to the cost of ownership. Prius Won’t Be Built in US In addition to GM’s pricing announcement for Volt, Toyota said on Tuesday that plans for building the Prius in the US, the car’s biggest market, have been delayed. Delayed for possibly as long as (get this) six years! The Los Angeles Times reports that, “Toyota had intended to let a thousand Priuses bloom from its new Mississippi plant. The new plan is to wait until the car is remodeled and, more to the point, to wait until the global economy is a bit more sales-friendly.” Sure, but six years!? Putting-off the Prius being built in the US is no big surprise; the very Mississippi plant where Toyota planned on putting these cars together has seen its own construction stop-and-start due to the worldwide recession and a very uncertain car market (last month, on June 17th, Toyota announced construction has resumed on the plant and the factory will produce Corollas starting in Fall, 2011). Toyota’s plug-in Prius has yet to become a reality In May, 2008, Toyota announced sales of over 1,000,000 Prius gas/electric hybrids worldwide. Sales began in 1997 in Japan and in 2000 throughout much of the rest of the world. North America was by far the largest Prius market, with almost 600,000 of those initial million being sold here. So slowing the ability to build those cars in the US shows Toyota’s worries about the future; and not only their own future specifically, but that of the entire industry. Beginning in the 1980′s, the largest import car companies decided to “build ‘em where we sell ‘em” and in theory it was a good idea. It would cut all sorts of costs from building the vehicles and get them to markets much less expensively than shipping them across an ocean. Car-makers went on a tear, opening plants all over the world (and experts say the average car-making plant costs about $1 billion). In the US, import companies have set-up shop in what the industry calls “greenfield” areas of the country like Mississippi. But now they are seeing their rapid growth through the 1980′s and ’90s and early part of this century challenged by the realities of the worldwide economy. Interior of the new 2010 Prius Greenfield describes, to car makers, an area low on jobs and as devoid of unions as much as possible, mostly in our nation’s Southeast and Midwest. For instance, Toyota has plants in, among other places, Indiana and Texas, Honda is a major economic force in Ohio and Nissan builds many of the cars and trucks it sells in the US in Tennessee. Some may remember that even Volkswagen had a plant (which they’d bought from Chrysler) in the US during those years in Pennsylvania which built their ill-fated pickup truck. The plant closed in 1987 but now they’re coming back to build in the US –in Tennessee. But many of these plants are now being seen possible future white elephants. As the world gets greener, but the recession hangs on (and maybe comes back), even the building of the world’s most popular low emissions/high mileage car has been put on hold in its largest market.

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Gregory Unruh: Survival Instinct: Businesses Must Turn to Mother Nature

July 28, 2010

It’s an age-old story. An entrepreneur enters a complacent industry with a startling innovation. The start-up’s market share steadily grows and before long, it’s the new behemoth. But then the surviving competitors, backed against the wall, counter with their own innovations that neutralize the new behemoth’s advantage. Soon, the new behemoth is scrambling for survival, its former success rendered meaningless in the new competitive landscape. This isn’t a story about Microsoft and Apple. It’s a story about weeds. Several decades ago Monsanto, one of the large agribusiness firms developed a new herbicide called “RoundUp.” Revolutionary at the time, RoundUp came to dominate the market because it was both highly effective and broke down quickly, making it less toxic than other herbicides in common use. But the innovative breakthrough that made Monsanto’s success was genetically engineering staple crops so they were resistant to RoundUp (branded RoundUp Ready). This innovation meant farmers could spray their entire fields with RoundUp, but only kill the weeds, saving a huge amount of time. No weeds means that farmers don’t need to till their fields–a huge ecological boon. And no-till farming equates to fewer emissions, less soil-erosion and less chemical runoff. But this story doesn’t have a happy ending. The weeds weren’t content to just die off. As the use of RoundUp and RoundUp Ready crops has become ubiquitous, the weeds developed innovations of their own – an evolved resistance to RoundUp. As a result, Monsanto and its customers are scrambling. Farmers are returning to tilling and using older, more toxic herbicides to control weeds. There is even some concern that the revenge of the weeds will cause agricultural yields to fall for some crops. If so, the price of crops – like corn, soy beans and cotton where RoundUp Ready seeds were most popular – could rise. From a business perspective the strategic errors are evident. No competent executive would ignore competitive moves made by rivals. Indeed, one of the main responsibilities of management is to think about, anticipate and plan for competitive gambits. I spend a lot of my time convincing companies they should emulate the biosphere if they want to be sustainable. But it’s also time we begin thinking of the biosphere within the framework of competitive strategy. Just like traditional competitors, the biosphere will react and adapt to any business strategy that affects it. In a way, we need to go back to learn from the master – Mother Nature. After all, the biosphere’s rule of survival of the fittest gives us an ideal model of competitive adaptation and interplay. Predators get stronger and prey get sneakier, predators get smarter and prey get faster, and so on to produce the diversity and dynamism of the natural world today. It’s a continual refrain for humanity. Monsanto failed to view weeds as a competitor who would react to their innovation. Far too many companies act similarly–as if the impact they have on the planet will not change the competitive landscape and that the biosphere won’t react. A recent article from The Climate Desk by Felix Salmon notes how few companies have even begun to think about contingency plans–or competitive responses more properly–to the biosphere’s adaptation to the changing climate. The private sector shouldn’t be singled out here. It’s time for the biosphere to figure into more strategic plans–as a partner and a competitor–that is constantly adapting. Cross-posted from Forbes

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Video: Resler Says ‘Balanced’ Beige Book Means Low Inflation: Video

July 28, 2010

July 28 (Bloomberg) — David Resler, chief economist at Nomura Securities, talks with Bloomberg’s Lori Rothman and Michael McKee about today’s release of the Beige Book and the outlook for the U.S. economy. Resler discusses the outlook for real estate, uncertainty in the jobs market, and current banking conditions. (Source: Bloomberg)

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Tom Emmer, Anti-Gay Pol, Gets Donations From Target, Stirring Up Controversy

July 28, 2010

Over at The Awl, Abe Sauer has been documenting the rise to prominence of Tom Emmer , a Republican member of Minnesota’s State House of Representatives who is running to replace Tim Pawlenty as Minnesota’s governor. Most of you non-Minnesotans probably know Emmer as the guy who wanted to cut the minimum wage for service-sector workers who earn income based on tips . Another thing you might want to know is that he’s hostile to the rights of the LGBT community. Per Sauer : Emmer says marriage “is the union between one man and one woman” and he supports the constitutional marriage amendment defining marriage as such. As a point of his “values” position, Emmer has been married to just one (presumably biological) woman since 1985. Meanwhile, claiming that it infringes on individual rights, he opposed the state’s indoor smoking ban. Displaying a complete lack of self-awareness, Emmer called one of these two issues “social engineering.” Can you guess which one? Enter national mega-retailer Target, whose corporate headquarters is in Minneapolis. As Sauer reported last week, Target donated “$100,000 cash and another $50,000 of in-kind goods and services” to a political action committee named MN Forward. In turn, MN Forward has used those donations to run ads in favor of Emmer’s candidacy. Sauer called Target’s donations “surprising,” and it’s not hard to see why : Progressive compared to its peers, Target extends domestic-partner benefits to gay and lesbian employees. It has also openly sponsored Twin Cities Pride and other gay and lesbian events in the state. Target puts its name on Minnesota AIDS Walk, a move that many corporations, worried about religious consumer terrorism, are far too cowardly to even consider. Target’s been deservedly rewarded, receiving a top rating of 100 percent on the 2009 and 2010 Human Rights Campaign Corporate Equality Index and Best Places to Work for LGBT Equality, the 2009 Rainbow Families Award and the 2009 Lavender Pride Award–and a reputation amongst the LGBT community as a “good” big box retailer. In subsequent follow-ups, Sauer has documented that Target’s response to inquiries on this matter is based on two points . First: that its donations are based “strictly on issues that affect our retail and business interests.” Second: It continually insists that its “rating of 100% on the 2009 and 2010 Human Rights Campaign Corporate Equality Index further demonstrates the reputation our company has earned.” The Huffington Post reached out to the Human Rights Campaign today, to inquire about whether Target’s political donations in this instance would affect that pristine 100 percent rating on its Corporate Equality Index. The short answer: No, because political donations aren’t part of that index’s calculations. From HRC spokesman Michael Cole: Since news of Target’s contribution to MN Forward, an independent expenditure committee, became public last week, people have asked HRC if political contributions by companies are factored into a company’s score on the Corporate Equality Index (CEI). Unless the contribution is to a ballot initiative that is anti-LGBT (such as California’s Prop. 8 in 2008), political contributions are not factored into a company’s score for a number of good reasons. It’s important to understand that the CEI is a measure of the workplace practices of a company toward its own LGBT employees. We don’t believe that rating companies based upon their political contributions is an accurate reflection of their commitment to LGBT equality in the workplace. In fact, corporate America is leading the way on issues of equality: over 85% of Fortune 500 companies prohibit discrimination on the basis of sexual orientation and 40% include gender identity in their nondiscrimination policies; and 57% provide domestic partnership health insurance benefits. Companies most often contribute for reasons associated with their particular business. With respect to the CEI and political contributions, it would be difficult to develop criteria by which to judge companies. Virtually every company in the Fortune 1000 today has contributed to candidates (of both political parties) that have voted against issues important to the LGBT community. There are Democrats and Republicans alike, for instance, that voted against the repeal of DADT in the U.S. House of Representatives. Should a company that contributed to these incumbents get points deducted from their CEI score? As a rule, we don’t believe that political contributions to candidates make companies any less committed to a diverse and inclusive workforce. HRC does pledge to keep an eye on this issue, however: The advent of unlimited corporate political contributions as a result of a recent U.S. Supreme Court ruling is a subject of great concern to all progressive movements, ours included. We will continue to monitor its impact on issues of equality and will revisit the issue of whether and how to factor in the political contributions made by corporate America as new information becomes known to us. Over at the Village Voice , Jen Doll speaks to Target spokesperson Jessica Carlson, and gets a little bit further with Target’s side of this debate: So, why donate to someone who’s anti gay marriage if you call yourself a supporter of the gay comunity? Carlson : At this point what we’re sharing is what was in Gregg’s email. To be clear, we donated to a political action committee, the MN Forward, which is a bi-partisan group, and not directly to Emmer’s campaign. Carlson goes on to say that she “can’t speculate on the nature of where our donations will go” in the wake of this story. RELATED: Real America: Why Target Supports Tom Emmer [The Awl] Real America: Target CEO Chooses “Business” over Gay Rights [The Awl] Target Says “We Do Not Have a Political Agenda” [Runnin' Scared @ The Village Voice] [Would you like to follow me on Twitter ? Because why not? Also, please send tips to tv@huffingtonpost.com -- learn more about our media monitoring project here .]

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Video: Woolner Discusses WikiLeaks’ Release of War Documents: Video

July 28, 2010

July 28 (Bloomberg) — Bloomberg columnist Ann Woolner talks with Mark Crumpton about WikiLeaks’ release of 92,000 leaked documents on the war in Afghanistan. (Source: Bloomberg)

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Leo W. Gerard: For the Strength of Rosie the Riveter: Make It in America

July 28, 2010

Rosie the Riveter defiantly rolls up her blue work shirt to show off a brawny bicep. She’s a symbol of American strength. She worked in a manufacturing job, one of millions that constructed the defense machine that won World War II for the Allies. She said, “We can do it.” And America did. Now, however, shuttered U.S. factories and off-shored manufacturing are sapping American strength. The nation has lost more than 40,000 manufacturing plants and one-third of its manufacturing jobs, nearly six million , over the past dozen years. China is on the verge of overtaking the U.S. in manufacturing output. And Americans know it. Late in April, 58 percent of 1,000 likely voters told pollsters they believed America’s economy no longer led the world. They also told pollsters they supported enacting a national manufacturing policy to promote resurgence of domestic production — a return to the days of a robust Rosie the Riveter and a country that could secure its independence with dynamic manufacturing capability. Democrats in Congress heard that message. They’ve created a program called “Make It in America.” They plan to pass a series of bills to create an environment in which both Americans and American manufacturers make it. “We want everybody to make it in America,” House Speaker Nancy Pelosi said as she described the plan to 2,000 bloggers and progressive activists at Netroots Nation 2010 last week in Las Vegas. After all the support America has given the financial sector — estimated to total more than $4 trillion — it’s time for Congress to invest in the productive sector, the one that creates jobs, real wealth and American power. “We must stop the erosion of our manufacturing base, our industrial base, our technological base,” the Speaker told Netroots Nation. “It is a national security issue to do so, if we had no other justification,” she said, adding that there are, of course, plenty of other reasons. She said the strategy is to pass “one bill after another” supporting American manufacturing. The House started last week with two — one to ease American industries’ access to raw materials and parts and another to improve specialized workforce training. In addition, Speaker Pelosi said, House leaders want to address currency manipulation — the deliberate undervaluing of currency to make a country’s exports artificially cheap and imports into that country artificially expensive. Currency manipulation by China, for example, is believed by both conservative and liberal economists to be adding as much as 40 cents to every dollar of the cost of U.S. products exported to China and discounting Chinese goods sold in the U.S. by 40 cents on every dollar. “There is a strong interest in our caucus in holding China accountable for manipulation of currency. That would make a tremendous difference in our trade because currency manipulation is really a subsidy to their exports to America — an unfair advantage,” the Speaker said at Netroots Nation. Other bills Speaker Pelosi hopes to pass soon include $5 billion in tax credits for domestic manufacturers that produce components for alternative energy and a requirement that foreign manufacturers keep at least one worker stationed in the U.S. so the company can be officially served with court papers. Also, there’s a bill by Illinois Congressman Daniel Lipinski that would require each U.S. president to produce a manufacturing strategy in the second year of office and to review progress annually. The survey that prompted Democrats to create the “Make It in America” program was commissioned by the Alliance for American Manufacturing (AAM) and conducted by Democratic pollster Mark Mellman and Republican pollster Whit Ayres. They found that likely voters believed creating manufacturing jobs was more important than reducing the federal deficit and more important than cutting government spending. The survey also showed strong support for policies requiring the government to buy American-made goods. Similarly, it showed the Democrats, Independents and Republicans surveyed felt the quality of products manufactured in America exceeded those made in China, Japan, India and Germany. Americans now even prefer U.S.-made cars: An AP-GfK Poll in April showed 38 percent of Americans favor U.S. vehicles. Asian brands got 33 percent. Chrysler takes advantage of that sentiment in its commercial for the new Grand Cherokee . The words are chilling: “The things that make us American are the things we make,” it begins. “This has always been a nation of builders, craftsmen, men and women for whom straight stitches and clean welds were matters of personal pride. They made the skyscrapers and the cotton gins, colt revolvers, Jeep 4-by-4s,” the ad continues. “These things make us who we are,” the narrator says. Yes. The things Americans make, make the country strong. To the sound of a sledge hammer pounding a railroad spike, the narrator goes on to describe the reborn Grand Cherokee: “This, our newest son, was imagined, drawn, craved, stamped, hewn and forged here, in America. It is well-made and it is designed to work. This was once a country that made things, beautiful things, and so it is again.” Well, not quite. Chrysler may make a terrific Grand Cherokee in Michigan. But American manufacturing needs some help. And with unemployment stuck at 9.5 percent, so do the American people. “Make it in America” is that aid. The AAM poll showed 85 percent of those who said the U.S. had lost economic leadership believed America could regain it. Americans believe we can still do it. *** Make sure Congress acts. Join the One Nation Working Together march on Washington Oct. 2 to demand good jobs, as well as Wall Street and immigration reform.

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Prop Traders Being Reassigned In Wake Of Volcker Rule

July 28, 2010

A Fox Business report on Tuesday evening made backers of the Volcker Rule nervous that big banks had already found a way to trade taxpayer-backed money for their own profit in opposition to the intention of the new law. A closer look, however, at recent moves by major banks shows that they appear to be complying with the law for now. From Fox Business: Goldman Sachs (GS: 147.93 ,+0.84 ,+0.57%) has figured out a novel approach to getting around the Volcker Rule’s restrictions on trading: it’s remaking its risk-taking traders into asset managers, and the rest of Wall Street may soon follow, FOX Business Network has learned. The big Wall Street firm has moved about half of its “proprietary” stock-trading operations — which had made market bets using the firm’s own capital — into its asset management division, where these traders can talk to Goldman clients and then place their market bets. The move is designed to exploit a loophole in the Volcker Rule, part of the recently signed financial-reform legislation named after presidential economic adviser and former Federal Reserve chief Paul Volcker. Business Insider then picked up the story: It seems like Goldman isn’t just circumventing the rule, but actually changing the role of prop traders. You’d assume that instead of trading with the firm’s money on prop trading desks, the traders will be trading with the firm’s clients’ money on the asset management team. But proprietary trading can easily become related to client operations and very closely resemble the prop trading done on strictly defined “prop trading” desks. Thanks to a line in the Volcker Rule which specifies trading “operations unrelated to customer operations,” as long as the “prop trading” is done for client-related purposes, it’s OK. While the original legislation allowed banks to do prop trading “in facilitation of customer relations,” that language has since been removed to address concerns about the very kind of loophole now being explored. Removing that line stripped banks of a key weapon against the Volcker Rule. “We are in fact pleased with the development because it shows how strong the Volcker Rule is,” said a Senate Democratic aide who’d been involved in drafting the legislation. “These firms are moving their traders into their asset management division because they recognize that these traders can no longer engage in prop trading but rather must trade on behalf of customers — who can exercise real market discipline on those traders. That should lead to a significant reduction in risk to the financial system.” Indeed, now that prop trading has largely been banned, banks which intend to follow the law would either reassign these traders to other desks or lay them off. The law does allow firms to trade a small amount of taxpayer-backed capital for their own profit, fueling fears that banks would use the leeway to continue to trade large positions. But, noted the aide, “the mere fact that the firms are putting people in asset management is a good sign, not a bad one. The talk about loopholes and weak Volcker Rule is really just uninformed.” Bank of America, too, looks to be following the law, at least for now. From Fox: “There are some indications that BofA is following Goldman’s lead. A Bank of America spokesman says the firm has no plans to fire its proprietary traders because most of the business now involves dealing with customers, as opposed to traders coming up with their own market ideas and then using firm capital to trade.”

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Robert Chase Becomes Enservio’s SVP, Products

July 28, 2010

Chase Brings Proven Product Leadership and Deep Domain Knowledge

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Gary Shapiro: Washington’s Gain Is The Nation’s Loss

July 28, 2010

This is the first installment of a two-part series running this week. Government “Stimulated” Jobs Enrich D.C., But They Hurt All of US Almost every week I experience a tale of two cities as I travel from Washington, D.C., to Detroit to see my wife and toddler son. For Washington, it is the best of times. Today’s U.S. Department of Labor numbers reflect that the Washington area’s 6.4 percent unemployment is the lowest of any large area in the nation. Washington area home prices are up nine percent. The Washington economy is super-charged by the inflow of new federal government money and the legal and lobbying business generated by a government proposing and issuing new laws and rules. Even the quiet mission of Washington associations is growing as Americans realize that vital interests are at stake as the federal government rushes to legislate and regulate. Americans outside Washington are paying more to Washington experts to explain lengthy 2,000-page bills as well as multitudes of proposed rules coming from the federal government. More than 10,000 lobbyists are formally registered to lobby the federal government (and this certainly understates the number who lobby but do not meet the 20 percent lobbying threshold before formal filing is required). Interest groups, including unions, businesses and the AARP, reported spending $3.5 billion to influence the federal government in 2009, and likely a higher amount will be reported in 2010. Washington litigators will soon flood the D.C. federal courts with lawsuits in a desperate attempt to stave off new federal rules harmful to business. American Bar Association statistics reveal that the number of “active, resident” lawyers in Washington, D.C., jumped from 46,689 in 2008 to 48,456 in 2009. This is the second highest increase in the nation with only New York adding more lawyers. (Washington, D.C. now has one lawyer for every 12 D.C. residents! This is more than ten times the rate of the next most-lawyered state, New York, which has one lawyer for every 127 citizens). Why the large increase in lawyers and lobbying? The Obama Administration and Congress have been legislating and regulating to a degree never seen before in most of our lives. This has fueled the Washington economy making it the nation’s healthiest metropolitan area by almost every definition. And the Washington boom will continue as the federal government hires thousands of new employees to meet the mandates of the health care and financial “reform” bills. The Washington area is among the wealthiest in the country. It has thousands of million-dollar-plus homes and is awash in imported luxury cars and high-end stores. Forbes.com reports that six of the ten wealthiest counties in the nation surround Washington, D.C. The average family makes six figures in a few Washington area counties. It is the best of times for many in the Washington area. For Detroit, and virtually every other major U.S. metropolitan area, it is the worst of times. The unprecedented number of “for sale” signs, high unemployment and flaccid business environment, tell a tale of decline. The relative opulence of Washington compared to the distress of the rest of the country epitomizes a challenged nation. More, it is difficult to find any American business executive who is not concerned about the prospects for the U.S. economy. Corporate America not only has reversed its natural optimism, many believe the federal government is making it worse. If the Republican leadership does not seek to retake Congress on a pro-jobs platform outside the Washington Beltway, a mile-wide window of opportunity is being missed. Business owners who create jobs are frustrated. They don’t understand why Washington is making life more difficult for them. They are perplexed with new requirements like the health-care law mandating every business report to the IRS information on any purchase exceeding $600. They see all sorts of federal payroll taxes rising next year, and they don’t understand why American corporate taxes are the second highest in the developed world. A dozen national business leaders I met with Tuesday agreed that their represented industries have been hurt by the well-meaning efforts of the federal government to help the economy. The complex stimulus packages, bail-outs, health care and financial “overhaul” laws combined with a hyper-regulatory environment give their industries little confidence to hire or invest in the United States. Heap on threats of tax increases, new rules, an increasingly restrictive union agenda and a protectionist environment, job creators view the federal government’s recent activism as harmful. An anti-free market and anti-employer environment has their industries looking at overseas investment for growth. Business executives from large and small companies view the United States as an increasingly hostile place to do business. The lack of business confidence, investment and jobs creation is not surprising given how our political leaders have demonized the very businesses whose investment, profits and growth create jobs. The word “corporate” is too often combined with the word “greed.” Profits are considered evil or excessive. The “free market” has shifted from a positive description of the American economic system to pejorative. The “invisible hand” of the free market is being replaced entirely by a visible hand of what politicians think a market should look like. Our American edge in entrepreneurial activity and innovation is threatened by our own government. New burdens and taxes are being added without considering real business and job creation implications. We have to pivot quickly to make this the best of times for every American, not just for those of us lucky enough to be part of the Washington economy. Later this week, I will provide specific suggestions on what needs to be done to reverse the Washington anti-jobs, anti-business agenda. These suggestions will not increase the deficit and will improve the economy and create productive jobs. Gary Shapiro is the president and CEO of the Consumer Electronics Association.

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Video: Evans Explains Insurers’ Use of Retained-Asset Accounts: Video

July 28, 2010

July 28 (Bloomberg) — David Evans talks with Bloomberg’s Scarlet Fu about his investigation into retained-asset accounts by life insurers and how the insurers profit from these accounts at the expense of grieving families. (Source: Bloomberg)

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Alexandra Wrage: Bribery as a Business Strategy

July 28, 2010

Your company is pursuing a big deal in a dodgy country – a “challenging market” – and things have started to unravel. You’re nearing the culmination of the negotiations and, after months of business dinners and late-night-cognac conversations, Mr. Avaricio, the government official making the final decision, has stopped taking your calls. He communicates through a low-level colleague who was previously very polite, but who now seems somehow to have the upper hand, that your competitor has offered to “include Mr. Avaricio in the deal” with a 10% share to be wired to his off-shore account. There follow the usual expressions of regret, the strongly stated preference for your company and the desire to continue what has been an “important personal relationship.” This would all be possible if Mr. A. could be accommodated. And so you agree to match the competitor’s 10% kick-back to the foreign official. You agree to violate US law and the laws of his country to salvage the deal. Suddenly all smiles, the emissary jots down the name of a small company you’ve never heard of that can be retained quickly … this afternoon … as a local “consultant” on the deal for the convenient sum of 10% of the total value. The following morning you return to U.S. headquarters with the signed contract in hand. What have you just bought for you and your company? You’ve bought an unenforceable contract, to begin with. Regardless of how carefully negotiated and documented, a bribery scheme is unenforceable. If the official on the inside reneges or if he is removed in a change of government, whether violent or democratic, you must begin again. If he simply stops returning your calls, you are back where you were, but poorer by 10% of the deal. Even without a change of government, bribed officials rarely stay bribed. Once they know you’re a player, (that is, that you can be played), they can move the goal and have confidence you’ll follow. Suddenly, there are unnamed others who also require payment: colleagues in his department, officials higher up the chain, inspectors, investigators, judges. You’ll never meet these people, but with enough money Mr. A. can take care of them for you. A particular favorite of the Mr. A’s of the world is to require additional bribes to secure the release of his country’s payment to your company. You’ve performed as promised and delivered the goods, but now it seems the folks who pay the bills want their cut. Shorn as it is on the front end, throughout the period of the contract and then again when it comes time for payment, your company’s profit on this deal is suddenly paper thin. Negligible profits are the best outcome to hope for. If your side deal is uncovered, and angry competitors and whistleblowers make that increasingly likely, you’ve bought a substantial fine. Fines levied against U.S. companies in the hundreds of millions of dollars are no longer unusual. Fines levied against individuals are smaller, but must be paid by the individual himself and can be ruinous. You may also have bought your company a shareholder class action suit, the cost of which can quickly surpass an SEC or Department of Justice enforcement action. You’ve almost certainly bought years of business disruption as teams of lawyers and forensic accountants span out across your global operations to determine whether this is an isolated event or a pattern of conduct. The fees and travel expenses associated with the investigation will surpass the cost of any fine imposed. It will be almost impossible to conduct business overseas during the period of the investigation; every consultant will be suspect and many will be asked to stand-down on marketing efforts while the lawyers determine whether they are legitimate or simply shills. Remedial measures may be adopted or imposed that will take years to implement and millions of dollars to roll-out. These are hard, measurable business costs. Yet all of these costs assume only a U.S. enforcement action. The country in which the official is bribed, the country of Mr. Avaricio, may also join the fray. Due process in that country may not be all that you would hope. Alongside the fines, you may well have secured your own place in prison. The U.S. Department of Justice has expressly stated that proceeding against individuals is now a priority. Proceeding against individuals in the country in which the violation occurred is always a possibility and we’ve seen the death penalty used in cases of bribery in more than one country. An added irony: the proceedings, and the numerous defenses against them, often give rise to demands for bribes as well. In the eyes of the public at large, you have branded your company as corrupt. Even those who don’t know the details know that German engineering giant Siemens ultimately settled for over a billion dollars after engaging in widespread commercial bribery. Communities ravaged by corruption generally know who the offenders are. In the eyes of bribe seekers, you have branded your company as a compliant and promising target. Whether you intend to pay or not, that reputation will ensure delay and negotiation over every aspect of every deal while local officials test your resolve in an effort to secure their cut. Fines. Imprisonment. Delay, uncertainty, risk and expense. Not exactly a case study for business school.

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Video: Vicente Fox Discusses Arizona Immigration Law: Video

July 28, 2010

July 28 (Bloomberg) — Former Mexican President Vicente Fox talks about Arizona’s immigration law and the impact on Mexican-U.S. relations. A federal judge barred the state from enforcing part of the law, while denying the U.S. government’s request for a preliminary injunction. Fox speaks with Margaret Brennan on Bloomberg Television’s “InBusiness.” (This is an excerpt of the full interview. Source: Bloomberg)

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David Isenberg: The GAO Transcripts, Part 22: A Convoy Was Attacked? Really, You Don’t Say

July 28, 2010

This is the twenty second installment of the Government Accountability Office interview transcripts that were prepared pursuant to the July 2005 GAO report ” Rebuilding Iraq: Actions Needed To Improve Use of Private Security Providers .” The GAO met with two PSCs to get their viewpoint on interacting with the U.S. military. Who they can’t be determined from the transcript. But from their viewpoint the military could have done better in certain regards. For example: During this incident, a _____________ convoy was attacked for two days. _____________ equested aid from the miIitary, but received none. 41 assets were lost. After this incident, _____________ management team contacted the military. The military had no idea that the convoys were attacked even though they were accompanied by military vehicles. _____________ was aware of the situation because they have intra-convoy communication with a convoy movement control center. _____________ ___________ ater learned that the military escort that was supposed to be accompanying the convoy did not request aid or release information on the convoy’s situation. Also, the U.S., military, in their view did not have qualified personnel for convoy duty. _____________ feels that the _____________ support provided by the military are inexperienced. Most of the _____________ the convoys were previously cooks, etc and had not shot a gun since base camp training. Of course, this would have been during the first year and a half after the U.S. invaded Iraq so the situation likely improved in terms of the ability of U.S. soldiers Standard disclaimer: I have put in ( _____ ) to reflect those words of phrases which have been blacked out in the transcript. I have also put in the underlining as it appeared in the original transcript. As in the transcript, I have left out letters from various words, even when it seems obvious what the word is. Prepared by: Kate Walker Index Date Prepared: October 19, 2004 DOC Number. 1195724 Reviewed by: Carole Coffey DOC Library: Goal 2 Job Code. 350544 Record of Interview Title Interview with Contractor Purpose To gain on-the-ground insight to the Contractor perspective Contact Method Face-to-face Contact Place _____________ Contact Date October 9, 2004 Participants _____________ _____________ _____________ Carole Coffey, Analyst in Charge, GAO Glenn Furbish, Senior Analyst, GAO Kate Walker, Analyst, GAO Comments/Remarks: We met with _____________ and _____________ to discuss their experiences in interacting with the military. _____________ currently is currently working on tasks order _____________ __________________________ and task order _____________of all task orders which provides _____________n Iraq. CONVOY SUPPORT The military has complete control of convoy movements. The rnilltary decides the number of escorts necessary given the threat level. In addition to military support, the Kuwaiti Military Police also escort the convoy. The current standard protocols for convoys in Kuwait are: _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ The Army takes a “hands-off’ approach to convoys traveling in Iraq. When asked if he ever felt that the level of support that the Army had given him was insufficient, _____________ plied that he was a civilian and he really does not know what adequate protection warrants. _____________ did indicate, however, that the level of protection the military provides had been increased since an incident on 8 and 9 April 2004. During this incident, a _____________ convoy was attacked for two days. _____________ equested aid from the miIitary, but received none. 41 assets were lost. After this incident, _____________ management team contacted the military. The military had no idea that the convoys were attacked even though they were accompanied by military vehicles. _____________ was aware of the situation because they have intra-convoy communication with a convoy movement control center. _____________ ___________ ater learned that the military escort that was supposed to be accompanying the convoy did not request aid or release information on the convoy’s situation. After learning about the attack, the military increased security force protection and reduced the convoy size from _____________ In addition, the military added _____________ support, which convoys did not have before. The military also gave _____________ nvoy tracking system called Joint Distribution Logistic Management (JDLM) to help monitor their convoys _____________ so uses Qualcom to communicate with ifs convoys. Page 1 Record of interview _____________ also finds that military support is often unfamiliar with the territory. After the April incident, the military also told _____________ that they were going to get _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ __________________________ _____________ _____________ feels that the _____________ support provided by the military are inexperienced. Most of the _____________ the convoys were previously cooks, etc and had not shot a gun since base camp training. _____________ believes that the military is conserving their assets for more risky endeavors. TRANSFER POINTS _____________ reported that _____________ had noted that transfers between Army and Marine area of responsibility (AOR) are not seamless. Most recently, a convoy traveling to Anaconda that was being escorted by the Army had one of their trucks shot up by a Marine as the convoy entered the Marines AOR. _____________ heard some complaints regarding the support given by the Marines. He believes that the Marines feel that since _____________ is an Army contract that they should not be held responsible for their protection. _____________inds that “the Marines are a very independent group that likes to do things themselves.” He says there are a lot of “flexing over who’s in charge” between the Army and the Marines. MILITARY AID _____________ indicated that has a military contact person for times of need. Depending on the type of situation _____________ will call upon the aid of either the army or the Kuwaiti Ministry of Interior (KMOI). Typically _____________ will request help from KMOI in minor situations and rely upon military aid for larger problems. INTERNAL REPORTING AND COMMUNICATIONS Internally, _____________ tracks damages to its trucks incurred via rocks, IEDs, etc. _____________ believes that _____________ has good internal communication, but external communication with the military is not strong. _____________ latest fatality occurred south of Baghdad, when a _____________ ommander was killed by an IED. According to _____________ he military had known about the IED, but had not told anyone about it because they had heard that the IED was not live. RULES OF ENGAGEMENT Under the agreed upon rules of engagement _____________ mployees and subcontractors are not allowed to attack insurgents unless they are returning fire. _____________ employees are not allowed to take proactive attacks. CURRENT SECURITY SITUATION IN IRAQ Since the April convoy attack, _____________ ports that they have seen more security from the military. _____________ s, however, that they are still operating in a war zone and vulnerable to the insurgents. Pge 2 Record of Interview IMPROVEMENTS IN IRAQ _____________ would like to see increased route security, especially on main supply routes (MSR). At any given time, there are nearly _____________ convoys moving per week on MSRs. _____________ elieves that the military should be more proactive in protecting these routes. Extra support for convoys moving north would also improve the situation in Iraq as insurgents are aware that convoys _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ elieves that the military needs to reassess their policies dealing with PSCs. He believes that the rules of engagement for PSC need to be clarified. _____________ _____________ feels that _____________ has an advantage over other PSCs in their relationship with the military, as_____________ deals with the military directly and have full visibility. There has been some talk of creating a military “bubble” in Iraq and having the military control movements within the inner triangle of Cedar, Mosul, and Alasad in Iraq. In this central triangle, only military vehicles would travel and contractors would provide transportation and services to the main entry points. _____________ elieves that this system would be more successful because the military would be better able to manage its own personnel and improve internal communications. Page 3 Record of Interview

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